May212013
Hearing Transcript on The U.S. Department of Veterans Affairs Fiscal Year 2009 Budget–Office of Inspector General and Office of Information and Technology.
|
U.S. DEPARTMENT OF VETERANS AFFAIRS FISCAL YEAR 2009 BUDGET—OFFICE OF INSPECTOR GENERAL AND OFFICE OF INFORMATION AND TECHNOLOGY
HEARING BEFORE THE SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS OF THE COMMITTEE ON VETERANS' AFFAIRS U.S. HOUSE OF REPRESENTATIVES ONE HUNDRED TENTH CONGRESS SECOND SESSION FEBRUARY 13, 2008 SERIAL No. 110-69 Printed for the use of the Committee on Veterans' Affairs
U.S. GOVERNMENT PRINTING OFFICE For sale by the Superintendent of Documents, U.S. Government Printing Office
|
|
COMMITTEE ON VETERANS' AFFAIRS |
|||||
|
|
CORRINE BROWN, Florida |
STEVE BUYER, Indiana, Ranking |
|
||
|
|
|||||
|
|
Malcom A. Shorter, Staff Director SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS
Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public hearing records of the Committee on Veterans' Affairs are also published in electronic form. The printed hearing record remains the official version. Because electronic submissions are used to prepare both printed and electronic versions of the hearing record, the process of converting between various electronic formats may introduce unintentional errors or omissions. Such occurrences are inherent in the current publication process and should diminish as the process is further refined. |
|
|||
C O N T E N T S
February 13, 2008
U.S. Department of Veterans Affairs Fiscal Year 2009 Budget—Office of Inspector General and Office of Information and Technology
OPENING STATEMENTS
Chairman Harry E. Mitchell
Prepared statement of Chairman Mitchell
Hon. Ginny Brown-Waite, Ranking Republican Member
Prepared statement of Congresswoman Brown-Waite
Hon. Timothy J. Walz
WITNESSES
U.S. Department of Veterans Affairs:
Jon A. Wooditch, Deputy Inspector General, Office of Inspector General
Prepared statement of Mr. Wooditch
Hon. Robert T. Howard, Assistant Secretary for Information and Technology and Chief Information Officer, Office of Information and Technology
Prepared statement of Mr. Howard
U.S. Government Accountability Office, Valerie C. Melvin, Director, Human Capital and Management Information Systems Issues
Prepared statement of Ms. Melvin
MATERIAL SUBMITTED FOR THE RECORD
U.S. DEPARTMENT OF VETERANS AFFAIRS FISCAL YEAR 2009 BUDGET—OFFICE OF INSPECTOR GENERAL AND OFFICE OF INFORMATION AND TECHNOLOGY
Wednesday, February 13, 2008
U. S. House of Representatives,
Subcommittee on Oversight and Investigations,
Committee on Veterans' Affairs,
Washington, DC.
The Subcommittee met, pursuant to notice, at 2:34 p.m., in Room 210, Cannon House Office Building, Hon. Harry E. Mitchell [Chairman of the Subcommittee] presiding.
Present: Representatives Mitchell, Space, Walz, and Brown-Waite.
OPENING STATEMENT OF CHAIRMAN MITCHELL
Mr. MITCHELL. Good afternoon. Welcome to the hearing on the proposed budget for the U.S. Department of Veterans Affairs (VA) Office of Inspector General (OIG) and the proposed budget for the VA Office of Information and Technology (OI&T) . This is the Subcommittee on Oversight and Investigations.
This hearing will come to order. We are here today to examine the President's proposed budgets for fiscal year 2009 for the Inspector General of the VA and the VA's Office of Information and Technology. These budgets are not related, but are equally important.
Our first panel will address the OIG's proposed budget. The President's budget proposes $76 million for the OIG for the fiscal year 2009, which is $4 million below their fiscal year 2008 budget. I believe this cut is absolutely irresponsible.
The Inspector General is an essential, independent, nonpartisan check against waste, fraud, and abuse and is one of the best ways of ensuring accountability at the VA during time of war.
This reduction would result in a ten percent cut in OIG staffing which would weaken the VA's watchdog when hundreds of thousands of veterans need VA to make improvements.
This Subcommittee held a hearing just two weeks ago where Dr. Daigh, one of the OIG witnesses today, and his team in the Office of Healthcare Inspections testified to the shocking and tragic events at the VA Hospital in Marion, Illinois.
The VA Medical Inspector, Dr. Daigh, and his group, found nine patients who died in the past two years as a result of substandard care.
I will be asking Dr. Daigh what additional resources are needed to look at the VA Hospital system to make sure there are no more Marions out there. I know he does not have those resources now and the President's budget would reduce the OIG even further.
The Federal Government has 25 statutory mandated Inspector Generals. If you compare the number of OIG employees with the number of employees in the Agency, the VA has the lowest ratio in the entire government. The same comparison of budget for the OIG and budget for the Agency puts the VA near the bottom.
Unfortunately, the President's proposed cut does not account for the OIG's return on investment. In fiscal year 2007, the VA's Inspector General had hard dollar recoveries, money taken from illegal activities and placed into the United States Treasury, of $237.9 million. Return on investment just on hard dollars recovery was more than three to one.
The OIG also saved over $300 million by cutting off benefits of payments to fugitive felons, that is people receiving benefits who have outstanding arrest warrants for felonies.
Our second and third panels will address the President's budget proposal for VA Office of Information and Technology. Congress has mandated a separate budget line so that the amounts and purposes of information technology (IT) expenditures are visible and can be evaluated.
The VA is doing a better job of categorizing its IT expenditures, but there is more work to be done. In order for Congress to provide effective oversight, IT costs must be allocated to costs that are as precise and accurate as possible.
