Veterans Affairs: Sustained Leadership Needed to Address High-Risk Issues

VA is responsible for providing benefits and services to veterans, including health care, disability compensation, and various types of financial assistance. In fiscal year 2019, VA received a total budget of $201.1 billion and a discretionary budget of $86.6 billion—the largest in VA's history—to carry out its mission. GAO, along with the VA Inspector General and other entities, continues to identify significant deficiencies in VA's governance structures and operations—all of which can affect the care provided to our nation's veterans.

This testimony focuses on the status of VA's efforts to address GAO's high-risk designations and open GAO recommendations in the following areas: VA health care, acquisition management, and disability claims workloads and benefit eligibility criteria, among other areas. It is primarily based on GAO's March 2019 high-risk update and a body of work that spans more than a decade.

The Department of Veterans Affairs (VA) has longstanding management challenges. As a result, GAO added several VA programs to its High-Risk List. This list focuses attention on government operations that are most vulnerable to fraud, waste, abuse, or mismanagement, or in need of transformation. These include managing risks and improving VA health care, VA acquisition management, and improving and modernizing VA disability programs, including managing claims and updating eligibility criteria.

VA health care was designated high risk in 2015 due to concerns about VA's ability to ensure the cost-effective and efficient use of resources to improve the timeliness, quality, and safety of health care for veterans. GAO identified five areas of concern: (1) ambiguous policies and inconsistent processes; (2) inadequate oversight and accountability; (3) information technology challenges; (4) inadequate training for VA staff; and (5) unclear resource needs and allocation priorities. VA's efforts to address each of these areas have been impeded by leadership instability. However, since his July 2018 confirmation, Secretary Wilkie has demonstrated his commitment to address the department's high-risk designations. His actions to date have allowed the department to maintain its leadership commitment rating of partially met in GAO's 2019 High-Risk update. VA also partially met the action plan criteria. As of March 2019, it did not meet the other three criteria for removal from the High-Risk List (agency capacity, monitoring, and demonstrated progress). This is, in part, because GAO continues to have audit findings that illustrate that the five areas of concern have not been fully addressed. For example:

In a series of reports from 2012 through 2018, GAO found VA's wait time data unreliable for primary and specialty care as well as for care in the community. GAO also found that VA did not measure the full wait times that veterans experience in obtaining care across these settings.

In November 2017, GAO reported that VA medical center officials did not always conduct or document timely required reviews of providers when allegations of wrongdoing were made against them.

In April 2019, GAO found that VA's governance plan for modernizing its electronic health record system was not fully defined, potentially jeopardizing its fourth attempt at modernization.

In April 2019, GAO reported that VA's appraisal process for assessing medical center director performance relies heavily on a system with long-identified deficiencies that remain unaddressed, thus diminishing VA's ability to hold officials accountable.

In its 2019 High-Risk Report, GAO added VA acquisition management as a high-risk area in light of the department's numerous contracting challenges and the significant federal investment in serving veterans. To date, GAO has identified challenges in the following areas: (1) outdated acquisition regulations and policies; (2) lack of an effective medical supplies procurement strategy; (3) inadequate acquisition training; (4) contracting officer workload challenges; (5) lack of reliable data systems; (6) limited contract oversight and incomplete contract documentation; and (7) leadership instability. For example, as of May 2019, VA does not have updated acquisition regulations and officials expect to have a full update by 2021; a process which has been in place since 2011.

GAO designated improving and modernizing federal disability programs, including VA's program, as high risk in 2003. GAO identified two areas of concern related to VA: (1) managing disability claims workload and (2) updating disability benefit eligibility criteria. As a result of these concerns, veterans may not have their disability claims and appeals processed in a timely manner. GAO reported in March 2018 that VA is making a major effort to reform its appeals process by onboarding new staff and implementing new technology. However, its appeals planning process does not provide reasonable assurance that it will have the capacity to successfully implement the new process and manage risks. VA agreed with GAO's recommendation to better assess risks associated with appeals reform.

VA leadership has committed to addressing GAO's high-risk concerns and has launched several transformational efforts. For example, VA is currently implementing the Veterans Health Administration Plan for Modernization, a framework that aims to modernize the department, as well as the VA MISSION Act of 2018. This Act requires VA to consolidate programs that allow veterans to receive care outside VA. If successful, these efforts could be transformative for VA. However, such success will only be achieved through sustained leadership attention and detailed action plans that include metrics and milestones to monitor and demonstrate VA's progress. Sustained congressional oversight will also be essential.

Since 2000, GAO has made more than 1,200 recommendations to reduce VA's high-risk challenges, and VA has implemented approximately 70 percent. GAO will continue to monitor VA's progress in implementing the remaining open recommendations.

I am pleased to be here today to discuss the Department of Veterans  Affairs’ (VA) efforts to address longstanding management challenges. As  a result of these challenges, we added several VA programs to our High- Risk List. This list focuses attention on government operations that are  most vulnerable to fraud, waste, abuse, or mismanagement, or in need of  transformation.

VA is in need of transformation. We, along with VA’s Inspector General  and other entities, continue to identify significant deficiencies in VA’s  governance structures and operations—all of which can affect the care  provided to our nation’s veterans. To address these deficiencies, we  have made over 1,200 recommendations to VA since 2000; VA has  implemented approximately 70 percent of them. However, important  recommendations remain unimplemented (open), and we continue to  identify similar deficiencies in recent and ongoing work. In March 2019,  we sent a letter to the Secretary of VA that detailed 30 open  recommendations that we deem the highest priority for implementation  (priority recommendations). Fully addressing these open  recommendations could significantly improve VA operations; however,  the recommendations highlight issues that are symptomatic of broader,  systemic management and oversight challenges that will only be  addressed through transformative action. Our High-Risk Report provides  VA a roadmap for this needed transformation.

Secretary Wilkie has said that VA is committed to addressing our high- risk concerns and has launched several transformational efforts. For  example, VA is currently implementing its modernization plan, a  framework through which the department intends to systemically overhaul  its structure, culture, governance, and systems through organizational  improvements. Congress has also acted to drive overarching change by,  for example, passing the VA MISSION Act of 2018 (VA MISSION Act).  Among other things, this Act requires VA to consolidate several  community care programs into a permanent program. VA is currently  implementing aspects of this Act.

My statement today focuses on the status of VA’s efforts to address its  high-risk designations and open GAO recommendations in the following  areas: (1) managing risks and improving VA health care; (2) VA  acquisition management; (3) improving and modernizing federal disability  programs; and (4) other government-wide high-risk areas that have direct  implications for VA and its operations. This statement also describes VA’s  ongoing efforts to transform and modernize the department.

