Chairman, distinguished Members of the Subcommittee, thank you for this opportunity to present the Department of Veterans Affairs (VA) Fiscal Year 2011 budget for the Office of Information and Technology (OI&T). Our budget provides the resources necessary to continue our aggressive pursuit of the President’s two overarching goals for the Department—to transform VA into a 21st Century organization and to ensure that we provide timely access to benefits and high quality care to our Veterans.

To achieve the transformation of VA into a 21st Century organization capable of meeting Veterans’ needs today and in the years to come, we must leverage the power of information technology (IT). OI&T is absolutely integral to everything we do at the Department, and it is vital we continue the development of IT systems that will meet new service delivery demands and modernize or replace increasingly fragile systems that are no longer adequate in today’s health care and benefits delivery environment. Simply put, IT is indispensable to achieving VA’s mission.

The Department’s IT operations and maintenance program supports 334,000 users, including VA employees, contractors, volunteers, and researchers situated in 1,400 health care facilities, 57 regional offices, and 158 national cemeteries around the country. Our IT program protects and maintains vital health and benefits records for 8.5 million Veterans with the level of privacy and security mandated by both statutes and directives.

VA's 2011 budget provides $3.3 billion for IT, the same level of funding provided in 2010. The resources we are requesting will fund the development and implementation of an automated solution for processing education claims ($44.1 million), the Financial and Logistics Integrated Technology Enterprise project to replace our outdated, noncompliant core accounting system ($120.2 million), development and deployment of the paperless claims processing system ($145.3 million), and continued development of Telehealth and Home Care Model ($48.6 million). In addition, the 2011 budget request includes $52 million for the advancement of the Virtual Lifetime Electronic Record, a Presidential priority that involves our close collaboration with DoD.

The IT budget request for FY 2011, while level from FY 2010, is fully supportive of our goals as well as a 32 percent increase over our FY 2009 IT appropriation. Over the past 8 months we have implemented new management approaches within IT that will help ensure we obtain maximum value for Veterans from the taxpayer dollars invested. While we are realizing benefits from these changes during FY 2010, by FY 2011 we expect that full implementation will result in substantial performance improvements and cost avoidance.

Improved IT Management Systems:  Over the last 8 months, we have focused on implementing five key management approaches to improve the results of VA's IT investments. They are:

• The Program Management Accountability System (PMAS)
• A prioritized IT operating plan
• Transparent operational metrics
• The next generation IT security plan
• And, most importantly, a customer service focus in every area of IT

I will discuss each of these management approaches below:

PMAS: A rigorous internal review of VA information technology development projects was conducted in the spring of 2009. The review documented a long-standing failure to deliver major software products on schedule and at cost. Of the more than 280 projects reviewed, many were more than 13 months behind schedule and over half were more than 50 percent over cost estimates. Some of the causes included insufficient program documentation, insufficient change control processes, and program manager burn out.

In response, VA instituted a rigorous management approach to address performance shortcomings, the Program Management Accountability System. Under PMAS, projects must deliver smaller, more frequent releases of new functionality to customers. PMAS mandates that specific program resources and documentation be in place before development begins and mandates that approved processes be used during the system development life cycle (SDLC). Most importantly, PMAS mandates strict adherence to achieving project milestones, and implements strong corrective measures if a project misses multiple milestones. This ensures that customers, project members, and vendors working on a project are aligned, accountable, and have access to the resources necessary to succeed before work begins. .

In July 2009, VA temporarily stopped 45 of our most problematic IT projects. Since then, 17 of those projects were given the go-ahead to continue developing in order to meet near-term milestones, 15 projects were completely re-planned and restarted, 12 of the projects were stopped, and one project is pending. The cost avoidance from re-planning or stopping projects is $54 million for FY 2010. We are using those funds and personnel resources on other projects, to help increase their probability of success.

PMAS provides near-term visibility into troubled programs, allowing us to provide help earlier and avoid long-term project failures. Frequent software deliveries allow customers to provide earlier feedback on system functionality, eliminates “big bang” program/project failures, and increases the probability of successfully developing and deploying IT systems.

Prioritization: In implementing PMAS, we quickly identified that one issue causing projects to fail at VA was insufficient resources. Quite simply, VA was trying to do too much. Many projects failed to meet expectations because they were under-resourced and destined to fail from the start. To address this issue, VA recently ranked all of our IT spend items -approximately 1,000 line items including projects and recurring costs such as leases and licenses -from most to least important from the customer’s point of view. VA determined how many of those items can be successfully completed with our current resources and, most importantly, determined which items could not be completed. We obtained buy-in for these decisions from our internal customers throughout the process. VA will make hard decisions during FY 2010 based on this prioritization. For the customer, this means fully resourcing the most important projects even though it means not resourcing important, but lower priority items.

Operational Metrics: Well-managed IT organizations are heavily oriented towards tracking and reporting their operational metrics. These are the real “score-card” items in IT: system availability, system response, customer service volumes and customer response. By focusing on operational metrics, an IT organization quickly determines how well it is serving its customers, where it is weak, and what it needs to do to provide better services. Over the last 8 months we have made progress on identifying and tracking the metrics that matter most in VA. Today, VA tracks the IT operational metrics that cover about 25 percent of our existing infrastructure, and we continue to add new metrics to our tracking list.