One specific topic the Subcommittee will explore is the funding for IT resources to support the innovation and creativity of VA's healthcare providers. The Office of Information and Technology has set aside $8 million this year to provide IT support to the clinicians in the field to continue to improve VistA. Unfortunately, there is nothing set aside for this in the President's proposed fiscal year 2009 budget.
I think this is a mistake. There are benefits to centralization of IT, but centralization has hurt the way VA personnel use new technology to take care of our veterans. VA must do all it can to preserve and promote the unique talents of its healthcare providers to innovate and to keep VistA and VA at the forefront of medical care.
Our veterans have fought for our freedom and the least we can do is provide adequate resources to ensure they receive the highest quality of care when they become veterans.
[The statement of Chairman Mitchell appears in the Appendix.]
Mr. MITCHELL. Before I recognize the Ranking Republican Member for her remarks, I would like to swear in our witnesses. I ask all the witnesses from all panels if they would please stand and raise your right hand.
[Witnesses sworn.]
Mr. MITCHELL. Thank you.
I now recognize Ms. Brown-Waite for her opening remarks.
OPENING STATEMENT OF HON. GINNY BROWN-WAITE
Ms. BROWN-WAITE. Thank you very much, Mr. Chairman.
I do not know about you, but it seems like the witnesses are so far away. It is not meant to be in an unfriendly manner. We would love to have you closer, but this happens to be the configuration of this room.
Mr. Chairman, last Thursday, the full Committee reviewed the entire budget for the Department of Veterans Affairs for fiscal year 2009. Today we will be focusing on two specific portions of that budget, namely the funding for the Office of Inspector General and the Office of Information and Technology over which this Subcommittee has direct oversight.
Over the past year, I found that the information reported to our Committee by the Office of Inspector General is very useful in providing this Subcommittee with the information that we need to conduct our oversight responsibilities.
For fiscal year 2008, the OIG was provided with sufficient funding to plus-up their full-time equivalent (FTE) staff to 488 FTEs, which was an addition of 48 new staff members. I understand that the OIG is in the process of hiring these staff and they are to be assigned to several new high-profile audits, healthcare inspections, and criminal investigations.
However, I am greatly concerned that the fiscal year 2009 budget that was proposed reduces the FTE staff by 48, same number we just plussed-up. I hope to hear from the OIG as to how this reduction in staff funding will affect the continuation of the audits already in process and the future oversight and investigations conducted by the OIG.
During this Subcommittee's January 29th hearing on patient safety, I raised concerns about a possible reduction in the budget for the Office of Inspector General. As I stated at that hearing, we, Members of this Committee, and Members of Congress, have an obligation to ensure that the funding for the OIG is not only maintained at the 2008 level, but that we work together to provide additional funds for fiscal year 2009.
The OIG's Combined Assessment Program, also known as CAP review, is an unmatchable cyclical audit that surveys patient safety, infrastructure safety, management inefficiencies, and also allows the VA to keep its finger on the pulse of the VA's health delivery system.
I was pleased to see that the President has requested a plus-up for the Office of Information and Technology. I know that the transition to a new centralized IT system has not always been smooth. But under the leadership of General Howard, it has moved forward and I hold high hopes that the kinks, bumps, and turf wars along the way will continue to be worked out. VA's centralized IT infrastructure has been a landmark decision that all other departments could only hope for.
I do, however, want to make certain that the funding Congress provides to VA for its OI&T operations will be managed wisely without unnecessary expenditures on IT systems that are stagnant and not moving forward.
We have often heard about the problems that plagued the systems in my own back yard like the CoreFLS $340 million debacle and the delays in moving off of Legacy IT systems.
With the centralization of funding to one officer such as Assistant Secretary Howard, I am hopeful that VA can move forward on the right track to provide systems that will be able to serve our Nation's veterans and give the American taxpayer the most bang for the tax dollars.
In closing, Mr. Chairman, I would like to again reiterate that I appreciate your holding this hearing so that we can review in more detail the complex nature of each of these budget lines in the Department of Veterans Affairs budget.
And with that, I yield back the balance of my time.
[The statement of Congresswoman Brown-Waite appears in the Appendix.]
Mr. MITCHELL. Thank you.
Mr. Walz?
OPENING STATEMENT OF HON. TIMOTHY J. WALZ
Mr. WALZ. Thank you, Mr. Chairman. And just briefly, I want to thank you, of course, for holding this hearing and for your passionate words on what it takes to make sure our veterans are receiving their care and to the Ranking Member who has been an absolutely sterling voice on these issues of making sure that we are not only providing the services, we are providing them in a cost-effective and timely manner.
And to each of you who are here today on all the panels, I say every time we are here, but I think it is important for us to all keep it in mind, we are all here with a single purpose and that is to provide the best quality of care we can to our veterans who serve this Nation. And we are partners in this.
As Members sitting up here, we lean on your expertise and your ability to help us figure that out. And our job is to help make sure that we are doing the job that we are asked to do as providing that oversight. So I truly thank you.
And I have also spoken passionately and many of you have testified before of the Office of Inspector General, for starters, that I am a big fan of this office. One is that it is absolutely critical in the ability for us to deliver and to manage what we are doing in such a large organization. We see you as partners in effectiveness and the return we get on our money from the OIG Office is one we should be very proud of.
So I would echo and associate myself with the words of both the Chairman and the Ranking Member that when we see the budget being cut in the OIG, we know that puts you in a very difficult position, if you are going to live with what you are given and still trying to carry out your job. Our job is to make sure, though, that we deliver that, deliver what you need.