This statement is based on our 2019 high-risk update and our body of  work that spans more than a decade. For these products we analyzed  VA’s documents related to the department’s efforts to address its high- risk areas and interviewed VA officials, among other things. More detailed  information on the scope and methodology of our prior work can be found  within each specific report. We conducted the work on which this  statement is based in accordance with generally accepted government  auditing standards. Those standards require that we plan and perform the  audit to obtain sufficient, appropriate evidence to provide a reasonable  basis for our findings and conclusions based on our audit objectives. We  believe that the evidence obtained provides a reasonable basis for our  findings and conclusions based on our audit objectives.

VA is responsible for providing benefits to veterans, including health care,  disability compensation, and various types of financial assistance. In  fiscal year 2019, VA received a total budget of $201.1 billion, and the  largest discretionary budget in its history—$86.6 billion, about $20 billion  higher than in 2015. The department operates one of the largest health  care delivery systems in the nation through its Veterans Health  Administration (VHA), with 172 medical centers and more than 1,000  outpatient facilities organized into regional networks. VA has faced  growing demand by veterans for its health care services, with the total  number of veterans enrolled in VA’s health care system rising from 7.9  million to more than 9 million from fiscal year 2006 through fiscal year  2017. In fiscal year 2019, VHA received $73.1 billion of VA’s $86.6 billion  discretionary budget.

In addition to providing health care services, VA provides cash benefits to  veterans for disabling conditions incurred in or aggravated by military  service. To carry out its mission, VA spends tens of billions of dollars to  procure a wide range of goods and services, including medical supplies;  to construct hospitals, clinics, and other facilities; and to provide the  information technology (IT) to support its operations.

We have made hundreds of recommendations to improve VA’s  management and oversight of the services it provides to veterans.  Specifically, since 2000, we have made 1,225 recommendations to VA.  While VA has implemented most of the recommendations, a number  remain open, as of April 2019. Specifically, more than 125 recommendations related to VA health care remain  open, including 17 recommendations that have remained open for 3  years or more;

15 recommendations related to improving VA acquisition  management remain open, including 1 recommendation that has  remained open for 3 years or more; and

12 recommendations related to management of disability claims  workloads.

In 2017, we began sending letters to VA and appropriate congressional  committees identifying priority recommendations for VA to implement in  order to significantly improve its operations. We categorized these  recommendations into nine areas: (1) veterans’ access to timely health  care; (2) veterans’ community care program; (3) human capital  management; (4) information technology; (5) appeals reform for disability  benefits; (6) quality of care and patient safety; (7) national policy  documents; (8) contracting policies and practices; and (9) veterans’  access to burial options.

Overall Rating for the Managing Risks and Improving VA Health Care High-Risk Area Remained Unchanged in 2019

Since we designated VA health care as a high-risk area in 2015, VA has  begun to address each of the identified five areas of concern related to  managing risks and improving VA health care: (1) ambiguous policies and  inconsistent processes; (2) inadequate oversight and accountability; (3) IT  challenges; (4) inadequate training for VA staff; and (5) unclear resource  needs and allocation priorities.

Since our 2017 High-Risk Report, ratings for all five criteria remain  unchanged as of March 2019. Specifically, the leadership commitment  and action plan criteria remain partially met. Although VA has  experienced leadership instability over the past 2 years in several senior  positions, a new Secretary was confirmed in July 2018. Secretary Wilkie  has demonstrated his commitment to addressing the department’s high- risk designation by, among other things, creating an office to direct an  integrated, focused high-risk approach and communicating to VA leaders  the importance of addressing our recommendations and working with  GAO. The Secretary’s actions, to date, have allowed the department to  maintain its leadership commitment rating as of March 2019.

The action plan criterion also remains partially met as of March 2019. In  March 2018, VA submitted an action plan to address the underlying  causes of its high-risk designation, but the plan did not clearly link actions  to stated outcomes and goals or establish a framework to assess VA’s  progress. VA officials told us that instead of revising the March 2018  action plan, it will incorporate its plans to address the high-risk  designation into the department’s current initiatives. Specifically, VA is  currently implementing the VHA Plan for Modernization, through which  the department intends to modernize VA’s structure, culture, governance,  and systems through organizational improvements. VA officials have  indicated that the VHA Plan for Modernization is intended, among other  things, to address the high-risk areas for VA health care. VA officials also  told us they are currently developing operational plans for the VHA Plan  for Modernization, and these plans will include goals, time frames, and  metrics, among other things. VA estimates that the operational plans will  be complete by September 2019.

The monitoring, demonstrated progress, and capacity criteria remain  unmet since our 2017 High-Risk Report. In order to address the  monitoring and demonstrated progress criteria, VA’s ongoing revisions to  its action plan need to include the addition of certain essential  components, including metrics, milestones, and mechanisms for  monitoring and demonstrating progress in addressing the high-risk areas  of concern. VA’s capacity rating also remains not met. Though the  department took steps to establish offices, workgroups, and initiatives to  address its high-risk designation, many of these efforts are either in the  initial stages of development or resources have not been allocated.

For each of the five identified areas of concern related to managing risks  and improving VA health care, ratings reflect the level of progress VA has  made to address them.

Ambiguous policies and inconsistent processes. Since our 2017  High-Risk Report, ratings for all five criteria remain unchanged for this  area of concern as of March 2019.

Leadership commitment: partially met. In September 2017, we  reported that VHA had approximately 800 national policies, the  majority of which were outdated. VHA reported reducing the number  of national policies by 26 percent, and work continues in this area. In  addition, VHA established an inventory of approximately 55,000 local  policies as of October 2017. In October 2018, VHA noted its plans to  determine who is responsible for monitoring implementation of  national and local policy, as well as the alignment between these  levels of policy. At that time, VHA also discussed its future plans to  monitor the implementation and alignment of national and local policy  and update its national policy directive by the end of June 2019.  Additionally, VA has implemented a structure for leadership input into  the policy process, such as at the VHA Chief of Staff level. However,  senior leadership has lacked the stability needed to ensure issued  policy meets agency goals.

Capacity: not met. Since 2017, VA has issued an updated directive on  policy management, and put in place procedures to train staff and  obtain input from all levels on policy development. However, VA  continues to face challenges in this area because it is reliant on  contracts and information technology resources, which if delayed, can  impede progress toward meeting goals.

Action plan: partially met. Since 2017, VA has further refined its root  cause analysis for this area of concern. In June 2017, VA also  identified the following as enterprise-wide root causes of its high-risk  designation: disjointed strategic planning; poorly defined roles, responsibilities, and decision authorities; poor horizontal and vertical integration;  lack of reliable data and analysis;  ineffective human capital management; and  inadequate change management.

VA relied on these root cause analyses as the foundational drivers for the  VHA Plan for Modernization. However, VA has not used these analyses  to develop and prioritize appropriate milestones and metrics in the action  plan.