This includes keeping VistA, the information system that houses our Electronic Health Record system, available well over 99.9 percent of the time nationally. We also monitor performance of our help desk environments where, on average, over 60 percent of issues are resolved on the first phone call and the average speed of answer for our help desk attendants is less than 30 seconds.

Tracking operational metrics has also helped us identify long-term strategies to improve the system availability of VistA and other key VA systems, and to obtain concurrence in those strategies. We have identified that VistA systems perform more consistently and reliably in a data center environment, and I have directed that all VistA systems migrate to this model. From a customer service perspective, we are adopting an enterprise help desk strategy to standardize our business processes based on both industry and experiential best practices. As we gain more insight into how well our IT systems and processes are operating to serve our customers, we will be able to continually improve our results.

Data Security/ Information Protection: In support of VA’s vision and mission, it is important that Veterans’ most sensitive information about their personal identity and medical records is protected. In the FY11 budget, we requested $112.5 million for: cyber security; privacy; electronic freedom of information act (E-FOIA); identity and access management; and personal identity verification (PIV). Our goal is to ensure that VA safeguards Veterans’ information in a way that minimizes interference with the business processes that are used to deliver services to our nation’s Veterans.

A prime example is our medical device information architecture (MDIA) initiative, which requires medical center facility Chief Information Officers (CIOs) to certify that all networked medical devices are isolated within a virtual local area network (VLAN), where firewalls allow medical devices to communicate while reducing the risk that medical device system will be compromised. An area that we continuously look to improve is remediating the significant number of outstanding plans of action and milestones (POA&Ms) that identify security deficiencies at each facility. In the recently released VA Inspector General’s (IG) draft FY09 Federal Information Security Management Act (FISMA) report, the IG notes that we have significantly reduced (by more than half) the number of outstanding POA&Ms in FY09. However, we still need dedicated resources to aggressively remediate the more than 11,000 unresolved POA&Ms to improve our overall information security posture.

In addition, the quality of individual system security plans will be a focused effort continuing in 2011 with several initiatives aimed at increasing content awareness, validity of security control status, and specific definition of accreditation boundaries.

We are also moving to a continuous monitoring program of evaluating security controls where we will transform from a self-evaluation method to a more technical method where we will actively scan our systems for vulnerabilities. VA is a large, distributed organization and we are improving centralized access to management systems to continuously monitor our gateways and security compliance.

The VA PIV project is a Departmental initiative to provide compliance with Homeland Security Presidential Directive (HSPD)-12, Federal Information Processing Standard (FIPS) 201, the Federal Common Policy, and related standards that address the Federal Government’s need for a standardized identity credential to be issued to all federal employees and contractors. The VA PIV system is designed to deliver “security as a service” by integrating with the VA Enterprise Architecture service-oriented systems model and providing a more integrated and standardized approach to security.

In addition to implementing new technologies and processes to improve information security, we are also mindful of the ongoing need to enhance security training and awareness efforts to reinforce the VA culture of vigilance in protecting sensitive information.

Customer Service Focus: These four management approaches have a common goal --to excel in improving IT service to our customers. Using a variety of techniques to monitor, measure, and improve our performance, a renewed focus will allow us to build on our successes and to identify and quickly address and resolve areas not working so well. We are establishing IT advocates for medical, benefits and corporate customers to streamline communications between customers and the IT organization. We have asked our customers to provide feedback through the performance appraisal process and have invited medical center and regional office Directors to submit input on the IT customer service they are receiving at their facility. A nationwide customer service survey is in the planning stages and will gauge areas that seem to be working and those requiring improvement. The results from these actions will assist in refining our staff’s performance plans to ensure we are measuring what our customers feel is most important to support their mission.

Paperless/Veterans Benefit Management System (VBMS): Our major investments will continue to increase above the FY 2010 level to meet the on-going demands for our Veterans and transforming VA. We will request $145.3 million for the VBMS.

In FY 2009, OI&T and Veterans Benefits Administration (VBA) started the VBMS Initiative, which will serve as a cornerstone of VBA’s long-term, comprehensive plan to achieve timely processing of benefits to Veterans. The VBMS Initiative is a business transformation initiative supported by technology and designed to improve VBA’s service delivery. It is a holistic solution that integrates a business transformation methodology (to address process, people, and organizational structure factors) and a 21st Century paperless claims processing system. The VBMS Initiative will work in conjunction with other VBA initiatives and efforts, such as the Veterans Relationship Management Program (VRM), a Veteran-facing program featuring multi-channel information exchange between Veterans and VA, including, for example, on-line self-service capabilities. The VBMS Initiative will further integrate with the Veterans Services Network (VETSNET), which is VBA’s present suite of applications supporting Compensation and Pensions claims processing.

