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entitled 'VA Health Care: Spending for Mental Health Strategic Plan 
Initiatives Was Substantially Less Than Planned' which was released on 
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Report to Congressional Requesters: 

United States Government Accountability Office: 

GAO: 

November 2006: 

VA Health Care: 

Spending for Mental Health Strategic Plan Initiatives Was Substantially 
Less Than Planned: 

VA Mental Health Services: 

GAO-07-66: 

GAO Highlights: 

Highlights of GAO-07-66, a report to congressional requesters 

Why GAO Did This Study: 

The Department of Veterans Affairs (VA) provides mental health services 
to veterans with conditions such as post-traumatic stress disorder 
(PTSD) and substance abuse disorders. To address gaps in services 
needed by veterans, VA approved a mental health strategic plan in 2004. 
VA planned to increase its fiscal year 2005 allocations for plan 
initiatives by $100 million above fiscal year 2004 levels and its 
fiscal year 2006 allocations for plan initiatives by $200 million above 
fiscal year 2004 levels. 

GAO was asked to provide information on VAs allocation and use of 
funding for mental health strategic plan initiatives in fiscal years 
2005 and 2006, and to examine the adequacy of how VA tracked spending 
and the extent of spending for plan initiatives. 

GAO reviewed VA reports and documents on plan initiatives and conducted 
interviews with VA officials at headquarters, 4 of 21 health care 
networks, and seven medical centers. VA networks provide oversight of 
medical center operations and most medical center resources. 

What GAO Found: 

In fiscal year 2005, VA headquarters allocated about $88 million of the 
$100 million above fiscal year 2004 levels that VA officials intended 
for mental health strategic plan initiatives. VA allocated about $53 
million directly to medical centers and certain offices based on 
proposals submitted for funding and other approaches targeted to 
specific initiatives. VA solicited proposals from networks for 
initiatives to be carried out at medical centers through requests for 
proposals (RFP). In addition, VA headquarters officials said that VA 
allocated $35 million for plan initiatives through VAs general 
resource allocation system to its 21 health care networks on a 
retrospective basis, several months after resources had been provided 
to the networks though the general resource allocation system. VA did 
not notify network and medical center officials that these funds were 
to be used for plan initiatives. Network and medical center officials 
interviewed told GAO that they were not aware these allocations had 
been made. As a result, it is likely that some of these funds were not 
used for plan initiatives. VA did not allocate the approximately $12 
million remaining of the $100 million for fiscal year 2005 because, 
according to VA officials, there was not enough time during the fiscal 
year to do so. Medical center officials said they used funds allocated 
for plan initiatives for new services and for enhancement of existing 
services. For example, two medical centers increased the number of 
mental health providers at community-based outpatient clinics. However, 
some medical center officials reported they did not use all funds 
allocated by the end of the fiscal year, due in part to the time it 
took to hire staff. 

In fiscal year 2006, VA headquarters allocated about $158 million of 
the $200 million above fiscal year 2004 levels intended for mental 
health strategic plan initiatives directly to medical centers and 
certain offices. VA allocated about $92 million of these funds to 
support new initiatives, using RFPs and other targeted funding 
approaches. VA also allocated about $66 million to support recurring 
costs of continuing initiatives from the prior fiscal year. About $42 
million of the $200 million for fiscal year 2006 was not allocated. 
Officials from seven medical centers GAO interviewed reported they had 
used funds for plan initiatives, such as the creation of a new case 
management program. Officials at some medical centers reported they did 
not anticipate problems using all of the funds allocated within the 
fiscal year; however, officials at other medical centers were less 
certain they would be able to do so. 

VA tracking of spending for plan initiatives was inadequate. In fiscal 
year 2005, VA did not track such spending. In fiscal year 2006, VA 
tracked aspects of plan initiatives but not dollars spent. However, 
available information indicates that VA spending for plan initiatives 
was substantially less than planned. In fiscal year 2006, VA medical 
centers returned to headquarters about $46 million of about $158 
million allocated for plan initiatives because they could not spend the 
funds that year. However, VA cannot determine to what extent the 
approximately $112 million remaining was spent on plan initiatives 
because it did not track specifically how these funds were spent. 

What GAO Recommends: 

GAO recommends that VA track the extent to which the resources 
allocated for strategic plan initiatives are spent for these 
initiatives. VA did not comment on the content of this report. 

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-66]. 

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Laurie E. Ekstrand at 
(202) 512-7101 or ekstrandl@gao.gov. 

[End of Section] 

Contents: 

Letter: 

Results In Brief: 

Background: 

VA Allocated about $88 Million of the $100 Million Planned for Mental 
Health Strategic Plan Initiatives in Fiscal Year 2005, but Officials 
Reported That Not All Allocated Funds Were Used for Plan Initiatives: 

VA Allocated about $158 Million of the $200 Million Planned for Mental 
Health Strategic Plan Initiatives in Fiscal Year 2006, but Some 
Officials Were Uncertain If All Funds Would Be Used for Plan 
Initiatives: 

VA Tracking of Funds Spent for Mental Health Strategic Plan Initiatives 
Was Inadequate, but Available Information Indicates That Spending for 
These Initiatives Was Substantially Less Than Planned: 

Conclusion: 

Recommendation for Executive Action: 

Agency Comments: 

Appendix I: Department of Veterans Affairs (VA) Health Care Networks, 
Medical Centers, and Other Facilities GAO Selected for Review: 

Appendix II: Description of Selected Department of Veterans Affairs 
(VA) Mental Health Services: 

Appendix III: Comments from the Department of Veterans Affairs: 

Appendix IV: GAO Contact and Staff Acknowledgments: 

Related GAO Products: 

Tables: 

Table 1: Summary of VA Information on Mental Health Strategic Plan 
Allocations to Medical Centers and Certain Offices by Type of Mental 
Health Service, Fiscal Year 2005: 

Table 2: Summary of VA Information on Planned Funding for Mental Health 
Strategic Plan Initiatives Not Allocated by Type of Mental Health 
Service, Fiscal Year 2005: 

Table 3: Summary of VA Information on Mental Health Strategic Plan 
Allocations to Medical Centers and Certain Offices by Type of Mental 
Health Service, Fiscal Year 2006: 

Table 4: Summary of VA Information on Planned Funding for Mental Health 
Strategic Plan Initiatives Not Allocated by Type of Mental Health 
Service, Fiscal Year 2006: 

Abbreviations: 

CBOC: community-based outpatient clinic: 
CWT: Compensated Work Therapy: 
OEF: Operation Enduring Freedom: 
OIF: Operation Iraqi Freedom: 
OMHS: Office of Mental Health Services: 
PTSD: post-traumatic stress disorder: 
RFP: request for proposal: 
VA: Department of Veterans Affairs: 
VERA: Veterans Equitable Resource Allocation system: 

United States Government Accountability Office: 
Washington, DC 20548: 

November 21, 2006: 

The Honorable Lane Evans: 
Ranking Minority Member: 
Committee on Veterans' Affairs: 
House of Representatives: 

The Honorable Michael Michaud: 
Ranking Minority Member: 
Subcommittee on Health: 
Committee on Veterans' Affairs: 
House of Representatives: 

The Department of Veterans Affairs (VA) provides a range of inpatient 
and outpatient mental health services to veterans with conditions such 
as depression, post-traumatic stress disorder (PTSD), and substance 
abuse disorders. In November 2004, the Secretary of VA approved a 
mental health strategic plan that identified additional services that 
VA planned to add to the baseline of mental health services that it 
already offered to meet veterans' mental health needs.[Footnote 1] This 
mental health strategic plan was based on previous VA efforts that 
identified gaps in the availability and adequacy of VA mental health 
services, including services for the treatment of substance abuse 
disorders. VA's mental health strategic plan was intended to help VA's 
leadership identify the actions and resources needed to begin 
eliminating the gaps between mental health services VA provided at the 
time of the plan's formulation and those additional services VA 
anticipated that would be required to meet future needs. 

VA indicated at a 2005 congressional hearing[Footnote 2] that it would 
provide $100 million above fiscal year 2004 levels for mental health 
strategic plan initiatives in fiscal year 2005 from available 
resources. In addition, in a 2005 executive decision memo, VA indicated 
its intent to increase its fiscal year 2006 funding levels to $200 
million above fiscal year 2004 levels for mental health strategic plan 
initiatives. This $200 million in funds for fiscal year 2006 was to be 
composed of $100 million for a continuation of fiscal year 2005 
initiatives plus an additional $100 million included in the President's 
budget request for fiscal year 2006, according to the executive 
decision memo. These additional funds represented only a portion of the 
overall funds available to support VA mental health services in those 2 
fiscal years. VA's appropriation for fiscal year 2006, for example, 
included more than $31.5 billion for its medical programs,[Footnote 3] 
of which VA expected to spend more than $2 billion on mental health 
services. VA headquarters allocates most of these resources to VA's 21 
regional health care networks[Footnote 4] through a general resource 
allocation system and the networks in turn allocate resources to their 
medical centers. 

VA officials have stated that funds for mental health strategic plan 
initiatives are to be used to address priorities such as the expansion 
of PTSD services, postdeployment mental health services for veterans 
returning from combat in Iraq and Afghanistan and other geographic 
areas--Operation Iraqi Freedom (OIF) and Operation Enduring Freedom 
(OEF), respectively, and the expansion of programs for the treatment of 
substance abuse disorders. In recent years, VA's mental health services 
and budget have come under increased scrutiny due to the potential for 
increased demand for mental health services from veterans returning 
from combat in Iraq and Afghanistan. In particular, concerns have been 
expressed by members of Congress and others regarding the adequacy of 
resources that VA is devoting to provide mental health care for these 
veterans while also continuing to provide services for veterans who are 
currently receiving mental health care. 

You requested that we provide information on VA's allocation and 
spending for mental health strategic plan initiatives in fiscal years 
2005 and 2006, and the extent to which VA tracks the use of funding for 
plan initiatives. In this report, we provide information on (1) how 
much of the $100 million for mental health strategic plan initiatives 
in fiscal year 2005 was allocated and how those funds were used by 
selected medical centers, (2) how much of the $200 million for mental 
health strategic plan initiatives in fiscal year 2006 was allocated and 
how those funds were used by selected medical centers, and (3) the 
adequacy of how VA tracked funds spent for mental health strategic plan 
initiatives in fiscal years 2005 and 2006 and the extent to which 
allocated funds were spent for these initiatives. 

