This is the accessible text file for GAO report number GAO-12-703 
entitled 'Veterans Paralympics Program: Improved Reporting Needed to 
Ensure Grant Accountability' which was released on July 26, 2012. 

This text file was formatted by the U.S. Government Accountability 
Office (GAO) to be accessible to users with visual impairments, as 
part of a longer term project to improve GAO products' accessibility. 
Every attempt has been made to maintain the structural and data 
integrity of the original printed product. Accessibility features, 
such as text descriptions of tables, consecutively numbered footnotes 
placed at the end of the file, and the text of agency comment letters, 
are provided but may not exactly duplicate the presentation or format 
of the printed version. The portable document format (PDF) file is an 
exact electronic replica of the printed version. We welcome your 
feedback. Please E-mail your comments regarding the contents or 
accessibility features of this document to Webmaster@gao.gov. 

This is a work of the U.S. government and is not subject to copyright 
protection in the United States. It may be reproduced and distributed 
in its entirety without further permission from GAO. Because this work 
may contain copyrighted images or other material, permission from the 
copyright holder may be necessary if you wish to reproduce this 
material separately. 

United States Government Accountability Office: 
GAO: 

Report to Congressional Committees: 

July 2012: 

Veterans Paralympics Program: 

Improved Reporting Needed to Ensure Grant Accountability: 

GAO-12-703: 

GAO Highlights: 

Highlights of GAO-12-703, a report to congressional committees. 

Why GAO Did This Study: 

The Veterans Benefits Improvement Act of 2008 established VA’s 
Paralympics Program to promote the lifelong health of disabled 
veterans and members of the Armed Forces through physical activity and 
sports. Additionally, the act authorized VA to provide a grant to 
USOC’s Paralympics Division, and allowed USOC to enter into subgrant 
agreements to provide adaptive sports activities to veterans and 
service members. The act also mandated GAO to report on the VA 
Paralympics program. 

GAO is required to (1) review how VA and its grantee and subgrantees 
used program funds to provide adaptive sports opportunities to 
veterans and service members; (2) assess how VA is overseeing its 
grantee’s and subgrantees’ use of funds; and (3) describe how veterans 
and service members have benefited from VA Paralympics activities. To 
do this, GAO reviewed relevant federal laws, regulations, guidance, 
agency reports, and a non-probability sample of 21 of 76 subgrant 
files, consisting of data on about 56 percent of funds subgranted. GAO 
also conducted site visits to two states and interviewed veterans as 
well as agency and grantee officials. 

What GAO Found: 

The Department of Veterans Affairs (VA) and the U.S. Olympic Committee 
(USOC) primarily awarded program funds through subgrants to 65 
national and community organizations that support adaptive sports 
opportunities. However, their respective program expenditure reporting 
was not consistent with federal internal control standards, making it 
difficult to know fully how program funds were spent. VA’s reporting 
of first-year program funding was problematic because it did not 
closely track costs until midway through the fiscal year. During the 
second fiscal year-—2011—-VA granted $7.5 million to USOC, which, in 
turn, awarded $4.4 million to subgrantees and spent the remainder 
primarily on operations and personnel. Subgrantees reported using 
funds for activities such as training and camps. GAO found, however, 
that USOC did not have sufficient reporting requirements in place for 
subgrantees to provide information on how VA funds were used separate 
from other sources of funding. 

VA relied upon self-reported, unverified information to oversee the 
grant program but is planning to make improvements. In fiscal year 
2011, VA did not conduct any on-site or remote monitoring to verify 
how funds were used. Thus, VA lacked information on how well USOC and 
subgrantees managed grant funds, potentially exposing itself to paying 
for services not delivered. In 12 of 21 subgrant files selected, USOC 
was not holding subgrantees accountable for meeting the terms of their 
agreements. For example, one subgrantee agreed to conduct 10 
activities, but the file indicated only 4 were conducted. VA reported 
that it has plans to improve to oversight, including conducting on-
site monitoring of grantees’ and subgrantees’ use of funds and having 
USOC verify financial reports for at-risk subgrantees, such as those 
with large subgrants. 

While program benefits were reported by subgrantees and participants, 
up until this point VA has not systematically measured how adaptive 
sports activities benefit the health and well-being of veterans and 
service members. Subgrantees primarily report anecdotal information on 
program benefits, such as individual success stories. VA collects 
information on the number of activities and participants from USOC. In 
2011, over 10,000 participants were served through nearly 2,000 
activities. However, these metrics are flawed due to double counting 
and other measurement issues. VA officials also recognize that the 
metrics do not comprehensively measure program benefits. Thus, VA and 
USOC have hired a contractor to conduct a study on the effects of 
adaptive sports on rehabilitation and reintegration of veterans and 
service members into the community. 

Figures: VA-Funded Archery and Wheelchair Racing Competitions: 

[Refer to PDF for image: 2 photographs] 

Source: GAO and U.S. Olympic Committee. 

[End of figure] 

What GAO Recommends: 

GAO recommends that VA take additional actions to improve grantee and 
subgrantee reporting of expenditures, activities, and participants, as 
well as USOC’s monitoring of subgrantees. In commenting upon a draft 
of this report, VA agreed with these recommendations and reported that 
it was taking steps to implement them. 

View [hyperlink, http://www.gao.gov/products/GAO-12-703]. For more 
information, contact Daniel Bertoni at (202) 512-7215 or 
bertonid@gao.gov. 

[End of figure] 

Contents: 

Letter: 

Background: 

VA Grants and USOC Subgrants Were Awarded Primarily to Provide 
Adaptive Sports Opportunities, but Reporting on Expenditures Was 
Problematic: 

VA Relied on Self-Reported, Unverified Information to Oversee the 
Grant Program, but Is Taking Steps to Improve Oversight: 

Program Benefits Have Been Reported but VA Does Not Systematically 
Measure Them: 

Conclusions: 

Recommendations: 

Agency Comments and Our Evaluation: 

Appendix I: Objectives, Scope and Methodology: 

Appendix II: United States Olympic Committee's Cost Definitions for 
Subgrantees' Use of Funds: 

Appendix III: Comments from the Department of Veterans Affairs: 

Appendix IV: GAO Contact and Staff Acknowledgments: 

Related GAO Products: 

Table: 

Table 1: Fiscal Year 2011 VA Paralympics Program Funding: 

Figures: 

Figure 1: VA Paralympics Program's Organization Chart, Including 
Program Fund Recipients: 

Figure 2: Number of Subgrantees Providing Activities by Sport, Fiscal 
Year 2011: 

Figure 3: Fiscal Years 2011 and 2012 Projected Budget Estimates for 
Subgrantees: 

Figure 4: Examples of Anecdotal Reports on VA Paralympics Program 
Benefits: 

Abbreviations: 

IG: Inspector General: 

GAO: U.S. Government Accountability Office: 

OMB: Office of Management and Budget: 

USOC: United States Olympic Committee: 

VA: Department of Veterans Affairs: 

[End of section] 

United States Government Accountability Office: 
Washington, DC 20548: 

July 26, 2012: 

The Honorable Patty Murray: 
Chairman: 
Committee on Veterans' Affairs: 
United States Senate: 

The Honorable Richard Burr: 
Ranking Member: 
Committee on Veterans' Affairs: 
United States Senate: 

The Honorable Jeff Miller: 
Chairman: 
Committee on Veterans' Affairs: 
House of Representatives: 

The Honorable Bob Filner: 
Ranking Member: 
Committee on Veterans' Affairs: 
House of Representatives: 

In 2010, an estimated 3.4 million veterans had a disability due to 
service-related injuries and illnesses.[Footnote 1] Due to advances in 
battlefield medicine, a larger proportion of military personnel are 
surviving their wounds than in previous generations, though often with 
serious medical conditions including amputations, traumatic brain 
injuries, and post traumatic stress disorder. To promote the lifelong 
health of veterans and servicemembers with disabilities through 
regular participation in physical activity and sports, as well other 
related purposes, the Veterans Benefits Improvement Act of 2008 
[Footnote 2] established the Office of National Veterans Sports 
Programs and Special Events within the Department of Veterans Affairs 
(VA). The act also authorized VA to provide monthly assistance 
allowances to veterans with disabilities participating in Paralympics 
competitions or training operated by the United States Olympic 
Committee (USOC). Additionally, the act authorized grants solely to 
USOC[Footnote 3] to plan, develop, manage, and implement an integrated 
adaptive sports program[Footnote 4] for veterans and servicemembers 
with disabilities, including joint outreach with VA. The act also 
allows USOC to enter into partnership agreements with other 
organizations, essentially subgranting funds to conduct adaptive 
sports activities. VA conducts grant oversight to help ensure that 
USOC is effectively and efficiently providing adaptive sports 
opportunities, reliably managing its financial reporting, and is in 
compliance with applicable laws and regulations. Moreover, the act 
mandated GAO to submit a report of the VA Paralympics program by 
September 30, 2012.[Footnote 5] 

In response to our this mandate, our objectives are to (1) review how 
VA and its grantee and subgrantees used program funds to provide 
adaptive sports opportunities to veterans and servicemembers; (2) 
assess how VA is overseeing grantee's and subgrantees' use of funds; 
and (3) describe how veterans and servicemembers have benefited from 
VA Paralympics activities. 