Monitoring: not met. Since the March 2018 action plan lacked specific  metrics and mechanisms for assessing and reporting progress, it is  not clear how VA is monitoring its progress.

Demonstrated progress: not met. Our work continues to indicate VA is  not yet able to show progress in this area. Since its 2015 high-risk  designation, we have made 50 new recommendations in this area of  concern, 32 of which were made since our 2017 report was issued.  For example,  In November 2017, we reported that, due in part to  misinterpretation or lack of awareness of VHA policy, VA medical  center officials did not always conduct or document timely  required reviews of providers when allegations were made against  them. We also found that VHA was unable to reasonably ensure  appropriate reporting of providers to oversight entities such as  state licensing authorities. As a result, VHA’s ability to provide  safe, high quality care to veterans is hindered because other VA  medical centers, as well as non-VA health care entities, may be  unaware of serious concerns raised about a provider’s care.

We recommended that VHA direct medical centers to document  and oversee reviews of providers’ clinical care after concerns are  raised, among other recommendations. All of our  recommendations remain open. As of January 2019, VA  estimated completing the recommended revisions to its policy and  audit processes in August 2019 and August 2020, respectively.

In July 2018, we reported that VA collected data related to  employee misconduct and disciplinary actions, but data  fragmentation, reliability issues, and inadequate guidance  impeded department-wide analysis of those data. Thus, VA  management is hindered in making knowledgeable decisions  regarding the extent of misconduct and how it was addressed.

We recommended that VA develop and implement guidance to  collect complete and reliable misconduct and associated  disciplinary-action data department-wide, whether through a single  information system, or multiple interoperable systems. VA  concurred with this priority recommendation, which remains open.  VA reported that it expects to implement one or more information  systems that will collect misconduct and associated disciplinary  action data in January 2020.

Inadequate oversight and accountability. Since our 2017 High-Risk  Report, ratings for one criterion improved and four remain unchanged for  this area of concern as of March 2019.

Leadership commitment: partially met. VA has made organizational  changes, including establishing the Office of Integrity, to standardize  and streamline the agency’s oversight of its programs and personnel.  However, since 2017, the lack of stability in the Under Secretary for  Health position has hindered its ability to demonstrate sustained  commitment to improving this area of concern.

Capacity: not met. VA has begun to implement capacity-building  initiatives directed at improving oversight and accountability. For  example, VHA’s Office of Internal Audit and Risk Assessment, a key  component of the department’s oversight and accountability model,  began conducting audits in 2018. However, according to VA’s action  plan, the department has yet to allocate resources for this office, such  as sufficient staff to carry out its activities.

Action plan: partially met. In March 2019, the rating for this criterion  improved to partially met. In 2018, VA conducted an analysis of the  root causes contributing to findings of inadequate oversight and  accountability, an important step in identifying the underlying factors  contributing to this area of concern. addresses gaps in physician staffing, including those for mental  health providers, which may affect veterans’ access to care,  among other issues.

We recommended that VHA should develop and implement a  process to accurately count all physicians providing care at each  medical center, including physicians who are not employed by  VHA. VHA did not concur with this recommendation, which we  reiterated in our priority recommendation letter.

In a series of reports from 2012 through 2018, GAO found VA’s  wait time data unreliable for primary and specialty care, as well as  for care in the community. GAO also found that VA did not  measure the full wait times that veterans experience in obtaining  care across these settings. Specifically, in December 2012, we  made two recommendations to VA to improve the reliability and  oversight of wait time measures, both of which are designated as  priority, and remain open.

Similarly, in June 2018, we reported that VHA could not  systematically monitor the timeliness of veterans’ access to  Veterans Choice Program care because it lacked complete,  reliable data to do so. Specifically, we found (1) a lack of data on  the timeliness of accepting referrals and opting veterans in to the  program, (2) inaccuracy of clinically indicated dates, which are  used to measure the timeliness of care, and (3) unreliable data on  the timeliness of urgent care.

We recommended that VA take steps to improve the timeliness  and accuracy of data on veterans’ wait times for care and its  oversight of the future community care program that will  consolidate other community care programs with the Veterans  Choice Program, whose authority sunsets on June 6, 2019. VA  concurred with eight of the 10 recommendations related to these  findings, all of which remain open. VA reported that, in order to  improve wait times data accuracy under the Veterans Community  Care Program, it intends to implement several initiatives through  September 2019.

In September 2018, we reported on the timeliness of third-party  administrators’ payments to community providers under VA’s  largest community care program, the Veterans Choice Program.  Although VA has taken steps to improve the timeliness of claim  payments to these providers, VA is not collecting data or  monitoring compliance with third-party administrators’ customer  service requirements for provider calls. This could adversely affect  the timeliness with which community providers are paid, possibly  making them less willing to participate and affecting veterans’  access to care.

We recommended that VA collect data on and monitor compliance  with its requirements pertaining to customer service for community  providers. VA agreed with the recommendations, but has not yet  implemented them.

In November 2018, we reported that VHA’s suicide prevention  media outreach activities declined in recent years due to  leadership turnover and reorganization. Additionally, we found that  VHA did not assign key leadership responsibilities or establish  clear lines of reporting for its suicide prevention media outreach  campaign, which hindered its ability to oversee the campaign.

In April 2019, VA implemented one of the recommendations by  providing a new oversight plan for its suicide prevention media  outreach campaign. It plans to implement the remaining  recommendation by working with communications experts to  develop metrics, targets, and an evaluation strategy to improve its  outreach efforts.

In April 2019, we reported that VHA’s appraisal process for  assessing medical center director performance relies heavily on  medical center performance information. VHA designed the  Strategic Analytics for Improvement and Learning (SAIL) system  to provide internal benchmarking of medical center performance  and to promote high quality health care delivery across its system  of regional networks and medical centers. SAIL was evaluated in  2014 and 2015 by VHA and an external contractor, respectively,  but VHA has not assessed the recommendations from those  evaluations, or taken action on them. The evaluations, which  found issues related to the validity and reliability of SAIL and its  ratings for measuring performance and fostering accountability,  together included more than 40 recommendations for  improvement.

Without ensuring that the recommendations resulting from these  previous evaluations are assessed and implemented as  appropriate, the identified deficiencies may not be adequately  resolved, and VHA’s ability to hold officials accountable for taking  the necessary actions may be diminished. VA concurred with the  two recommendations we made to address these findings, both of  which remain open.

Information technology challenges. Since our 2017 High-Risk Report,  ratings for one criterion regressed, one improved, and three remain  unchanged this area of concern as of March 2019.

Leadership commitment: not met. In March 2019, the rating for this  criterion declined to not met. In January 2019, the Senate confirmed a  new VA Chief Information Officer (CIO). This is the fourth official to  lead VA’s IT organization since our 2017 High-Risk Report, and the  frequent turnover in this position raises concerns about VA’s ability to  address the department’s IT challenges.