And I think it is important for us to keep in mind, too, the President's budget is a suggestion. The Constitution clearly puts the authority for budgeting right here with the Members up here. Our goal is to work together. It is a different set of eyes. We want to make sure whatever we can do to deliver to you.
And a comment also on the integrity and the hard work of the IT, I, as a veteran, am concerned about this. When the 26 million letters were sent, I was one of those also. I do not want to diminish the concern that many veterans have, but I once again do think it is important to point out that progress has been made. And as the Ranking Member pointed out, too, we just want to make sure that we have a lot more of the successes and a lot less of the dead ends.
So with that, Mr. Chairman, I thank you and I really look forward to the testimony.
I do again want to thank you all for being here and the work you do for our veterans.
Mr. MITCHELL. Thank you.
At this time, I ask unanimous consent that all Members have five legislative days to submit a statement for the record. Hearing no objection, so ordered.
I want to welcome the first panel. And at this time, I would like to welcome Mr. Jon A. Wooditch, the Deputy Inspector General, to the witness table. Mr. Wooditch is accompanied by experts in the fields of healthcare, audits, and investigations.
Mr. Wooditch, if you would please introduce your team and then after that, you have five minutes to make your statement. Thank you.
STATEMENT OF JON A. WOODITCH, DEPUTY INSPECTOR GENERAL, OFFICE OF INSPECTOR GENERAL, U.S. DEPARTMENT OF VETERANS AFFAIRS; ACCOMPANIED BY JOHN D. DAIGH, M.D., CPA, ASSISTANT INSPECTOR GENERAL FOR HEALTHCARE INSPECTIONS, OFFICE OF INSPECTOR GENERAL; JAMES O’NEILL, ASSISTANT INSPECTOR GENERAL FOR INVESTIGATIONS, OFFICE OF INSPECTOR GENERAL; AND BELINDA FINN, ASSISTANT INSPECTOR GENERAL FOR AUDITING, OFFICE OF INSPECTOR GENERAL, U.S. DEPARTMENT OF VETERANS AFFAIRS
Mr. WOODITCH. Thank you very much. I appreciate the opportunity to take a moment to introduce those responsible for the OIG's accomplishments.
Belinda Finn over here to my far right conducts audits aimed at improving VA nationwide. During the past year, audit work presented before this Committee included outpatient waiting times, variances in disability compensation payments, and contracting deficiencies.
To my left is Dr. David Daigh. He conducts healthcare inspections to improve patient care. In addition to testifying before this Committee on quality management issues at the Salisbury Medical Center, he recently appeared, as Mr. Chairman mentioned, before this Committee to discuss patient deaths at Marion, Illinois.
Lastly, Jim O'Neill is to my right. His criminal and administrative investigative work on the data loss involving 26 million veterans and the more recent incident at the Birmingham Medical Center, has heightened awareness of protecting personally identifiable information throughout the entire Federal Government.
That is our senior management team, and I am very proud of them.
Now if I may start my statement. Mr. Chairman, Members of the Subcommittee, thank you for the opportunity to address the 2009 budget for the Inspector General.
A year ago, we testified before this Committee concerning our oversight of VA. Since then, we achieved over $820 million in monetary benefits for return on investment of $12.00 for every dollar spent. We issued 217 reports with over 800 recommendations for corrective action and completed over 1,100 criminal investigations. While we have accomplished much, much more remains to be done.
For fiscal year 2008, OIG funding is $80.5 million, which includes $7.9 million in emergency funding authorized by the President. This funding supports 488 FTE. We are very appreciative of this funding and we have launched an aggressive recruiting effort to fill these positions as soon as we can. For 2009, the budget submitted for the OIG is $76.5 million which supports 440 FTE.
I would now like to take a moment to highlight some of the key issues that we will focus on this year and in 2009. A primary focus of our work is on the quality of healthcare. We will review internal controls such as the peer review process to ensure they are functioning correctly. CAP reviews will be expanded to address credentialing and privileging and we will begin assessing clinical outcomes to ensure veterans are not exposed to excessive risk.
Veterans who have returned from current conflict experience two medical traumas with great frequency, traumatic brain injury (TBI) and post traumatic stress disorder (PTSD). We will review access, diagnoses, and treatment to identify any unmet clinical needs. We will initiate reviews of care provided at 1,000 outpatient clinics and Vet Centers.
For many veterans, especially those in rural areas, these facilities are their primary access to medical care. It is only through a review of this population can we ensure they are receiving quality care.
We believe the disparity between specialty medical care at large medical centers compared to small, rural facilities may place veterans at risk. We plan to devote attention to this issue through a focused nationwide review.
Budget and resource allocation are critical to meeting veterans' healthcare needs. We plan to review the resource allocation system that tracks demand and usage across VA to ensure equitable distribution of resources as veteran demographics change.
VA spends a significant amount of money on pharmaceuticals. We will review the effectiveness of internal controls to prevent loss and theft.
We will assess the timeliness and accuracy of processing benefit claims, especially in light of the increasing workload associated with Operation Iraqi Freedom/Operation Enduring Freedom veterans.
VA lacks an integrated system to safeguard and account for financial operations. We plan to review VA's efforts to replace existing legacy systems, which do not adequately support preparation of VA's consolidated financial statement.
We will expand our oversight of the systemic weaknesses that we have found and reported on of VA procurement and we will continue to follow-up on the continuing information and security control concerns identified in an our annual Federal Information Security Management Act (FISMA) audits.
In closing, we will always focus available resources on the most urgent issues. However, reports on issues such as those at the Marion Medical Center are examples of reactive work that were not planned for. These reviews are very labor intensive and require us to postpone and cancel other planned and ongoing priority work.