To address these issues, we analyzed both planned and final program 
budget expenditure data; reviewed program reports, guidance, and 
relevant federal laws and regulations; and interviewed VA and USOC 
officials and other program stakeholders about VA's Paralympics 
program activities funded with fiscal years 2010, 2011, and 2012 
appropriations. Because USOC is delayed by one fiscal year in its use 
of program funds, we reported their annual budget information 
separately from VA's annual budget information. We assessed VA's and 
USOC's budget data and found them sufficiently reliable for our 
reporting purposes. As part of this analysis, we reviewed subgrantee 
plans for spending grant funds as reported to USOC. We do not provide 
information on subgrantees' final, reported expenditures because we 
found that some subgrantees reported spending more than what they were 
granted, making it unclear to us which portion of their program costs 
were funded by VA. In addition, we reviewed a non-probability sample 
of 21 out of the 76 subgrant files maintained by USOC during a site 
visit to the organization's headquarters in Colorado Springs, 
Colorado. These subgrant files included information on grant 
activities that occurred during fiscal year 2011 and were a mix of 
some that were selected based on their larger size as well as others 
that were randomly selected. In total, the sample files contained 
information on 56 percent of funds USOC provided in subgrants using 
fiscal year 2010 dollars. We also interviewed subgrantees, regional 
stakeholders, and veteran program participants at a site visit to a VA 
adaptive sports program event in Chicago, Illinois in August 2011. 
(See appendix I for more details.) 

We conducted this performance audit from June 2011 through July 2012 
in accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe 
that the evidence we obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. 

Background: 

VA's Office of National Veterans Sports Programs and Special Events' 
mission is to motivate, encourage, and sustain participation and 
competition in adaptive sports among veterans and members of the Armed 
Forces with disabilities. This is to be accomplished through 
collaboration with VA clinical personnel as well as national and 
community-based adaptive sports programs. This office is responsible 
for the VA Paralympics program's administration, including the grant 
award process, grant oversight, distribution of any monthly assistance 
allowances to eligible athletes, and program outreach. For fiscal 
years 2010 through 2012, the federal law authorizes appropriations of 
$2 million for monthly assistance allowances for competitive athletes 
in training and $8 million for grants to USOC.[Footnote 6] The grant 
program will need to be reauthorized to continue in fiscal year 2014. 
VA officials stated that, in the first years of the Paralympics 
program--fiscal years 2010 and 2011--$10 million in federal funds were 
made available for each year.[Footnote 7] Prior to receiving this 
initial funding, the office had a troubled beginning. In February 
2010, VA's Inspector General (IG) found that the office's initial 
director had abused agency resources and obstructed the IG 
investigation.[Footnote 8] Since then, VA officials reported that they 
hired a new office director, restructured the office housing the 
program, and addressed these issues of malfeasance. 

The USOC is a non-profit organization that serves as the National 
Olympic and Paralympic Committees and, as such, is responsible for 
training, entering, and funding U.S. teams for the Olympic and 
Paralympic Games. Furthermore, the organization has a well-established 
history of providing adaptive sports opportunities to people with 
disabilities. To reach veterans and servicemembers throughout the 
United States, USOC subgrants VA funding to national and community 
organizations that provide adaptive sports opportunities. (See figure 
1 for the VA Paralympics program's organizational chart, including 
external organizations and individuals who receive program funds.): 

The categories of subgrantees are: 

* National Partners: national organizations that offer camps, clinics 
and on-going programs for veterans and servicemembers with 
disabilities through local chapters. Individual annual subgrant 
amounts range from $100,000 to $500,000. 

* Athlete Development subgrant recipients: organizations that conduct 
a national network of camps and clinics to provide opportunities for 
veterans and servicemembers with disabilities to receive sport-
specific instruction and assessment. These opportunities help 
participants meet U.S. Paralympics standards of performance for 
emerging athletes. Individual annual subgrant amounts range from 
$15,000 to $300,000. 

* Model Community Partners: community organizations that provide 
leadership in various geographic regions for promoting adaptive sports 
and to help increase regional capacity for Paralympic sports. These 
organizations are allowed to further subgrant funds to other local 
organizations to provide direct services. Individual annual subgrant 
amounts range from $2,500 to $175,000. 

* Olympic Opportunity Fund recipients: community organizations that 
aim to bring adaptive sports opportunities to their local communities. 
Individual annual subgrant amounts range from $5,000 to $45,000. 

Figure 1: VA Paralympics Program's Organization Chart, Including 
Program Fund Recipients: 

[Refer to PDF for image: illustration] 

Office of the VA Secretary: 

Office of Public and Intergovernmental Affairs: 
Office of National Veterans Sports Programs and Special Events: 
Funds to: 
Athletes receiving monthly assistance allowances. 

Grantee: U.S. Olympic Committee, Paralympic Division; 
Funds to: 

Sub grantee: National Partners; 
Subawardee: Local chapters. 
                  
Sub grantee: Athlete Development grant recipients. 

Sub grantee: Model Community Partners; 
Subawardee: Local organizations. 

Sub grantee: Olympic Opportunity Fund grant participants. 

Source: GAO analysis of VA and USOC documents. 

[End of figure] 

As a condition of receiving these funds, USOC must permit VA to 
conduct the oversight VA determines is appropriate.[Footnote 9] 
Furthermore, the federal law requires USOC to submit to the Secretary 
of VA an annual report detailing its use of grant funds. [Footnote 10] 
The reports are to include the number of veterans who participated in 
the adaptive sports program and the administrative expenses. USOC 
provided this first annual report to VA in November 2011. In turn, VA 
is required to report annually to Congress on the use of program funds 
for each year the Secretary makes grants to USOC. [Footnote 11] 
Additionally, VA and USOC officials agreed that USOC would submit 
quarterly progress reports throughout the year. During fiscal year 
2011, USOC provided quarterly reports that included descriptions of 
activities conducted by subgrantees, the number of veterans and 
servicemembers served in the activities, and anecdotal information on 
how participants benefited from activities. 

Regular reporting of relevant, reliable, and timely information and 
regular monitoring are necessary for an entity to run and control its 
operations according to GAO's Standards for Internal Controls in the 
Federal Government and OMB's internal control framework for the 
federal government.[Footnote 12] This internal controls guidance 
states that program managers need both operational and financial data 
to determine whether they are meeting their strategic and annual 
performance plans and effectively and efficiently using resources. 
Monitoring of internal controls should occur within the normal course 
of business as well as through separate evaluations. Furthermore, 
members of the Domestic Working Group's Grant Accountability Project 
[Footnote 13]--a task force of federal, state, and local audit 
organizations--found that subgrantees, many of which are small 
organizations, often lack training and experience in grant management. 
Therefore, the group suggested that government agencies provide 
guidance to subgrantees on how to conduct financial reporting that 
complies with federal and state requirements and auditing and 
accounting standards. The group also suggested that government 
agencies conduct ongoing monitoring of subrecipients as well as field 
or desk audits of potentially high-risk subgrantees. 

VA Grants and USOC Subgrants Were Awarded Primarily to Provide 
Adaptive Sports Opportunities, but Reporting on Expenditures Was 
Problematic: 

VA Awarded the Majority of Program Funds to USOC, but VA's 
Administrative and Personnel Expenditure Reporting Had Weaknesses: 

In the first 2 years of the Paralympics program, VA granted most of 
its available funds for the program to USOC, but inconsistent with 
federal internal controls standards for reporting relevant and 
reliable information, we found weaknesses in VA's administrative and 
personnel expenditure reporting. In fiscal year 2010, VA allotted $10 
million for the Paralympics program.[Footnote 14] VA granted $7.5 
million to USOC and obligated about $400,000 to contract with a 
consulting firm to design an outreach strategy for informing eligible 
participants about the program. It is not clear, however, how much 
money VA spent, in total, on administrative and personnel costs 
associated with this program in fiscal year 2010, primarily because VA 
did not closely track these costs until midway through fiscal year 
2011. VA officials told us that the Office of National Veterans Sports 
Programs and Special Events did not have a full-time program director 
and was not fully operational until about midway through fiscal year 
2011, and as a result, VA did not establish accounting codes for the 
Paralympics program until that time. VA officials also said that some 
administrative and personnel costs were charged to other VA programs 
as general expenses, and therefore cannot be traced back to the 
Paralympics program. In addition, VA officials said they were unable 
to obligate the full amount of fiscal year 2010 funds available to 
athletes' monthly assistance allowances before the end of the fiscal 
year, due to the delays in establishing the program. 

In fiscal year 2011, VA once again allotted $10 million for the 
Paralympics program. VA obligated a total of about $8.9 million, of 
which $7.5 million was granted to USOC. The remainder was spent on 
athletes' monthly assistance allowances as well as agency 
administrative and personnel costs. (See table 1.) 

Table 1: Fiscal Year 2011 VA Paralympics Program Funding: 

VA Personnel Costs; 
Obligated: $11,753; 
Expended: $11,753; 
Remaining Unobligated Amount: $0. 

VA Administrative Costs; 
Obligated: $322,817; 
Expended: $224,285; 
Remaining Unobligated Amount: $98,532. 

Athletes' Monthly Assistance Allowances; 
Obligated: $1,079,000; 
Expended: $675,906; 
Remaining Unobligated Amount: $403,094. 