Capacity: not met. In May 2018, VA awarded a contract to acquire the  same commercial electronic health record system as the Department  of Defense (DOD). However, VA is early in the transition and its  actions are ongoing. Additionally, VA has developed a strategy for  decommissioning its legacy IT systems, which are tying up funds that  could be reallocated for new technology to enable improved veteran  care, but has made limited progress in implementing this effort.

Action plan: partially met. In March 2019, the rating for this criterion  improved to partially met. In 2018, VA conducted an analysis to  identify the root causes of IT challenges, which informed the goals in  its action plan. However, VA’s action plan contained significant  information gaps, including missing interim milestone dates. These  information gaps raise questions about VA’s commitment to  addressing IT-related root causes and need to be addressed before  we can consider this criterion met.

Monitoring: not met. The March 2018 action plan lacked specific  metrics and mechanisms for assessing and reporting progress.

Demonstrating progress: not met. Our work continues to indicate VA  is not yet able to show progress in this area. Since its 2015 high-risk  designation, we have made 14 new recommendations in this area, 12  of which were made since our 2017 report was issued. For example:  In June 2017, to address deficiencies we found related to VA’s  pharmacy system, we recommended that VA take six actions to  provide clinicians and pharmacists with improved tools to support  pharmacy services to veterans and reduce risks to patient safety.  This included assessing the extent to which the interoperability of  VA and DOD’s pharmacy systems impacts transitioning service  members. VA generally concurred with these recommendations,  all of which remain open.

In April 2019, we testified that from 2001 through 2018, VA  pursued three efforts to modernize its health information system— the Veterans Health Information Systems and Technology  Architecture (VistA). (See Fig. 2.) However, these efforts resulted  in high costs, created challenges ensuring the interoperability of  health data, and ultimately did not result in a modernized VistA.  Specifically, in December 2017, we reported that VA obligated  over $1.1 billion for contracts with 138 contractors during fiscal  years 2011 through 2016 for two modernization initiatives, an  Integrated Electronic Health Record program with the DOD and  VistA Evolution. We have ongoing work that examines the cost to  VA of VistA and the department’s actions to transition from VistA  to a new electronic health record system.

Regarding the department’s most recent effort, the Electronic  Health Record Modernization, we testified in April 2019 that the  governance plan for this program was not fully defined, which  could jeopardize its fourth attempt to modernize its electronic  health record system. VA plans to implement the same electronic  health record system the DOD is currently deploying. The new  system is intended to be the authoritative source of clinical data to  support improved health, patient safety, and quality of care  provided by VA.

VA has not fully implemented our priority recommendation calling  for the department to define the role of the Interagency Program  Office in the governance plans for acquisition of the department’s  new electronic health record system. VA concurred with this  recommendation and reported that the Joint Executive Committee,  a joint governance body, approved a role for the Interagency  Program Office, but as of April 2019 VA has yet to provide us with  documentation of this development.

We also testified in April 2019 that VA has not yet fully addressed  the recommendation we made in September 2014 to expedite the  process for identifying and implementing an IT system for the  Family Caregiver Program. We reported in September 2014 that  the Family Caregiver Program, which was established to support  family caregivers of seriously injured post-9/11 veterans, has not  been supported by an effective IT system. Specifically, we  reported that, due to limitations with the system, the program  office did not have ready access to the types of workload data that  would allow it to routinely monitor workload problems created by  the program. Without such information, the program’s workload  issues could persist and impact the quality and scope of caregiver  services, and ultimately the services that veterans receive.

VA concurred with our recommendation and subsequently began  taking steps to implement a replacement system. However, the  department has encountered delays and reported recently  initiating an effort to implement a new IT system to support the  program based on existing commercially available software. We  have ongoing work to evaluate VA’s effort to acquire a new IT  system to support the Family Caregiver Program.

Inadequate training for VA staff. Since our 2017 High-Risk Report,  ratings for one criterion improved and four remain unchanged for this area  of concern as of March 2019.

Leadership commitment: not met. VA officials have reported progress  in establishing a process to develop an enterprise-wide annual  training plan to better ensure that VA staff are adequately trained to  provide high-quality care to veterans. However, the actions necessary  to complete and implement this training plan are not reflected in VA’s  March 2018 action plan for the training area of concern, raising  questions about the process through which it will be developed. The  lack of progress in setting clear goals for improving training  demonstrates that VA lacks leadership commitment to address our  concerns in this area.

Capacity: not met. VA has created working groups and task forces— such as the Learning Organization Transformation Subcommittee in  the National Leadership Council—with specific responsibilities.  However, VA’s ability to demonstrate capacity is limited because,  according to VA’s March 2018 action plan, the department relies on  external contractor support services to meet training goals.

Action plan: partially met. In March 2019, the rating for this criterion  improved to partially met. VA completed a root cause analysis for  training deficiencies, which informed the goals underlying its action  plan. However, the action plan continues to have deficiencies  identified in 2017. For example, not all goal descriptions correspond to  planned actions and the action plan lacks detail about how and which  data will be collected to assess progress.

Demonstrated progress: not met. Our work continues to indicate that  VA is not yet able to show progress in this area. Since its 2015  designation, we have made 11 new recommendations in this area of  concern, 3 of which were made since our 2017 report was issued. For  example, in April 2018 we reported that, while the department has  recommended training for patient advocates—staff members who  receive and document feedback from veterans or their  representatives—it has not developed an approach to routinely  assess their training needs or monitored training completion. The  failure to conduct these activities increases VA’s risk that staff may  not be adequately trained to advocate on behalf of veterans. As a  result, we recommended VHA develop an approach to routinely  assess training needs and monitor training completion. VA concurred  with our recommendations, which remain open.

Unclear resource needs and allocation priorities. Since our 2017  High-Risk Report, ratings for one criterion improved and four remain  unchanged for this area of concern as of March 2019.

Leadership commitment: partially met. In December 2017, a VA Chief  Financial Officer (CFO) was confirmed after the department spent  over 2.5 years under an interim CFO. In addition, VA is in the process  of establishing a new office to estimate workforce resource  requirements.

Capacity: not met. VA has established functions intended to inform  cost analyses of major VA initiatives, including a new financial  management process to replace its outdated financial systems.  However, it is unclear in its action plan the extent to which VA has  identified the resources needed to establish and maintain these  functions.

Action plan: partially met. In March 2019, the rating for this criterion  improved to partially met. Since our 2017 High-Risk Report, VA  conducted a root cause analysis of this area of concern. However,  VA’s action plan lacks metrics for monitoring progress and does not  include all of VA’s ongoing actions, such as efforts to assess current  and future regional demand for veterans’ health care services.

Monitoring: not met. Since VA’s action plan lacks specific metrics and  mechanisms for assessing and reporting progress, it is not clear how  VA is monitoring its progress.

