What GAO Found

GAO found that VA’s estimated savings from two of its six operational improvements lacked analytic support and estimated savings from another were flawed. Without a sound methodology for estimating these savings, VA runs the risk of not achieving them. Furthermore, due in part to flaws GAO identified with another operational improvement—reducing acquisition costs—VA decided to revise it. Because this effort was still in progress, GAO could not evaluate VA’s estimated savings and process for tracking actual savings from this operational improvement. In addition, GAO found that VA lacks a process for tracking actual savings for one operational improvement and its processes may overstate results for two others. Without an accurate process for tracking these savings, VA will be unable to determine whether it has realized the estimated savings reflected in the President’s budget request for fiscal years 2012 and 2013.

Why GAO Did This Study

The President’s budget request for the Department of Veterans Affairs (VA) for fiscal years 2012 and 2013 included a total of $2.5 billion dollars in savings from six VA-wide operational improvements. If VA’s estimated savings for fiscal years 2012 and 2013 do not come to fruition and VA receives appropriations in the amount requested by the President, VA may have to make difficult trade-offs to provide health care services with the resources provided.

GAO assessed (1) the basis for VA’s estimated savings from each improvement and (2) VA’s process for tracking its actual savings from each improvement. GAO obtained documentation that described the methodology VA used to develop its savings estimates and the process it used to track those savings. By analyzing the documentation and interviewing VA officials, GAO assessed whether VA’s savings estimates were reasonable and whether VA’s process for tracking savings would allow it to accurately determine actual savings.

What GAO Recommends

GAO recommends that VA develop (1) a sound methodology for estimating savings from new operational improvements and (2) a detailed process for tracking actual savings resulting from those improvements for which GAO identified concerns. VA concurred with GAO’s findings and recommendations on all but two initiatives within the real property improvement, stating that the savings from these initiatives were not overstated. GAO believes its findings and recommendations remain valid.

For more information, contact Randall B. Williamson at (202) 512-7114 or williamsonr@gao.gov.

Status Legend:

Review Pending-GAO has not yet assessed implementation status.

Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.

Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.

Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.

• Review Pending
• Open
• Closed - implemented
• Closed - not implemented

Recommendations for Executive Action

Recommendation: In order to better inform future budget requests, the Secretary of Veterans Affairs should develop a sound methodology for estimating savings from new operational improvements. This methodology should include: (1) an explanation of how savings from each operational improvement will be achieved; (2) an explanation for the basis of any assumptions included in the savings estimates; and (3) an implementation plan that includes a realistic timeline for implementation, to help ensure that savings can be achieved within the targeted time frame.

Agency Affected: Department of Veterans Affairs

Status: Open

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Recommendation: The Secretary of Veterans Affairs should develop a detailed process for tracking VA's actual savings resulting from those operational improvements for which we identified concerns. This process should provide detailed written guidance for those responsible for tracking the savings, which outlines the methodology for calculating savings.

Agency Affected: Department of Veterans Affairs

Status: Open

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.