USOC Grant; 
Obligated: $7,500,000; 
Expended: $7,500,000; 
Remaining Unobligated Amount: $0. 

Total; 
Obligated: $8,913,570; 
Expended: $8,411,944; 
Remaining Unobligated Amount: $501,626. 

Source: VA Budget Data as of September 30, 2011. 

Note: Not all personnel costs for fiscal year 2011 are included in the 
number above because accounting codes for the program were not 
established until midway through the year. 

[End of table] 

VA planned to spend about $1.1 million in 2011 on monthly assistance 
allowances to assist competitive athletes with their training, but 
ultimately spent about $675,900. According to VA officials, fewer 
athletes than expected were able to apply for the allowance, so the 
Paralympics program returned some portion of the remaining funds to 
VA's Office of Public and Intergovernmental Affairs general expense 
account.[Footnote 15] USOC officials explained that the monthly 
information an athlete must submit to obtain an allowance, such as a 
detailed training log, can be burdensome. USOC is working with VA to 
develop a new online reporting tool to help ease the burden of this 
monthly reporting requirement in an effort to encourage greater 
participation.[Footnote 16] 

VA also planned to spend about $334,500 on fiscal year 2011 
administrative and personnel costs associated with the Paralympics 
program, the majority of which was for contracted services. 
Specifically, within its administrative costs, VA contracted with a 
consulting firm to provide grants management services, including 
assistance with developing grant agreements, providing technical 
assistance, and developing performance measures for grantees. The 
contractor did not use all of the funding it obligated for this 
contract, and returned to VA approximately $98,500. According to VA, 
$11,753 in fiscal year 2011 funds was spent on personnel for the 
Paralympics program. However, the salaries for the Director of the 
Paralympics program and other personnel who contributed to 
establishing the program are not fully reflected in these personnel 
costs; those salaries were funded through other VA programs because 
separate accounting codes for the Paralympics program were not 
established until midway through fiscal year 2011. Indeed, the 
Director of the Paralympics program was paid out of funds from the 
Office of National and Special Events. As a result, only those 
expenses that were incurred after the codes were established were 
reported on VA's budget for the Paralympics program. In fiscal year 
2012, VA's total personnel and administrative costs are projected to 
increase to about $2.2 million as the fiscal year 2012 budget will now 
reflect activities and personnel from the Office of National and 
Special Events, which has been consolidated into the Office of 
National Veterans Sports Programs and Special Events.[Footnote 17] 
Specifically, in addition to the Paralympics activities, the Office of 
National Veterans Sports Programs and Special Events now funds five 
additional staff who travel to and administer six separate national 
events, as well develop related outreach literature for these events. 

USOC Used About Half of Its Grant to Provide Adaptive Sports 
Opportunities: 

USOC was awarded a 1-year grant of $7.5 million by VA in fiscal year 
2010, to be used during fiscal year 2011. USOC was also awarded a 1-
year grant of $7.5 million in fiscal year 2011 to be used during 
fiscal year 2012. In fiscal year 2011, USOC subgranted approximately 
$4.4 million to organizations to provide adaptive sports opportunities 
and used the remaining $3.1 million for its operations and personnel 
and administrative costs.[Footnote 18] Some of USOC's subgrantees did 
not use all of the funding they received for their adaptive sports 
programs, so they collectively returned about $50,000 to USOC. VA 
officials reported that USOC returned these remaining funds to VA. 

In fiscal year 2011, about half of the $1.5 million USOC spent on 
operations went towards outreach and awareness efforts as well as 
program support for the Paralympics sport programs, while the 
remaining half was used to provide training and technical assistance. 
For example, USOC works with VA medical centers and local 
organizations to help them develop relationships and expand 
opportunities for veterans and servicemembers with disabilities to 
engage in adaptive sports. USOC's program budget shows that operation 
costs are projected to decrease to $1.1 million in fiscal year 2012. 
Fiscal year 2011 was the first year that USOC implemented a VA grant 
program. USOC officials told us the decrease in 2012 operations costs 
reflects the fact in fiscal year 2011, there were significant upfront, 
one-time costs to build the foundation of the program, such as 
designing outreach materials and regional training. USOC officials 
also said "lessons learned" from their experiences during that first 
year will allow them to plan more effectively going forward. 

USOC reports personnel costs separately from administrative costs. In 
fiscal year 2011, USOC spent about $1.3 million on personnel costs. 
Specifically, this funding went toward salaries, Social Security 
taxes, Medicare withholdings, and benefits for 17 program staff and 
additional temporary staff. The salaries of program staff ranged from 
about $20,000 to $175,000 and covered positions including the 
administrative assistants, coaches, grant managers, and program 
director, among others. Further, in addition to having staff who are 
dedicated to administering the program, USOC has staff dedicated to 
the outreach and technical assistance efforts described above; they 
are responsible for designing and implementing USOC's outreach 
materials and facilitating conferences, regional meetings/trainings, 
and other training and education activities for veterans. 

In fiscal year 2012, USOC projects spending about $1.9 million to pay 
for the salaries of 12 program staff. As a percent of its budget, 
USOC's personnel costs are projected to increase from 18 percent in 
fiscal year 2011 to 26 percent in fiscal year 2012. USOC officials 
said that the increase is due to its fiscal year 2011 grant with VA 
spanning a 17 month period of performance. This differs from the first 
grant USOC received which was for a 12 month period of performance. 

In contrast, USOC's allocated administrative costs[Footnote 19] are 
projected to decrease from $253,000 in fiscal year 2011 to $0 in 
fiscal year 2012. [Footnote 20] Specifically, in fiscal year 2011 
these funds went toward indirect costs such as rental expenses, 
supplies, event expenses, and utilities. A USOC official told us that 
they chose not to allocate any administrative costs in fiscal year 
2012 because they want to allocate the most possible funding to 
programming that directly serves veterans. USOC reported that it plans 
to pay for administrative costs associated with the VA program through 
other funding sources. 

Subgrantees Provided a Range of Activities, but Determining Whether 
They Spent Funds As Planned Was Problematic: 

Subgrantees reported using funds to provide opportunities in a range 
of activities--through camps, practice/trainings, and competitions--
across 29 adaptive sports. Cycling/handcycling and skiing were the 
most common activities. (See figure 2.): 

Figure 4: Number of Subgrantees Providing Activities by Sport, Fiscal 
Year 2011: 

[Refer to PDF for image: horizontal bar graph] 

Cycling/Handcycling: 
Number of subgrantees: 25. 

Skiing[A]: 
Number of subgrantees: 23. 

Other[B]: 
Number of subgrantees: 20. 

Wheelchair Basketball: 
Number of subgrantees: 15. 

Boat Sports: 
Number of subgrantees: 9. 

Shooting: 
Number of subgrantees: 9. 

Track and Field: 
Number of subgrantees: 9. 

Swimming: 
Number of subgrantees: 8. 

Biathlon: 
Number of subgrantees: 7. 

Fitness: 
Number of subgrantees: 6. 

Goal Ball[D]: 
Number of subgrantees: 6. 

Sled Hockeye: 
Number of subgrantees: 6. 

Archery: 
Number of subgrantees: 5. 

Triathlon: 
Number of subgrantees: 5. 

Source: GAO analysis of sport data in USOC fiscal year 2011 annual 
report. 

[A] The "Skiing" category includes cross country and alpine skiing. 

[B] The "Other" category includes bowling, climbing, curling, fencing, 
judo, powerlifting, road racing, sitting volleyball, snowboarding, 
surfing, wheelchair racing, wheelchair rugby, and wheelchair tennis. 

[C] The "Boat Sports" category includes kayaking, rowing, and sailing. 

[D] Goal ball is an indoor game invented for participants with visual 
impairments in which opposing teams try to roll a ball with bells 
across the other team's goal line. 

[E] Sled hockey is similar to ice hockey in terms of general rules and 
concepts. It differs in that it allows participants with mobility 
limitations to sit on an adaptive sled, which is affixed with two 
skate blades and a runner in the front to form a tripod. The hockey 
stick has a pick on the end which participants use to propel the sled 
across the ice. 

[End of figure] 

The majority of USOC's subgrantees received relatively small grants in 
fiscal year 2011; of the 76 grants USOC awarded to 65 organizations, 
54 were Olympic Opportunity Fund subgrants, awarded through a 
competitive process, ranging from $5,000 to about $45,000.[Footnote 
21] As previously described, Olympic Opportunity Fund subgrants 
provide adaptive sports to veterans' local communities. For example, 
one subgrantee reported using Olympic Opportunity funds to provide 
cycling and sled hockey activities, such as weekly hand cycling 
clinics and training sessions on adaptive equipment. Another 
subgrantee reported using Olympic Opportunity funds to hold a weekly 
power-lifting group, an indoor kayaking clinic, and a judo clinic. 

The remaining 22 subgrants generally were larger, ranging from $15,000 
to $500,000, and were provided to Athlete Development organizations 
and National and Model Community Partners. These organizations 
provided a wider range of activity types through national networks, 
local chapters, or community organizations in various geographic 
regions. For example, one Athlete Development subgrantee reported 
holding an outreach clinic at a nearby VA hospital where they educated 
staff and potential participants about adaptive sports options and 
hosted a ski camp which included a sit-ski clinic, a race, and 
strength and conditioning training for a cross-country skiing 
marathon. In addition, a National Partner subgrantee reported using 
its funds to train and educate staff and program leaders on adaptive 
and Paralympic sports, and to conduct outreach and recruitment 
campaigns. This organization also awarded and administered subgrants 
to some of its local chapters to hold archery, cycling, fencing, 
wheelchair basketball, and swimming activities, among others. 

