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2013

Performance
and
Accountability
Report
Honoring All Who Have Served



































2013PerformanceandAccountabilityReport
TableofContents
SecretarysLetter
ExecutiveSummary.......................................................................PartI 1
PartI.ManagementsDiscussionandAnalysis
DepartmentOverview.......................................................................................................................................I6
OurMissionWhatWeareHeretoDo......................................................................................................I6
OurPrograms.............................................................................................................................................I6
WhatWeDo........................................................................................................................................I6
WhereWeAreLocated......................................................................................................................I10
WhoWeServe...................................................................................................................................I11
Resources.................................................................................................................................................I12
OurOrganization......................................................................................................................................I13
LeadershipandGovernance.....................................................................................................................I14
AgencyPriorityGoals......................................................................................................................................I16
MajorAccomplishments I19
MostImportantAchievementsandChallenges.. .I30
FinancialHighlights .. I44
ManagementControls,Systems,andCompliancewithLawsandRegulations.. .I48
PartII.PerformanceSection
PerformanceOverview................................................................................................................................. II1
2013Performance:ADepartmentLevelSummary....................................................................................II1
PerformanceMeasuresbyOrganizationandProgramwithShortfallAnalysis...................................................II2
PreventionIndexV........................................................................................................................................II18
ClinicalPracticeGuidelinesIV.........................................................................................................................II19
PercentofNewPrimaryCareAppointmentsCompletedWithin14DaysofAppointmentCreationDate.........II20
PercentofNewSpecialtyCareAppointmentsCompletedWithin14DaysofAppointmentCreationDate.......II21
PercentofEstablishedPrimaryCareAppointmentsCompletedWithin14DaysofDesiredDate......................II22
PercentofEstablishedSpecialtyCareAppointmentsCompletedWithin14DaysofDesiredDate.II23
PercentofPatientsRatingVAHealthCareas9or10onaScaleFrom010(Inpatient)II24
PercentofPatientsRatingVAHealthCareas9or10onaScaleFrom010(Outpatient)............II25
PercentofDisabilityCompensationandPensionPendingInventoryThatismore125DaysOld......................II26
NationalAccuracyRateforCompensationEntitlementClaims.......................................................................II27
AverageDaystoCompleteCompensationEntitlementClaims ..II28
NationalAccuracyRateforPensionMaintenanceClaims II29
PercentofDICClaimsInventoryOver125Days II30
PercentageofOriginalandReopenedPensionClaimsInventoryPendingOver125Days II31
AverageDaystoCompletePensionMaintenanceClaims II32
AverageDaystoCompleteOriginalandReopenedPensionClaims .II33
AverageDaystoCompleteOriginalEducationClaims //34
AverageDaystoCompleteSupplementalEducationClaims
II35

RehabilitationRate .II36
DefaultResolutionRate...........................................................................................................................................II37
RateofHighClientSatisfactionRatingsonServicesDelivered(Insurance).. .II38
AdditionalPerformanceInformation(VHA) II39








































PercentofGravesinNationalCemeteriesMarkedWithin60DaysofInterment.....II41
PercentofVeteransServedByaBurialOptionWithinaReasonableDistance(75Miles).....II42
PercentofRespondentsWhoRatetheQualityofServiceProvidedasExcellent.......II43
PercentofRespondentsWhoRateNationalCemeteryAppearanceasExcellent .II44
PercentofApplicationsforHeadstonesandMarkersthatareProcessedwithin20Days...II45
AdditionalPerformanceInformation(NCA). .. II46
KeyMeasuresDataTable...............................................................................................................................II49
AssessmentofDataQuality............................................................................................................................II62
QualityAssuranceProgram(MillenniumAct).. ...II67
OIGMajorManagementChallengesandGAOHighRiskAreas........................................................................II76
PartIII.FinancialSection
LetterfromtheChiefFinancialOfficer.............................................................................................................III1
ConsolidatedFinancialStatements..................................................................................................................III3
ConsolidatedBalanceSheets....................................................................................................................III3
ConsolidatedStatementsofNetCost........................................................................................................III4
ConsolidatedStatementsofChangesinNetPosition................................................................................III5
CombinedStatementsofBudgetaryResources.........................................................................................III7
NotestoConsolidatedFinancialStatements...........................................................................................III11
FundBalancewithTreasury....................................................................................................................III28
Investments...........................................................................................................................................III29
AccountsReceivable...............................................................................................................................III30
DirectLoansandLoanGuarantees..........................................................................................................III31
Inventories.............................................................................................................................................III42
GeneralProperty,PlantandEquipment..................................................................................................III43
HeritageAssets......................................................................................................................................III44
Debt.................................................................................................................................................III45
LiabilitiesNotCoveredByBudgetaryResources......................................................................................III46
Leases.................................................................................................................................................III54
InsurancePrograms................................................................................................................................III57
CommitmentsandContingencies...........................................................................................................III60
FundsFromDedicatedCollections..........................................................................................................III63
ExchangeTransactions...........................................................................................................................III66
NetProgramCostsbyAdministration.....................................................................................................III69
DisclosuresRelatedtotheStatementsofBudgetaryResources...............................................................III71
ReconciliationofNetCostofOperationstoBudget.................................................................................III76
IndependentAuditorsReport.......................................................................................................................III77
RequiredSupplementaryStewardshipInformation(Unaudited)....................................................................III94
RequiredSupplementaryInformation(Unaudited)......................................................................................III101
PartIV.OtherAccompanyingInformation
ScheduleofSpending(Unaudited)...IV1
SummaryofFinancialStatementAuditandManagementAssurances .IV5
ImproperPaymentsEliminationandRecoveryAct(IPERA)of2010.................................................................IV7
Definitions...................................................................................................................................................IV26
ListofAbbreviationsandAcronyms.............................................................................................................IV45
WebAccess..................................................................................................................................................IV52
Notes:
(1)
Inthisreport,withtheexceptionoftableandcharttitles,referencestoyears(e.g.,2009,2012)arefiscalyearsunlessstatedotherwise.















ExecutiveSummary
Introduction
In2013,withmorethan$150billioninobligationsandapproximately312,841fulltime
equivalentemployees,VAtooknumerousactionsthathelpedimprovethequalityoflifefor
AmericasVeteransandtheirfamilies. Ourmajorachievementsaresummarizedbelow.
ImplementingAgencyPriorityGoals(APG)
VAhasthreeAgencyPriorityGoals(APG)thatcontinuetoserveasaplatformtotransformVA
intoa21
st
centuryorganizationthatispeoplecentric,resultsdriven,andforwardlooking. Each
APGisdesignedtosolveakeyproblemfacingtheDepartmentand/ortheVeteransweserve.
InformationonhowwellVAisdoingonspecificAPGsbeginsonpageI16.
MedicalServices: DeliveringHighQualityHealthCare
In2013,VAmaintainedthelargestintegratedhealthcaresysteminAmerica. Throughoutthe
year,VAcontinuestoimplementnewinnovativepracticestoimproveVeteransaccessto
healthcare,suchastelemedicineandmobileclinics,toprovidecaretomorethan6million
uniquepatients.Ourcommitmenttodeliveringtimely,highqualityhealthcaretoAmericas
Veteranswhilecontrollingcosts,remainsatoppriority.
Keyperformanceresultsfor2013include: (DetailsincludedonpagesPartII18throughII 61)
QualityofHealthCare: VAcontinuestoimproveperformanceonnationallyrecognized
industrystandards,suchastheClinicalPracticeGuidelinesIndex(CPGI)andthePrevention
Index(PI).
PatientAccess: 93percentofprimaryandspecialtycare,and95percentofmentalhealth
appointmentsforestablishedpatientswerecompletedwithin14daysofdesired
appointmentdate.
HomelessVeterans: ProgramenhancementsundertheEliminateVeteranHomelessness
Initiativewillensuretheprovisionofhousing,healthcare,benefits,employment,and
residentialstabilitysothateveryVeteranhasaccesstoasafe,stableenvironment. No
Veteranshouldbeunsheltered. Investmentsineffectivestrategieslikerapidrehousing
andpermanentsupportivehousing,alongwithunprecedentedcollaborationbetween
Federal,state,andlocalagencies,withthesupportoftheUnitedStatesInteragencyCouncil
onHomelessness,haveyieldedsubstantialreductionsinVeteranhomelessness.
During2013,146,557VeteranswereservedbyVAsHealthCareforHomelessVeterans
outreachinitiatives,anincreaseofapproximately23percentfrom2012. Inpartnership
withtheDepartmentofHousingandUrbanDevelopment(HUD),atotalof45,153Veterans
hadpermanenthousingthroughtheHUDVASupportiveHousing(HUDVASH)Program,as
ofSeptember30,2013. TheseVeteranswerealsoprovidedwithdedicatedcasemanagers
andaccesstohighqualityVAhealthcare. ThetotalnumberofVeteranswhoobtained
housingduring2013inHUDVASHwas14,484,whileover28,000additionalVeterans
Management Discussion and Analysis Part I - 1




