The first major milestone of the VBMS Initiative, targeted for delivery in April 2010, is a Virtual Regional Office (VRO). The VRO will initiate the design process by creating a flexible, iterative, user-in-the-middle development process to solidify user needs and business requirements through a living specification. Following establishment of the VRO prototype, VBA will conduct additional pilots through December 2011 to further validate, refine, and harden process and systems requirements. Finally, production environments will be established for a nationwide rollout in FY 2012.

Post 9/11 GI Bill (Chapter 33): The Post 9/11 GI Bill creates a robust enhancement of VA’s education benefits, evoking memories of the World War II Era GI Bill. Because of the significant opportunities the Act provides to Veterans and their families in recognition of their service, and their particular value in the current economic environment, we must deliver the benefits in this Act effectively and efficiently, and with a client-centered approach. In August 2009, the new Post-9/11 GI Bill program was launched. We received more than 397,000 original and 219,000 supplemental applications since the inception of this program.

The 2011 budget provides $44.1 million to complete the automated solution for processing Post-9/11 GI Bill claims and to begin the development and implementation of electronic systems to process claims associated with other education programs. The automated solution for the Post 9/11 GI Bill education program is scheduled to be implemented by December 2010.

In 2011, we expect the total number of all types of education claims to grow by 32.3 percent over 2009, from 1.70 million to 2.25 million. To meet this increasing workload and to complete education claims in a timely manner, VA has established a comprehensive strategy to develop an end-to-end solution that uses rules-based, industry-standard technologies to modernize the delivery of education benefits.

Virtual Lifetime Electronic Record (VLER): Each year, more than 150,000 active and reserve component service members leave the military. This transition is heavily reliant on the transfer of paper-based administrative and medical records from the Department of Defense (DoD) to the Veteran, the VA, or other non-VA health care providers. A paper-based transfer carries risks of errors or oversights and delays the claim process.

In April 2009, the President charged VA Secretary Shinseki and Defense Secretary Gates with building a fully interoperable electronic records system that will provide each member of our Armed Forces a Virtual Lifetime Electronic Record (VLER). This virtual record will enhance the timely delivery of high-quality benefits and services by capturing key information from the day they put on the uniform, through their time as Veterans, until the day they are laid to rest. The VLER is the centerpiece of our strategy to better coordinate the user-friendly transition of service members from their service component into VA, and to produce better, more timely outcomes for Veterans in providing their benefits and services.

In December 2009, VA successfully exchanged electronic health record (EHR) information in a pilot program between the VA medical center in San Diego and a local Kaiser Permanente hospital. We exchanged EHR information using the Nationwide Health Information Network (NHIN) created by the Department of Health and Human Services. Interoperability is key to sharing critical health information. Using the NHIN standards will allow organizations like VA and DoD to partner with private sector health care providers and other Federal agencies to promote better, faster, and safer care for Veterans. Last month DoD joined this pilot and we will soon announce additional VLER health community sites. VA has $52 million in IT funds in 2011 to continue the development and implementation of this Presidential priority.

Financial and Logistics Integrated Technology Enterprise (FLITE): The 2011 budget provides $120.2 million to continue developing the FLITE Program. FLITE is a multi-year initiative to standardize business processes and modernize the information technology environment supporting financial and asset management within VA. The program has three primary components: a financial management component referred to as the Integrated Financial Accounting System (IFAS); an asset management component referred to as the Strategic Asset Management System (SAM); and a FLITE data warehouse project.

The FLITE program is a collaborative effort between the VA’s Office of Management (OM) and the OI&T. The SAM Pilot contract was awarded to General Dynamics Information Technology in late April 2009 and is underway at the Milwaukee VA Medical Center. This program is being managed closely by OM and OI&T. The FLITE Program Office provides updates to the Deputy Secretary every 2 weeks. The SAM pilot project of FLITE has been managed under PMAS since last summer. While the project missed its first milestone under PMAS, it has subsequently been re-planned and has made its first milestones under the new project plan.

Home Telehealth: Our increasing reliance on non-institutional long-term care includes an investment in 2011 of $48.6 million for Telehealth and the Home Care Model. Taking greater advantage of the latest technological advancements in health care delivery will allow us to more closely monitor the health status of Veterans and will greatly improve access to care for Veterans in rural and highly rural areas. Telehealth will place specialized health care professionals in direct contact with patients using modern IT tools. VA’s home telehealth program cares for 35,000 patients and is the largest of its kind in the world. A recent study found that patients enrolled in home telehealth programs experienced a 25 percent reduction in the average number of days hospitalized and a 19 percent reduction in hospitalizations. Telehealth and telemedicine improve health care by increasing access, eliminating travel, reducing costs, and producing better patient outcomes.

Closing Statement

In closing, I would like to thank you again for your continued support and for the opportunity to testify before this Committee on the important work we are undertaking to improve VA’s IT project development. We will use these more rigorous management approaches as we create the new IT systems necessary to support the President’s vision of a 21st Century VA. The following pages provide the details on a number of our high-visibility and/or investments planned for FY 2011. And with the support of the FY 2011 budget, OI&T will continue to demonstrate its unwavering goal in achieving both President Obama’s and Secretary Shinseki’s vision of a 21st century Department committed to serving those who have selflessly served our Nation. I would now like to address any questions you might have.