All subgrantees' grant agreements required them to report how VA funds 
were used to cover program expenses. As part of their agreements, 
subgrantees provided a projected budget detailing plans to spend 
program funds in six categories: personnel, operations, equipment, 
supplies, travel, and administrative costs (see appendix II for USOC's 
cost definitions for subgrantees' use of funds). Although subgrantees 
could not spend more than 10 percent of the total amount granted on 
administrative costs, no other category had spending limits. Of the 
approximately $4.4 million USOC awarded for fiscal year 2011, 
subgrantees projected using over half, or about $2.6 million, on 
operations and personnel costs. Subgrantees projected that these costs 
would remain about the same for fiscal year 2012. (See figure 3.): 

Figure 5: Fiscal Years 2011 and 2012 Projected Budget Estimates for 
Subgrantees: 

[Refer to PDF for image: stacked horizontal bar graph] 

FY 2011: 
Personnel: 33%; $1.4 million; 
Operations: 26%; $1.2 million; 
Equipment and supplies: 20%; $876,775; 
Travel: 14%; $633,067; 
Administration: 7%; $302,331. 

FY 2012: 
Personnel: 26%; $1.2 million; 
Operations: 31%; $1.4 million; 
Equipment and supplies: 14%; $611,676; 
Travel: 22%; $957,168; 
Administration: 7%; $294,771. 
   
Source: GAO analysis of USOC expenditure data. 

Note: USOC expenditure data reported equipment and supplies as one 
combined budget item. 

[End of figure] 

Inconsistent with federal internal control standards, we found that 
during the first program year, USOC did not have reporting 
requirements or electronic reporting systems in place for subgrantees 
to provide information on how VA funds were used separate from other 
sources. As a result, there was a lack of reliable information on 
actual expenditures. Our review of a sample of subgrantees' files 
raised concerns with how subgrantees reported their actual 
expenditures. In 7 of the 21 subgrantees' files we reviewed, it was 
difficult to determine how the subgrantees spent their grant funding, 
and 4 out of these 7 files reported spending more than they were 
actually granted by VA to provide adaptive sports activities. For 
example, in one case, a subgrantee received a grant for $35,000 but 
reported expenditures to USOC in excess of $89,000. In reviewing these 
files, we found that USOC had not determined what portion of the 
subgrantees' program costs were funded with VA dollars. While USOC 
provided a template to each subgrantee to report quarterly 
expenditures, the template did not explicitly request that a 
subgrantee only provide information on how VA funds were spent. When 
asked if they reconciled a subgrantee's reported expenditures with 
planned expenditures, USOC officials told us they generally did not 
have enough time between the receipt of a subgrantee's quarterly 
budget and the deadline to submit a quarterly report to VA to ensure 
that the budget information was accurate. This lack of follow-up is 
inconsistent with OMB internal controls guidance, which provides that 
management should regularly reconcile and compare data within the 
normal course of business. 

USOC officials said they were aware of reporting problems and, at the 
beginning of fiscal year 2012, were developing and implementing an 
electronic system that will allow subgrantees to report quarterly 
expenditures online, among other things. USOC officials told us such a 
system should help them process the reports more quickly. However, 
they acknowledged the system will not include controls to ensure 
subgrantees report only those costs specific to the VA grant. VA 
officials told us that they are aware that this electronic system has 
limitations and they have directed USOC to make the necessary 
improvements. In addition, VA reported that it provided guidance on 
how USOC could improve data processes, and USOC has agreed to send its 
grant management staff to training, both in effort to enhance USOC's 
data reporting capabilities. 

VA Relied on Self-Reported, Unverified Information to Oversee the 
Grant Program, but Is Taking Steps to Improve Oversight: 

VA Lacked Information on How USOC and Subgrantees Used Funds: 

VA lacked information on how USOC and subgrantees used funds due to 
its reliance on self-reported, unverified quarterly reports from USOC. 
Inconsistent with federal internal controls standards, VA officials 
stated that they did not independently review or verify how grant 
funds were used due to a lack of staff to oversee the program in 
fiscal year 2011. In fact, VA did not hire staff dedicated to managing 
the Paralympics program until it had already granted funds to USOC. 
Specifically, in September 2010, VA and USOC established a memorandum 
of agreement for the grant, but a Paralympics program director was not 
hired until February 2011. The director, with the assistance of 
interns, reported spending the rest of the fiscal year finalizing the 
office's outreach campaign, administering the monthly assistance 
allowance program, and processing USOC's fiscal year 2011 grant 
application.[Footnote 22] According to VA officials, another VA 
Paralympics staff person was hired in September 2011. Furthermore, 
with the establishment of the Paralympics program, agency officials 
stated that grant management became a new administrative 
responsibility for the VA Office of Public and Intergovernmental 
Affairs as well as USOC and the subgrantees, and all of these program 
stakeholders needed time to learn about appropriate oversight 
mechanisms. 

USOC officials told us their quarterly reports were primarily based on 
the quarterly reports they obtained from subgrantees, and therefore, 
the available information VA had for oversight may not have been 
accurate. USOC officials managing the grant program did not conduct 
any separate reviews to verify the information provided to them by 
subgrantees, and as mentioned earlier, did not make efforts to 
reconcile expenditure data in these quarterly reports as they were 
submitted. To gain additional information about how subgrantees were 
managing funds in the first program year, USOC's Audit Division 
selected 2 of the 65 subgrantees, based on risk-related criteria, for 
review in the fall and winter of 2012, and the grant managing 
officials plan to use the information from those audits to develop 
future plans for oversight. 

Our review of a sample of USOC's files on subgrantees showed that USOC 
officials were not holding subgrantees accountable for meeting the 
terms of their subgrant agreements--a grant management problem about 
which VA was not in the position to know about given its lack of 
oversight. We found that many subgrantee files lacked information on 
the status of their grant expenditures and the activities the 
subgrantees agreed to conduct. USOC reported using a process in which 
quarterly reports are checked against subgrantees' agreements to 
ensure completeness of agreed-upon activities. However, in 12 of the 
21 subgrant files we reviewed, we did not find evidence that the 
subgrantees conducted all agreed-upon activities. For example, one 
National Partner had agreed to develop 27 programs related to 
handcycling, bowling, and trapshooting, but the reports we found 
mentioned that only 18 programs had been completed. Another National 
Partner agreed to conduct 10 activities related to outreach, 
introducing adaptive sports at VA clinics, and identifying athletes 
for higher level of competition, but the case file indicated only 4 of 
these activities had been completed. Furthermore, in 11 of the 12 
files, we did not find any documentation explaining why the planned 
activities did not occur, nor did we find written permission from USOC 
to change the scope of agreed-upon activities. 

In 5 of the 21 files we reviewed, we found that subgrantees 
transferred more than 20 percent of funds from one budget category to 
another without the written permission of USOC, as required by their 
grant agreements. For 2 of these files, we identified significant 
issues with the subgrantees' financial management and reporting. 
Specifically, 1 file belonged to a subgrantee that received a $400,000 
grant that was one of the organizations subjected to an audit by 
USOC's Audit Division. The division officials found that, in addition 
to making unallowed transfers, the subgrantee had instances of non-
compliance with OMB Circular A-122's Cost Principles for Non-Profit 
Organizations (including unexplained personnel and administrative 
charges by five employees), did not consistently document and 
communicate requirements and responsibility related to the VA funds it 
subgranted to its member chapters, and did not clearly and formally 
document its methodology for determining and allocating administrative 
costs to the VA grant.[Footnote 23] Another subgrantee who made 
unallowed budget transfers also reported purchasing a van without the 
written permission of USOC, which is required by the grant agreement 
prior to making equipment purchases exceeding $5,000. This same 
subgrantee also received another $35,000 VA-funded grant for which it 
did not submit required expenditure reports. 

VA Plans to Improve Its Grant Monitoring: 

VA officials recognized that their grant oversight has been limited 
and report that improvements are under development. In December 2011, 
VA established a monitoring plan that identifies the specific 
information USOC should report and requires USOC to establish a 
similar plan to oversee subgrantees. Specifically, VA's plan requires 
USOC to submit quarterly reports and an annual report that include 
summary data on the activities provided, number of veterans served, 
levels of expended and unexpended funds, and available assets, among 
other information. VA's plan does not, however, require on-site or 
remote evaluations of USOC and the subgrantees, nor a review of USOC's 
monitoring outcomes for subgrantees. When asked why such monitoring 
was not included in the plan, VA officials stated that they recognize 
that a lack of separate evaluations is a gap in their oversight and 
are working to address this limitation. For example, in fiscal year 
2012, VA officials reported conducting on-site visits of USOC to 
discuss various aspects of grant management. VA plans to conduct 
additional on-site reviews of USOC and selected subgrantees later in 
the year.[Footnote 24] Furthermore, officials are expecting that 
information from USOC's subgrantee reviews will eventually be 
incorporated into subgrantee application packages, which they will 
review before finalizing future grant agreements. Also, after 
reviewing the first quarter reporting for fiscal year 2011 funds in 
January 2012, VA officials reported asking USOC officials to provide 
more information about whether subgrantees were providing deliverables 
within the agreed-upon timeframes. 