To provide information on how much of the $100 million for fiscal year 
2005 and $200 million for fiscal year 2006 for mental health strategic 
plan initiatives was allocated to networks, medical centers, and 
certain offices, we reviewed the plan itself as well as reports and 
other documents related to the development, implementation, and funding 
of the mental health strategic plan. We also conducted interviews with 
VA headquarters officials with responsibilities related to mental 
health services, budgeting, and the allocation of financial resources. 
We took steps to ensure that the data VA provided to us on the funding 
allocated in fiscal years 2005 and 2006 were sufficiently reliable for 
our purposes. We reviewed the data for internal consistency and 
compared the data to other VA information as well as information we 
obtained through interviews with VA officials. We did not independently 
verify the accuracy of the data. Nor did we independently determine the 
extent to which legislation regarding VA health care expressly requires 
spending or authorizes various types of mental health services but 
relied on VA's determination regarding these services. To describe how 
funds were used by selected medical centers, in May and June 2006, we 
conducted site visits to 2 of VA's 21 health care networks and three 
medical centers located in those networks, and we also conducted phone 
interviews with officials in 2 other networks and four medical centers 
located in those networks.[Footnote 5] We selected these 4 networks 
because VA had identified them as having gaps in substance abuse and/or 
mental health services prior to the implementation of the mental health 
strategic plan, and because they received varying levels of funding-- 
from relatively high to relatively low--in fiscal year 2005 for mental 
health strategic plan initiatives. We interviewed clinical and 
administrative officials at these networks and medical centers and at 
three community-based outpatient clinics (CBOC)[Footnote 6] associated 
with these medical centers and at five Vet Centers.[Footnote 7] We 
conducted these interviews in May and June 2006. The findings from our 
site visits and phone interviews with network and medical center 
officials cannot be generalized to other medical centers or networks. 
For a list of VA health care networks and medical centers included in 
our review, see appendix I. For a list of selected VA mental health 
services discussed in this report, see appendix II. This work expands 
upon the preliminary findings that we reported in September 
2006.[Footnote 8] 

To discuss how VA tracked funds spent for mental health strategic plan 
initiatives in fiscal years 2005 and 2006 and the extent to which these 
funds were spent for mental health strategic plan initiatives, we 
reviewed documents related to VA's tracking efforts and interviewed VA 
headquarters officials responsible for those efforts. We also requested 
from VA headquarters information on the amount of funds returned by 
medical centers to headquarters when medical centers were unable to 
spend all the funds in a fiscal year. In addition, we requested 
information from VA headquarters on the amount of funds medical centers 
spent on plan initiatives. To gain further insights and perspectives on 
veterans' mental health services generally, we reviewed our previous 
work on VA health care, including those related to mental health and 
strategic planning (see Related GAO Products at the end of this 
report), and interviewed officials from selected veterans' service 
organizations and professional and advocacy organizations. We focused 
on the allocation and use of funds related to mental health strategic 
plan initiatives, and did not evaluate the appropriateness of the 
mental health strategic plan, VA's efforts to implement the initiatives 
outlined in the plan, or VA's allocation and use of funding for mental 
health services generally. We performed our work from January 2006 
through November 2006 in accordance with generally accepted government 
auditing standards. 

Results In Brief: 

VA headquarters allocated about $88 million of the $100 million VA 
officials said would be used for VA mental health strategic plan 
initiatives in fiscal year 2005 by using several approaches. VA 
allocated about $53 million directly to medical centers and certain 
offices based on proposals submitted for funding and other approaches 
targeted to specific initiatives. VA headquarters solicited submissions 
from networks through requests for proposals (RFP) for specific 
initiatives to be carried out at networks' medical centers. In 
addition, VA headquarters officials said that VA allocated $35 million 
for mental health strategic plan initiatives through VA's general 
resource allocation system to its 21 health care networks, which, in 
turn, could allocate these resources to individual medical centers. 
VA's decision that $35 million of the funds allocated through its 
general resource allocation system was for mental health strategic plan 
initiatives was a retroactive decision, made several months after these 
resources had been provided to networks through the general resource 
allocation system. Moreover, VA did not notify networks and medical 
centers that these funds were to be used for plan initiatives. Network 
and medical center officials we interviewed in 4 networks told us that 
they were unaware that any portion of their general allocation was to 
be used specifically for mental health strategic plan initiatives. The 
approximately $12 million remaining of the $100 million was not 
allocated because, according to headquarters officials, there was not 
enough time during the fiscal year to allocate the funds. Officials we 
interviewed from seven medical centers in four networks reported using 
resources allocated directly to their medical centers for plan 
initiatives for new mental health services and more of the services 
they were already providing. For example, one medical center used 
funding to develop a program to help veterans with mental health 
diagnoses develop job skills and find employment. Some medical center 
officials told us they had not been able to use all of the funds 
provided for plan initiatives during the fiscal year in part because of 
the length of time it took to hire new staff. 

VA headquarters allocated about $158 million of the $200 million VA 
planned for its mental health strategic plan initiatives in fiscal year 
2006 directly to medical centers and certain offices by using several 
approaches. VA allocated about $92 million of these funds to support 
new mental health strategic plan initiatives, using RFPs and other 
approaches targeted to specific initiatives. VA also allocated about 
$66 million to support the recurring costs of continuing mental health 
strategic plan initiatives that were funded in fiscal year 2005 through 
RFPs and other targeted approaches. About $42 million of the $200 
million for fiscal year 2006 was not allocated. A portion of the 
approximately $42 million not allocated was a result of partial-year 
allocations made for projects that were funded later in fiscal year 
2006 and that are expected to receive 12-month allocations for fiscal 
year 2007, according to VA officials. Officials we interviewed at seven 
medical centers said they had used funds to implement plan initiatives. 
Such initiatives included a new mental health intensive case management 
program at one medical center. However, officials at some medical 
centers told us they were uncertain that they would be able to use all 
of the funds for plan initiatives by the end of the fiscal year. 

VA tracking of spending for plan initiatives in fiscal years 2005 and 
2006 was inadequate. In fiscal year 2005, VA headquarters did not track 
the spending of allocated funds for mental health strategic plan 
initiatives. In fiscal year 2006, VA began tracking information on 
mental health strategic plan initiatives by developing a quarterly 
reporting system that focused primarily on staffing but did not track 
dollars spent. In fiscal year 2006, VA compiled information on 
allocated funds returned to headquarters by medical centers that they 
could not spend in the fiscal year. However, VA does not have 
information on whether the funds medical centers retained were spent 
for plan initiatives. Available information indicates that spending of 
allocations for plan initiatives was substantially less than planned in 
both fiscal years 2005 and 2006. In fiscal year 2005, about $12 million 
of the planned $100 million for plan initiatives was not allocated for 
them and thus was not spent for them. Thirty-five million dollars was 
allocated through VA's general resource allocation system, but because 
VA headquarters did not specify that these funds were for plan 
initiatives, it is likely that portions of this money were not spent on 
them and VA officials said that they do not have information on these 
funds being spent for plan initiatives. VA officials also told us that 
they did not have information on the extent to which the approximately 
$53 million allocated directly to medical centers and certain offices 
was actually spent on plan initiatives. Officials at medical centers we 
interviewed told us that they used some of these funds on mental health 
activities other than the planned initiatives or carried over funds 
until the next fiscal year. In fiscal year 2006, available information 
indicates that the maximum amount of allocated funds that could have 
been spent for plan initiatives also fell substantially below what was 
planned. About $42 million of the $200 million that was planned for 
allocation to plan initiatives was never allocated for these 
initiatives, and thus, never spent for them. Also, about $46 million of 
the approximately $158 million that was allocated was returned by 
medical centers to headquarters because it had not been spent on plan 
initiatives by the end of the fiscal year. However, all of the 
approximately $112 million in allocations that medical centers and 
offices retained was not necessarily spent on plan initiatives as 
originally planned. VA instructed medical centers in August 2006 to 
spend funds for other mental health activities if they could not spend 
the funds for the plan initiatives for which they were allocated by the 
end of the fiscal year. Moreover, VA did not track specifically how 
these funds were spent. 

To help provide information on how funds are spent for VA's mental 
health strategic plan initiatives, we are recommending that VA track 
the extent to which the resources allocated for plan initiatives are 
spent for those initiatives. 

VA did not provide agency comments on the contents of this report. We 
offered VA the opportunity to review but not retain copies of this 
report as part of a process to help safeguard the draft contents from 
unauthorized disclosure. However, VA chose not to review the draft 
report in this manner. VA had previously seen portions of this report 
that had been included in a statement for the record prepared for a 
hearing of the House Veterans' Affairs Committee, Subcommittee on 
Health, on September 28, 2006. We discussed the information in that 
statement with VA officials who have responsibilities related to mental 
health services, budgeting, and the allocation of financial resources, 
and they agreed that the data in the statement were accurate. Further, 
we briefed VA staff on the new material in this report on November 14, 
2006. 

Background: 

VA operates a national health care system that provides health care 
services to over 5 million patients annually. As part of that system, 
VA provides mental health services to veterans in inpatient and 
outpatient settings in a variety of VA health care facilities, 
including medical centers, CBOCs, and Vet Centers. Veterans receiving 
these services include homeless veterans, veterans with serious mental 
illness, and veterans returning from combat who are dealing with 
postdeployment readjustment issues. Mental health services are provided 
for a range of conditions such as depression, PTSD, and substance abuse 
disorders. 

Organizational Structure and Funding of VA's Mental Health Services: 

VA's Under Secretary for Health heads VA health care programs and is 
responsible for oversight of operations in VA's 21 health care 
networks, which are structured to manage and allocate resources to more 
than 150 VA medical centers. Mental health services are provided on an 
inpatient and outpatient basis in medical centers and may also be 
provided on an outpatient basis in CBOCs, which are associated with 
medical centers. Within VA, the lead mental health expert is the Deputy 
Chief Patient Care Services Officer for Mental Health. This position 
does not have direct authority for operations, but instead serves as an 
advisor to VA networks and medical centers on mental health services. 
In addition, the official in this position is responsible for oversight 
of the Office of Mental Health Services (OMHS) located at VA 
headquarters. OMHS includes various clinical experts who provide 
consultation on mental health services, including PTSD and substance 
abuse, to VA program officials in the networks and medical centers. 

VA headquarters allocates most of its medical program services budget 
each year through a general resource allocation system to its 21 health 
care networks. This system, the Veterans Equitable Resource Allocation 
(VERA) system, uses a case-mix[Footnote 9] formula to allocate funding 
to the networks, which in turn allocate funding to their medical 
centers. Although the VERA system is used to allocate funds, it does 
not designate funds for specific purposes or prescribe how those funds 
are to be used.[Footnote 10] Medical centers also receive funding for 
specific purposes, such as prosthetics, from VA headquarters that is 
not allocated through the VERA system. In addition, VA medical center 
resources include collections from insurance reimbursements, 
copayments, and deductibles for the care of some veterans.[Footnote 11] 

VA's Mental Health Strategic Plan: 

In April 2002, President Bush established the President's New Freedom 
Commission on Mental Health and directed the Commission to identify 
policies that could be implemented by federal, state, and local 
governments to improve the delivery of mental health care across the 
country.[Footnote 12] In July 2003, the Commission released its final 
report and recommendations for improving the American mental health 
care system. After release of the report, VA's Under Secretary for 
Health formed a work group of mental health and health care 
professionals charged with reviewing the Commission's recommendations 
to determine if those recommendations were relevant to VA's mental 
health program. 