obtainedhousingwithassistancefromotherVHAhomelessprogramsduringthatsame
timeperiod.
TelehealthPrograms: VAstelehealthprogramscontinuetobethelargestandmost
comprehensiveintheNation. In2013,VAspecifictelehealthapplicationsclinicalvideo
teleheath(CVT),hometelehealth(HT)andstoreandforwardtelehealth(SFT) provided
careto603,532patients,carethatamountedto1,787,181telehealthbasedepisodesof
care. CVTistheuseofrealtimeinteractivevideoconferencingtoassess,treatandprovide
caretoapatientremotely. HTappliesprinciplestocoordinatecareusinghealth
informatics,diseasemanagementandtechnologiessuchasinhomeandmobilemonitoring,
messagingand/orvideotechnologies. SFTistheuseoftechnologiestoacquireandstore
clinicalinformation(e.g.data,image,soundandvideo)thatisthenforwardedtoor
retrievedbyaprovideratanotherlocationforclinicalevaluation. VAachieveda20percent
expansionintheHTservicesitprovidesinsupportofnoninstitutionalcare,chroniccare
management,acutecaremanagement,andhealthpromotion/diseasepreventionservices
deliveredto143,281Veteranswithmedicalandmentalhealthconditions. Theseservices
enabledtheseVeteranstoliveindependentlyintheirownhomesandlocalcommunities.
VAhasseena24percentexpansionin2013inthenumberofVeteranpatientsreceiving
careviaCVTbasedtelementalhealthservicesthatsupported95,059Veterans. Telemental
healthenablesVeteranpatientstoreceiveservicesintheirlocalcommunitiesreducingthe
needforbothpatientsandclinicianstotravel,withtravelassociatedcostsavingsof$34.45
perconsultation. VA'sprovisionoftelehealthbasedclinicalserviceshasgrownby24
percent,therebyincreasingaccesstocareforruralVeteranpatientsandreducingavoidable
travel. TelehealthservicesforthecareofVeteranscontinuestoexpandinsizeandscope
supportingnewservicesthatprovideTeleDermatology,TelePathology,TeleAudiology,Tele
IntensiveCare,andWomen'stelehealthservices,aswellasclinicalconsultationsbyVA
providersto2,077Veteransdirectlyintheirhomesviavideotelehealthconnections.
Additionally,VAcompleted8,948TeleAudiologyencountersin2013(80percentgrowth
comparedto2012).
MentalHealth: Veteransrequiringmentalhealthservicescontinuestogrow,increasing
from927,052Veteransin2006tomorethan1.46millionVeteransin2013. Thesenumbers
areexpectedtocontinuetogrow. Tomeetthisneed,VAhasincreasedthementalhealth
budgetin2013byover39percentsince2009. Additionally,VAhasincreasedthenumber
ofmentalhealthprovidersin2013bymorethan1,600staffsince2012. VAcontinuesto
monitoraccesstomentalhealthcare,includingcareinspecificmentalheatlhprograms.
Management Discussion and Analysis Part I - 2









































Benefits: EnsuringaHighQualityofLifeAfterMilitaryService
In2013,VAreceivedover1millionclaimsfordisabilitybenefitsandprocessed1,169,085
claims. Throughout2013,VAachievedanumberofsignificant,positiveperformanceresultsin
thebenefitsdeliveryarea:
ReducingtheClaimsBacklog: InApril2009,VAdefinedtheclaimsbacklogforthefirsttime
asclaimspendingover125daysandbeganredesignoftheentiresystemwithagoalof
processingclaimswithin125daysorlessin2015,at98percentaccuracy. VBAsaggressive
TransformationPlanintegratespeople,process,andtechnologyinitiativestoachievethese
longtermgoals. Ofnote,VBArealigneditsregionalofficesintoamoreefficient
organizationalmodel,revampeditstrainingprogram,anddeployedanendtoend
paperlesselectronicclaimsprocessingsystemknownastheVeteransBenefitsManagement
SystemateveryregionalofficebyJune10,2013. Toaddressthelengtheningwaittimes
thatmanyVeteransfacedfordecisionsontheirdisabilitycompensationclaimsduringthis
periodofchange,VAimplementedan"oldestclaimsfirst"initiativeonApril19,2013. VBA
hascompletedallclaimspendingmorethan2yearsandwillcompleteallclaimspending
morethan1yearbytheendof2013. AsofSeptember30,2013,theinventoryofdisability
claimswas722,013claimsthelowestsinceNovember2010.
JointVA/DepartmentofDefense(DoD)IntegratedDisabilityEvaluationSystem(IDES)
Program: IncoordinationwithDoD,VAhasdevelopedandimplementedanIDESto
providewounded,ill,orinjuredServicemembersfitnessfordutydeterminationsfor
continuedmilitaryserviceand,ifseparated,expeditiouspaymentofVAdisabilitybenefits.
IDESnowoperatesat139MilitaryTreatmentFacilitiesworldwideandcovers100percentof
ServicememberswhoarereferredtoMedicalEvaluationBoardsforfitnessdeterminations.
IDESsimplifiestheprocessfordisabledServicememberstransitioningtoVeteranstatus,
improvestheconsistencyofdisabilityratingsandimprovescustomersatisfaction. The
averagedaystocompleteIDESclaims,followingtheparticipantsseparationfromservicein
2012,was54days,withanaverageof78.4daysin2013. SincetheinceptionoftheIDES
pilotin2007,morethan88,000Servicemembershavebeenreferredtotheprogram, and
morethan34,000Servicemembersarecurrentlyenrolled. VAandDoDcontinuetowork
togethertoimproveIDESprocessingandtimeliness.
SeamlessTransition: VAandDoDhavejointlydevelopedandimplementedtheBenefits
DeliveryatDischarge(BDD)andtheQuickStart(QS)programstoallowServicemembersto
submitclaimswhileonactiveduty. VAcompleted59,877predischargeclaimsin2012and
completed62,697predischargeclaimsin2013. VAandDoDarereviewingcurrent
processestoimprovetheefficiencyandtimelinessofthepredischargeprograms.
Quality: VAimprovednationalcompensationbenefitentitlement(rating)accuracyfrom85
percentto86percentin2012,ona12monthcumulativebasis. Ratingaccuracyfor2013is
89percent. VBAbegantrackingissuebasedqualitymeasuresinOctober2012. Reporting
onbothissuebasedandclaimsbasedqualityallowsVBAtotargetspecificareasforwhich
theworkforceneedsremedialandmoreeffectivetraining. Issuebasedquality,ona3
monthcumulativebasis,is96.7percentasofSeptember2013.
Management Discussion and Analysis Part I - 3






