Demonstrating progress: not met. Our work continues to indicate VA  is not yet able to show progress in this area. Since its 2015  designation, we have made 16 new recommendations in this area of  concern, 10 of which were made since our 2017 report. For example:  In May 2017, we reported identifying several limitations with VA’s  clinical productivity metrics and statistical models for tracking  clinical efficiency; this limits VA’s ability to assess whether  resources are being used effectively to serve veterans.  Specifically, we found that productivity metrics may not account  for all providers or clinical services, reflect the intensity of clinical  workload, and reflect providers’ clinical staffing levels. Additionally,  we found that efficiency models may also be adversely affected by  inaccurate workload and staffing data. As a result, VA cannot  systematically identify best practices to address low productivity  and inefficiency as well as determine the factors VA medical  centers commonly identify as contributing to low productivity and  inefficiency.

We made four recommendations to address these findings; three  of which VA implemented in the spring of 2018 by improving  productivity metrics and staffing and workload data. To implement  the remaining recommendation, VA should establish a process to  oversee medical centers’ plans for addressing low clinical  productivity and inefficiency.

In August 2018 we reported that VA medical centers face  challenges operating their Sterile Processing Services programs— notably, addressing workforce needs, such as lengthy hiring time  frames and limited pay and professional growth potential. VHA’s  Sterile Processing Services workforce challenges pose a potential  risk to VA medical centers’ ability to ensure access to sterilized  medical equipment. Until VHA examines these workforce needs,  VHA won’t know whether or to what extent the reported  challenges adversely affect VA medical centers’ ability to  effectively operate their Sterile Processing Services programs and  ensure access to safe care for veterans.

We recommended that VA examine workforce needs and take  action based on this assessment, as appropriate. VA concurred  with this recommendation, which remains open.

VA Acquisition Management Was Added to GAO’s High-Risk List in 2019

In light of numerous contracting challenges that we have identified, and  given the significant investment in resources to fulfill its critical mission of  serving veterans, we added VA acquisition management as a new high- risk area in 2019. VA has one of the most significant acquisition  functions in the federal government, both in dollar amount of obligations  and number of contract actions. Specifically, about a third of VA’s  discretionary budget in fiscal year 2018, or about $27 billion, has been  used to contract for goods and services.

We have identified challenges in the following areas of concern related to  VA’s acquisition management: (1) outdated acquisition regulations and  policies; (2) lack of an effective medical supplies procurement strategy;  (3) inadequate acquisition training; (4) contracting officer workload  challenges; (5) lack of reliable data systems; (6) limited contract oversight  and incomplete contract file documentation; and (7) leadership instability.

Outdated acquisition regulations and policies. VA’s procurement  policies have historically been outdated, disjointed, and difficult for  contracting officers to use. In September 2016, we reported that (1) the  acquisition regulations contracting officers currently follow have not been  fully updated since 2008 and (2) VA had been working on completing a  comprehensive revision of its acquisition regulations since 2011.

VA’s delay in updating this fundamental source of policy has impeded the  ability of contracting officers to effectively carry out their duties. We  recommended in September 2016 that VA identify measures to expedite  the revision of its acquisition regulations and clarify what policies are  currently in effect. VA concurred with this priority recommendation and, as  of January 2019, had rescinded or re-issued updated policy memoranda  for all information letters, which VA previously used to provide guidance  that was temporary in nature.

VA has also made some progress in updating its acquisition regulations,  but more work remains to be done over the next several years. As of April  2019, VA reports that 15 of the 41 parts in its acquisition regulations  update were published as final rules, 10 were issued as proposed rules  for public comment, and the remainder are at an earlier stage of the  rulemaking process. All parts are scheduled to be out for public comment  by March 2020, but the final rules are not expected to be published until  April 2021.

Lack of an effective medical supplies procurement strategy. VA’s  program for purchasing medical supplies has not been effectively  executed, nor is it in line with practices at leading hospitals. To support  more efficient purchasing of medical supplies for its 172 medical centers  that serve the needs of about 9 million veterans, VA launched the Medical  Surgical Prime Vendor-Next Generation (MSPV-NG) program in  December 2016. MSPV-NG was part of VA’s overall effort to transform its  supply chain and achieve $150 million in cost avoidance.

In November 2017, we reported that VA’s approach to developing its  catalog of supplies was rushed and lacked key stakeholder involvement  and buy-in. It also relied on establishing non-competitive blanket  purchase agreements for the overwhelming majority of products, resulting  in low utilization by medical centers. VA had set a target that medical  centers would order 40 percent of their supplies from the MSPV-NG  catalog, but utilization rates were below this target with a nationwide  average utilization rate across medical centers of about 24 percent as of  May 2017. This low utilization adversely affected VA’s ability to achieve  its cost avoidance goal.

We recommended in November 2017 that VA develop, document, and  communicate to stakeholders an overarching strategy for the program.  VA concurred with this priority recommendation and is developing  strategies to address it. First, in February 2019, VA developed and  documented a new, overarching acquisition strategy for its Medical  Surgical Prime Vendor (MSPV) program, and has begun the process of  communicating it to key stakeholders, including clinical and logistics staff.  Further, VA is developing a separate strategy to involve clinicians in  developing requirements with plans to complete a pre-pilot of this strategy  by September 2019. In response to a congressional request to assess  these and other program changes, we recently began a review of VA’s  MSPV program.

Inadequate acquisition training. VA acquisition training, at times, has  not been comprehensive nor provided to staff that could benefit from it. A  2006 statute required, and a 2016 Supreme Court decision  (Kingdomware Technologies, Inc. v. United States) reaffirmed, that VA is  to give preference to veteran-owned small businesses when competitively  awarding contracts—a program known as Veterans First. In September  2018, we reported that training on VA’s Veterans First policy did not  address some of its more challenging aspects. For example, many of the  contracting officers we interviewed were uncertain about how to balance  the preference for veteran-owned small businesses with fair and  reasonable price determinations when lower prices might be found on the  open market.

In addition, VA provided several installments of online training sessions  on the Veterans First policy to contracting officers but did not make them  mandatory. As a result, only 52 percent of VA contacting officers  completed the follow-up training by the spring of 2018. We recommended  in September 2018 that VA provide more targeted training to contracting  officers on how to implement the Veterans First policy, particularly in the  area of making fair and reasonable price determinations, and assess  whether this training should be designated as mandatory. VA concurred,  and in April 2019, VA’s Chief Acquisition Officer (CAO) stated that VA is  taking steps to make this training mandatory. VA also reported that its  Acquisition Academy will provide Veterans First training to all contracting  staff on May 30, 2019.