The VA is faced with evolving challenges. If the OIG is to remain an agent of positive change, our resources need to be commensurate with this challenge.
I thank you again for the opportunity to appear before this Committee. We are available now to answer your questions. Thank you.
[The statement of Mr. Wooditch appears in the Appendix.]
Mr. MITCHELL. Thank you.
I have a couple of questions. First, Mr. Wooditch, what impact would the $4 million cut in the OIG's budget that the President's budget proposes, how would this impact your operation and your ability to do your job?
Mr. WOODITCH. Well, the obvious impact of that cut is a loss of 48 positions. With this comes a corresponding reduction in the number of audits we can perform, the number of healthcare inspections, and the number of criminal investigations that we can perform.
This translates into less monetary benefits, fewer arrests and convictions, fewer report recommendations aimed at improving VA's programs and operations. Of particular concern is the fact that these 48 positions were given to us this year.
As I mentioned, we are in the process of filling them with experienced staff so they can hit the ground running. We are faced with the problem of having to hire these people only to lose them in the following year.
Staffing swings of this magnitude for an organization our size not only impacts employee morale and productivity, it also makes it extremely difficult to accomplish meaningful, strategic, and long-term planning and more importantly, it is very, very, very difficult to consider which high-priority projects will have to be suspended or canceled.
Mr. MITCHELL. Among other things, the OIG investigates fraud, waste, and abuse in the VA programs and contracts and recovers money by ways of fines and restitution.
Am I understanding that in 2007, the actual dollars that were deposited in the Treasury was $237.9 million? And the question is, how does this compare to the total annual budget for the Office of the OIG in 2007?
Mr. WOODITCH. As you mentioned, sir, the monetary benefits reported by the OIG are basically derived from three sources. First we have the dollar value of economic efficiencies associated with improvements in processes and productivity.
The second category includes savings generated by reducing erroneous payments.
Then last, as you mentioned, we have hard dollar recoveries that go directly back to either VA or to the U.S. Treasury. As you mentioned, these include fines, penalties, restitution, the civil judgments resulting from our criminal investigations. Importantly, it also reflects recoveries from contractors who have overcharged VA which we have identified through our post-award contract reviews.
For 2007, our overall return on investment, as I mentioned, was $12.00 for every dollar spent. Briefly I will break down these three categories.
Efficiencies generated by economic improvements return an investment of $1.60 for every dollar we spent. Reduced outlays, reduced erroneous payments generated $4.10 for every dollar we spent. I think the one that is really the most important concerning our cost benefit is that we have been able to return hard dollars back to the United States Government of $3.20 for every dollar we spent.
No matter how you slice it, the OIG has proven itself to not only a sound fiscal investment but one that has historically recovered more than its cost to operate.
Mr. MITCHELL. Thank you.
Dr. Daigh, you testified two weeks ago about the shocking and tragic situation at the VA Hospital in Marion, Illinois, where many patients died as a result of substandard care.
What resources would you need to conduct a system-wide investigation to ensure our veterans and the American public that there are no other Marions out there and do you have those resources now?
Dr. DAIGH. Sir, it is not possible to ensure that a Marion will not occur. I believe that if I had about 20 FTE more that I could significantly reduce the likelihood that those events would occur and that we could provide comfort and assurance that we will have done all we can to ensure that policies are followed appropriately with respect to the issues that arose at Marion.
Mr. MITCHELL. One quick question. Is there anything you can do to help ensure that veterans receive the appropriate mental health care that they need and do you have the resources to do that?
Dr. DAIGH. We have done, I think, a fair amount in this area, trying to focus both on specific cases where we think practice ought to change. Specifically it would be those individuals who died where their care involved both mental health issues and usually drug abuse. And getting VA to recognize that they need to deal with both problems at one time, I think, has been an important change in that area.
We have also reviewed and will focus on the mental health strategic plan to ensure that what is an agreed upon, reasonable way to ensure veterans receive mental healthcare is, in fact, rolled out as delivered.
Additionally, we are focusing on and would like to focus more, on if we had the resources, the mental healthcare provided at community-based outpatient clinics (CBOCs) and Vet Centers. There are about 800 CBOCs, a couple hundred Vet Centers. And at the Vet Centers, there is a piece of that I think is probably healthcare.
And CBOCs is where most individuals receive care who cannot easily get to a major hospital. And I think that with the resources I identified to you, I can provide more assurance that veterans will receive proper care there.
We have also put together a data set that identifies all returning veterans and cohorts by the year that they leave the U.S. Department of Defense (DoD). And I think that by using that data set as an analysis tool that we can get a better statistical look and provide better assurance as to what care the veterans who are returning year by year have been receiving.
So the answer is I think with the additional resources I identified, I think we can do a much better job of ensuring veterans receive the mental healthcare that they should both for TBI, PTSD, and associated disorders.
Mr. MITCHELL. Thank you.
Ms. Brown-Waite?
Ms. BROWN-WAITE. Thank you very much, Mr. Chairman.
I guess this question would be for Deputy Inspector General Wooditch. Obviously the statement was made if you had an additional 20 FTE staff people helping in the Office of Inspector General where you would use them.
What if there was an additional 20? Where would you devote those personnel to? What areas would you assign them to?
Mr. WOODITCH. We have many projects that we cannot get to within our current funding. In addition to the 20 FTE that Dr. Daigh just mentioned to provide some sort of assurance that we do not have another Marion, if we had 20 more FTE, I think we would have to sit down and assess our workload and determine where we can get the most bang for the buck.