DependencyandIndemnityCompensation(DIC): AsaresultofVBAsprioritizationofrating
claims,combinedwithsimplifiedproceduresforprocessingDICclaims,VAreducedthe
backlogofDICclaimsfrom8,742attheendofJanuary2013,to2,954asoftheendof
September2013. Inadditiontoreducinginventory,VAreducedtheaveragedaysto
completeDICclaimsbynearly12percent,from165to145daysattheendofSeptember
2013,andreducedtheaveragedayspendingforDICclaimsby42percent,from159daysat
theendofJanuaryto92daysattheendofSeptember2013.
Insurance: VAissuedlifeinsurancepoliciestoover41,000Veteransandseparating
Servicemembers,manyofwhomaredisabledandwouldnothavebeenabletopurchase
lifeinsuranceinthecommercialinsuranceindustryduetotheirimpairedinsurability
resultingfrommilitaryservice.
Education: VAprovidededucationbenefitstoapproximately1,023,000studentsin2013.
Thenumberofstudentsreceivingeducationbenefitscontinuestoincreasesincethe
implementationofthePost9/11GIBill;claimscompletedincreased28percentoverthe
2012leveltoapproximately4.5millionin2013.
VocationalRehabilitationandEmployment: VArehabilitatedover8,050(estimate)
Veteransin2013,providingmorethan6,730(estimate)ofthemwiththerequiredtoolsand
skillsneededtoobtainandmaintaincareeremployment. Morethan1,330(estimate)
Veteranswereprovidedwithassistanceingainingindependenceindailyliving.
Housing: In2013,VAguaranteedapproximately629,312loanstoVeterans. Ofthese,
241,205wereforthepurchaseofahome,and388,107werefortherefinanceofahome
loan. In2013,VAalsoprovided1,099SpeciallyAdaptedHousinggrantstoseverelydisabled
VeteransandServicememberstoconstructanadapteddwellingormodifyanexistingone
tomeettheirspecialneeds.
BurialsandMemorials: HonoringVeteransforSacrificesonBehalfofthe
Nation
VAhonorstheserviceandsacrificesofAmericasVeteransthroughtheconstructionand
maintenanceofNational,State,andTribalcemeteriesasnationalshrines,byfurnishing
headstones,markers,andmedallionsforthegravesofVeteransburiedinprivatecemeteries,
andprovidingPresidentialMemorialCertificates(PMC)tohonortheserviceofdeceased
AmericanVeterans.
Keyperformanceresultsfor2013areasfollows:
MoreVeteransServedbyBurialOption: AnewVAfundedStateVeteranscemeteryopened
toserveVeteransintheareaofSpanishFort,AlabamaandanewVAfundedTribalVeterans
cemeteryopenedtoserveVeteransoftheRosebudSiouxTribeinRosebud,SouthDakota.
Timeliness: VAachieveda95percentthresholdoftheproportionofgravesinNational
cemeteriesmarkedwithin60daysofinterment.
Quality: 99percentofsurveyrespondentsratedNationalcemeteryappearanceas
"Excellent." Ninetypercentofsurveyrespondentsalsoratedthequalityofheadstonesor
markersreceivedfromVAasExcellent.
Management Discussion and Analysis Part I - 4























Finance: EnsuringProperStewardshipofTaxpayerDollars
VAisextremelyproudtohaveobtainedanunqualifiedauditopiniononitsfinancial
statementsforthe15
th
consecutiveyear. VAhasworkeddiligentlyonremediatingits
oneremainingmaterialweakness,InformationTechnology(IT)SecurityControls,and
hasmadesignificantprogress;however,thiswillremainamaterialweaknessin2014.
VAsuccessfullyremediateditssignificantdeficiencyfrom2012,UndeliveredOrders.
In2013,VAcontinuedtouseAmericanRecoveryandReinvestmentActof2009(RecoveryAct)
fundstoimproveitsmedicalfacilitiesandnationalcemeteries,aswellastoprovidegrantsfor
Statenursinghomesanddomiciliaryfacilities. FollowingthesuccessfulobligationinJuly2010
of100percentofVAsRecoveryActfunds(totaling$1.86billion,includingonetimepayments
toVeterans),VAconcentratedeffortsduring2013toincreaseoutlays. AsofSeptember2013,
VAhasmadeoutlaystotaling$1.83billion(98percentofRecoveryActfunds).
ExecutiveOrder13589datedNovember15,2011directedagenciestocutwasteinspending
andidentifyopportunitiestopromoteefficientandeffectivespendinginspecificareas;travel,
ITdevices(inventories,usage,andcontrols,)printing,executivefleet,suppliesandmaterials,
andpromotionalitemuseandpurchases. WiththeexceptionofManagementSupport
Contracts,theAdministrationsandStaffOfficeshavetheflexibilitytotakereductionsacross
thecategoriesofTravel,SuppliesandMaterials,andPrinting,asdeterminedbestfortheir
organization. VAdevelopedandexecutedaplantoreducethecostassociatedwithactivities
coveredintheorder. Thereductiontobetakenintheseareaswasdefinedas20percentbelow
VAs2012budgetrequest,tobeaccomplishedin2012and2013. VAmonitorsspending
monthlyandreportsstatus30daysafterthecloseofeachquartertoOMB. In2013,VA
exceededitsspendingreductiontargetof$173.5millionby24.6percent.
Management Discussion and Analysis Part I - 5



























DepartmentOverview
OurMission:WhatWeAreHeretoDo
To fulfill President Lincolns promise " To care for him who shall have
borne the battle and for his widow and his orphan" by serving and
honoring the men and women who are Americas Veterans.
PresidentLincolnsimmortalwordsdeliveredinhisSecondInauguralAddressnearly150years
agodescribebetterthananyothersthemissionoftheDepartmentofVeteransAffairs(VA).
WecareforVeterans,theirfamilies,andSurvivorsmenandwomenwhohaveresponded
whentheirNationneededhelp. Ourmissionisclear,direct,andhistoricallysignificant. Itisa
missionthateveryemployeeisproudtofulfill.
VAfulfillsthesewordsbyprovidingworldclassbenefitsandservicestothemillionsofmenand
womenwhohaveservedthiscountrywithhonorinthemilitary. PresidentLincolnswords
guidetheeffortsofallVAemployeeswhoarecommittedtoprovidingthebestmedicalcare,
benefits,socialsupport,andlastingmemorialsthatVeteransandtheirdependentsdeservein
recognitionofVeteransservicetothisNation.
OurPrograms: WhatWeDo
VeteransHealthAdministration
ProvidingMedicalCare
VAoperatesthelargestintegratedhealthcaredeliverysysteminAmerica. Inthiscontext,VA
meetsthehealthcareneedsofAmericasVeteransbyprovidingabroadrangeofprimarycare,
specializedcare,andrelatedmedicalandsocialsupportservices. VAfocusesonproviding
healthcareservicesthatareuniquelyrelatedtoVeteranshealthorspecialneeds. VAisalso
theNationslargestproviderofhealthcareeducationandtrainingforphysicianresidentsand
otherhealthcaretrainees. Theseeducationandtrainingprogramsaredesignedtohelpensure
thatthereisanadequatesupplyofclinicalcareprovidersforVeteransandtheNation.
Web: http://www1.va.gov/health/index.asp
ConductingVeteranCenteredResearch
VAadvancesmedicalresearchanddevelopmentinwaysthatsupportVeteransneedsby
pursuingmedicalresearchinareasthatmostdirectlyaddressthediseasesandconditionsthat
affectVeterans.
SharedVAmedicalresearchfindingscontributetothepublicgoodbyimprovingtheNations
overallknowledgeofdiseaseanddisability.
Web: http://www.research.va.gov
Management Discussion and Analysis Part I - 6