Following that effort, in July 2004, VA completed its mental health 
strategic plan for improving the delivery of mental health services 
within its health care system. This plan was formally approved by the 
Secretary of VA in November 2004. The mental health strategic plan 
contained recommended initiatives for improving VA mental health 
services by addressing a range of issues, including, for example, 
improving awareness about mental illness and improving access to mental 
health services. According to VA officials, the mental health strategic 
plan was designed to address gaps in mental health services provided to 
veterans across the country. Some of the service gaps identified by the 
VA were in treating veterans with serious mental illness,[Footnote 13] 
female veterans, and veterans returning from combat in Iraq and 
Afghanistan. The implementation of the mental health strategic plan 
sought to ensure, for example, that mental health services are provided 
in community-based outpatient settings; that veterans have consistent 
access to mental health services across the country; and that acute 
inpatient mental health services are coordinated with other inpatient 
services provided to veterans. 

Within VA, OMHS is responsible for coordinating with the networks and 
medical centers on the overall implementation of the mental health 
strategic plan. This includes formulating strategies for allocating 
funds committed for the plan's implementation. Such strategies include, 
for example, the use of RFPs solicited from networks for specific 
initiatives to be carried out at their individual medical centers. In 
addition to making these funding decisions, OMHS is also responsible 
for tracking the use of funds allocated for implementing the mental 
health strategic plan. 

While VA initially attempted to develop an estimate of the cost to 
fully implement the mental health strategic plan, VA has since decided 
that a comprehensive cost estimate is inappropriate. According to VA, a 
full-implementation cost estimate is inappropriate because the plan is 
a "living document" that will continue to change over time as it is 
implemented, and thus, the costs will change as well. VA, working with 
an actuarial firm that used certain assumptions provided by VA, 
developed both a long-term and a shorter-term "unofficial" estimate of 
implementation costs for the initiatives included in the plan because 
VA wished to have a "rough estimate" of what might be entailed in 
providing all services that might be needed if capacity were not a 
constraint, according to VA officials. VA and the actuary it used 
concluded, however, that the methodology used to develop these 
estimates was problematic. For example, the estimates used incorrect 
projections for utilization of mental health services, in part, because 
VA's population and mental health services are different from those in 
the private sector. VA officials said that more current and accurate 
data are becoming available for use in projecting the number of OIF and 
OEF veterans who would be entering the system and need such services, 
and that such data and improvements in projecting demand were used in 
development of the President's budget request for fiscal years 2006 and 
2007. 

VA Allocated about $88 Million of the $100 Million Planned for Mental 
Health Strategic Plan Initiatives in Fiscal Year 2005, but Officials 
Reported That Not All Allocated Funds Were Used for Plan Initiatives: 

VA headquarters allocated about $88 million of the $100 million that VA 
officials said would be allocated for VA mental health strategic plan 
initiatives in fiscal year 2005 by using several approaches. About $53 
million was allocated directly to medical centers and certain offices 
and $35 million was allocated through VA's general resource allocation 
system to its health care networks, according to VA officials. The 
approximately $12 million remaining of the $100 million was not 
allocated by any approach, headquarters officials said, because there 
was not enough time during the fiscal year to allocate the funds. 
Officials we interviewed at seven medical centers in four networks 
reported using allocated funds to provide new mental health services 
and to provide more of existing services. However, some medical center 
officials reported that they did not use all allocated funds for plan 
initiatives by the end of fiscal year, due in part to the length of 
time it took to hire new staff. 

VA Allocated Approximately $53 Million Directly to Medical Centers and 
Certain Offices: 

VA headquarters allocated about $53 million directly to medical centers 
and certain offices based on proposals submitted for funding and other 
approaches targeted to specific initiatives related to the mental 
health strategic plan in fiscal year 2005. (See table 1.) VA 
headquarters developed RFPs and solicited submissions from networks for 
specific initiatives to be carried out at their individual medical 
centers through these RFPs. VA allocated resources through this and 
other targeted approaches to support a range of mental health services, 
based, in part, on the priorities of VA leadership and legislation for 
programs related to PTSD, substance abuse, and other mental health 
areas,[Footnote 14] according to VA headquarters officials. VA 
headquarters officials told us that the Secretary of VA had identified 
several areas of the mental health strategic plan that were to be 
priorities for implementation, including those related to substance 
abuse, PTSD, services for veterans of OIF/OEF, mental health in CBOCs, 
and homelessness. Nearly $20 million of the approximately $53 million 
allocated by using RFPs and other targeted approaches was for mental 
health services related to legislation that expressly required spending 
or authorized such services, according to VA officials. In addition, 
nearly $33 million was allocated for mental health services not 
directly related to such legislation. 

Table 1: Summary of VA Information on Mental Health Strategic Plan 
Allocations to Medical Centers and Certain Offices by Type of Mental 
Health Service, Fiscal Year 2005: 

Type of mental health service: Allocations related to legislation that 
expressly required spending or authorized services: Domiciliary 
expansion[A]; 
Amount allocated (dollars): $5,999,971. 

Type of mental health service: Allocations related to legislation that 
expressly required spending or authorized services: Compensated work 
therapy/supported employment mentoring sites[B]; 
Amount allocated (dollars): 4,535,738. 

Type of mental health service: Allocations related to legislation that 
expressly required spending or authorized services: PTSD[B]; 
Amount allocated (dollars): 2,726,840. 

Type of mental health service: Allocations related to legislation that 
expressly required spending or authorized services: Operation Iraqi 
Freedom (OIF) and Operation Enduring Freedom (OEF)[B]; 
Amount allocated (dollars): 2,445,554. 

Type of mental health service: Allocations related to legislation that 
expressly required spending or authorized services: Substance abuse[B]; 
Amount allocated (dollars): 2,175,367. 

Type of mental health service: Allocations related to legislation that 
expressly required spending or authorized services: Psychosocial 
rehabilitation for veterans with serious mental illness[B]; 
Amount allocated (dollars): 1,786,414. 

Type of mental health service: Allocations related to legislation that 
expressly required spending or authorized services: Subtotal; 
Amount allocated (dollars): $19,669,884. 

Type of mental health service: Allocations not directly related to 
legislation that expressly required spending or authorized services[C]: 
PTSD and OEF/OIF; 
Amount allocated (dollars): 12,899,611. 

Type of mental health service: Allocations not directly related to 
legislation that expressly required spending or authorized services[C]: 
Compensated work therapy enhancement and expansion; 
Amount allocated (dollars): 4,972,784. 

Type of mental health service: Allocations not directly related to 
legislation that expressly required spending or authorized services[C]: 
Grant and per diem liaisons; 
Amount allocated (dollars): 4,500,000. 

Type of mental health service: Allocations not directly related to 
legislation that expressly required spending or authorized services[C]: 
Mental health services in nursing homes; 
Amount allocated (dollars): 4,000,000[D]. 

Type of mental health service: Allocations not directly related to 
legislation that expressly required spending or authorized services[C]: 
Community-based outpatient clinic mental health; 
Amount allocated (dollars): 1,997,653. 

Type of mental health service: Allocations not directly related to 
legislation that expressly required spending or authorized services[C]: 
Substance abuse; 
Amount allocated (dollars): 2,998,911. 

Type of mental health service: Allocations not directly related to 
legislation that expressly required spending or authorized services[C]: 
Mental health intensive case management teams; 
Amount allocated (dollars): 999,824. 

Type of mental health service: Allocations not directly related to 
legislation that expressly required spending or authorized services[C]: 
Development of educational programs; 
Amount allocated (dollars): 600,000[E]. 

Type of mental health service: Allocations not directly related to 
legislation that expressly required spending or authorized services[C]: 
Subtotal; 
Amount allocated (dollars): $32,968,783. 

Type of mental health service: Total; 
Amount allocated (dollars): $52,638,667. 

Source: GAO summary of VA information. 

Notes: A total of $48 million was allocated to medical centers to use 
for their mental health services. In addition, $4 million was allocated 
to VA's Office of Geriatrics and Extended Care and $600,000 was 
allocated to the Employee Education System. GAO did not independently 
determine the extent to which legislation regarding VA health care 
expressly requires spending or authorizes these services but relied on 
VA's determination regarding these services. 

[A] Related to the Homeless Veterans Comprehensive Assistance Act of 
2001, which authorized VA to establish up to 10 new domiciliary 
programs for homeless veterans, and authorized appropriations of $5 
million in fiscal years 2003 and 2004 for any such domiciliaries. See 
Pub. L. No. 107-95,  2043, 115 Stat. 903, 913. 

[B] Related to the Veterans Health Care, Capital Asset, and Business 
Improvement Act of 2003, in which Congress required VA to allocate a 
minimum of $25 million in each of fiscal years 2004, 2005, and 2006 to 
carry out a program to expand and improve the provision of specialized 
mental health services for veterans, including PTSD and substance abuse 
services. Congress also required VA to ensure that after these 
allocations, total expenditures related to treatment of substance abuse 
and PTSD were not less than $25 million above the total expenditures on 
such programs in fiscal year 2003, adjusted for increases in the costs 
of delivering those services. See Pub. L. No 108-170  108, 117 Stat. 
2042, 2046-47. 

[C] For some mental health services, such as substance abuse, VA 
planned to allocate some funds that were related to legislation 
expressly requiring spending or authorizing those services as well as 
other funds that were not. 

[D] This amount was allocated to VA's Office of Geriatrics and Extended 
Care. 

[E] This amount was allocated to VA's Employee Education System. 

[End of table] 

Most of the approximately $53 million allocated--about $48 million-- 
went to VA medical centers. PTSD services and OEF/OIF veterans' mental 
health care received combined allocations of about $18 million. In 
addition, combined allocations for Compensated Work Therapy (CWT) 
totaled nearly $10 million. Other initiatives receiving funding 
included substance abuse services, domiciliary expansion, and 
psychosocial rehabilitation for veterans with serious mental illness. 
In addition, VA allocated $4 million that was initially planned for CWT 
programs to VA's Office of Geriatrics and Extended Care to support 
development of a new nursing home care model. This shift occurred 
toward the end of the fiscal year, when it appeared that not all mental 
health strategic plan funding would be allocated that year. VA 
officials noted that the nursing home model was aligned with 
initiatives in the mental health strategic plan related to the needs of 
veterans in long-term care settings. The remaining funds--$600,000-- 
were allocated to VA's Employee Education System to develop educational 
programs. 