But I can tell you right now Jim O'Neill, our AIG for Investigations, his investigators right now carry a workload of 12 cases per agent, one of the highest in the Federal Government. With a workload that significant, one thing happens. When we have a data loss case, we have to divert resources to look at the data loss cases, those criminal investigations get postponed. They never get canceled. We will get back to them, but some of them take years to get back to.
So we would probably put some resources into a quick response team for data analysis, then the rest of them in the criminal investigative arena.
Ms. BROWN-WAITE. If I could follow-up on that. Is there a list that perhaps you could share with this Committee of additional needs that you see for the Inspector General's Office to be looking at?
And I do not know, Mr. Mitchell, do you have such a list?
Mr. MITCHELL. No.
Ms. BROWN-WAITE. It would be helpful to us to also know what needs our attention as the Oversight Committee. And with the concurrence of the Committee, maybe it would be helpful, not today, but if you would sit down with the Committee staff and I am available and perhaps Mr. Mitchell so that we can take a look at that because we want you to have additional staff so that the important job that you do can be done, can be accomplished in an efficient manner so that we get every cent that should be going to the vets that right now may be siphoned off into other areas, some illegal areas, so that we can get that money out there.
So if you would be willing to share such a list, we sure would appreciate having it. It will help us also to justify asking for more money.
Mr. WOODITCH. Well, thank you for the opportunity to meet with you and your staff to discuss these issues. We will prepare such a list and we will be contacting your staff to set up meetings. Thank you.
Ms. BROWN-WAITE. Okay. I have another question and I think this probably would be for Ms. Finn. And I am asking this because I believe, and please correct me if I am wrong, you did the study on the problems in the Boston area.
The VA's acquisition system that they are using right now for purchases, does that desperately need to be revised and made uniform so that we have real accounting areas that are used instead of miscellaneous for millions and millions of dollars?
Ms. FINN. One of the first things VA needs is a system to give them visibility over all of the contracting actions. They do not have that right now. They are working on a system, but they are just starting to implement it. And it is too early to say whether or not it is going to have all of the needed information.
Certainly they need to be able to correctly collect and track the obligations and the expenditures related to all of the contracting. That would be a critical need for good financial management.
Ms. BROWN-WAITE. Refresh my memory. How long have they been looking at this?
Ms. FINN. I do not know for sure. The Electronic Contract Management System has been under development and implementation for about three to four years, I believe. I do not know totally how long they have been developing a system. I will be glad to get back to you on that.
Ms. BROWN-WAITE. You know, so many times organizations think they have to reinvent the wheel when there are major software companies out there that have it and they will come in and they will modify it for government. And some of them specialize just in government. But if you would give us an update on that later, that would be wonderful.
Ms. FINN. Okay.
[The VA Inspector General, Hon. George J. Opfer, followed up in a March 20, 2008, letter, which appears in the Appendix.]
Ms. BROWN-WAITE. And thank you very much.
And with that, I yield back my time.
Mr. MITCHELL. Thank you.
Mr. Walz?
Mr. WALZ. Well, thank you, Mr. Chairman.
And, once again, thank you all for what you are saying. I am going to have you help me and it is somewhat subjective, the questions I am going to ask. And I do not say this in any way facetiously, but I am trying to get a grasp on this, who requested that the budget be dropped for the OIG? How would that process work?
I mean, I would assume that the Secretary was involved in that when the cabinet level people sat around and talked about how they were going to do this year's budget. Who would make the decision and say, send this over to the House with a cut in the OIG? Do you have any idea on how that would work?
Mr. WOODITCH. It is difficult to talk about the internal budget process in the Government without sounding like I am soliciting resources.
Mr. WALZ. Yes. And I know you are in a tough spot because of that. I understand that.
Mr. WOODITCH. But I think I could help you a little bit in answering that question by saying that the OIG does develop a budget on what we think we need to bring us to current services and any additional planning initiatives that we think need to be addressed.
Those are submitted to the Department. The Department will review those, make a decision on whether they support that. They will submit their position to Office of Management and Budget (OMB). OMB will make a final decision. They will get back to us. If we disagree with it, we are allowed to appeal it. They make a final decision and then the President's budget is submitted.
So anywhere between when it leaves this office until it arrives in front of Congress, the kind of cuts that you are talking about could occur.
Mr. WALZ. And the difficulty that lies in there is because of the conflicts there, for us to be able to see what was requested by OIG and we see what was agreed upon.
I am under the assumption that you probably asked for more, but I guess that is part of the process, I would assume.
Mr. WOODITCH. Well, we asked for resources to do a lot of the things that we are currently not doing.
Mr. WALZ. So bottom line is right now we could do a better job of protecting our veterans, and we could do a better job of protecting our tax dollars if we were investing more in the OIG?
Mr. WOODITCH. Yes, sir, I believe that is true.
Mr. WALZ. Okay. And I want to come back to this issue and this is one, Ms. Finn, you can help me with. Did you say we are currently having a very difficult time tracking contracts? Is that correct?
Ms. FINN. That is correct. At the present time, VA does not have any one system that collectively can provide visibility over all of the contract actions.
Mr. WALZ. So, internally in the VA, there is someone providing audits and then you are doing the inspections on these audits, is that the correct procedure?
Ms. FINN. Audits of contracts?
Mr. WALZ. Yes.
Ms. FINN. We actually within the OIG provide some pre- and post-award services to the Department on a reimbursable basis.
Mr. WALZ. Is there any redundancy in who is watching these contracts or if you do not catch it, it does not get caught?
Mr. WOODITCH. I would like to answer that, sir, if I may. VA has their own internal process of monitoring what they do. They have reviews done by General Counsel. They have reviews done from a technical standpoint in complying with the Federal Acquisition regulations. But I think I am safe in saying that if you are talking about independent objective reviews, our office is the only one that really does that.