VeteransBenefitsAdministration
DeliveringCompensationBenefits
TheCompensationprogramprovidesmonthlypaymentsandancillarybenefitstoVeteransin
accordancewithratesspecifiedbylaw,inrecognitionoftheaveragepotentiallossofearning
capacitycausedbyadisabilityordiseaseincurredinoraggravatedduringactivemilitary
service.
Thisprogramalsoprovidesmonthlypayments,asspecifiedbylaw,tosurvivingspouses,
dependentchildren,anddependentparentsinrecognitionoftheeconomiclosscausedbythe
Veteransdeathduringactivemilitaryserviceor,subsequenttodischargefrommilitaryservice,
asaresultofaserviceconnecteddisability.
Web: www.vba.va.gov/bln/21/compensation/
ProvidingPensionBenefits
Pensionbenefitsaremonthlypayments,specifiedbylaw,providedtoVeteranswith
nonserviceconnecteddisabilities,whoservedinatimeofwar. Veteransmustmeetspecific
incomelimitationsandmustbepermanentlyandtotallydisabledormusthavereachedtheage
of65. Thisprogramalsoprovidesmonthlypayments,asspecifiedbylaw,toincomeeligible
survivingspousesanddependentchildrenofdeceasedwartimeVeteranswhodieasaresultof
adisabilityunrelatedtomilitaryservice.
Web: www.vba.va.gov/bln/21/pension/
ProvidingFiduciaryServices
FiduciaryservicesareprovidedtoVeteransandbeneficiaries,whobecauseofinjury,disease,
infirmitiesofage,orbecausetheyareminorchildren,areunabletomanagetheirfinancial
affairs. Thisprogramprovidesforaselectedfiduciary,normallyafamilymemberorcaregiver,
tomanagethebeneficiarysfinancialaffairstoensureallofhisorherdebtsarepaid.
Additionally,throughthefiduciaryprogram,periodicvisitsareconductedwithbeneficiariesto
ensuretheyarebeingproperlycaredfor.
Web: http://www.vba.va.gov/bln/21/Fiduciary/
ProvidingEducationalOpportunities
VAseducationprogramsprovideeligibleVeterans,Servicemembers,Reservists,Survivors,and
dependentstheopportunitytoachievetheireducationalorvocationalgoals. Education
programsalsoassisttheArmedForcesinrecruitmentandretentionandhelpVeteransreadjust
tocivilianlife.
ThesebenefitsservetoenhancetheNationscompetitivenessthroughthedevelopmentofa
bettereducatedandmoreproductiveworkforce. VAadministersanumberofeducation
programs,includingtheMontgomeryGIBill,thePost9/11GIBill,andtheVeteransRetraining
AssistanceProgram(VRAP),whichprovidesfinancialsupporttounemployedVeteransbetween
35and60yearsoldwhoarenoteligibleforotherVAeducationbenefits. VRAPtraining
Management Discussion and Analysis Part I - 7






programsmustbeginonorafterJuly1,2012,andtheauthoritytomakepaymentsendson
March31,2014.
Web: www.gibill.va.gov
DeliveringVocationalRehabilitationandEmploymentServices
VAsVocationalRehabilitationandEmployment(VR&E)programprovidesawiderangeof
vocationalandemploymentservicestoVeterans,activedutyServicemembers,andeligible
dependents. TheseservicesaredesignedtohelpServicemembersandVeteranschoosea
careerpathandassisttheminachievingtheiremploymentgoals. Assistanceincludesinterest
andaptitudetesting,occupationalexploration,careercounseling,training,andjobplacement
services.
Thisprogramalsoprovidesservicestoenhanceanindividualsopportunitytoobtaincareer
employmentthroughtraining. VApaysthecostsoftuition,fees,books,supplies,equipment,
and,ifneeded,specialservices. VAalsoprovidesamonthlybenefitallowancetohelpwith
livingexpenses.
Web: http://www.vba.va.gov/bln/vre/index.htm
ProvidingEducationalandVocationalCounseling
VAsVocationalRehabilitationandEmploymentprogramadministerstheEducationaland
VocationalCounselingbenefittotransitioningServicemembersandcurrentbeneficiariesand
newVeteranseligibleunderallEducationchapters. Thecounselingservicesmayincludecareer
decisionmakingforcivilianandmilitaryoccupations,assistancewithchoosinganappropriate
civilianoccupationanddevelopingatrainingprogram,selectionofanacademicfacility,and
academicandadjustmentcounselingtoresolvebarriersthatimpedesuccessintrainingand/or
employment.
PromotingHomeOwnership
VAsLoanGuarantyprogramhelpseligibleVeterans,activedutypersonnel,survivingspouses,
andmembersoftheReservesandNationalGuardinpurchasinghomes. VAalsoassiststhese
borrowersinretainingtheirhomesthroughjointservicingeffortswithVAguaranteedloan
servicersviaforeclosureavoidanceservices. Inaddition,VAoffersSpeciallyAdaptedHousing
grantstoVeteransandServicememberswhohavecertainserviceconnecteddisabilitiesforthe
purposeofconstructinganadapteddwellingormodifyinganexistingonetomeettheirspecial
needs.
TheLoanGuarantyprogramalsoprovidesdirectloanstoNativeAmericanVeteranslivingon
FederaltrustlandandofferssomeloanstothepublicwhenbuyinghomesownedbyVAasa
resultofforeclosure.
Web: http://www.homeloans.va.gov
Management Discussion and Analysis Part I - 8










MeetingInsuranceNeeds
VAsInsuranceprogramprovidesallServicemembersandtheirfamilieswithuniversally
availablelifeinsurance,whichisautomaticallyissuedwithoutunderwriting. Theprogram
providesServicememberstheoptiontocontinueinsurancecoverageafterseparatingfromthe
military. TheInsuranceprogramalsooffersServicememberstraumaticinjuryprotection. The
programcontinuestoprovidelifeinsurancecoveragetoWorldWarIIandKoreanWarera
Veterans,andtoVeteranswhohavelostorimpairedinsurabilityresultingfrommilitaryservice
andthereforecannotobtaincommercialinsuranceatstandardratesapplicabletohealthy
individuals. Intotal,theprograminsures6.9millionVeterans,Servicemembers,andtheir
families.
Insurancecoverageismadeavailableinreasonableamountsandatpremiumratescomparable
tothoseofferedbycommercialcompanies. Theprogramensuresacompetitive,securerateof
returnoninvestmentsheldonbehalfoftheinsured.
Web: http://www.insurance.va.gov
NationalCemeteryAdministration
DeliveringBurialandMemorialServicestoVeterans
PrimarilythroughtheNationalCemeteryAdministration(NCA),VAhonorsVeteransandtheir
familieswithfinalrestingplacesinNationalshrinecemeteriesandwithlastingtributesthat
commemoratetheirserviceandsacrificetoourNation.