Contracting officer workload challenges. The majority of our reviews  since 2015 have highlighted workload as a contributing factor to the  challenges that contracting officers face. Most recently, in September  2018, we reported that about 54 percent of surveyed VA contracting  officers said their workload was not reasonable and found that workload  stresses have exacerbated the struggles that they face implementing the  department’s Veterans First policy.

In addition, in September 2016, we reported that VHA contracting officers  processed a large number of small dollar-value actions to support medical  center operations, many of which involve emergency procurements of  routine items to support immediate patient care. Contracting officers and  the department’s Acting CAO told us that these frequent and urgent  small-dollar transactions reduce contracting officers’ efficiency and ability  to take a strategic view of VHA’s overarching procurement needs. We  reported in November 2017 that emergency procurements accounted for  approximately 20 percent—$1.9 billion—of VHA’s overall contract actions  in fiscal year 2016. Figure 3 shows the percent of VHA contract actions  designated as emergencies in fiscal year 2016 by each network  contracting office.

We recommended in November 2017 that VHA network contracting  offices work with medical centers to identify opportunities to more  strategically purchase goods and services frequently purchased on an  emergency basis. VA concurred with this recommendation and recently  offered to provide us with a demonstration of the supply chain dashboard  that VA uses to track items purchased on an emergency basis, which we  plan to attend by the end of May 2019. VA also agreed to conduct an  analysis of its purchase card spending to identify items that should be  purchased through its MSPV program. VA expects to complete this  analysis by July 2019. If implemented, this would allow for both greater  contracting officer efficiency and cost savings. For example, based on a  similar recommendation we made in 2012, VA began more systematically  employing strategic sourcing in FY 2013, and in subsequent fiscal years  reported about $10 billion in savings over a 5-year period.

Lack of reliable data systems. The lack of accurate data has been a  long-standing problem at VA. In September 2016, we reported that VA  had not integrated its contract management and accounting systems,  resulting in duplicative efforts on the part of contracting officers and  increased risk of errors. We and VA’s Inspector General each  recommended that VA perform data checks between the two systems. VA  concurred with this recommendation and some VA contracting  organizations have made efforts to address this risk. Further, VA reported  in March 2019, that it plans to adopt a new integrated financial and  contract management system, which it plans to install VA-wide over a 9- year period, with the final site receiving the system in 2027.

Limited contract oversight and incomplete contract file  documentation. VA has had difficulty ensuring that its contracts are  properly monitored and documented. In September 2018, we reported  that, although VA obligated $3.9 billion to veteran-owned small  businesses in fiscal year 2017, its contracting officers were not effectively  monitoring compliance with key aspects of the department’s Veterans  First policy, such as limits on subcontracting (which ensure that the goal  of the program—to promote opportunities for veteran-owned  businesses—is not undermined). In many cases, we found that clauses  requiring compliance were not included in the VA’s contracts and orders  with veteran businesses because the contracting officers either forgot to  include them or were unaware of the requirement.

The contracting officers we spoke with also said that they do not have  sufficient time or knowledge to conduct oversight. Through limited  reviews, VA has identified a number of violations that would warrant a  broader assessment of the fraud risks to the program. We recommended  in September 2018 that VA establish a mechanism to ensure that  mandatory subcontracting-related clauses be consistently incorporated  into set-aside contracts with veteran-owned businesses and that VA  conduct a fraud risk assessment for the Veterans First program. VA  concurred with these recommendations and is taking steps to implement  them. For example, VA reported in April 2019 that it had made  modifications to its electronic contract management system to ensure the  clauses would be included in set-aside contracts and anticipated  completing testing of the modifications in May 2019.

We also reported in September 2016 that a number of VA contract files  we reviewed were missing key documents, increasing the risk that key  processes and regulations were not followed. We recommended that  VA focus its internal compliance reviews to ensure that required contract  documents are properly prepared and documented. VA concurred with  this recommendation. Since then, VA has made policy changes that  revised its processes for compliance reviews of contract documentation.  We are currently following up with VA to obtain the results of its  compliance reviews to determine if VA has fully implemented this  recommendation.

Leadership instability. We have previously reported, most recently in  September 2018, that procurement leadership instability has made it  difficult for the VA to execute and monitor the implementation of key  acquisition programs and policies. For example, changes in senior  procurement leadership, including the CAO and VHA’s Chief  Procurement and Logistics Officer, occurred during the implementation of  MSPV-NG and similar instability in leadership affected the MSPV-NG  program office itself. Overall, the MSPV-NG program office has had four  directors, two of whom served in an acting capacity, since its inception in  2014.

To address this instability, we recommended in November 2017 that VA  appoint a non-career employee as the CAO and prioritize the hiring of the  MSPV-NG program office’s director position on a permanent basis. VA  concurred with these recommendations and implemented them in 2018.  Stable leadership should help bring consistent and much needed  direction to the MSPV-NG program, but we recently identified other areas  within the VA where sustained leadership is also needed. For instance, in  September 2018, we reported there have been six Acting Directors within  the past 2 and a half years within an oversight office that helps assess  whether VA is in compliance with aspects of its Veterans First policy.

Ratings for the VA Disability High-Risk Areas Either Remained Unchanged or Regressed in 2019

We designated improving and modernizing federal disability programs as  high risk in 2003. An estimated one in six working-age Americans  reported a disability in 2010. Many of these Americans need help finding  or retaining employment, or rely on cash benefits if they cannot work.  Three of the largest federal disability programs—one run by VA— disbursed about $270 billion in cash benefits to 21 million people with  disabilities in fiscal year 2017. However, federal disability programs,  including VA’s, struggle to meet their needs. In particular, VA struggles to  manage its disability claims workloads, and, when determining whether  individuals qualify for disability benefits, VA relies on outdated eligibility  criteria.

Managing disability claims workloads. Since our 2017 High-Risk  Report, our assessment of ratings for all five criteria remains unchanged  for this area of concern for VA as of March 2019.

Leadership commitment: met. VA has maintained leadership focus on  managing initial disability claims and appeals workloads through  various initiatives to improve benefits processing and reduce  backlogs. Enhancing and modernizing VA’s disability claims and  appeals processes are goals in its 2018–2024 strategic plan.

Capacity: partially met. VA has continued building the capacity to  process initial disability claims, such as using an electronic system to  distribute claims ready for decisions to available staff. On appeals, VA  is reforming its process, onboarding hundreds of new staff, and  implementing new technology. However, as we reported in March  2018, VA’s appeals plan does not provide reasonable assurance that  it will have the capacity to implement the new process and manage  risks. VA agreed with our recommendation to better assess risks  associated with appeals reform and took some steps to address risks,  such as limited testing of the new process. However, as of April 2019  VA has not fully addressed this recommendation. For example, VA  has not developed plans to fully address risks, such as veterans  choosing more resource-intensive options at higher rates than  expected.