With input from VA, USOC finalized a monitoring plan of subgrantees in 
early 2012 that, in addition to reviewing subgrantee reports, will 
require USOC officials to audit financial data for subgrantees 
selected on risk-based criteria. USOC's plan includes a checklist for 
reviewing and verifying information in these quarterly reports; the 
checklist mentions comparing the reports to the agreed-upon activities 
and conducting remote and on-site reviews. USOC aims to conduct enough 
site visits to review the use of half of all fiscal year 2011 funds. 
Furthermore, USOC plans to use risk-based criteria to select 
subgrantees for remote audits of financial data; these criteria will 
include the size of the subgrant award, additional granting of VA 
funds to other entities by the subgrantee, and the absence of a 
current audit report. The remote audits will include reviewing the 
subgrantees' ledgers and comparing them to what was submitted in the 
quarterly reports and reviewing documentation that supports selected 
transactions to ensure that they are compliant with OMB guidance. 
However, given that we found that USOC was not holding subgrantees 
accountable--despite having an oversight process in place--VA will 
need to ensure its monitoring efforts include overseeing the 
implementation of USOC's plans. 

Program Benefits Have Been Reported but VA Does Not Systematically 
Measure Them: 

Some Participants Have Reported Improvements to Their Health and Well-
Being: 

We found that many subgrantees and participants reported benefits from 
VA's Paralympics program. Subgrantees primarily reported anecdotal 
information on program benefits in their quarterly reports to USOC, 
and USOC then provided some of these examples in their quarterly 
reports to VA. This anecdotal information included participant success 
stories, testimonials, and related news articles, and was consistently 
positive with regards to the program's value in the first year. (See 
figure 4 for examples.) 

Figure 4: Examples of Anecdotal Reports on VA Paralympics Program 
Benefits: 

"Kevin is a 21 year old Veteran with a SCI (paraplegia) injury 
incurred 6/2011. Kelly worked with Kevin on a 1:1 basis for 2 months 
to train on the hand cycle, eventually leading to him training on his 
own at home. Kevin signed up for the Marine Corps Marathon prior to 
his injury. After his injury in 6/2011, Kevin was determined to still 
compete in this marathon, but due to his injury, he was not able to 
run, so he wanted to handcycle. Kevin finished the Marine Corp 
Marathon this past October 2011 at a time of 2:18! It shows that with 
the right resources, guidance, and determination, nothing can keep 
someone from attaining their dreams (even if you have to adapt!). 
Kevin utilized one of the cycles that was purchased through this 
grant." 
- Subgrantee quarterly report; 

"One athlete stated 'I still find it hard to believe. Me, a C7 
quadriplegic, on the water rowing. It feels so good to exercise, and 
be treated like an athlete. Rowing is a beautiful sport. And now it's 
my thing'"; 
- Subgrantee quarterly report; 

"An alumni (army sergeant) told us that because of the confidence he 
gained the first year, he was able to remain sober for the past year 
(he had been abusing drugs and alcohol and had been arrested several 
times) and had started college-"; 
- Subgrantee quarterly report; 

"Benjamin is a Wounded Warrior from Arizona who ... was no longer 
affiliated with a military facility, no longer active, suffering from 
depression and excessive weight gain and coping with a recent spinal 
cord injury. He came to our Winter Wounded Warriors Camp, Operation 
High Altitude accompanied by his mom and with a great deal of 
trepidation. He fell in love with the sport of Nordic skiing and was 
eager to come back to participate in our upcoming biathlon camp"; 
- Subgrantee quarterly report; 

"I have been in a wheelchair for almost 3 years. I have known about 
the sports that are available and the resources but I only recently 
took advantage of them. The biggest benefit I have received from going 
to these events is being around people that 'get you.' I'm not saying 
that other people can't try to understand what it's like to be in a 
chair but they will never really know unless they experience it 
themselves.... I've talked to dozens of vets about these events and 
they all said that these programs have become an integral part of 
their lives, as well as mine." 
- Veteran Participant; 

"Thank you for the great opportunity, I was starting to feel kind of 
isolated and this event helped me in so many different ways. It was 
really good to meet a lot of the other vets and active duty wounded 
warriors. Thank you thank you thank you, it meant a lot." 
- Veteran Participant; 

"[Skiing] allows you to focus on your abilities rather than your 
disabilities. You're normal again. You can compete, get your 
competitive edge." 
- Veteran Participant, Bi-lateral Leg Amputee. 

Sources: USOC fiscal year 2011 quarterly and annual program reports 
and subgrantee fiscal year 2011 grant files submitted to USOC. 

[End of section] 

During our site visit to an adaptive sports event in Chicago, veterans 
we spoke with also told us how adaptive sports programs have improved 
their mental and physical health. All six veterans in one group 
interview agreed that the greatest benefit was to their mental health; 
they believe that adaptive sports are a tool that helps them deal with 
depression. They also said that participating in group activities with 
other veterans with disabilities made them feel less isolated in their 
challenges. Other veterans said that they had experienced social 
benefits, including a boost to their self-esteem; one veteran 
described how he developed long-term friendships during the 
competitions, and another described how these events show veterans 
that they can be physically active despite their disabilities. 
Veterans also told us that competitions motivated them to stay active 
on an on-going basis and improved their overall physical health. For 
example, some veterans said regular participation in athletic 
activities made them physically stronger in their remaining limbs and 
had improved their balance and dexterity. One veteran in particular 
told us that he had lost 68 pounds in 4 months due to his regular 
participation in Paralympic program activities. 

Counts of Activities and Participants Are Inconsistent, but VA Is 
Taking Steps to Improve Measurement of Program Benefits: 

While VA requires USOC and its subgrantees to count the number of 
adaptive sports activities conducted and the number of participants 
served, these measurements are not always accurate.[Footnote 25] In 
its fiscal year 2011 annual report to VA, USOC stated that over 10,000 
veterans and servicemembers participated in nearly 2,000 activities. 
However, VA officials acknowledged that the participation and activity 
data are flawed. Indeed, in USOC's quarterly reports to VA, USOC 
stated there is some double counting of unique veterans/servicemembers 
and activities due to partnerships and collaboration among the 
Paralympic community. For example, a veteran might attend activities 
sponsored by different subgrantees, and each subgrantee might then 
include that same veteran in their separate count. The extent of this 
double counting is unknown due to a lack of a systematic review of the 
activity and participant counts. Although VA is required by law to 
report annually to Congress on the number of veterans who participated 
in adaptive sports activities and the administrative expenses, it has 
yet to do so.[Footnote 26] 

Additionally, in our review of a sample of 21 subgrantee reports, we 
found some inconsistencies with how subgrantees count program 
participants and activities, further diminishing the reliability of 
these data. It was difficult to determine, in fact, how 16 out of the 
21 were counting their participants or activities as many 
organizations had different interpretations of what qualified as a 
participant or activity. For example, 8 out of the 21 subgrantee 
reports counted activities that did not have veteran or military 
participants--some of them even counted purchases of equipment as 
activities. Also, 6 out of the 21 subgrantees administered more than 
one type of a VA Paralympics grant and submitted reports where it was 
difficult to determine which grant corresponded with which counts of 
activities and participants. 

While subgrantees and program participants reported program benefits, 
VA has not yet systematically measured how adaptive sports activities 
specifically benefited the health and well-being of veterans and 
servicemembers. A couple of USOC's subgrantees conducted surveys 
asking for feedback on specific events or activities, but VA has not 
conducted a program-wide survey or study to collect information about 
the various events and their benefits. Absent this measurement, VA 
largely relies on the anecdotal information supplied by subgrantees 
and program participants. Moreover, VA officials recognize that 
participant and activity counts do not comprehensively measure how 
participation in adaptive sports can improve a person with 
disabilities' quality of life, including improved physical health, 
enhanced confidence and self-esteem, reduction in depression and 
improved relationships with family members and other members of the 
community. 

VA wants to improve its measurement of Paralympics activity benefits. 
VA and USOC have, in turn, taken the initiative to hire a contractor 
to conduct a study on the effects of adaptive sports on rehabilitation 
and reintegration of veterans and servicemembers into the community, 
including five life domains (self-care, mobility skills, communication 
with family and friends, participation in society, and acceptance of 
disability) and the psychosocial outcomes, including self-esteem and 
quality of life. The study will include a survey of participants in VA 
adaptive sports activities, with questions focusing on uncovering key 
life and goal-setting concerns of participants as well as employment 
and educational goals and opportunities. VA and USOC are expecting the 
contractor to provide a preliminary report to Model Community Partners 
by the end of September 2012. They have also planned for the final 
results of this study to be shared with internal and external 
audiences, including government agencies, the research community, and 
the general public. In addition, VA and USOC have tasked the 
contractor to conduct an assessment of the VA Paralympics program that 
will include identification of issues, trends, obstacles, and 
barriers, which will assist USOC and subgrantees with managing 
expectations and program performance. VA and USOC have required the 
contractor to provide an annual report on this assessment by November 
2012. VA officials told us they have also been assisting the 
Paralympic Research and Sport Science Consortium with facilitating 
research in Paralympic and adaptive sports. VA officials stated that 
this research is focused on activities that would both enhance 
Paralympic sports and capabilities to provide rehabilitative 
opportunities to Veterans and members of the Armed Forces with 
disabilities. In addition, VA officials stated that they are seeking 
feedback from Paralympic and adaptive sport communities, academia, 
research institutions, and other entities to try to develop metrics to 
measure effectiveness. 