Mr. WALZ. Okay. And did somebody have a number or did we say we could get it? How much fraud, waste, and abuse was caught last year, for example, in contracting? Do we have any idea on that?
Mr. WOODITCH. Fraud, waste, and abuse, in our pre-award and post-award area, the pre-awards basically look at contract bids and we look for opportunities to negotiate a better price. In the post-award, we look at where we are overcharged and from that, we try to collect the overcharges.
I think in 2007, our total pre and post-award monetary benefits were several hundred million dollars. I can get the exact number back to you later.
[The VA Inspector General, Hon. George J. Opfer, followed up in a March 20, 2008, letter, which appears in the Appendix.]
Mr. WALZ. About how many firms are involved in that or how many contracts would you guess? Is that another one that is pretty hard to—
Mr. WOODITCH. It is difficult to estimate what that is. It varies by year to year. We do a lot more pre-award work than we do post-award. We probably look at over a hundred a year in pre-award and probably a third of that in post-award. We could look at a lot more, but we are limited to the 25 staff we have dedicated to that area.
Mr. WALZ. So at a time of national conflict and war and a time when our budgets are pressed, we have people war profiteering and at the same time, we are going to cut the people who can stop that war-profiteering? Is that an over-dramatization or is that what we are looking at?
Mr. WOODITCH. I do not think it is an over-dramatization. I think, like I said earlier, if you invest more monies in us, you will get a greater return on your investment.
Mr. WALZ. Well, I again want to say to close here before I give it back to the Chairman that I do appreciate that and please know that we are fighting. And I also understand the very sensitive situation you are in with this budgeting. But please know that we will do our job of asking these hard questions and make sure we get this thing right.
So I yield back.
Mr. MITCHELL. Thank you.
Mr. Space?
Mr. SPACE. I have no questions.
Mr. MITCHELL. Thank you very much for coming today. We appreciate your testimony. And you have got a friend up here. You have got a bunch of them.
Mr. WOODITCH. Thank you very much.
Mr. MITCHELL. At this time, we would like to invite the second panel to come forward.
I might add that at about 3:20, they expect to call for votes again. So hopefully we can get through all of this.
I welcome panel two to the witness table. Ms. Valerie Melvin is the Director of Human Capital and Management Information Systems Issues for the U.S. Government Accountability Office, (GAO). She will be accompanied by her Assistant Director, Ms. Barbara Oliver. We look forward to hearing her unbiased view of the IT budget.
And, Ms. Melvin, you have five minutes to make your presentation.
STATEMENT OF VALERIE C. MELVIN, DIRECTOR, HUMAN CAPITAL AND MANAGEMENT INFORMATION SYSTEMS ISSUES, U.S. GOVERNMENT ACCOUNTABILITY OFFICE; ACCOMPANIED BY BARBARA OLIVER, ASSISTANT DIRECTOR, HUMAN CAPITAL AND MANAGEMENT INFORMATION SYSTEMS ISSUES, U.S. GOVERNMENT ACCOUNTABILITY OFFICE
Ms. MELVIN. Thank you, Mr. Chairman and Members of the Subcommittee. I am pleased to participate in today's hearing on VA's information technology budget.
As you know, the use of information technology is crucial to helping VA effectively serve our Nation's veterans for which the Department is seeking approximately $2.4 billion for fiscal year 2009. However, the Department has long been challenged in its information technology management, having experienced cost, schedule, and performance problems in a number of systems initiatives.
To provide greater accountability and authority over its resources, VA has been realigning its organization to centralize IT management under the Chief Information Officer (CIO) and to standardize budgets, operations, and systems development.
Over the past two years, we have assessed and reported on the realignment initiatives and at your request, my testimony today summarizes our findings regarding the Department's actions and their impact to date in providing greater authority and accountability over the Department's IT budget and resources.
In this regard, the Department has taken a number of important steps toward a more disciplined approach to overseeing and accounting for its budget and resources. Among these actions, it designated necessary leadership within the CIO's Office to be responsible for developing and tracking expenditures against the budget, activated three governance boards to facilitate budget oversight and to manage its investments, finalized an IT strategic plan that aligns with the Department's strategic plan, and developed multi-year budget guidance to improve future management of the IT investment portfolio.
All of these steps represent positive movement in VA's attempt to establish greater control of its information technology. To date, however, their effectiveness in ensuring accountability for the Department's resources and budget has not yet been clearly established. It remains too early to assess the full impact of the Department's actions because a number of them have only recently become operational or have not yet been fully implemented.
For example, the Governance Board's first involvement in budget oversight only recently began in May 2007 and none of the boards have yet been involved in all stages of the budget formulation and execution processes.
In addition, because the multi-year budget guidance is applicable to future budgets for fiscal years 2010 through 2012, it is too early to determine VA's effectiveness in implementing this guidance.
Even more significantly, improved IT management processes that are being instituted as a cornerstone of the realignment remain behind schedule, with the date that VA plans to complete the implementation of certain budget control processes having changed from July 2008 to at least fiscal year 2011. However, as we have previously noted, it is crucial for the CIO to ensure that well-established and integrated processes are in place to lead, manage, and control VA's IT resources.
Thus, Mr. Chairman, while VA's actions to increase IT oversight and accountability hold promise for achieving a more disciplined management approach, their success will depend on the extent to which the Department follows through in ensuring that the actions are effectively instituted and executed.
VA has said that these management processes are essential to correcting deficiencies that it encountered with its previously decentralized management approach. Thus, establishing the processes is crucial to the overall success of this initiative and to realizing the potential benefits that could accrue from having a solid and sustainable centralized approach to managing the Department's IT budget and resources.