Web: http://www.cem.va.gov
StaffOffices
TheDepartmentsstaffofficesarecriticaltoVAsabilitytodeliverservicestoVeteransinacost
effectivemanner. Theseofficesprovideavarietyofservicesincludinginformationtechnology,
humanresourcesmanagement,strategicplanning,financialmanagement,acquisition,and
facilitiesmanagement.
Management Discussion and Analysis Part I - 9
Management Discussion and Analysis Part I - 10


Our Programs: Where We Are Located
VA provides medical care, benefits, and burial services throughout the Nation. Shown below is
a depiction of VAs geographical locations as of March 30, 2013. The map identifies 151
Medical Centers, 300 Vet Centers, 827 Communitybased Outpatient Clinics, 135 VA
Community Living Centers, 6 Independent Output Clinics, 103 Residential Rehabilitation
Centers, 225 National and State Cemeteries, and 56 Regional Offices.
Source: VAST Q2FY13 VA Office of Policy and Planning -- National Center for Veterans Analysis and Statistics (008B1)

Although State Veterans Cemeteries are included on the above map, they are not VA
facilities per se. VA provides grants for the establishment of Stateoperated cemeteries,
which provide a burial and memorial benefit to Veterans.



OurPrograms:WhoWeServe
Asdescribedonthepreviouspages,VAprogramsandservicesareasvariedastheVeteransand
familymembersweserve. VAscommitmenttothosewhohave"bornethebattle"continues.
ThechartbelowdescribeshowmanyparticipantsarebeingservedbyVA.
Program
YeartoYearComparison
2012
Participants
2013
Participants
Percent
Change
*MedicalCare
UniquePatients 6,333,100 6,418,439 1.3%
Compensation
Veterans 3,534,457 3,743,259 5.9%
Survivors/Children 365,220 376,979 3.2%
Pension
Veterans 313,870 308,140 1.8%
Survivors 206,688 210,450 1.8%
Education
(1)(2)
Veterans/Servicemembers 660,800 703,100 6.4%
Reservists 79,400 79,900 0.6%
Survivors/Dependents 204,000 240,000 17.6%
VocationalRehabilitation
(2)
ProgramParticipants 114,281 124,570 9%
Housing
LoansGuaranteed 539,900 629,300 16.6%
SpeciallyAdaptedHousing(SAH)Grants
(Approved)
1,205 1,099 8.8
Insurance
Veterans 1,328,696 1,258,152 5.3%
Servicemembers/Reservists 2,387,500 2,350,500 1.5%
Spouses/DependentChildren 3,202,000 3,121,000 2.5%
Burial
Interments 118,200 124,800 5.6%
GravesMaintained 3,226,500 3,309,700 2.6%
Headstones/Markers(Processed) 354,600 358,600 1.1%
PresidentialMemorialCertificates 719,100 654,500 9.0%
(1)
Figuresrepresent12monthrollingdatathroughSeptember.
(2)
Doesnotrepresentuniqueparticipants. Someparticipantstrainedundermorethanoneeducationprogram.
*VHAs2013numberisanestimate.
Part I - 11 Management Discussion and Analysis



Resources:OurPeople
AsofSeptember30,2013,theDepartmentemployedabout312,841fulltimeequivalent(FTE)
employeesnationwide. ThechartsbelowshowthedistributionofFTEemployeesbyprogram
area.
Asshownbelow,morethan270,000FTEsupportVAshealthcaresystem,oneofthelargestin
theworld. OftheremainingFTE,approximately21,130areinvolvedwithproviding
compensationandpension,aswellasotherbenefitstoVeteransandtheirfamilies. About
1,700FTEprovideburialandmemorialservicesforVeteransandtheireligiblespousesand
children,andabout10,479,locatedprimarilyintheWashington,DCarea,providepolicy,
administrative,informationtechnology,andmanagementsupporttotheprograms.
Resources:OurBudget
In2013,VAobligatedapproximately$150billion. *Approximately98percentoftotalfunding
wentdirectlytoVeteransintheformofmonthlypaymentsofbenefitsorfordirectservices,
suchasmedicalcare. ThedepictionsbelowshowhowVAspentthefundswithwhichitwas
entrusted.
*The obligation information shown above does not tie to the Obligations Incurred amounts shown in the Financial Statements. The difference includes
but is not limited to the fact that adjustments to prior-year expired funds are netted with Obligations Incurred in the Financial Statements.
Part I - 12 Management Discussion and Analysis


OurOrganization
Part I - 13 Management Discussion and Analysis











LeadershipandGovernance
VAseniorleadershipmakespolicydecisionsthroughvariousinternalgoverningbodies. Fourof
themostcriticalaredescribedbelowwithkeyactionstheyundertookin2013.
Governance Major2013Actions
VAExecutiveBoard
Membership
TheVAExecutiveBoard(VAEB)ischairedbytheSecretary
andincludestheDeputySecretary;ChiefofStaff;Under
SecretariesforHealth,Benefits,andMemorialAffairs;
AssistantSecretaries;GeneralCounsel;andtheChairmanof
theBoardofVeteransAppeals.
Purpose
TheVAEBistheDepartmentsmostseniormanagement
decisionmakingforum.VAEBreviews,discusses,and,
throughthedecisionsoftheSecretary,providesdirectionon
Departmentalpolicy,strategicdirection,resourceallocation,
andperformanceinkeyareas.
TheVAEBreviewedthefollowing:
FiscalYear(FY)20152019ProgrammingDecision
Memorandum
FY2015BudgetSubmission
20142020StrategicPlan
VAEnterpriseRiskManagement
FY20162020PlanningGuidance
FY20162020ProgrammingGuidance
StrategicManagementCouncil
Membership
TheStrategicManagementCouncil(SMC)ischairedbythe
DeputySecretaryandincludestheAssistantSecretaries;the
DeputyUnderSecretariesforHealth,Benefits,andMemorial
Affairs;theGeneralCounsel;ChairmanoftheBoardof
VeteransAppeals;andtheChiefofStaff.
Purpose
TheSMCservesasacollaborativeanddeliberativebodythat
providesoversightandguidanceonkeystrategicand
operationalissuesthatarelikelytorequireactionbyVA
decisionmakers.
TheSMCreviewedthefollowing:
FY2015BudgetSubmission
20142020StrategicPlan
VAEnterpriseRiskManagement
HRAStrategicPlan
AcquisitionProgramManagementFramework
FY2013TransitionPlanning
FY20162020PlanningGuidance
FY20162020ProgrammingGuidance
Part I - 14 Management Discussion and Analysis