VA officials stated that the goals of its adaptive sports programming 
have changed in the past few years with the establishment of the 
Paralympics program. Prior to the Paralympics program and its current 
leadership, the Office of Public and Intergovernmental Affairs focused 
on engaging veterans and servicemembers with disabilities in a few 
Paralympic sport competitions it sponsored once a year. However, with 
the Paralympics program and the Office of National Veterans Sports 
Programs and Special Events in place, VA has expanded its goals to 
include veteran participation in local and community adaptive sports 
programs throughout the year and for on-going sports participation to 
have an impact on the veterans' overall physical and emotional well-
being. Further, VA is working with other VA entities to incorporate 
Paralympic and adaptive sports into rehabilitative whole-life programs 
for Veterans and members of the Armed Forces with disabilities. For 
example, VA officials stated that they worked with some of their 
subgrantees to develop adaptive sports program-related training 
webinars and other support materials for VA entities such as 
recreation therapists, centers for blind and visually impaired, and 
Community Living Centers. 

Conclusions: 

After veterans and servicemembers face life altering disabilities 
resulting from their service in the Armed Forces, the VA Paralympics 
program works to empower them to move forward in their next phase of 
life. In partnership with USOC and its subgrantees, VA has been able 
to introduce numerous participants to a variety of sports adapted for 
their physical conditions. Beyond providing access to recreational 
opportunities, veteran participants told us that adaptive sports have 
changed the way they think about their disabilities and provided them 
with opportunities to improve their physical health. As this program 
matures, it has the potential to provide greater access to adaptive 
sports and garner a wider range of benefits for participants. VA must, 
however, improve the program's oversight and reporting to help ensure 
program funds are efficiently and effectively used. Although USOC is 
planning various oversight initiatives and is implementing an 
electronic reporting system for subgrantees, we found that USOC's past 
efforts at financial accounting, subgrantee oversight, and reporting 
on participation and activities were weak, resulting in gaps in 
program knowledge about how program funds were actually spent, whether 
or not all promised activities occurred, and how many people benefited 
from the activities. Moving forward, without this information, VA and 
policymakers will struggle to make informed decisions about the 
program's future. VA officials report that they are building a 
stronger oversight structure, but to the extent USOC's weaknesses 
remain, VA may miss opportunities to better use program resources to 
motivate, encourage, and sustain participation and competition in 
adaptive sports among veterans and servicemembers with disabilities. 

Recommendations: 

To improve oversight within the VA Paralympics grant program, we 
recommend the Secretary of VA direct the National Director of the 
Office of National Veterans Sports Programs and Special Events to take 
the following three actions: 

1. Require USOC to modify reporting requirements that will: 

a. Direct subgrantees to only include VA Paralympics program funds in 
expenditure reports; and: 

b. Provide a consistent methodology for how subgrantees should count 
their program activities and participants, including explicit 
instruction on what should and should not be counted as an activity or 
participant. 

2. Ensure USOC adds controls to its electronic reporting system that 
will require subgrantees to identify how VA grant funds were used 
separate from other funding sources subgrantees use to support 
adaptive sports activities. 

3. Review the implementation of USOC's monitoring plan after a 
reasonable period to ensure planned efforts were conducted. 

Agency Comments and Our Evaluation: 

VA provided us with comments on a draft of this report, which we have 
reprinted in appendix III. In its comments, VA agreed with our 
recommendations and reported that efforts were underway to address 
each of them. Specifically, VA reported that USOC has already agreed 
to direct subgrantees to only include information on VA Paralympics 
program funds in expenditure reports. Furthermore, USOC has agreed to 
send its grant management staff to training in an effort to improve 
its data reporting. Regarding USOC's electronic reporting system, VA 
reported that USOC has included the requirement that subgrantees 
identify how VA funds were used separately from other funding sources, 
and VA will review the system before it goes on-line during the fourth 
quarter of 2012. VA indicated that USOC also plans to provide training 
to subgrantees on how to appropriately report on grant funds during 
this quarter. In response to our recommendation on following up on 
USOC's monitoring plan, VA reported that, in April 2012, it began 
meeting with USOC to improve USOC's subgrant monitoring program, which 
now includes weekly conference calls with VA. VA also provided 
technical comments, which were incorporated into the report as 
appropriate. 

We are sending copies of this report to relevant congressional 
committees, the Secretary of the Department of Veterans Affairs, the 
Chief of Paralympics, USOC, and other interested parties. The report 
will also be available at no charge on the GAO Web site at [hyperlink, 
http://www.gao.gov]. 

If you or your staffs have any questions about this report, please 
contact me at (202) 512-7215 or bertonid@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 key contributions 
to this report are listed in appendix IV. 

Signed by: 

Daniel Bertoni: 
Director, Education, Workforce, and Income Security Issues: 

[End of section] 

Appendix I: Objectives, Scope and Methodology: 

The objectives of this report were to (1) review how VA and its 
grantee and subgrantees used program funds to provide adaptive sports 
opportunities to veterans and servicemembers; (2) assess how VA is 
overseeing grantees' and subgrantees' use of funds; and (3) describe 
how veterans and servicemembers have benefited from VA Paralympics 
activities. The mandated requirement to include a description of how 
the United States Paralympics, Inc. (which was superseded by the 
Paralympic Division of the United States Olympic Committee (USOC)) 
used grant funds from the Department of Veterans Affairs (VA) is 
provided under the first research objective. The other mandated 
requirements to include the number of veterans with disabilities who 
benefited from such grants and how such veterans benefited were 
addressed under the third research objective. To address the three 
objectives, we analyzed both planned and final program budget 
expenditure data; reviewed program reports, guidance, and relevant 
federal laws and regulations; and interviewed VA and USOC officials 
and other program stakeholders about VA's Paralympics program 
activities funded with fiscal years 2010, 2011, and 2012 
appropriations. 

Specifically, to determine how VA and its grantees used program funds, 
we reviewed information on planned and actual program expenditures 
provided by VA and USOC and interviewed VA and USOC officials to 
better understand the purposes for which funds were used. VA started 
spending Paralympic program funds in fiscal year 2010, but did not 
have complete final expenditure information for that first program 
year. As a result, we discuss this incomplete expenditure data in our 
report findings. We obtained VA's complete planned and final 
expenditure budget information on fiscal year 2011 funds, but could 
only report planned expenditures for fiscal year 2012, as their actual 
expenditures for that year had not yet been finalized at the writing 
of this report. USOC provided data to us on subgrantees' planned and 
final expenditures. Subgrantees' planned expenditures were based on 
subgrant agreements made by USOC and the subgrantee, and final 
expenditures were based on data from quarterly reports submitted by 
each subgrantee to USOC. To determine the reliability of VA and USOC 
data on planned and actual program expenditures for that year, we 
interviewed VA and USOC officials about their procedures for 
collecting and maintaining these data. In addition, we reviewed a 
nonprobability sample of 21 subgrant files to verify the accuracy of 
data reported to USOC and to better understand how USOC maintains 
these data. The sample included all types of USOC subgrants mentioned 
in the background of this report. Specifically, all of USOC's National 
Partner subgrants were included, and if these National Partners were 
also awarded Olympic Opportunity Fund subgrants, those subgrants were 
also included. The sample also included Model Community Partners and 
other Olympic Opportunity Fund subgrantees which were selected 
randomly after being stratified according to their subgrant type and 
USOC-designated geographic region. Due to errors in the original list 
of subgrantees by subgrant type provided by USOC, our sample also 
included two Athlete Development subgrants. In total, the sample files 
contained information on 56 percent of funds USOC provided in 
subgrants using fiscal year 2010 dollars. Due to problems we found 
with subgrantee reporting, we did not report information on 
subgrantees' actual expenditures. (See the body of the report for more 
information.) We reported only those expenditure data we believe were 
sufficiently reliable for the purposes of our study. 

To determine how VA oversaw grantees' use of funds, we interviewed VA 
and USOC officials and obtained and reviewed quarterly progress 
reports from USOC, examples of progress reports from subgrantees, and 
VA's and USOC's monitoring plans. Furthermore, we reviewed the same 
non-probability sample of 21 subgrant files to obtain information on 
whether their activities were documented as required under USOC 
policies--mentioned in subgrant agreements, subgrant applications, and 
interviews with the organization's officials--and as promoted by GAO's 
guidelines for internal controls and the Domestic Working Group's 
Grant Accountability Project's promising practices. 

To determine how veterans and servicemembers have benefited from VA 
Paralympics program activities, we reviewed participant and activity 
counts in the same non-probability sample of 21 subgrantee files 
maintained by USOC. We found issues with double-counting of activities 
and participants, as well as issues of counting non-
veteran/servicemember activities and participants. However, to be 
responsive to our mandate, we provided USOC's total counts of 
activities and participants in the report along with a discussion of 
why these numbers are not reliable. We reviewed USOC quarterly and 
annual program reports to VA. We also interviewed VA and USOC 
officials as well as subgrantees, regional stakeholders, and veteran 
program participants at a site visit to a VA adaptive sports program 
event in Chicago, Illinois in August 2011. 