VA headquarters officials issued five RFPs from October 2004 to January 
2005 that described the specific types of services for which mental 
health strategic plan funding was available. The RFPs related to PTSD, 
veterans of OIF and OEF, substance abuse, and psychosocial 
rehabilitation services were issued in October 2004; the domiciliary 
RFP was issued in January 2005. All of the RFPs noted that funding 
would be provided to address unmet needs or gaps in services. Review 
panels headed by mental health experts within VA reviewed the proposals 
submitted by networks, ranked them, and provided their rankings to VA's 
leadership who made the allocation decisions.[Footnote 15] VA then 
allocated funding directly to medical centers for the mental health 
strategic plan initiatives beginning in February 2005 and continuing 
throughout fiscal year 2005. 

In addition to RFPs, VA also used other approaches targeted to specific 
initiatives based on identified needs. For example, VA headquarters 
officials used a targeted approach to allocate funding to medical 
centers to expand mental health services at CBOCs that had fewer mental 
health visits than a standard that VA identified for this 
purpose.[Footnote 16] In addition, VA headquarters allocated funds to 
support the creation of CWT-supported employment mentor sites in each 
network. The medical centers selected at those sites were expected to 
provide training and support for existing and future CWT programs aimed 
at helping veterans with serious mental illness find and maintain 
employment. VA headquarters also used targeted funding approaches to 
allocate funds to medical centers to enhance existing CWT programs 
through the addition of new staff and to establish CWT programs at 
medical centers without such programs. VA headquarters used targeted 
approaches to allocate funding for new and expanded mental health 
intensive case management teams; grant and per diem liaisons for 
homeless veterans; and PTSD, OIF and OEF veterans', and substance abuse 
services. 

VA headquarters officials said that allocations made for initiatives in 
fiscal year 2005 through RFPs and other approaches targeted to specific 
initiatives would be made for a total of 2 to 3 fiscal years. These 
officials said they anticipated that medical centers would hire 
permanent staff whose positions would need to be funded for more than 1 
year. The expectation of VA leadership was that after funds allocated 
through these approaches were no longer available, medical centers 
would continue to support these programs using their general operating 
funds received through VA's general resource allocation system. 

VA Allocated $35 Million through Its General Resource Allocation System 
to Its Health Care Networks on a Retrospective Basis: 

VA allocated $35 million for mental health strategic plan initiatives 
in fiscal year 2005 through its general resource allocation 
system[Footnote 17] to its health care networks, according to VA 
headquarters officials. The decision to allocate these resources to 
VA's networks for mental health strategic plan initiatives was 
retrospective and VA did not notify networks and medical centers of 
this decision. Although VA headquarters made fiscal year 2005 general 
resource allocations to the networks in December 2004,[Footnote 18] the 
decision that $35 million in funds allocated at that time was for 
mental health strategic plan initiatives was not finalized until April 
2005, several months after the general allocation had been made. VA 
headquarters officials said that they made the decision to allocate $35 
million from the general resource allocation system because these 
resources would be more rapidly allocated than if they had been 
allocated through RFPs. However, other VA headquarters officials told 
us that the decision was also made, in part, because VA did not have 
sufficient unallocated funds remaining after the December 2004 general 
allocation to fund $100 million for the mental health strategic plan 
through RFPs and other targeted approaches. 

VA headquarters officials, as well as network and medical center 
officials, indicated that there was no guidance to the networks and 
medical centers instructing them to use specific amounts from their 
general fiscal year allocation for mental health strategic plan 
initiatives. Network and medical center officials we spoke with in four 
networks were unaware that any specific portion of their general 
allocation was intended by headquarters officials to be used for mental 
health strategic plan initiatives. Several VA medical center officials 
noted, however, that some of the funds in their general allocation were 
used to support mental health programs generally, as part of their 
routine operations. However, because network and medical center 
officials we interviewed did not know that funds had been allocated for 
mental health strategic plan initiatives through VA's general resource 
allocation system, nor did VA headquarters notify networks and medical 
centers throughout VA of this retrospective allocation, it is likely 
that some of these funds were not used for plan initiatives. 

VA Did Not Allocate about $12 Million Planned for Mental Health 
Strategic Plan Initiatives: 

VA did not allocate approximately $12 million remaining of the $100 
million planned for mental health strategic plan initiatives in fiscal 
year 2005 because, according to VA headquarters officials, there was 
not enough time during the fiscal year to allocate the funds through 
the RFP process or other approaches targeted to specific initiatives. 
In addition, officials said that when resources were allocated later in 
the fiscal year through an RFP, rather than at the beginning of the 
year, the amount allocated was only a portion of the annualized cost. 
For example, if funds for a project with an annual cost of $4 million 
were allocated midway through the fiscal year, only half the annual 
cost was allocated at that time--$2 million. The expectation was that 
the full $4 million would be made available for the project over the 12 
months in the next fiscal year. The approximately $12 million in 
unallocated funds in fiscal year 2005 was intended for mental health 
strategic plan initiatives based on an allocation plan developed by VA. 
(See table 2.) About $11 million of the resources not allocated was for 
services related to legislation that expressly required spending or 
authorized such services, according to VA officials. VA headquarters 
officials said that the funds not allocated for mental health strategic 
plan initiatives were allocated for other health care services. 

Table 2: Summary of VA Information on Planned Funding for Mental Health 
Strategic Plan Initiatives Not Allocated by Type of Mental Health 
Service, Fiscal Year 2005: 

Type of mental health service: Related to legislation that expressly 
required spending or authorized services: Substance abuse[A]; 
Planned amount not allocated (dollars): $2,824,633. 

Type of mental health service: Related to legislation that expressly 
required spending or authorized services: Operation Iraqi Freedom (OIF) 
and Operation Enduring Freedom (OEF)[A]; 
Planned amount not allocated (dollars): 2,554,446. 

Type of mental health service: Related to legislation that expressly 
required spending or authorized services: PTSD[A]; 
Planned amount not allocated (dollars): 2,273,160. 

Type of mental health service: Related to legislation that expressly 
required spending or authorized services: Psychosocial rehabilitation 
for veterans with serious mental illness[A]; 
Planned amount not allocated (dollars): 2,213,586. 

Type of mental health service: Related to legislation that expressly 
required spending or authorized services: Compensated work 
therapy/supported employment mentoring sites[A]; 
Planned amount not allocated (dollars): 1,464,262. 

Type of mental health service: Related to legislation that expressly 
required spending or authorized services: Subtotal; 
Planned amount not allocated (dollars): $11,330,116[B]. 

Type of mental health service: Not directly related to legislation that 
expressly required spending or authorized services[C]: Compensated work 
therapy enhancement and expansion; 
Planned amount not allocated (dollars): 1,027,216. 

Type of mental health service: Not directly related to legislation that 
expressly required spending or authorized services[C]: Subtotal; 
Planned amount not allocated (dollars): $1,031,217[D]. 

Type of mental health service: Total; 
Planned amount not allocated (dollars): $12,361,333. 

Source: GAO summary of VA information. 

Notes: GAO did not independently determine the extent to which 
legislation regarding VA health care expressly requires spending or 
authorizes these services but relied on VA's determination regarding 
these services. 

[A] Related to the Veterans Health Care, Capital Asset, and Business 
Improvement Act of 2003, in which Congress required VA to allocate a 
minimum of $25 million in each of fiscal years 2004, 2005, and 2006 to 
carry out a program to expand and improve the provision of specialized 
mental health services for veterans, including PTSD and substance abuse 
services. Congress also required VA to ensure that after these 
allocations, total expenditures related to treatment of substance abuse 
and PTSD were not less than $25 million above the total expenditures on 
such programs in fiscal year 2003, adjusted for increases in the costs 
of delivering those services. See Pub. L. No 108-170  108, 117 Stat. 
2042, 2046-47. 

[B] Included in this subtotal is less than $100 that was not allocated 
for domiciliary expansion. The Homeless Veterans Comprehensive 
Assistance Act of 2001 authorized VA to establish up to 10 new 
domiciliary programs for homeless veterans. See Pub. L. No.107-95,  
2043, 115 Stat. 903, 913. 

[C] For some mental health services, such as substance abuse, VA 
planned to allocate some funds that related to legislation expressly 
requiring spending or authorizing those services as well as other funds 
that were not. 

[D] Included in this subtotal is approximately $4,000 that was not 
allocated for community-based outpatient clinic mental health, 
substance abuse, PTSD, and OIF/OEF services, as well as for mental 
health intensive case management teams. 

[End of table] 

Medical Center Officials Reported Using Allocated Funds for Mental 
Health Strategic Plan Initiatives, but Not Using All Funds Allocated 
for Plan Initiatives: 

Officials we interviewed from seven medical centers in four networks 
reported using the funds allocated to them for mental health strategic 
plan initiatives through RFPs and other targeted approaches, but some 
officials said that some of these funds were not used for plan 
initiatives in fiscal year 2005. Officials said they used funds 
allocated to provide new mental health services and to provide more of 
existing mental health services included in plan initiatives. For 
example, officials at medical centers in Bay Pines and the Tennessee 
Valley Healthcare System reported using funds to increase the number of 
mental health providers at CBOCs, some of which previously had no 
mental health providers available to see veterans. The Albuquerque 
medical center used funds to develop a CWT-supported employment program 
to help veterans with mental health diagnoses develop job skills and 
find employment. The Tennessee Valley Healthcare System also 
implemented a new 6-week PTSD day treatment program in which veterans 
live in the community but come to the medical center during the day for 
counseling, group therapy, and other services. The Tampa medical center 
funded new mental health staff to work with veterans being treated in 
its Polytrauma Rehabilitation Center. The Tuscaloosa medical center 
opened a new domiciliary for homeless veterans and the Phoenix medical 
center hired a new grant and per diem liaison for its homeless program. 
The medical centers in our review used the mental health strategic plan 
funds for recurring uses, such as hiring staff, and for nonrecurring 
uses. Nonrecurring uses included acquisition of furniture and equipment 
as well as building renovation. 

Officials at four medical centers reported that they were not able to 
use all of their fiscal year 2005 funding by the end of the fiscal year 
as planned and cited several factors that contributed to this 
situation. The length of time it takes to recruit new staff in general 
and the special problems of hiring specialized staff such as 
psychiatrists were cited. Officials at two medical centers noted that 
they received funding for multiple new positions, but that it was 
difficult for the medical center to recruit and hire for so many 
positions in a relatively short period of time. In addition, in some 
cases the need to locate or renovate space for mental health programs 
contributed to delays in using funds. For example, officials at the 
Albuquerque medical center reported that although it received funding 
for staff for a new residential program, it took some time to renovate 
the space needed for that program, which limited the amount of funding 
for staff they were actually able to spend in fiscal year 2005. 