Governance Major2013Actions
SeniorReviewGroup
Membership
TheSeniorReviewGroup(SRG)ischairedbytheChiefof
StaffandincludesPrincipalDeputyAssistantSecretaries;
theChiefsofStaffforHealth,Benefits,andMemorial
Affairs;theDeputyGeneralCounsel;andtheViceChairman
fortheBoardofVeteransAppeals.
Purpose
TheSRGservesasacollaborativeanddeliberativebodythat
providesoversightandguidanceonkeystrategicand
operationalissuesandmakesrecommendationsonissues
thatshouldbeconsideredaspartofVAsgovernance
process. Somegovernancemeetingswereconducted
jointlyin2013asSRG/SMCmeetings.
TheSRGreviewedthefollowing:
FY2015BudgetSubmission
20142020StrategicPlan
VAEnterpriseRiskManagement
HRAStrategicPlan
AcquisitionProgramManagementFramework
2013TransitionPlanning
ELBReconstructionProposal
ActionPlanningonEmployeeSurveyResults
VACentralOfficeSpaceReductionInitiative
RevitalizingVAsGovernanceProcess
OperationalManagementReview
Membership
TheOperationalManagementReview(OMR)is
chairedbytheDeputySecretaryorChiefofStaff.
AttendeesincludetheExecutiveSponsorand
SeniorProgramManagersfortheDepartments
MajorInitiativesandpriorityprogramsand
representthekeysupportingorganizations,the
AssistantSecretariesfortheOfficesofInformation
andTechnology(OIT),HumanResourcesand
Administration(HRA),Acquisition,Logistics,and
Coordination(OALC)andotherprogram
stakeholders.
Purpose
TheOMRisaperformancemanagementprocess
thatoverseestheplanningandexecutionofthe
DepartmentsMajorInitiativesandprogramsof
record(POR).TheExecutiveSponsorandSenior
ProgramManagerspresenttheiractualvs.planned
statusinregardstoCost,Schedule,and
Performance. Thefocusisonriskmanagement
andissueresolution. Inaddition,anoverarching
purposeofthismonthlyforumistobuildVAs
capabilitiesandcrossDepartmentalcoordination
topromoteandsustainlongterm,effective
execution.
Majoractionsachievedduring2013includedthefollowing:
ProvidedoversightofeightMajor
initiatives/portfolios/AcquisitionPrograms/process
improvements,includingregularOMRmeetingswiththe
DeputySecretaryorChiefofStaff,monthlyperformance
reporting,andweeklyTransSyncmeetings.
AddedtwopriorityCorrectiveActionProgramstothe
OMRprocess: CapitalProgramsImprovementPlan,to
addressrootcausestoperformanceissuesinVAMajor
Construction;andIntegratedAcquisitionManagement,
toaddressrootcausestoperformanceissuesinVAand
VHAacquisition.
ImplementedweeklyOMRsessionsfortopicscentralto
thesuccessofVBATransformationandeliminationof
thebacklog,resultinginnearrealtimeriskandissue
managementatthehighestlevelsofVAleadership.
Continuedimplementationofthecapabilitybased
IntegratedHealthPortfolio.
ThroughthecollectiveeffortsoftheDepartments
EnterpriseProgramManagementOffice(ePMO),OALC,
andOIT,trackedprogressinawardingofInformation
Technology(IT)contracts,implementingcorrective
actionsasneededtoimproveperformance.
HeldaMajorInitiativeSummitthatsharedprogram
managementbestpracticeswithVAProgramManagers.
PartneredwithOALCtoprepareforimplementationof
VA'sAcquisitionProgramManagementFramework,
leveragingbestpracticesandlessonslearnedfromVAs
OMRprocesstofurtherenhanceprogramexecution
acrosstheDepartment.
Part I - 15 Management Discussion and Analysis
















VA has identified three APGs, which represent the Departments highest priorities. Each of the

three APGs is focused on improving direct service delivery to Veterans and eligible beneficiaries
and requires extensive collaboration across VA organizations and with non-VA partners. In
addition, each APG will result in short-term and high impact improvement in VA performance.
Refer to www.Performance.gov for additional information.
HOMEL ES S NES S ( AGENCY PRI ORI TY GOAL )
Problem Being Addressed 2013 Actions and Progress
In2012,homelesspopulation
estimatesnotedthatapproximately
62,619Veteranswerehomelessinthe
UnitedStatesonasinglenight.
SinglemaleVeteransare
disproportionallyrepresentedamong
thehomelesspopulation.Basedon
themostrecentdataavailable,atany
giventimeapproximately14percent
ofthehomelessadultpopulationare
Veterans.Veteranscompriseroughly
9.6percentofthetotaladult
populationoftheUnitedStates.
During2013,146,557Veteranswere
servedbyVAHealthCareforHomeless
Veteransoutreachinitiatives,anincrease
ofapproximately23percentfrom2012.
InpartnershipwithHUD,atotalof45,153
Veteranshadpermanenthousingthrough
theHUDVASHProgramasofSeptember
30,2013. TheseVeteranswerealso
providedwithdedicatedcasemanagers
andaccesstohighqualityVAhealthcare.
In2013,thetotalnumberofVeterans
whoobtainedhousinginHUDVASHwas
14,484,whileover28,000additional
Veteransobtainedhousingwith
assistancefromourotherhomeless
programsduringthatsametimeperiod.
Investmentsineffectivestrategieslike
rapidrehousingandpermanent
supportivehousing,alongwith
unprecedentedcollaborationbetween
councilagencies,haveyieldedsubstantial
reductionsinVeteranshomelessness.
Part I - 16 Management Discussion and Analysis






































VBAACCES S ( AGENCY PRI ORI TY GOAL )
ProblemBeingAddressed 2013ActionsandProgress
ImprovedawarenessofVAservices
andbenefitsbyincreasingthe
timelinessandrelevanceofonline
informationavailabletoVeterans,
Servicemembers,andeligible
beneficiaries.
Bothperformancemeasureswhichsupportthe
2013AccessAPGofincreasingeBenefits
registereduserbasehavebeenexceeded.
Thesemeasuresare:
- Increasingthenumberofletters
generatedbyclientsviaeBenefits
- Increasingthenumberofpageviews
(perquarter)ofCompensationand
Pensionclaimsstatusaccessedby
clientsviaeBenefits
Singlesignontechnologyhasbeendeployed
allowingseamlessaccessbetweeneBenefits,
MyHeatheVet,TRICAREOnline,VetSuccess,
andVAforVets
Sixteenconsecutivequarterlyreleasessince
October2009haveproducedover50self
servicefeatureswithintheeBenefitsportal
Servicemembersarenowrequiredtogetan
accountshortlyafteraccession
Over2.8millionregistereduserssincelaunch
inOctober2009
UsedbyServicemembersandVeteransinover
25countries
Over27millionvisitsin2013andinSeptember
2013over3.9millionvisits
Expandedaccesstosurvivorstoviewclaims
andpaymentinformationinspring2013
Part I - 17 Management Discussion and Analysis



























































VBABAC K L OG ( AGE NC Y PR I OR I T Y GOAL )
ProblemBeingAddressed

2013ActionsandProgress
Reducingthelengthoftimeit
takestoprocesscompensation
andpensionratingrelated
claimsisanintegralpartofVAs
missiontoserveVeteransby
providingallpossiblebenefits
underthelawtoeligible
claimantsinatimely,accurate,
andcompassionatemanner.
VAseekstoeliminatethe
disabilityclaimsbacklogin2015
andensurethatnoVeteranhas
towaitmorethan125daysfor
ahighqualitydecision.
CrossAgencyCollaboration
ToachieveprocessingefficienciesthatwillenableVAtoreduce
theclaimsbacklogandimprovedecisionquality,VAisemployinga
synchronizedandintegratedtransformationstrategythat
incorporatespeople,processes,andtechnologyinitiatives.

VeteransBenefitsManagementSystem(VBMS)andVeterans
ClaimsIntakeProgram(VCIP)workcollaborativelytoassistinthe
transitionfromthepaperenvironmenttothedigitaloperating
environment.
o VCIPdeliverssolutionsforintakeofsourcematerial,
documentation,electronicrecords,anddataindirect
supportoftheVBAclaimsprocess,whileworking
collaborativelywithallstakeholderstomanageVBAs
transitionfromthepaperenvironmenttothedigital
operatingenvironment.
VBAhasimplementedVBMS,apaperlessITclaimsprocessing
system. All56RegionalOffices(RO)andtheAppeals
ManagementCenter(AMC)areoperatinginVBMSasofJune
2013. Attheendof2013,over250millionpiecesofpaperwere
scannedintodigitalformat,resultingin63percentofallpaper
basedclaimsbeingmadeavailableforprocessinginVBMS.VBA
begantrackingissuebasedqualityinOctober2012asan
enhancementtotheQualityReviewTeam(QRT)initiativethatis
functioninginallRegionalOffices. TheQRTmissionistoimprove
theaccuracyofVBAratingdecisionsandensureVeteransreceive
thecorrectrating,thefirsttime.Reportingonbothissuebased
andclaimsbasedqualityallowsformoreeffectivetrainingand
casemanagementwhenclaimsarereviewedandtrackedby
medicalissue.
Currently,VBAmaintainsROclaimsprocessingjurisdictionsthat
arealignedwithstateboundaries. Inrecentyears,VBAhas
brokeredclaimsbetweenROstomaximizeresources. While
VBAintendstocontinueitstraditionalbrokeringpracticesin2014,
thefuturestateofVBAsbrokeringcapabilitiesliesinthe
developmentofadigitaloperatingenvironment.This
environmentincludesanationalworkqueuethatwillallowclaims
toberoutedautomaticallyonlogic,basedonVBAspriorities.VBA
beganutilizingtheNationalWorkQueueinApril2013.
TheBoardofVeteransAppealshasincreasedVideo
Teleconferencehearings,whichreducestravelexpendituresand
VeteranwaittimeforBoardhearings.
TheBoardofVeteransAppeals,VBA,andVHAcollaborateclosely
toeliminateavoidableremands.
Part I - 18 Management Discussion and Analysis