[End of section] 

Appendix II: United States Olympic Committee's Cost Definitions for 
Subgrantees' Use of Funds: 

Type of Cost: Administrative; 
Definition: Costs associated with the subawardee and the 
implementation and tracking of the subaward programs. 

Type of Cost: Equipment; 
Definition: Costs of non-construction related purchases for special 
purpose equipment that is used for the purposes of the grant. 

Type of Cost: Operations; 
Definition: Includes, but is not limited to, costs of: advertising and 
public relations related to the federal grant; audit and related 
services; communication (e.g. telephone, postage); meetings and 
conferences; participant support; publication and printing; rental of 
building and equipment; and transportation. 

Type of Cost: Personnel; 
Definition: Includes, but is not limited to, costs of: salaries and 
wages, director and executive committee membership fees, incentive 
awards, fringe benefits, pension plans, allowances for off-site pay, 
incentive pay, location allowances, hardship pay, and cost-of-living 
differentials. 

Type of Cost: Supplies; 
Definition: Costs of materials, supplies, and fabricated parts 
necessary to carry out the grant. 

Type of Cost: Travel; 
Definition: Costs of expenses for transportation, lodging, 
subsistence, and related items incurred by employees in travel status 
on official business. 

Source: US Olympic Committee. 

[End of table] 

[End of section] 

Appendix III: Comments from the Department of Veterans Affairs: 

Department of Veterans Affairs: 
Washington DC 20420: 

July 10, 2012: 

Mr. Daniel Bertoni: 
Director, Education, Workforce, and Income Security Issues: 
U.S. Government Accountability Office: 
441 G Street, NW: 
Washington, DC 20548: 

Dear Mr. Bertoni: 

The Department of Veterans Affairs (VA) has reviewed the Government
Accountability Office's (GAO) draft report, "Veterans Paralympics 
Program: Improved Reporting Needed to Ensure Grant Accountability" 
(GA0-12-703) and concurs with GAO's findings. 

The enclosure specifically addresses GAO's recommendations, provides 
an action plan, and provides technical comments. VA appreciates the 
opportunity to comment on your draft report. 

Sincerely, 

Signed by: 

John R. Gingrich: 
Chief of Staff: 

Enclosure: 

[End of letter] 

Enclosure: 

Department of Veterans Affairs (VA) Comments to Government 
Accountability Office (GAO) Draft Report "Veterans Paralympics Program:
Improved Reporting Needed to Ensure Grant Accountability" (GA0-12-703): 

GAO Recommendation: To improve oversight within the VA Paralympics grant
program, the Secretary of VA should direct the National Director of 
the Office of National Veterans Sports Programs and Special Events to: 

Recommendation 1: Require USOC to modify reporting requirements that 
will: 

a. Direct subgrantees to only include VA Paralympics program funds in 
expenditure reports; 

b. Provide a consistent methodology for how subgrantees should count 
their program activities and participants, including explicit 
instruction on what should and should not be counted as an activity or 
participant. 

VA Comment: Concur. VA has developed a grant monitoring plan and 
provided it to the USOC that specifically addresses oversight of grant 
funds. The USOC is following the methodology outlined in VA's grant 
monitoring plan and will incorporate it in subsequent reports. VA and 
the USOC have already implemented elements of the plan that will be 
reflected in the USOC's upcoming 3rd quarter reports to VA. VA has 
asked, and USOC has agreed, to direct subgrantees to only include VA 
Paralympic program funds as specified in the recommendation. VA and 
USOC are working with subgrantees to implement these new requirements 
in any future grant applications. 

Additionally, VA personnel attended grant training, and USOC agreed to 
send their grant management personnel to the same training curriculum 
provided to VA grant managers. 

Recommendation 2: Ensure USOC adds controls to its electronic 
reporting system that will require subgrantees to identify how VA 
grant funds were used separate from other funding sources subgrantees 
use to support adaptive sports activities. 

VA Comment: Concur. At the request of VA, the USOC has developed the 
tool to accomplish this recommendation. The new tool will provide an 
electronic reporting system that will require subgrantees to identify 
how VA grant funds were used separately from other funding sources to 
support adaptive sports activities. VA will review the USOC system 
before it goes online to ensure that it meets VA needs. The system is 
expected to be operational in the fourth quarter of 2012. The USOC 
will also provide training in the fourth quarter of 2012 to 
subgrantees on appropriate reporting. 

VA Recommended Change: VA additionally recommends revising 
Recommendation 2 to read as follows: "Ensure USOC adds controls to its 
electronic reporting system that will require subgrantees to identify 
how VA grant funds were used separately from other funding sources 
subgrantees use to support adaptive sports activities." 

Recommendation 3: Review the implementation of USOC's monitoring plan 
after a reasonable period to ensure planned efforts are conducted. 

VA Comment: Concur. Beginning in April 2012, VA and USOC staff began 
developing an enhanced grant monitoring program. VA and USOC staff met 
in June 2012 to finalize and approve an enhanced USOC grant monitoring 
program, and will meet quarterly to review and continue progress. In 
June, the USOC reorganized staff to put full-time emphasis on grant 
oversight and monitoring and beginning in July, VA and
USOC began conducting weekly grant oversight conference calls to 
review subgrantee status. 

[End of section] 

Appendix IV: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Daniel Bertoni, 202-512-7215, or bertonid@gao.gov: 

Staff Acknowledgments: 

In addition to the contact named above, the following staff members 
made important contributions to this report: Brett Fallavollita, 
Assistant Director; Danielle Giese, Analyst-in-Charge; Kristy Kennedy; 
Nisha Hazra; and Juliann Gorse. Also, Shana Wallace provided guidance 
on the study's methodology; Craig Winslow provided legal advice; James 
Bennett assisted with report graphics; and Susannah Compton provided 
writing assistance. 

[End of section] 

Related GAO Products: 

VA Mental Health: Number of Veterans Receiving Care, Barriers Faced, 
and Efforts to Increase Access. [hyperlink, 
http://www.gao.gov/products/GAO-12-12]. Washington, D.C.: October 14, 
2011. 

VA Education Benefits: Actions Taken, but Outreach and Oversight Could 
Be Improved. [hyperlink, http://www.gao.gov/products/GAO-11-256]. 
Washington, D.C.: February 28, 2011. 

VA Health Care: Spending for and Provision of Prosthetic Items. 
[hyperlink, http://www.gao.gov/products/GAO-10-935]. Washington, D.C.: 
September 30, 2010. 

Standards for Internal Control in the Federal Government. [hyperlink, 
http://www.gao.gov/products/GAO/AIMD-00-21.3.1] Washington, D.C.: 
November 1, 1999. 

GAO's Mission: 

The Government Accountability Office, the audit, evaluation, and 
investigative arm of Congress, exists to support Congress in meeting 
its constitutional responsibilities and to help improve the 
performance and accountability of the federal government for the 
American people. GAO examines the use of public funds; evaluates 
federal programs and policies; and provides analyses, recommendations, 
and other assistance to help Congress make informed oversight, policy, 
and funding decisions. GAO's commitment to good government is 
reflected in its core values of accountability, integrity, and 
reliability. 

Obtaining Copies of GAO Reports and Testimony: 

The fastest and easiest way to obtain copies of GAO documents at no 
cost is through GAO's website (www.gao.gov). Each weekday afternoon, 
GAO posts on its website newly released reports, testimony, and 
correspondence. To have GAO e-mail you a list of newly posted 
products, go to www.gao.gov and select "E-mail Updates.": 

Order by Phone: 

The price of each GAO publication reflects GAO's actual cost of 
production and distribution and depends on the number of pages in the 
publication and whether the publication is printed in color or black 
and white. Pricing and ordering information is posted on GAO's 
website, http://www.gao.gov/ordering.htm. 

Place orders by calling (202) 512-6000, toll free (866) 801-7077, or 
TDD (202) 512-2537. 

Orders may be paid for using American Express, Discover Card, 
MasterCard, Visa, check, or money order. Call for additional 
information. 

Connect with GAO: 

Connect with GAO on Facebook, Flickr, Twitter, and YouTube. Subscribe 
to our RSS Feeds or E-mail Updates. Listen to our Podcasts. Visit GAO 
on the web at www.gao.gov. 

To Report Fraud, Waste, and Abuse in Federal Programs: 

Contact: 

Website: www.gao.gov/fraudnet/fraudnet.htm E-mail: fraudnet@gao.gov 
Automated answering system: (800) 424-5454 or (202) 512-7470: 

Congressional Relations: 

Katherine Siggerud, Managing Director, siggerudk@gao.gov, (202) 512-
4400, U.S. Government Accountability Office, 441 G Street NW, Room 
7125, Washington, DC 20548: 

Public Affairs: 

Chuck Young, Managing Director, youngc1@gao.gov, (202) 512-4800 U.S. 
Government Accountability Office, 441 G Street NW, Room 7149 
Washington, DC 20548: 

[End of section] 

Footnotes: 

[1] 2010 American Community Survey data. 

[2] Pub. L. No. 110-389, §§ 701-704, 122 Stat. 4145, 4180-85. 