Action plan: partially met. VA continues to implement plans to reduce  the initial disability claims backlog. For appeals reform, VA submitted  its appeals plan in November 2017 and provided several progress  reports throughout 2018. In March 2018, we reported that VA’s plan  for implementing a new disability appeals process did not explain how  VA would assess the new process compared to the legacy process,  and did not fully address risks associated with implementing a new  process.

We made two recommendations to improve VA’s disability benefit  appeals process, including that VA (1) clearly articulate in its appeals  plan how it will monitor and assess the new appeals process  compared to the legacy process, and (2) ensure that its appeals plan  more fully addresses related risks, given the uncertainties associated  with implementing a new process. As of April 2019, VA has taken  actions to address our recommendations, although key steps remain.  For example, VA has not fully articulated detailed steps and time  frames for assessing the relative performance of the new and legacy  appeals processes. Without this assessment, VA cannot determine  the extent to which the new process will achieve final resolution of  veterans’ appeals sooner than the legacy process.

Monitoring: partially met. VA monitors the timeliness of initial disability  claims and legacy appeals, and has set timeliness goals for some, but  not all, of the appeal options under the new process. VA’s plans also  signal how it intends to monitor the allocation of staff for concurrent  workloads in its legacy and new appeals processes. However, as of  April 2019, VA has yet to specify a complete set of balanced goals for  monitoring the new and legacy appeals processes (including timely  and accurate processing of appeals while ensuring veteran  satisfaction).

Demonstrated progress: partially met. VA reported it reduced the  backlog of initial disability claims from 611,000 in March 2013 to about  81,000 at the end of fiscal year 2018. However, VA’s Inspector  General reported in September 2018 that VA overstated its  performance by only reporting about 79 percent of the backlog. For  appeals, VA addressed some gaps in its plan for implementing  appeals reform, in accordance with our 2017 and 2018  recommendations, and has prioritized processing of legacy appeals.  However, as of September 2018, VA still had a backlog of about  396,000 legacy appeals.

Updating disability benefit eligibility criteria. Since our 2017 High-Risk  Report, VA’s ratings for the action plan and monitoring criteria regressed  while the other three remain unchanged as of March 2019.

Leadership commitment: met. VA has sustained leadership focus on  updating its Veterans Affairs Schedule for Rating Disabilities  (VASRD)—used to assign degree of disability and compensation  levels for veterans with military service-connected injuries or  conditions—to reflect advances in medicine and labor market  changes.

Capacity: partially met. In August 2017, VA officials told us that it had  taken actions to hire more staff for the regulations updates and  leverage outside researchers to evaluate veterans’ loss of earnings in  the current economy. However, as of September 2018, the agency  was still working to hire these staff. Moreover, VA’s current earnings  loss study covers only 8 of over 900 diagnostic codes and 2 of 15  body systems. VA needs to continue its current hiring and earnings  loss planning efforts to ensure it has the capacity to comprehensively  update the VASRD.

Action plan: partially met. In March 2019, the rating for this criterion  declined to partially met. As of April 2019, VA’s efforts to update the  VASRD included new plans to conduct earnings loss studies.  Veterans Benefits Administration officials stated they completed a  study for eight diagnostic codes under two body systems, and the  agency is determining whether its current approach for evaluating  earnings loss is applicable to updating other diagnostic codes.  However, we lowered VA’s prior rating of met to partially met because  its latest August 2018 updated plan, issued since our 2017 High-Risk  Report, provided limited detail on key planned activities, potentially  jeopardizing its third attempt at modernization over the past decade.  For example, VA’s plans do not indicate how and when VA will assess  the applicability of its current approach, and does not include plans for  updating earnings loss information for the remaining diagnostic codes  and body systems.

Monitoring: partially met. In March 2019, the rating for this criterion  declined to partially met. According to VA officials, VA continues to  track its progress toward finishing the medical updates by fiscal year  2020 and has updated its project plan to reflect delayed time frames.  However, we lowered VA’s prior rating for this criterion from met to  partially met because VA’s plans have changed since our last update,  and although it is conducting a study to update earnings loss  information for some diagnostic codes and body systems, its plan  does not include timetables for monitoring these or future updates to  earnings loss information.

Demonstrated progress: partially met. VA reported that as of  December 2018, it promulgated final regulations for 6 of 15 body  systems, proposed regulations for 2, and is reviewing draft regulations  for the remaining 7. However, VA has fallen about 4 years behind in  its efforts to fully update the VASRD and has not completed earnings  loss updates.

Other Government- Wide High-Risk Areas Have Implications for VA Operations

Several other government-wide high-risk areas include VA and its  operations. These areas include (1) improving the management of IT  acquisitions and operations, (2) strategic human capital management, (3)  managing federal real property, and (3) ensuring the cybersecurity of the  nation.

Improving the management of IT acquisitions and operations.  The executive branch has undertaken numerous initiatives to better  manage the more than $90 billion that is annually invested in IT  across the government. However, our work shows that federal IT  investments, including those made by VA, too frequently fail or incur  cost overruns and schedule slippages while contributing little to  mission-related outcomes. Thus, in 2015, we added improving the  management of IT acquisitions and operations to the High-Risk List.  To address the portion of the high-risk area for which it is responsible,  VA should, among other things, implement our past recommendations  on improving IT workforce planning practices and establishing action  plans to modernize or replace obsolete IT investments.

In August 2018, for example, we found that VA’s policies did not fully  address the role of its CIO consistent with federal laws and guidance  in the areas of IT workforce, IT strategic plan, IT budgeting, and IT  investment management. Until VA fully addresses the role of the CIO  in all of its policies, it will be limited in addressing longstanding IT  management challenges. We recommended that VA’s IT  management policies address the role of the CIO for key  responsibilities in the four areas we identified. VA concurred with this  recommendation, which remains open.

Strategic human capital management. This area was added to our  High-Risk List in 2001 and continues to be at risk today because  mission-critical skills gaps both within federal agencies and across the  federal workforce are impeding the government from cost-effectively  serving the public and achieving results. As of December 2018, VA  reported an overall vacancy rate of 11 percent at VHA medical  facilities, including vacancies of over 24,000 medical and dental  positions and around 900 human resource positions. Also, with 32  percent of the VA workforce eligible to retire in the next 5 fiscal years,  VA must address these mission-critical skill gaps and vacancies that  we continue to identify in our work.

In December 2016, for example, we found that VHA’s limited human  resources capacity combined with weak internal control practices has  undermined VHA’s human resources operations and its ability to  improve delivery of health care services to veterans. Further, VHA is  challenged by inefficiencies in its performance management  processes, including the lack of a performance appraisal IT system,  which prevents it from identifying trends and opportunities for  improvement. VHA can better support medical centers by establishing  clear lines of accountability for engagement efforts, collecting and  leveraging leading practices, and addressing barriers to improving  engagement. We made three recommendations to VA to improve its  performance management system. VA partially concurred with these  recommendations, which remain open.