Medical centers varied in how they treated fiscal year 2005 funds that 
were allocated by VA for mental health strategic plan initiatives but 
not used for those initiatives. Officials at three medical centers 
reported that they carried over the funds for use in the next fiscal 
year.[Footnote 19] For example, officials at the Phoenix medical center 
reported carrying over unused funding for a substance abuse residential 
rehabilitation program. Officials at two medical centers reported that 
they used these funds for other health care purposes. For example, 
officials at the Albuquerque medical center said that funding that was 
not used for staffing due to difficulties with hiring was made 
available to meet other needs in the medical center for that fiscal 
year. Officials at another medical center, the Tennessee Valley Health 
Care System, reported having unused fiscal year 2005 funding due to 
difficulties with hiring, and using this funding to support other 
mental health programs, in particular to hire mental health staff for 
its CBOCs. VA headquarters officials advised participants from networks 
and medical centers in a weekly conference call in August 2005 that if 
they were unable to hire staff for initiatives in fiscal year 2005, 
they should use the funds allocated only for mental health services. 

VA Allocated about $158 Million of the $200 Million Planned for Mental 
Health Strategic Plan Initiatives in Fiscal Year 2006, but Some 
Officials Were Uncertain If All Funds Would Be Used for Plan 
Initiatives: 

VA headquarters allocated about $158 million of the $200 million to be 
used for VA mental health strategic plan initiatives in fiscal year 
2006 directly to medical centers and certain offices by using several 
approaches. About $92 million of these funds was allocated to support 
new mental health strategic plan initiatives for fiscal year 2006. VA 
also allocated about $66 million to support the recurring costs of the 
continuing mental health strategic plan initiatives that were funded in 
fiscal year 2005. The remaining approximately $42 million was not 
allocated. Officials at some medical centers expected to use all the 
allocations they received during fiscal year 2006. However, officials 
at other medical centers were uncertain that they would use all their 
allocated funds for plan initiatives during the fiscal year. 

VA Allocated about $158 Million Directly to Medical Centers and Certain 
Offices: 

VA headquarters allocated about $158 million directly to medical 
centers and certain offices through RFPs and other approaches targeted 
to specific initiatives related to the mental health strategic plan in 
fiscal year 2006. (See table 3.) About $92 million was for new mental 
health strategic plan activities, and about $66 million was to support 
the recurring costs of continuing mental health strategic plan 
initiatives that were first funded in fiscal year 2005. As in fiscal 
year 2005, the new resources went to support a range of mental health 
services in line with priorities of VA's leadership and legislation, 
according to VA officials. Funding for services for PTSD, OIF and OEF 
veterans, substance abuse, and CBOC mental health services accounted 
for nearly three-fifths of the funds allocated for new initiatives. VA 
did not allocate resources in fiscal year 2006 for mental health 
strategic plan initiatives through its general resource allocation 
system, according to VA officials. 

Table 3: Summary of VA Information on Mental Health Strategic Plan 
Allocations to Medical Centers and Certain Offices by Type of Mental 
Health Service, Fiscal Year 2006: 

Type of mental health service: New fiscal year 2006 initiatives: 
Allocations related to legislation that expressly required spending or 
authorized services: Domiciliary expansion[A]; 
Amount allocated (dollars): $7,437,593. 

Type of mental health service: New Fiscal year 2006 initiatives: 
Allocations not directly related to legislation that expressly required 
spending or authorized services: PTSD and OEF/OIF; 
Amount allocated (dollars): 18,772,089. 

Type of mental health service: New Fiscal year 2006 initiatives: 
Allocations not directly related to legislation that expressly required 
spending or authorized services: Substance abuse; 
Amount allocated (dollars): 16,887,550. 

Type of mental health service: New Fiscal year 2006 initiatives: 
Allocations not directly related to legislation that expressly required 
spending or authorized services: Community-based outpatient clinic 
mental health; 
Amount allocated (dollars): 16,782,344. 

Type of mental health service: New Fiscal year 2006 initiatives: 
Allocations not directly related to legislation that expressly required 
spending or authorized services: Psychosocial and recovery-oriented 
services; 
Amount allocated (dollars): 6,249,025. 

Type of mental health service: New Fiscal year 2006 initiatives: 
Allocations not directly related to legislation that expressly required 
spending or authorized services: Telemental health programs to provide 
mental health services through videoconferencing; 
Amount allocated (dollars): 5,063,987. 

Type of mental health service: New Fiscal year 2006 initiatives: 
Allocations not directly related to legislation that expressly required 
spending or authorized services: Web-based support tools for veterans 
with mental health concerns; 
Amount allocated (dollars): 5,000,000. 

Type of mental health service: New Fiscal year 2006 initiatives: 
Allocations not directly related to legislation that expressly required 
spending or authorized services: Grant and per diem liaisons; 
Amount allocated (dollars): 4,700,000. 

Type of mental health service: New Fiscal year 2006 initiatives: 
Allocations not directly related to legislation that expressly required 
spending or authorized services: Mental health intensive case 
management teams; 
Amount allocated (dollars): 3,749,029. 

Type of mental health service: New Fiscal year 2006 initiatives: 
Allocations not directly related to legislation that expressly required 
spending or authorized services: Suicide prevention and residential 
rehabilitation treatment program infrastructure improvements; 
Amount allocated (dollars): 1,803,853. 

Type of mental health service: New Fiscal year 2006 initiatives: 
Allocations not directly related to legislation that expressly required 
spending or authorized services: Inpatient mental health services at 
two VA facilities in Tennessee; 
Amount allocated (dollars): 1,629,657. 

Type of mental health service: New Fiscal year 2006 initiatives: 
Allocations not directly related to legislation that expressly required 
spending or authorized services: Support for Gulf Coast mental health 
programs affected by Hurricane Katrina; 
Amount allocated (dollars): 1,610,643. 

Type of mental health service: New Fiscal year 2006 initiatives: 
Allocations not directly related to legislation that expressly required 
spending or authorized services: Educational programs; 
Amount allocated (dollars): 1,391,208. 

Type of mental health service: New Fiscal year 2006 initiatives: 
Allocations not directly related to legislation that expressly required 
spending or authorized services: Stand Down events for homeless 
veterans; 
Amount allocated (dollars): 467,665. 

Type of mental health service: New Fiscal year 2006 initiatives: 
Allocations not directly related to legislation that expressly required 
spending or authorized services: Pilot program for incarcerated 
veterans with mental illness; 
Amount allocated (dollars): 233,334. 

Type of mental health service: New Fiscal year 2006 initiatives: 
Allocations not directly related to legislation that expressly required 
spending or authorized services: Peer housing assistance pilot program 
for homeless veterans; 
Amount allocated (dollars): 168,980. 

Type of mental health service: New Fiscal year 2006 initiatives: 
Allocations not directly related to legislation that expressly required 
spending or authorized services: Initiative for mentally ill 
chemically- addicted veterans; 
Amount allocated (dollars): 69,517. 

Type of mental health service: Subtotal--new fiscal year 2006 
initiatives; 
Amount allocated (dollars): $92,016,474. 

Type of mental health service: Initiatives initially funded in fiscal 
year 2005; 
Amount allocated (dollars): 65,675,513. 

Type of mental health service: Total; 
Amount allocated (dollars): $157,691,987. 

Source: GAO summary of VA information. 

Notes: GAO did not independently determine the extent to which 
legislation regarding VA health care expressly requires spending or 
authorizes these services but relied on VA's determination regarding 
these services. 

[A] Related to the Homeless Veterans Comprehensive Assistance Act of 
2001, which authorized VA to establish up to 10 new domiciliary 
programs for homeless veterans. See Pub. L. No. 107-95,  2043, 115 
Stat. 903, 913. 

[End of table] 

VA headquarters officials used RFPs and other approaches targeted to 
specific initiatives to determine which medical centers would receive 
funding for new mental health strategic plan initiatives in fiscal year 
2006. In November 2005, for example, VA issued an RFP that covered six 
mental health areas: PTSD services, including residential services; 
health promotion and preventive care services for veterans returning 
from OEF and OIF; specialized substance abuse treatment programs; new 
mental health residential rehabilitation and treatment 
programs;[Footnote 20] enhanced or new CBOC mental health services; and 
new telemental health programs to provide mental health services 
through videoconferencing. VA also used other approaches to target 
funds to medical centers for grant and per diem program liaisons, new 
or expanded mental health intensive case management teams, and expanded 
inpatient services at the Tennessee Valley Healthcare System medical 
center. Further, VA allocated funding for medical supplies, equipment, 
and office furniture for Gulf Coast mental health programs affected by 
Hurricane Katrina. As in fiscal year 2005, VA allocated funding to the 
Employee Education System to support educational programs. VA also 
allocated funding to support additional mental health initiatives such 
as the development of web-based support tools for veterans with mental 
health concerns, infrastructure improvements at residential 
rehabilitation treatment facilities, suicide prevention efforts, and 
Stand Down events to provide services such as counseling and health 
screenings for homeless veterans. 

VA Did Not Allocate about $42 Million for Mental Health Strategic Plan 
Initiatives: 

VA did not allocate about $42 million of the $200 million planned for 
mental health strategic plan initiatives in fiscal year 2006 by any 
approach. The approximately $42 million in unallocated funds were 
intended for certain mental health strategic plan initiatives based on 
an allocation plan developed by VA. According to VA officials, VA was 
unable to allocate all the $200 million, in part, because of the 
delayed implementation of three new Centers of Excellence, focusing on 
veterans' mental health issues, including PTSD, for which VA planned 
allocations totaling $4.5 million.[Footnote 21] VA officials also cited 
the unanticipated length of time required to refine the processes for 
implementation of initiatives related to the provision of mental health 
services in primary care settings. VA had solicited proposals related 
to primary care mental health services through a May 2006 RFP[Footnote 
22] and had anticipated allocating about $11 million for such services 
from funds reserved for emerging needs related to the mental health 
strategic plan. In addition, VA officials reported that a portion of 
the funds were unallocated for reasons related to the timing of 
allocations that were made for plan initiatives through RFPs and other 
funds targeted to medical centers. Specifically, some of these 
allocations were made well into the fiscal year. VA allocated only the 
amount of funds through these approaches for fiscal year 2006 that 
would fund the projects through the end of the fiscal year, and not the 
full 12-month costs, which VA expects to fund in fiscal year 2007. VA 
officials said they anticipated that the full 12-month allocation would 
be available for these projects in fiscal year 2007. Most of the 
unallocated funds had been planned for initiatives to provide services 
that VA identified as not directly in response to legislation that 
expressly required spending or authorized such services. (See table 4.) 