MajorAccomplishments
AdvancesinTelehealth
In2013,VAstelehealthprogramsprovided1,787,181telehealthbasedepisodesofcaretoa
totalof603,532Veterans. VAhasachieveda20percentexpansioninhometelehealth
services;24percentexpansioninclinicbasedtelehealthservicesofwhich95,059Veterans
receivedtelementalhealth.TheseservicessupportVeteranpatientsintheirlocalcommunities
andreducetheneedforbothpatientsandclinicianstotravel. Servicesaddedin2013include
telespirometry,teleIntensiveCare,teleAudiologyandexpandedvideoconsultationinto
Veteranshomes.
AdoptionandExpansionofBlueButton

Acriticaltoolbywhichpatientsmaysharehealthinformation,VAsBlueButtonisemerging
withinthelargerecosystemofhealthinformationexchangebeingpromotedbyMeaningfulUse
regulations. BlueButtonPlusfacilitatestheinteroperabilityofhealthdataandpromotes
healthdataexchangeforthebenefitofpatients. Asevidenceofgrowingmomentum,over450
healthcareproviders,thirdpartyinsurancecompanies,patientadvocacygroups,and
technologycompaniesarenowparticipatingtoensureafutureinwhichindividualsareableto
view,download,andsharetheirhealthdata,therebybecomingactivemembersoftheirhealth
careteam.
ProgressinMillionVeteranProgram
TheMillionVeteranProgram(MVP),agroundbreakinggenomicmedicineprogram,endeavors
tocollectgeneticsamplesandgeneralhealthinformationfrom1millionVeteransinthenext5
7years. Theprogramisontracktoestablishoneofthelargestgenomicandhealthinformation
researchresourcesavailableintheworld,whichshouldhelpprovideanswerstomanypressing
medicalquestionsandleadtoimprovementsincareandpreventionforVeteransandthe
Nation. AsofSeptember30,2013,204,471Veteranshaveenrolled. Contractswereawarded
forgenotyping,aswellaswholeexomeandwholegenomesequencing. Wholeandfull
genomesequencingofthefirstfewhundredsampleshasbeeninitiated.
AccessImprovementsforMentalHealth
In2013VHAsuccessfullyhiredanadditional1,669newmentalhealthprovidersunderthe
PresidentsExecutiveOrderandestablished24pilotprogramswithcommunityprovidersacross
9statesand7VeteransIntegratedServiceNetworks(VISN)toimproveaccesstomentalhealth
care. Inaddition,telementalhealthusageisincreasingatanaveragerateof25percentmore
encountersperyearandVeteransreceivingmentalhealthserviceswithintheprimarycareis
averaginga58percentyearlygrowthsince2008. Morethan1.46millionVeteransreceived
specializedmentalhealthtreatmentfromVAin2012upfrom1.39millionin2012.
Part I - 19 Management Discussion and Analysis















EndingVeteranHomelessness
During2013,146,557VeteranshavebeenservedbyVAhealthcareforhomelessVeterans
outreachinitiatives,anincreaseof23percentfrom2012. InpartnershipwiththeDepartment
ofHousingandUrbanDevelopment(HUD),45,153Veteranswereinpermanenthousing
throughtheHUDVASHprogramasofSeptember30,2013. TheseVeteranshavealsobeen
assigneddedicatedcasemanagersandprovidedaccesstocomprehensivehealthservices.
Althoughmethodsforestimatingthetotalnumberofstreetandshelteredhomelesshave
limitations,mostrecentdata(HUD,December2012)showeda20percentdeclinein
homelessnessamongVeteranssinceJanuary2010.
ContinuingSupportforCaregivers
VAcontinuessuccessfulCaregiverSupportProgramimplementation. Asoftheendof2013,
11,957approvedfamilycaregivershavereceivedstipendsandadditionalbenefits,including
healthinsurancecoverageandmentalhealthtreatment. VAexpandedservicestofamily
caregiversofVeteransofalleras. VAlaunchedBuildingBetterCaregiversanevidencebased
6weekonlineworkshopdesignedtoreducecaregiverstress,depression,andincreasefamily
caregiverwellbeing. TheVAfamilycaregiverWebsite(www.caregiver.va.gov)receivesover
1,300hitsadayandtheCaregiverSupportLine(18552603274)hasreceivedover92,000
calls. TheCaregiverSupportProgramofferspeersupportmentoringandadditionaleducation
programs.
HealthcareQualityImprovements
Recognizingtheneedtoaddressemergingrisksandprioritizeexistingproblems,VHAhas
establishedaChiefRiskOfficerposition. UsingindustrystandardprinciplesofEnterpriseRisk
Management,VHAisbetterabletoaddressriskareasthatmayimpairourabilitytoachieve
strategicpriorities. ThisconcepthasbeenrolledouttoseveralVISNsandanewlydeveloped
riskregistrytoolhasbeendevelopedandisundergoingtesting.
RuralandAmericanIndianandNativeAlaskanVeteranCare
ImprovingaccesstohighqualityhealthcareforruralVeterans,aswellasAmericanIndianand
NativeAlaskanVeterans,isapriorityforVHA. FromOctober2010throughSeptember2013,
1.5millionVeteranswereservedclosertohomebyruralhealthfundedinitiativestoincrease
accesstocare,includingopeningnewruralclinics,deploymentofmobileclinics,partnerships
withcommunitybasedproviders,andincreaseduseoftelemedicine. In2013,VAandthe
IndianHealthService(IHS)signedaNationalReimbursementagreementresultingin81local
implementationplans. VAhasreimbursedover1milliondollarsinclaimstoIHSandother
tribalhealthprogramsservingover450NativeAlaskan/AmericanIndianVeterans.
ProgressonDisabilityClaims
VAisimplementingacomprehensiveorganizationalTransformationPlanaseriesofpeople,
process,andtechnologyinitiativestoincreaseproductivityandaccuracyofdisabilityclaims
processingacrossits56RegionalOffices. Aspartoftransformationefforts,VAhasadopteda
neworganizationmodelinprocessingclaimsthroughtheuseofsegmentedlanes. Whena
Part I - 20 Management Discussion and Analysis
