This concludes my prepared statement, and we would be pleased to respond to any questions that you have.
[The statement of Ms. Melvin appears in the Appendix.]
Mr. MITCHELL. Thank you.
I have just a couple questions. How confident are you that the current budget proposal accurately identifies the specific items, which IT dollars are being spent, and accurately identifies the amount of money associated with each item?
Ms. MELVIN. At this time, I do not believe that we could attach a level of confidence to it because we have not been able to look at the full process implemented throughout the Department. As I stated in my testimony, the Department is in the process of executing a number of the processes that are important to or that is identified, I should say, as part of its overall governance process for improved management and accountability for the budget. However, to date, it has been implemented in a sort of a piecemeal fashion in the sense that budget formulation has occurred for the fiscal year 2009 budget process and budget execution has occurred for the 2008 budget process. Thus far, the formulation as we understand it has been based on the use of the exhibit 300s, but we have not seen evidence yet based on the full set of practices and processes that the Department intends to use in terms of having a more solid and centralized approach to managing the resources.
Mr. MITCHELL. Thank you.
Just one more question. You say in your report that the VA has told you that it will not have the management processes necessary to centralize the control over IT budget until the year 2011. Why would the VA need three more years to do this?
Ms. MELVIN. That is actually stated in their IT strategic plan. And we do not know specifically why, but I can say that in our past work in looking at their management processes, in the discussions that we had with VA's officials, they did indicate that they had in some cases overestimated what would be required to actually get these management processes in place. Perhaps that is still a factor.
I do know that as they have been moving through this process, they have been looking at ways to refine some of the efforts that they are undertaking. And that seems to be a major piece of what has taken place and why they may not have been able to put them in place yet.
Mr. MITCHELL. Thank you.
Ms. Brown-Waite?
Ms. BROWN-WAITE. Thank you.
I would like to follow-up on the Chairman's line of questioning. Having been here for a few years, was it not supposed to originally be completed in July of 2008?
Ms. MELVIN. That is correct.
Ms. BROWN-WAITE. And the reasons for the delay?
Ms. MELVIN. At the time that we first started looking at the processes, there were a number of factors that were being considered by VA as reasons why they were not able to. They dealt with having to actually start looking at the implementation and, once they did, to see that some of the processes needed to be refined relative to their overall organization's structure.
We also noted in our prior work that they were in the process of staffing their offices, if you will, the process offices that would be major players in actually getting their business processes in place. Those factors collectively were reasons that were given for that.
I would also add that as a part of our work, one of the things that we had looked for are where VA has actually had an actual plan, if you will, with performance measures and results oriented objectives for what they were trying to achieve. And we have also stressed the need for them to have an implementation team that could monitor the progress that they were making in these areas.
Ms. BROWN-WAITE. Did you find such a plan?
Ms. MELVIN. There was not. We have seen in the strategic plan that they currently have in place that they do have a performance and accountability measurement process that hopefully will be beneficial in helping them to actually track better the actions that they are taking against the time frames and the milestones that they have put in place for this.
However, we have, I would say, disagreed basically in terms of the type of implementation team that would be needed to actually make sure that the realignment was undertaken effectively.
Ms. BROWN-WAITE. Could it be summarized? Give me a percentage here of the problem being just institutional opposition to change.
Ms. MELVIN. I cannot give you a percentage. I would say, though, and we have stated previously that in undertaking an effort of the magnitude that VA is undertaking, a lot of what they are doing is very ambitious.
Our past work relative to transformations within organizations, especially on a major level, have indicated that sometimes it takes up to five to seven years to be able to accomplish some of the goals such as VA is trying to achieve.
A lot of that involves making sure that there is cultural buy-in to the initiatives that are being undertaken, to the changes that are being made. There is a complex set of factors relative to being able to gain organization-wide approval, agreement, and acceptance of the changes that are there.
So I do think that these are factors that are important and perhaps are relevant to the situation that VA finds itself in.
Ms. BROWN-WAITE. Another question. And, by the way, thank you very much for being here—
Ms. MELVIN. You are very welcome.
Ms. BROWN-WAITE. —and doing the presentation, both of you. In your testimony, you discussed the challenges in maintaining VA's IT projects which according to your statement includes cost overruns, schedule slippages, and performance problems.
In your estimate, is the VA doing enough to fix these problems and what more could really be done?
Ms. MELVIN. VA is in the process of trying to implement its changes through its management process. We do believe that if they are able to effectively implement and execute the overall IT investment management processes that are a part of the realignment that they could go a long way in making sure that they have more information, can make more effective and better informed decisions relative to their projects.
A key to all of this is that this does show promise. However, we still remain very cautious and we still stress the need for them to have the fundamental business processes in place. And through doing that, I believe that that will be the support or the foundation that they need to be able to move forward to make some of the changes within, for example, key initiatives that you have seen and we have reported on that still have faced challenges for the Agency.
Ms. BROWN-WAITE. Thank you.
And with that, I yield back the balance of my time.
Mr. MITCHELL. Thank you.
And Mr. Walz has no questions, so thank you very much for appearing. We appreciate it.
Ms. MELVIN. You are welcome.
Mr. MITCHELL. And at this time, I welcome the third panel to the witness table. Mr. Robert T. Howard is the Assistant Secretary for Information and Technology at the VA and the Department's CIO. We look forward to hearing Assistant Secretary Howard's testimony.
And if Mr. Howard would please introduce the rest of your team and then, Mr. Howard, if you could spend five minutes on your remarks.