Table 4: Summary of VA Information on Planned Funding for Mental Health 
Strategic Plan Initiatives Not Allocated by Type of Mental Health 
Service, Fiscal Year 2006: 

Type of Mental Health Service: Related to legislation that expressly 
required spending or authorized services: Centers of Excellence[A]; 
Planned Amount Not Allocated (dollars): $4,500,000. 

Type of Mental Health Service: Related to legislation that expressly 
required spending or authorized services: Domiciliary expansion[B]; 
Planned Amount Not Allocated (dollars): 8,804. 

Type of Mental Health Service: Not directly related to legislation that 
expressly required spending or authorized services: PTSD and OEF/OIF; 
Planned Amount Not Allocated (dollars): 10,690,920. 

Type of Mental Health Service: Not directly related to legislation that 
expressly required spending or authorized services: Psychosocial and 
recovery-oriented services; 
Planned Amount Not Allocated (dollars): 5,652,638. 

Type of Mental Health Service: Not directly related to legislation that 
expressly required spending or authorized services: Telemental health 
programs to provide mental health services through videoconferencing; 
Planned Amount Not Allocated (dollars): 3,936,013. 

Type of Mental Health Service: Not directly related to legislation that 
expressly required spending or authorized services: Substance abuse; 
Planned Amount Not Allocated (dollars): 3,112,450. 

Type of Mental Health Service: Not directly related to legislation that 
expressly required spending or authorized services: Mental health 
program review; 
Planned Amount Not Allocated (dollars): 1,000,000. 

Type of Mental Health Service: Not directly related to legislation that 
expressly required spending or authorized services: Inpatient mental 
health services at two VA facilities in Tennessee; 
Planned Amount Not Allocated (dollars): 773,503. 

Type of Mental Health Service: Not directly related to legislation that 
expressly required spending or authorized services: Mental health 
intensive case management teams; 
Planned Amount Not Allocated (dollars): 539,419. 

Type of Mental Health Service: Not directly related to legislation that 
expressly required spending or authorized services: Community-based 
outpatient clinic mental health; 
Planned Amount Not Allocated (dollars): 194,266. 

Type of Mental Health Service: Not directly related to legislation that 
expressly required spending or authorized services: Reserved for 
emerging needs; 
Planned Amount Not Allocated (dollars): 11,900,000. 

Type of Mental Health Service: Total; 
Planned Amount Not Allocated (dollars): $42,308,013. 

Source: GAO summary of VA information. 

Notes: GAO did not independently determine the extent to which 
legislation regarding VA health care expressly requires spending or 
authorizes these services but relied on VA's determination regarding 
these services. 

[A] In the Conference Report accompanying the Military Quality of Life 
and Veterans Affairs Appropriations Act of 2006, the Conference 
Committee stated that VA should consider designating specialized 
medical treatment facilities for mental health and PTSD as Centers of 
Excellence, and directed VA to establish three specific centers. See 
H.R. Conf. Rep. No. 109-305, at 39 (2005). 

[B] Related to the Homeless Veterans Comprehensive Assistance Act of 
2001, which authorized VA to establish up to 10 new domiciliary 
programs for homeless veterans. See Pub. L. No. 107-95,  2043, 115 
Stat. 903, 913. 

[End of table] 

Medical Center Officials Reported Using Allocated Funds for Mental 
Health Strategic Plan Initiatives, but Were Uncertain Whether All Funds 
Allocated Would Be Used for Plan Initiatives: 

Officials at seven medical centers we interviewed in May and June of 
2006 reported using funds allocated to them through RFPs and other 
approaches to support new 2006 initiatives and to continue to support 
initiatives funded in fiscal year 2005. Officials at four of these 
medical centers told us that they were using these funds to support 
expanded mental health services. For example, officials at several 
medical centers, including Bay Pines, Decatur, and the Tennessee Valley 
Healthcare System, reported using fiscal year 2006 funding to expand 
mental health services in their CBOCs by adding clinical staff. As part 
of this expansion of services, the Tampa medical center used funding 
for a new mental health intensive case management program. Five medical 
centers had received funding for expanded mental health services, but 
had not yet used all of the allocated funds. The Albuquerque medical 
center, for example, had received funding for a new substance abuse 
program for geriatric patients and a new case management program for 
veterans with PTSD. As of May 2006, both programs were still being 
developed and positions had been advertised but had not yet been 
filled. 

Officials at two medical centers reported that they did not anticipate 
problems using all of the funds they had received in fiscal year 2006. 
However, officials at four other medical centers were less certain they 
would be able to use all of the funds. Officials at two of these 
medical centers were not sure whether they would be able to hire all of 
their new staff by the end of the fiscal year. In addition, officials 
at the Bay Pines and Phoenix medical centers noted that they had not 
yet learned whether proposals they submitted in response to fiscal year 
2006 RFPs would be funded; as a result, officials at those medical 
centers were uncertain whether they would be able to use all of their 
fiscal year 2006 funds for plan initiatives by the end of the fiscal 
year. 

VA Tracking of Funds Spent for Mental Health Strategic Plan Initiatives 
Was Inadequate, but Available Information Indicates That Spending for 
These Initiatives Was Substantially Less Than Planned: 

VA tracking of spending for mental health strategic plan initiatives 
was inadequate for fiscal years 2005 and 2006. In fiscal year 2005, VA 
headquarters did not track spending on mental health strategic plan 
initiatives. In fiscal year 2006, VA began to track some information on 
medical centers' mental health strategic plan initiatives, but did not 
track the amount of allocated funds that was spent for them.[Footnote 
23] VA headquarters officials used this newly instituted tracking 
system to gather implementation information reported by networks and 
medical centers on a quarterly basis. The tracked information was 
primarily related to positions to be filled, the schedule for filling 
them, and when they were filled. Headquarters officials said that this 
tracking was intended, in part, to measure medical centers' progress in 
implementing plan initiatives. Officials told us that they believe that 
tracking of hiring provides information on how funds were spent because 
most costs of initiatives are personnel costs. However, the data on 
hiring did not include information on the individual salaries of staff, 
associated benefits, the portion of the fiscal year for which staff are 
employed, equipment, supplies, rent, or renovation of facilities. As a 
result the quarterly reports do not allow VA to determine how much was 
spent on plan initiatives. In fiscal year 2006, VA headquarters 
officials compiled information on the amount of funds returned to 
headquarters that medical centers could not spend during the fiscal 
year. However, VA does not have information on whether the funds 
medical centers retained were spent for plan initiatives. 

Available information indicates that spending of allocations for mental 
health strategic plan initiatives was substantially less than planned 
in both fiscal years 2005 and 2006. In fiscal year 2005, approximately 
$12 million of the planned $100 million for plan initiatives was not 
allocated for plan initiatives and thus was not spent on them. Thirty- 
five million dollars was allocated through VA's general resource 
allocation system, but because VA headquarters did not specify that 
these funds were for mental health strategic plan initiatives, it is 
likely that portions of this money were not spent on them, and VA 
officials said they do not have information on these funds being spent 
for plan initiatives. In addition, VA officials told us that they did 
not have information on the extent to which the approximately $53 
million in funds that were allocated directly to medical centers and 
certain offices was actually spent on plan initiatives. Officials at 
medical centers we interviewed told us that they used some of these 
funds on mental health activities other than the planned initiatives or 
carried over funds until the next fiscal year. 

In fiscal year 2006, available information indicates that the maximum 
amount of allocated funds that could have been spent for plan 
initiatives in fiscal year 2006 also fell substantially below what was 
planned. About $42 million of the $200 million that was planned for 
allocation to mental health strategic plan initiatives was never 
allocated for them, and thus, never spent for plan initiatives. 
Additionally, about $46 million of the approximately $158 million that 
was allocated was returned by medical centers to headquarters because 
it had not been spent for plan initiatives before the end of the fiscal 
year.[Footnote 24] However, all of the remaining approximately $112 
million of funds allocated to and retained by medical centers and 
offices was not necessarily spent on plan initiatives as originally 
planned. VA officials provided written guidance to medical centers in 
August 2006 instructing them to spend funds for other mental health 
activities if they could not spend them for the planned initiatives 
before the end of the fiscal year. VA officials told us that because 
they had provided instructions to spend the funds on mental health 
activities that such activities would constitute spending on mental 
health strategic plan activities. VA's guidance, however, did not 
specify that funds be used for the plan initiatives or alternative 
initiatives. Moreover, VA did not track specifically how these funds 
were spent. As a consequence, VA cannot determine how much of the 
approximately $112 million that was allocated for plan initiatives and 
not returned to headquarters was spent on plan initiatives. 

Conclusion: 

VA allocated additional resources for mental health strategic plan 
initiatives in fiscal years 2005 and 2006 to help address identified 
gaps in VA's mental health services for veterans. The allocations that 
were made resulted in some new and expanded mental health services for 
plan initiatives according to officials at selected medical centers. 
However, in fiscal year 2005, lack of adequate time for headquarters to 
allocate funds for plan initiatives to medical centers, late-in-the- 
year allocations that hampered medical center efforts to bring staff on 
board during the fiscal year, and a lack of guidance concerning 
allocations for plan initiatives made through VA's general resource 
allocation system resulted in spending on initiatives falling short of 
what was planned. In fiscal year 2006, a larger amount, approximately 
$158 million of the planned $200 million for plan initiatives, was 
allocated to medical centers and other offices than in fiscal year 
2005. However, at the end of the fiscal year about $46 million was 
returned to VA headquarters that had not been spent on mental health 
strategic plan initiatives, and some funds that remained with medical 
centers and other offices may have been directed towards mental health 
activities other than plan initiatives. 

Although available information shows that a substantial portion of the 
resources intended for plan initiatives in fiscal years 2005 and 2006 
was not spent on these initiatives, VA does not know the amount of 
allocated funds actually spent on them. The extent of spending is 
unknown because VA did not track spending of these funds. Although some 
tracking of mental health strategic plan initiatives was started in 
fiscal year 2006, data were not collected that would allow an 
assessment of spending. Tracking the extent to which allocations for 
plan initiatives are spent for these initiatives is important as VA 
continues to allocate resources for future plan initiatives. This would 
help to ensure that the money is being spent as planned, and that VA is 
in fact addressing gaps that it has identified in mental health 
services for veterans. 