Managing federal real property. Since federal real property  management was placed on the High-Risk List in 2003, the federal  government has given high-level attention to this issue. However,  federal agencies, including VA, continue to face long-standing  challenges, including (1) effectively disposing of excess and  underutilized property, (2) relying too heavily on leasing, (3) collecting  reliable real property data for decision making, and (4) protecting  federal facilities.

In January 2019, for example, we reported that VA has enhanced its  data collection on vacant properties, but the agency does not collect  information needed to track and monitor disposal projects at the  headquarters level. Without information on the status of disposal  projects, VA cannot readily track and monitor its progress and identify  areas where facilities’ managers may need additional assistance. As a  result, we recommended that VA improve its procedures related to  disposal of excess and underutilized property to help local facility  managers plan, implement, and execute projects to dispose of those  properties. In addition, VA should collect key information on the status  of these disposal projects to help manage the process and identify  areas where management attention is needed. VA concurred with the  three recommendations we made related to these findings, all of  which remain open.

Ensuring the cybersecurity of the nation. We have designated  information security as a government-wide high-risk area since 1997.  We expanded this high-risk area in 2003 to include protection of  critical cyber infrastructure and, in 2015, to include protecting the  privacy of personally identifiable information. Federal agencies and  our nation’s critical infrastructures are dependent on IT systems and  electronic data to carry out operations and to process, maintain, and  report essential information. The security of these systems and data is  vital to public confidence and national security, prosperity, and well- being. Because many of these systems contain vast amounts of  personally identifiable information, agencies must protect the  confidentiality, integrity, and availability of this information. In addition,  they must effectively respond to data breaches and security incidents  when they occur.

In May 2016, for example, we found that VA had developed a risk  assessment for their selected high-risk systems, but had not always  effectively implemented access controls. These control weaknesses  included those protecting system boundaries, identifying and  authenticating users, authorizing access needed to perform job duties,  and auditing and monitoring system activities. Weaknesses also  existed in patching known software vulnerabilities and planning for  contingencies. An underlying reason for these weaknesses is that the  key elements of information security programs had not been fully  implemented. VA concurred with all of our five recommendations  related to improving its cybersecurity controls. However, two  recommendations—which specifically call for the department to  conduct security control assessments and develop a continuous  monitoring strategy—remain open.

In November 2018, the department’s inspector general reported that  VA had made progress in developing, documenting, and distributing  policies and procedures to support its security program, but identified  IT security as a major management challenge due to the persistence  of deficiencies. For example, the inspector general identified  significant deficiencies related to access, configuration management,  change management, and service continuity. In addition, VA’s  financial statement auditor reported deficiencies in the department’s  IT security controls as a material weakness for financial reporting  purposes. The auditor has reported IT security controls as a material  weakness for more than 10 years.

VA’s Transformational Efforts Are Ongoing

Since his confirmation in July 2018, Secretary Wilkie has demonstrated  his commitment to addressing the department’s high-risk designations by,  among other things, creating an office to direct an integrated approach for  high-risk concerns and communicating to VA leaders the importance of  addressing our recommendations. Additionally, VA leadership has also  encouraged senior leaders to meet with GAO subject matter experts from  acquisition, performance, human capital, and financial management,  among other areas, to discuss leading practices and VA’s modernization  efforts. In addition, senior leaders from GAO and VA meet regularly to  identify and address the root causes of high-risk issues, and discuss the  status of our recommendations and VA’s efforts to address them.

Fully addressing these issues will require sustained leadership attention  on these issues as well as leadership stability—something that VA has  not had in recent years. In particular, in the 2 years prior to Secretary  Wilkie’s confirmation, VA experienced leadership instability with senior- level vacancies in key positions, including the Under Secretary for Health,  CIO, and Deputy Under Secretary for Health for Community Care.

In addition to sustained leadership, VA must develop action plans for  addressing the high-risk issues. As noted earlier, VA officials have  stated that they are currently working to address our high-risk concerns  through the implementation of the VHA Plan for Modernization. The plan,  which identifies high-level implementation targets through 2020, provides  a framework to address the Secretary’s four priorities: (1) improving  training and customer service; (2) implementing the VA MISSION Act and  improving veterans’ access to care; (3) connecting the VA’s electronic  health records system to the DOD’s to ensure a continuum of care for  transitioning service members; and (4) transforming VA’s business  systems. As part of this effort, VA is focused on “10 lanes of effort,”  including transitioning to the same electronic health record system the  DOD is currently deploying, and transforming its business systems— including its human resource management, finance and acquisition  management, and supply chain functions—to improve the quality and  availability of services at VA medical centers.

In closing, VA has launched several significant efforts to address many of  the underlying management challenges it faces, including transforming its  electronic health record and financial management systems, updating its  medical surgical prime vendor program, and implementing the VA  MISSION Act. Any one of these efforts would be a significant undertaking  for an agency given their scope, time frames, and costs, and VA is  attempting to concurrently implement them. If successful, these efforts  could be transformative for VA. Sustained congressional oversight of VA’s  efforts will also be needed. We stand ready to support this oversight  through continued monitoring of VA’s efforts as it ensures that the  modernization efforts integrate and address many of the concerns that led  to the designation of various VA areas as high risk.

Chairman Pappas, Ranking Member Bergman, and Members of the  Subcommittee, this concludes my statement. I would be pleased to  respond to any questions you may have.

For further information about this statement, please contact Debra A.  Draper at (202) 512-7114 or draperd@gao.gov or Sharon M. M. Silas at  (202) 512-7114 or silass@gao.gov for VHA health care issues; Shelby S. Oakley at (202) 512-4841 or oakleys@gao.gov for VA acquisition management issues; or Elizabeth H. Curda at (202) 512-7215 or curdae@gao.gov for VA disability claims issues. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this statement. Key contributors to this statement were Ann Tynan, Mark Bird, David Bruno, Keith Cunningham, Cathleen Hamann, Lisa Gardner, Steven Lozano, William Reinsberg, Maria Storts, Jamie Whitcomb, Amanda Cherrin (Analyst-in-Charge), Kate Tussey, Jeff Hartnett, and Teague Lyons. Vikki Porter and Jacquelyn Hamilton also contributed to this statement.

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The Department of Veterans Affairs is in need of transformation and should address longstanding management challenges that we currently highlight on our High Risk List.

Since 2000, we have made more than 1,200 recommendations to improve management and operations at VA, and VA has implemented approximately 70% of them. Implementing the remaining recommendations could significantly improve VA’s operations and improve the care provided to the nation’s veterans.

In this testimony, we highlighted the need for VA to better manage risk to improve health care, focus on acquisition management, and modernize federal disability programs.