[3] The act actually refers to the United States Paralympics, Inc, but 
in 2009, when VA was preparing its first grant agreement, it was 
informed that USOC had dissolved United States Paralympics, Inc. as a 
separate entity and that it had been superseded by the Paralympic 
Division of USOC. To ensure grants were used as provided under the 
law, VA reported that it awarded them directly to USOC. 

[4] According to VA, both of the terms "Paralympic" and "adaptive 
sports" can be used when referring to recreational sports for those 
with a physical or visual disability. However, "Paralympic" can also 
refer to elite-level competition. For simplicity, VA uses the term 
"adaptive sports" when referring to the programs it promotes. 

[5] § 704, 122 Stat. 4185. 

[6] Sec 702(a), § 521A(g), 122 Stat. 4182-83 (codified at 38 U.S.C. § 
521A(g), and 703(a) § 322(d)(4), 122 Stat. 4184 (codified at 38 U.S.C. 
§ 322(d)(4)). 

[7] Although no appropriations were provided under the specific 
authorizations in the act, the program was funded from VA's Office of 
Pubic and Intergovernmental Affairs' general operating expenses 
account. Consolidated Appropriations Act, 2010, Pub. L. No. 111-117, 
123 Stat. 3034, 3300 (2009), Department of Defense and Full-Year 
Continuing Appropriations Act, 2011, Pub. L. No. 112-10, 125 Stat. 38, 
174 - 76, and Consolidated Appropriations Act, 2012, Pub. L. No. 112-
74, 125 Stat. 786, 1151. 

[8] At the time of the investigation, the duties associated with the 
Paralympics program were being handled by the director of the Office 
of National Programs and Special Events, which is now a part of the 
Office of National Veterans Sports Programs and Special Events. For 
more information about the investigation, see VA Office of Inspector 
General, Abuse of Authority, Misuse of Position and Resources, 
Acceptance of Gratuities, & Interference with an OIG Investigation, 
National Programs & Special Events (Washington, D.C.: February 5, 
2010). 

[9] Sec. 702(a), § 521A(b) (codified at 38 U.S.C. § 521A(b)). 

[10] Sec. 702(a), § 521A(j)(1) (codified at 38 U.S.C. § 521A(j)(1)). 

[11] Sec. 702(a), § 521A(k) (codified at 38 U.S.C. § 521A(k)). 

[12] Internal controls are defined as an integral component of an 
organization's management that provides reasonable assurance that the 
following objectives are being achieved: effectiveness and efficiency 
of operations, reliability of financial reporting, and compliance with 
applicable laws and regulations. Internal control, which is synonymous 
with management control, helps government program managers achieve 
desired results through effective stewardship of public resources. For 
more information about GAO and OMB's internal control frameworks, see 
Standards for Internal Control in the Federal Government. [hyperlink, 
http://www.gao.gov/products/GAO/AIMD-00-21.3.1] (Washington, D.C., 
November 1999) and OMB Circular A-123 Revised. 

[13] This project was conducted by the Domestic Working Group, which 
consists of 19 federal, state and local audit organizations and is 
chaired by the Comptroller General of the United States. The purpose 
of the group is to identify current and emerging challenges of mutual 
interest and explore opportunities for greater collaboration within 
the community of intergovernmental auditors. The group issued a guide 
for better managing of governmental grants in October 2005. 

[14] A VA official explained that the Office of National Veterans 
Sports Programs and Special Events is housed within the Office of 
Public and Intergovernmental Affairs and included in its overall 
budget report. VA Paralympics officials stated that, as a result, they 
assume they will receive $10 million from this total budget each 
fiscal year. They do not, however, always obligate or spend that much. 

[15] Program data show that the number of athletes who received 
payment from October 2010 to September 2011 steadily grew from 40 to 
over 70. On average, these athletes received monthly payments of 
approximately $700. VA officials noted that the total of $675,906 for 
fiscal year 2011 included retroactive payments made to athletes in 
fiscal years 2010 and 2011. And while these retroactive payments are 
included in the total amount spent, they are not included in the 
calculation of average monthly payment ($700). In July 2012, following 
an expansion of allowable Paralympic sports, VA reported that 
participation increased to 91 athletes. 

[16] An athlete's initial application for monthly assistance 
allowances is partially managed by USOC. Indeed, USOC works with the 
athlete to submit to VA the necessary paperwork--which includes 
information on their dependents and signatures from their coaches. The 
paperwork also demonstrates that the athletes have qualified for 
Paralympics training camps and competition. USOC also sets the 
military standards for each Paralympic sport activity. These military 
standards must be met for veteran athletes to be eligible to receive a 
monthly stipend. 

[17] As described earlier, the Office of National Veterans Sports 
Programs and Special Events is housed within the Office of Public and 
Intergovernmental Affairs. The old Office of National and Special 
Events had also been housed within this office. 

[18] Specifically, USOC's operations costs for fiscal year 2011 were 
$1.5 million; personnel costs were $1.3 million, and administrative 
costs were $253,000. 

[19] According to VA General Counsel guidance, the law governing the 
Paralympics program does not include personnel costs within its 
definition of administrative costs. For subgrantee use of funds, USOC 
defines administrative costs to include only costs associated with 
subawardees and the implementation and tracking of subaward programs. 

[20] The federal law allows USOC to use up to 5 percent and 
subgrantees to use up to 10 percent of grant or subgrant funding, 
respectively, for administrative expenses (Sec. 702(a), § 521A(d)(4) 
and (5), 122 Stat. 4182 (codified at 38 U.S.C. § 521a(d)(4) and (5)). 
At the same time, there are no limits on the proportion of funding 
that can be used for operations or personnel costs. In fiscal year 
2011, USOC's administrative costs represented 3 percent of its total 
grant amount. 

[21] Some subgrantees received more than one type of grant depending 
on the nature of the adaptive sports programming they planned to offer. 

[22] As previously described, USOC spent program funds a full fiscal 
year later; therefore, its application for fiscal year 2011 funds was 
submitted to VA during fiscal year 2011. 

[23] In its response to the Audit Division, the subgrantee agreed to 
avoid these problems with future grant funds. This subgrantee received 
another $400,000 grant from fiscal year 2011 program funds. 

[24] In May 2012, VA officials reported that they are still developing 
their process for conducting on-site reviews of subgrantees. The 
officials also mentioned that an internal control expert from VA's 
Office of Business Oversight has been assigned to advise them on all 
aspects of the grant process and they expect program changes will 
happen during the next grant cycle. 

[25] The authorizing legislation requires USOC to report on the use of 
grant funds, including the number of veterans who participated in the 
adaptive sports program. VA is, in turn, required to report to 
Congress annually on the use of funds. 38 U.S.C. § 521A(j)(1) and (k), 
respectively. 

[26] In commenting on a draft to this report, VA indicted that it 
anticipates providing a report to Congress on the Paralympics program 
for fiscal years 2010-2011 in August 2012. 

[End of section] 

GAO’s Mission: 

The Government Accountability Office, the audit, evaluation, and 
investigative arm of Congress, exists to support Congress in meeting 
its constitutional responsibilities and to help improve the 
performance and accountability of the federal government for the 
American people. GAO examines the use of public funds; evaluates 
federal programs and policies; and provides analyses, recommendations, 
and other assistance to help Congress make informed oversight, policy, 
and funding decisions. GAO’s commitment to good government is 
reflected in its core values of accountability, integrity, and 
reliability. 

Obtaining Copies of GAO Reports and Testimony: 

The fastest and easiest way to obtain copies of GAO documents at no 
cost is through GAO’s website [hyperlink, http://www.gao.gov]. Each 
weekday afternoon, GAO posts on its website newly released reports, 
testimony, and correspondence. To have GAO e-mail you a list of newly 
posted products, go to [hyperlink, http://www.gao.gov] and select 
“E-mail Updates.” 

Order by Phone: 

The price of each GAO publication reflects GAO’s actual cost of 
production and distribution and depends on the number of pages in the 
publication and whether the publication is printed in color or black 
and white. Pricing and ordering information is posted on GAO’s 
website, [hyperlink, http://www.gao.gov/ordering.htm]. 

Place orders by calling (202) 512-6000, toll free (866) 801-7077, or 
TDD (202) 512-2537. 

Orders may be paid for using American Express, Discover Card, 
MasterCard, Visa, check, or money order. Call for additional 
information. 

Connect with GAO: 

Connect with GAO on facebook, flickr, twitter, and YouTube.
Subscribe to our RSS Feeds or E mail Updates. Listen to our Podcasts.
Visit GAO on the web at [hyperlink, http://www.gao.gov]. 

To Report Fraud, Waste, and Abuse in Federal Programs: 

Contact: 
Website: [hyperlink, http://www.gao.gov/fraudnet/fraudnet.htm]; 
E-mail: fraudnet@gao.gov; 
Automated answering system: (800) 424-5454 or (202) 512-7470. 

Congressional Relations: 

Katherine Siggerud, Managing Director, siggerudk@gao.gov, (202) 512-4400
U.S. Government Accountability Office, 441 G Street NW, Room 7125
Washington, DC 20548. 

Public Affairs: 
Chuck Young, Managing Director, youngc1@gao.gov, (202) 512-4800
U.S. Government Accountability Office, 441 G Street NW, Room 7149 
Washington, DC 20548.