Recommendation for Executive Action: 

To provide information for improved management and oversight of how 
funds VA allocates are spent to fill identified gaps in mental health 
services for veterans, we recommend that the Secretary of Veterans 
Affairs direct the Under Secretary for Health to take the following 
action: 

Track the extent to which the resources allocated for mental health 
strategic plan initiatives are spent for plan initiatives. 

Agency Comments: 

VA did not provide agency comments on the contents of this report. We 
offered VA the opportunity to review and comment on the report, but not 
retain copies of the draft as part of a process to help safeguard the 
contents from unauthorized disclosure. VA in a written response 
(reproduced in app. III) said that it was unable to provide comments on 
the draft report because VA was not provided a copy of the report for 
appropriate staffing to include review and analysis. VA further stated 
that while it respected our desire to maintain the integrity of GAO 
draft reports by preventing improper disclosure of draft contents, that 
this did not outweigh the need for VA staff to have a copy of the draft 
report for review and analysis. We have provided similar report review 
opportunities to other agencies for other reports, and have received 
agency comments in those circumstances. 

We met with VA officials on November 14, 2006, and provided them with 
an oral briefing covering the contents of the draft report. Further, a 
portion of the contents of this report had previously been released as 
a statement for the record at a hearing held by the House Veterans' 
Affairs Committee, Subcommittee on Health, on September 28, 2006. We 
discussed the information in that statement with VA officials who have 
responsibilities related to mental health services, budgeting, and the 
allocation of financial resources, and they agreed that the data in the 
statement were accurate. As a result, VA is aware of the report's 
contents. 

As agreed with your office, unless you publicly announce the contents 
of this report earlier, we plan no further distribution of it until 30 
days from the date of this report. At that time, we will send copies to 
the Secretary of Veterans Affairs, appropriate congressional 
committees, and other interested parties. We will also make copies 
available to others upon request. In addition, the report will also be 
available at no charge on the GAO Web site at [Hyperlink, 
http://www.gao.gov]. If you or your staff have any questions about this 
report, please contact me at (202) 512-7101 or ekstrandl@gao.gov. 
Contact points for our Offices of Congressional Relations and Public 
Affairs may be found on the last page of this report. GAO staff who 
made major contributions to this report are listed in appendix IV. 

Signed by: 

Laurie E. Ekstrand: 
Director, Health Care: 

[End of section] 

Appendix I: Department of Veterans Affairs (VA) Health Care Networks, 
Medical Centers, and Other Facilities GAO Selected for Review: 

VA health care network: Network 7 (Atlanta, Ga.)--Southeast Network; 
Site visits or phone interviews: Phone interviews; 
Medical centers and other facilities: 
* Decatur, Ga., medical center; 
* Tuscaloosa, Ala., medical center; 
* Birmingham, Ala., Vet Center. 

VA health care network: Network 8 (Bay Pines, Fla.)--Sunshine 
Healthcare Network; 
Site visits or phone interviews: Site visits; 
Medical centers and other facilities: 
* Bay Pines, Fla., medical center; 
* Tampa, Fla., medical center; 
* Dunedin, Fla., community-based outpatient clinic (CBOC); 
* Lakeland, Fla., CBOC; 
* St. Petersburg, Fla., Vet Center; 
* Tampa, Fla., Vet Center. 

VA health care network: Network 9 (Nashville, Tenn.)--Mid South 
Healthcare Network; 
Site visits or phone interviews: Site visits; 
Medical centers and other facilities: 
* Tennessee Valley Healthcare System[A] (Nashville, Tenn., and 
Murfreesboro, Tenn., campuses) medical center; 
* Clarksville, Tenn., CBOC; 
* Chattanooga, Tenn., Vet Center. 

VA health care network: Network 18 (Phoenix, Ariz.)--Southwest Health 
Care Network; 
Site visits or phone interviews: Phone interviews; 
Medical centers and other facilities: 
* Albuquerque, N.M., medical center; 
* Phoenix, Ariz., medical center; 
* Albuquerque, N.M., Vet Center. 

Source: GAO. 

[A] The Tennessee Valley Healthcare System is a medical center that has 
two locations. 

[End of table] 

[End of section] 

Appendix II: Description of Selected Department of Veterans Affairs 
(VA) Mental Health Services: 

Table 6: : 

VA Mental Health Service: Community-based outpatient clinics (CBOC); 
Description: CBOCs provide medical services, which can include mental 
health, on an outpatient basis in a community setting. CBOCs are 
affiliated with a VA medical center. 

VA Mental Health Service: Compensated Work Therapy (CWT); 
Description: CWT is a therapeutic work-for-pay program that (1) uses 
remunerative work to maximize a veteran's level of functioning, (2) 
prepares veterans for successful reentry into the community, and (3) 
provides a structured daily activity to those veterans with severe and 
chronic disabling physical and/or mental conditions. 

VA Mental Health Service: Domiciliary program; 
Description: Domiciliary residential rehabilitation and treatment 
programs for homeless veterans, providing coordinated, integrated 
rehabilitative and restorative clinical care in a bed-based program, 
with the goal of helping eligible veterans achieve and maintain the 
highest level of functioning and independence possible. 

VA Mental Health Service: Grant and Per Diem program; 
Description: VA offers grants to non-VA organizations in the community 
to provide supportive housing programs and supportive service centers 
for homeless veterans. Once programs are established, VA provides per 
diem payments to help offset operational expenses of the program. Grant 
and per diem liaisons oversee services provided by these organizations. 

VA Mental Health Service: Mental health intensive case management; 
Description: Mental health intensive case management teams are designed 
to deliver high-quality services that: (1) provide intensive, flexible 
community support; (2) improve health status (reduce psychiatric 
symptoms and substance abuse); (3) reduce psychiatric inpatient 
hospital use and dependency; (4) improve community adjustment, 
functioning, and quality of life; (5) enhance satisfaction with 
services; and (6) reduce treatment costs. 

VA Mental Health Service: Mentally ill chemically-addicted veterans 
initiative; 
Description: The Mentally Ill Chemically Addicted program, intended to 
assist underserved veterans with serious and persistent mental 
illnesses, involves recovery-and rehabilitation-oriented services in 
Network 17 as well as training on the recovery model and psychosocial 
rehabilitation concepts and skills. 

VA Mental Health Service: Operation Iraqi Freedom (OIF) and Operation 
Enduring Freedom (OEF); 
Description: Assessment, preventative, and early intervention mental 
health services for veterans returning from combat in Iraq, 
Afghanistan, and other areas. These services involve outreach and 
education efforts, as well as a range of psychosocial support services. 

VA Mental Health Service: Peer housing assistance pilot program for 
homeless veterans; 
Description: The Peer Housing Location Assistance Group pilot program 
is a recovery-oriented program that encourages and enables each veteran 
to take responsibility and initiative to choose and apply for as many 
housing opportunities as his or her eligibility characteristics, 
preferences, and motivation permit. The program aims to help 
participants manage the process and frustrations of finding and 
maintaining safe and secure housing through a combination of 
information, problem-solving, encouragement, professional assistance, 
and peer support. 

VA Mental Health Service: Pilot program for incarcerated veterans with 
mental illness; 
Description: A collaborative venture between the North Texas Health 
Care System and the Texas Correctional Office on Offenders with Medical 
and Mental Impairments that provides active outreach and case 
management services to veterans with diagnosed mental illness being 
released from the Texas prisons and involves work with the Texas 
diversion courts for mentally ill offenders to provide outreach and 
case management services for veterans convicted of minor offences who 
have been diagnosed with mental illness. 

VA Mental Health Service: Polytrauma Rehabilitation Centers; 
Description: Polytrauma Rehabilitation Centers provide comprehensive 
interdisciplinary rehabilitation and coordinated complex medical, 
surgical, and mental health care, as well as long-term follow-up, to 
veterans of OIF and OEF who have sustained severe injuries and have 
complex rehabilitation needs. 

VA Mental Health Service: Post-traumatic stress disorder (PTSD); 
Description: Specialized services for veterans returning from Iraq and 
Afghanistan, as well as veterans from past service eras, including the 
Vietnam War. As part of VA's overall coordination of postdeployment 
programs, PTSD services are focused on veterans who are survivors of 
traumatic events and require comprehensive treatment. 

VA Mental Health Service: Psychosocial rehabilitation for veterans with 
serious mental illness; 
Description: A comprehensive approach to restoring a veteran's full 
potential following the onset of serious mental illness. This approach 
involves assisting the veteran in all aspects of normal life to attain 
the highest level of functioning in the community; it includes such 
components as patient and family education; enhancement of residential, 
social, and work skills; cognitive behavioral therapy; motivational 
interviewing, integrated dual diagnosis treatment, and provision of 
intensive case management when needed. 

VA Mental Health Service: Residential rehabilitation treatment program 
infrastructure improvements; 
Description: Safety, security, privacy, access, and infrastructure 
improvements to domiciliary and residential rehabilitation treatment 
programs, including repairs, renovations, furnishings, appliances, 
equipments, household goods, and program supplies and materials. A 
special emphasis for a component of these funds was improving access to 
these mental health residential programs for women veterans. 

VA Mental Health Service: Stand Downs; 
Description: Stand Downs are typically 1 to 3 day events that provide 
services to homeless veterans such as food, clothing, health 
screenings, VA and Social Security benefits counseling, and referrals 
to a variety of other supportive services such as housing, employment, 
and substance abuse treatment. Stand Downs are collaborative events 
that are coordinated between local VA facilities, other government 
agencies, and community agencies that serve the homeless. 

VA Mental Health Service: Substance abuse; 
Description: Specialized services for veterans with substance abuse 
disorders such as alcoholism and drug addictions. These services, for 
example, are provided in residential rehabilitation treatment programs. 

VA Mental Health Service: Suicide prevention initiative; 
Description: Initiative designed to obtain causes of death for veterans 
who have died in recent years, to identify those who have died from 
suicide and related causes, to identify risk factors, and to evaluate 
regional and local variability in rates and risk factors. The goal is 
to obtain information that can guide evidence-based efforts at suicide 
prevention, nationally and at other levels. 

VA Mental Health Service: Support for Gulf Coast mental health programs 
affected by Hurricane Katrina; 
Description: Special needs funding for medical supplies, equipment, 
office furniture, and modular buildings for Gulf Coast VA mental health 
programs that sustained damage due to Hurricane Katrina. 

VA Mental Health Service: Telemental health; 
Description: Telemental health uses electronic communications and 
information technology to provide and support mental health care where 
geographic distance separates the clinicians and patients. These 
services are often used in rural areas where the availability of mental 
health providers is limited. 

VA Mental Health Service: Web-based support tools for veterans with 
mental health concerns; 
Description: Initiative to develop an interactive set of web-based 
tools to allow veterans who have behavioral or mental health concerns 
to track important aspects of their self-care and professional care. 

Source: GAO summary of VA information. 