STATEMENT OF HON. ROBERT T. HOWARD, ASSISTANT SECRETARY FOR INFORMATION AND TECHNOLOGY AND CHIEF INFORMATION OFFICER, OFFICE OF INFORMATION AND TECHNOLOGY, U.S. DEPARTMENT OF VETERANS AFFAIRS; ACCOMPANIED BY STEPHEN WARREN, PRINCIPAL DEPUTY ASSISTANT SECRETARY, OFFICE OF INFORMATION AND TECHNOLOGY; PAUL TIBBITS, M.D., DEPUTY CHIEF INFORMATION OFFICER, OFFICE OF ENTERPRISE DEVELOPMENT, OFFICE OF INFORMATION AND TECHNOLOGY; AND ARNIE CLAUDIO, DIRECTOR, OVERSIGHT AND COMPLIANCE, OFFICE OF INFORMATION AND TECHNOLOGY, U.S. DEPARTMENT OF VETERANS AFFAIRS
Mr. HOWARD. Thank you, Mr. Chairman.
Chairman Mitchell and Ranking Member Brown-Waite, good afternoon and thank you for your invitation to discuss the President's fiscal year 2009 Information and Technology budget proposal for the Department of Veterans Affairs.
I am accompanied today by Steph Warren to my right, my Principal Deputy Assistant Secretary. And to his right is Dr. Paul Tibbits, the Deputy CIO for Enterprise Development. And to my left is Arnie Claudio, Director of Oversight and Compliance.
Let me begin this afternoon by recapping the major aspects of the IT reorganization and highlights of our experience to date.
Throughout fiscal year 2006 and 2007, the VA Office of Information and Technology transitioned to a new organization with the detailing of 5,010 IT personnel and beginning with the fiscal year 2008 budget, we reflect this completed consolidation along with the transferred funding for a total staffing level of 6,686 personnel.
We have been operating under this new organization for about a year and continue to learn a lot about what it takes to provide effective and efficient IT support to an organization the size and complexity of the VA.
As we move forward, we will continue to build upon our successes. However, we remain aware that our work is far from complete.
As a result of the enhanced visibility that we have been able to bring to the management of IT through the consolidation, we are discovering activities that need to be improved and enhanced from an overall management standpoint. This is especially true in the area of data security and infrastructure improvements.
For example, we have increased our emphasis regarding certification and accreditation and are developing better procedures regarding asset management. Progress is being made, but we have a way to go in establishing the organization and providing the high-quality IT support that VA and our veterans deserve.
Working with our new centralized organization has certainly been a challenge for all of us. But the other critical challenge we are dealing with is the new IT appropriation which was established in fiscal year 2006.
In that regard, we continue to focus our efforts in structuring and funding the IT appropriation along programmatic lines relating IT to the principle missions of the VA. Since this is a line item appropriation, prior planning is critically important and getting the funding up right is essential.
As you are aware, VA is requesting $2.442 billion to support IT development, operations, and maintenance expenses, including payroll for fiscal year 2009. This request reflects the consolidation of all VA IT into one appropriation, with the exceptions of non-payroll IT for credit reform programs and non-appropriated insurance benefit programs, both of which fall under different funding rules.
In fiscal year 2009, the majority of increases represent program priorities to enhance the support to veterans both directly and indirectly, especially in the area of medical care.
The non-pay portion of the 2009 budget has been realigned from previous submissions to delineate veteran strategic issues into two major classifications: veteran-facing IT systems and internal facing IT systems. This has been done to better link the appropriation to the mission of VA.
Veteran-facing IT systems support programs for veterans such as providing medical care and delivering compensation benefits, enhancing education opportunities, and programs of that nature. These veteran facing programs account for $1.295 billion of our request.
Internal facing IT systems are those that provide the capability to work more effectively in managing IT resources such as corporate management, financial resources management, and programs of that nature. Internal facing programs in our budget for 2009 total $418 million.
Together these amounts reflect a sizeable increase over fiscal year 2008 which will obviously be very helpful to us in the improvement of IT support to VA.
Over the past several years, VA IT has had a fairly level budget. Yet, at the same time, the organizations we support have been increasing in size, especially in terms of facilities and people. And as you well know, whenever you do that, you have to apply the necessary IT talent and tools to those activities.
The increase will help us provide the needed funding to accelerate selected programs, especially in the delivery of healthcare and to at least keep most of them on track.
A few words about veteran-facing medical programs. VA has laid a solid foundation for integrating information and technology into all aspects of healthcare operations, and will continue to lead the Nation in this area.
In fiscal year 2009, we have asked for an increase in funding necessary to sustain and modernize our healthcare delivery IT systems.
In the area of veteran-facing benefit programs, information and technology investments over the past several years and those planned for the future will enable new technologies to be used to facilitate the processing of claims and providing benefits to veterans and their families.
Internal-facing IT systems link to specific management categories, corporate management, financial resource management, asset management, and human capital management to name a few. VA is requesting, as I mentioned, $418 million for this area.
Two significant investments are in the categories of human capital management and financial resources management and these are necessary to replace existing systems with new technologies.
The Human Resource Information System is an OMB and the Office of Personnel Management managed project and the Financial and Logistics Integrated Technology Enterprise system addresses VA's long-standing weakness in the financial management area.
Mr. MITCHELL. Mr. Howard, could you wrap up?
Mr. HOWARD. Yes, sir.
So I want to point out one additional thing and then I will close and that is with respect to information security. You know we are doing a lot of work there. But one of our success stories has been our robust capability for oversight and compliance.
Arnie Claudio sitting to my left can speak to a lot of that. He has conducted over 150 assessments since last January and that particular information is providing a lot of visibility for us in areas that need to be fixed throughout the VA.
Sir, I thank you
Sign Up for Committee Updates
Stay connected with the Committee