[End of table] 

[End of section] 

Appendix III: Comments from the Department of Veterans Affairs: 

The Secretary Of Veterans Affairs: 
Washington: 

November 14, 2006: 

Ms. Laurie Ekstrand: 
Director: 
Health Care Team: 
U. S. Government Accountability Office: 
441 G Street, NW: 
Washington, DC 20548: 

Dear Ms. Ekstrand, 

This responds to your request that the Department of Veterans Affairs 
(VA) review and comment on your draft report on VA's spending 
implementing the Department's mental health strategic plan (GAO 
Engagement Code 290522.) 

VA was not provided a copy of the report for appropriate staffing, to 
include review and analysis. This is an unusual departure from what has 
been the usual GAO practice. Under this constraint, VA is unable to 
provide comments on your draft report. 

I do appreciate your providing an exit briefing and oral summary of the 
report's findings and recommendation to my staff today. 

I respect your desire to maintain the integrity of GAO draft reports 
and that leaks outside official channels be controlled. Yet, that does 
not outweigh the need for VA staff to have a copy of GAO's draft report 
to fact-check, review and analyze in order that we might develop cogent 
comments (including possible technical corrections). 

I hope that in the future GAO will appreciate that this is a critical 
step in the audit process and will provide the Department with a copy 
of draft reports when requesting VA's comments. 

Sincerely, Yours, 

Signed by: 

R. James Nicholson: 

[End of section] 

Appendix IV: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Laurie E. Ekstrand, (202) 512-7101 or ekstrandl@gao.gov: 

Acknowledgments: 

In addition to the contact named above, Debra Draper, Assistant 
Director; James Musselwhite, Assistant Director; Jennie Apter; Robin 
Burke; and Steven Gregory made key contributions to this report. 

[End of section] 

Related GAO Products: 

VA Health Care: Preliminary Information on Resources Allocated for 
Mental Health Strategic Plan Initiatives. GAO-06-1119T. Washington, 
D.C.: September 28, 2006. 

VA Health Care: Budget Formulation and Reporting on Budget Execution 
Need Improvement. GAO-06-958. Washington, D.C.: September 20, 2006. 

VA Long-Term Care: Data Gaps Impede Strategic Planning for and 
Oversight of State Veterans' Nursing Homes. GAO-06-264. Washington, 
D.C.: March 31, 2006. 

VA Long-Term Care: Trends and Planning Challenges in Providing Nursing 
Home Care to Veterans. GAO-06-333T. Washington, D.C.: January 9, 2006. 

VA Health Care: VA Should Expedite the Implementation of 
Recommendations Needed to Improve Post-Traumatic Stress Disorder 
Services. GAO-05-287. Washington, D.C.: February 14, 2005. 

VA Long-Term Care: Oversight of Nursing Home Program Impeded by Data 
Gaps. GAO-05-65. Washington, D.C.: November 10, 2004. 

VA and Defense Health Care: More Information Needed to Determine If VA 
Can Meet an Increase in Demand for Post-Traumatic Stress Disorder 
Services. GAO-04-1069. Washington, D.C.: September 20, 2004. 

VA Health Care: Resource Allocations to Medical Centers in the Mid 
South Healthcare Network. GAO-04-444. Washington, D.C.: April 21, 2004. 

Department of Veterans Affairs: Key Management Challenges in Health and 
Disability Programs. GAO-03-756T. Washington, D.C.: May 8, 2003. 

VA Health Care: Allocation Changes Would Better Align Resources with 
Workload. GAO-02-338. February 28, 2002. 

Agencies' Annual Performance Plans Under the Results Act: An Assessment 
Guide to Facilitate Congressional Decisionmaking, Version 1. GAO/GGD/ 
AIMD-10.1.18. Washington, D.C.: February 1998. 

Managing for Results: Critical Issues for Improving Federal Agencies' 
Strategic Plans. GAO/GGD-97-180. Washington, D.C.: September 16, 1997. 

Business Process Reengineering Assessment Guide, Version 3. GAO/AIMD- 
10.1.15. Washington, D.C.: May 1997. 

Agencies' Strategic Plans Under GPRA: Key Questions to Facilitate 
Congressional Review, Version 1. GAO/GGD-10.1.16. Washington, D.C.: May 
1997. 

FOOTNOTES 

[1] The plan is known formally as A Comprehensive Veterans Health 
Administration Strategic Plan for Mental Health Services. In this 
report, we will refer to it as the mental health strategic plan. 

[2] Full Committee Hearing on the Continuum of Care for Post Traumatic 
Stress Disorder Before the House Comm. on Veterans' Affairs, 109th 
Cong. (July 27, 2005). 

[3] Total includes medical care collections, but does not include 
certain other amounts, such as appropriations for construction. 

[4] VA headquarters delegates decision making regarding financing and 
service delivery for health care services to its 21 health care 
networks, including most budget and management responsibilities 
concerning medical center operations. Medical centers typically include 
one or more hospitals as well as other types of health care facilities 
such as outpatient clinics and nursing homes. 

[5] Throughout this report, the phrase "how funds were used by medical 
centers" refers to information provided by medical center officials 
regarding the hiring of staff, purchase of certain equipment, and other 
purposes. These activities would be expected to result in obligations 
and expenditures of funds either immediately or in the future. 

[6] CBOCs provide medical services, which may include mental health 
services, on an outpatient basis in local communities. As of December 
2005, VA operated over 700 freestanding CBOCs, in addition to other 
CBOCs that are located in VA medical centers. 

[7] Vet Centers provide mental health services, including readjustment 
counseling and outreach services, to all veterans who served in any 
combat zone. There are 207 such centers that operate in all 50 states, 
the District of Columbia, Guam, Puerto Rico, and the U.S. Virgin 
Islands. 

[8] See GAO, VA Health Care: Preliminary Information on Resources 
Allocated for Mental Health Strategic Plan Initiatives, GAO-06-1119T 
(Washington, D.C.: Sept. 28, 2006). 

[9] Case mix is a classification of patients into categories based on 
their health care needs and related costs. 

[10] For a discussion of how VERA allocates resources to networks, see 
GAO, VA Health Care: Allocation Changes Would Better Align Resources 
with Workload, GAO-02-338 (Washington, D.C.: Feb. 28, 2002). 

[11] For a discussion of resource allocations to medical centers, see 
GAO, VA Health Care: Resource Allocations to Medical Centers in the Mid 
South Healthcare Network, GAO-04-444 (Washington, D.C.: Apr. 21, 2004). 

[12] For more information about the President's New Freedom Commission 
on Mental Health, see, for example, [Hyperlink, 
http://http://www.mentalhealthcommission.gov]. 

[13] For the purposes of the mental health strategic plan, VA defined 
veterans with serious mental illness to be "those who currently or at 
any time during the past year: 1) have a diagnosed mental, behavioral 
or emotional disorder of sufficient duration to meet the Diagnostic and 
Statistical Manual of Mental Disorders (Fourth Edition) criteria, that 
2) results in a disability (i.e. functional impairment that 
substantially interferes with or limits one or more major life 
activities)." This definition included adults who would meet these 
criteria during the year without the benefit of treatment or support 
services. 

[14] The Veterans Health Care, Capital Asset, and Business Improvement 
Act of 2003, Pub. L. No. 108-170,  108, 117 Stat. 2042, 2046-47, 
required VA to allocate a minimum of $25 million in each of fiscal 
years 2004, 2005, and 2006 to carry out a program to expand and improve 
the provision of specialty mental health services for veterans, 
including PTSD and substance abuse services. Congress also required VA 
to ensure that after these allocations, total expenditures related to 
treatment of substance abuse and PTSD were not less than $25 million 
above the total expenditures on such programs in fiscal year 2003, 
adjusted for increases in the costs of delivering those services. The 
Homeless Veterans Comprehensive Assistance Act of 2001, Pub. L. No. 107-
95,  2043, 115 Stat. 903, 913, authorized VA to establish up to 10 new 
domiciliary programs for homeless veterans. 

[15] According to the network and medical center staff we spoke with, 
even though the proposals were formally submitted by the networks, 
medical center staff had a significant amount of input into the 
proposals. 

[16] VA's performance measure was that for each network, in at least 85 
percent of all CBOCs with 1,500 or more patients, mental health visits 
would account for at least 10 percent of all visits. VA targeted funds 
to CBOCs that had no mental health providers or that needed additional 
providers to meet the performance measure of 10 percent. 

[17] This allocation system is known as the Veterans Equitable Resource 
Allocation (VERA) system. In fiscal year 2005, VA headquarters used 
VERA to allocate about 85 percent of its medical care appropriations to 
its 21 health care networks, which in turn allocated resources to their 
medical centers. VERA allocates resources primarily on the basis of 
patient workload and case mix where workload is the number of veterans 
treated and case mix is a classification of patients into categories 
based on their health care needs and related costs. See GAO-02-338 and 
GAO-04-444. 

[18] Fiscal year 2005 covered the period of October 1, 2004, through 
September 30, 2005. 

[19] VA may carry over from one fiscal year to the next unobligated 
balances of funds made available without fiscal year limitation and 
other funds appropriated for multiple fiscal years. 

[20] These could include homeless domiciliary programs, psychosocial 
programs, substance abuse programs, PTSD programs, or other general 
programs. 

[21] In the Conference Report accompanying the Military Quality of Life 
and Veterans Affairs Appropriations Act of 2006, Pub. L. No. 109-114, 
the Conference Committee stated that VA should consider designating 
specialized medical treatment facilities for mental health and PTSD as 
Centers of Excellence, and directed VA to establish three specific 
centers. These centers are to be located at VA facilities in 
Canandaigua, New York; Waco, Texas; and San Diego, California. See H.R. 
Conf. Rep. No. 109-305, at 39 (2005). 

[22] Through the RFP, funds were available for programs that promote 
effective treatment of common mental health conditions in primary care 
settings, in order to integrate care for veterans' physical and mental 
health and allow mental health specialists to focus on veterans with 
more severe illnesses. Funds were also available for related education 
and training. 

[23] Although VA headquarters' tracking system did not track spending 
for plan initiatives in fiscal year 2005, some network and medical 
center staff we spoke with reported on separate efforts to track 
medical centers' use of funds for mental health strategic plan 
initiatives. Some network staff told us that they developed their own 
tracking processes because they anticipated that they would eventually 
have to account for the use of funds allocated for mental health 
strategic plan initiatives. 

[24] Officials told us that unspent fiscal year 2006 funds returned to 
headquarters were placed in a reserve fund for use in fiscal year 2007 
and would be used for plan initiatives in that fiscal year. These 
officials said that the reserve fund is composed of appropriations that 
do not have to be obligated within a single fiscal year. 

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