Veteranfilesaclaimorsendsevidencetosupporthisorherclaim,theIntakeProcessing
Centerssortitintooneofthreesegmentedlanes: Express,Core,orSpecialOperations. This
allowsVBAtoidentify,attheearliestpossiblepoint,anyVeteranwhorequiresexpedited
handling,suchasaVeteranexperiencingfinancialhardship,ahomelessVeteran,oraVeteran
whohasaterminalillness. Eachlanehasdedicatedclaimsprocessorswhoseskillsand
expertisematchthelanetowhichtheyareassigned. ThisallowstheVAtoprocessclaimsmore
quicklyandmoreaccurately.
OnApril19,2013,VBAimplementedaninitiativetoexpediteprocessingofdisabilityclaimsfor
Veteranswhohavewaitedlongerthan1yearforadecision. VBAinitiallyfocuseditseffortson
claimspendingover2years,completingover67,000oftheseclaimsin2months. SinceJune
20,2013,VBAhasfocusedonclaimspendingover1year. Asaresult,attheendof2013,the
inventoryofdisabilityclaimswas722,013claimsthelowestsinceNovember2010. VBA
continuestoworkwithVeteransServiceOrganizations(VSO)andcommunicateswithVeterans
throughsocialmedia,encouragingparticipationintheFullyDevelopedClaim(FDC)program.
FDCallowsformoretimelyclaimsdecisions. In2013,VBAcompleted67,967compensation
FDCs,withanaveragedaystocomplete(ADC)of120days,comparedtotheADCof347.6days
forregulardisabilitycompensationclaims.
VBAandVHAhavecollaboratedtoimplementtheAcceptableClinicalEvidence(ACE)program.
UnderACE,VHAclinicianscompleteaDisabilityBenefitsQuestionnairebyreviewingexisting
medicalevidenceandsupplementitwithinformationobtainedduringatelephoneinterview
withtheVeteran. ThisalleviatestheneedfortheVeterantoreporttoaninperson
examinationandallowsformoretimelyclaimsdecisions.
ProgressonPensionClaims
VBAisimprovingthedeliveryofbenefitsbyeliminatinginefficientpensionprocedures. In
December2012,VBAeliminatedtheneedforpensionbeneficiariestofileanannualeligibility
verificationreport(EVR). Theworkassociatedwithannuallysendingandprocessingan
estimated150,000EVRs,includingthesuspensionandreinstatementofbenefits,burdened
pensionbeneficiariesandsignificantlydisruptedVBAsabilitytotimelyworkpension,DIC,and
burialbenefitsclaimsduringtheannualEVRseason(JanuarythroughApril). VBAwillcontinue
toamendawardsbasedonchangesinunreimbursedmedicalexpensesandincomereportsto
us. However,byeliminatingtheEVRrequirement,VBAwillbeabletoredirectsignificant
resourceswithinthePensionManagementCenterstoaddressthebacklogofpensionandDIC
claims. Asaresult,VBAreducedthebacklogoforiginalandreopenedDICclaimsfrom8,742at
theendofJanuary2013,to2,954asoftheendofSeptember2013.
ImprovingAutomation
VeteransBenefitsManagementSystem(VBMS)isaWebbased,electronicclaimsprocessing
solutiondesignedasthetechnologyplatformforfasterandmoreaccuratedisabilityclaims
decisions. VBAcompletednationaldeploymentofVBMSinJune2013,whichwas6months
aheadofscheduleandallowedaccesstoover22,000endusers. GenerationTwoofVBMSin
Part I - 21 Management Discussion and Analysis














2013focusedonbuildingadditionalsystemcapabilities,suchasthecorrespondenceandwork
queuetools,whileleveragingsimpleautomationfeatures,suchasintegratingrulesbased
ratingcalculatorfunctionality.
VBAestablishedtheVeteransClaimsIntakeProgram(VCIP),whichisstreamliningprocessesfor
receivingdigitalrecordsanddataintoVBMSandotherVBAsystems.VCIPmanagessuch
primaryintakecapabilitiesasscanningandthetransferofVeterandataintoVBMS. Document
scanninghasbecomethemainmechanismfortransitioningfrompaperbasedclaimsfoldersto
thenewelectronicenvironment. Theuploadingofscanneddocumentstotheelectronicfolders
beganonOctober14,2012.Approximately112millionimageshadbeenuploadedtodate.
eBenefitsisajointVA/DoDWebportalthatprovidesresourcesandselfservicecapabilitiesto
Veterans,Servicemembers,andtheirfamiliestoresearch,securelyaccess,andmanagetheirVA
andmilitarybenefitsandpersonalinformation. SinceOctober2009,eBenefitshasenrolled
over3.059millionindividualsandprovidedover50selfservicefeaturesthrough14quarterly
releasesthathaveincreaseduseraccessibilityastheirpersonalinformationanddocuments
requiredforbenefiteligibilityareaccessible24hoursaday. Todate,over367,000homeloan
certificatesofeligibilityhavebeengeneratedandover353,000militarydocumentrequests
havebeenfulfilledviaeBenefits.
ThereleaseofVeteransOnlineApplication(VONAPP)DirectConnect(VDC)allowsclaimantsto
submitdisabilitycompensationclaimsviatheeBenefitsportal. Atinitialrelease,VDCemploys
aninterviewstyleprocesstogathertheinformationnecessarytoautopopulateVAForm21
526EZ,ApplicationforDisabilityCompensationandCompensationRelatedBenefits,to
automaticallyestablishacontrolinthesystemandsaveallclaiminformationinVBAs
corporatedatabase. Additionally,theclaimantmayuploaduptofivesupportingdocuments
(uptofivemegabytesperdocument)withtheclaim.
VAdeployedtheStakeholderEnterprisePortal(SEP)whichprovidesVSOsawindowintoa
Veteransactiveandhistoricalbenefitrequests,aswellastheabilitytoconductonline
transactionsrelatedtotheapplicationforbenefitsandservicesonbehalfofVeteransforwhom
theyhavebeengrantedpowerofattorney;SEPhas877registereduserssinceinception.
VBAwasabletoeliminatetheannualEVRrequirementbecauseitworkedwiththeInternal
RevenueService(IRS)andSocialSecurityAdministration(SSA)toimproveinteragencydata
sharingforpurposesofverifyingincomeeligibilityforitsneedsbasedbenefits. Underthe
improvedprocess,IRSandSSAprovideVBAincomeinformationonaweeklybasisforthose
applyingforneedsbasedbenefits. ByprovidingVBAwiththecapabilitytoverifytheincomeof
applicantsatthetimeofapplication,thedatasharinginitiativepreservestheintegrityofthe
pensionprogramforthosewithgenuineneed,reducesoverpayments,andreducesVAs
relianceonselfreporteddata.
Part I - 22 Management Discussion and Analysis










DecliningVeteranUnemployment
VetSuccess.govisaonestopshopforemploymentandtransitionresourcesforall
Veterans. TheWebsitewasintegratedwitheBenefitsinSeptember2013,allowingVeterans
receivingotherVAbenefitstoaccessemploymentinformationthroughVetSuccess.gov. In
2013,nearly230,000Veteransand6,500employersregisteredonVetSuccess.gov. Thenew
usersaddedin2013representa25percentincreaseinVeteranregistrantsanda28percent
increaseinemployerregistrantssince2012. Sinceinception,nearly35,000jobshavebeen
postedtothesite,with3,500newjobpostingsaddedin2013. Vetsuccess.govalsolinks
VeteranjobseekerstomillionsofcareeropportunitiesthroughtheVeteransjobbank.
ExpansionandImprovementsinPost911GIBillProgram
VAsLongTermSolution(LTS)systemprocessesover44percentofsupplementalclaimswithin
1dayofreceipt. Inaddition,over80percentofallPost9/11GIBillsupplementalclaimsare
automatedpartiallyorfully. Sinceactivationofautomationin2013,approximately1,236,210
claimshavebeenfullyprocessedendtoendwithouthumanintervention. Asoftheendof
September2013,theaveragedayspendingforanoriginalclaimis26days,andasupplemental
claimis10days. WiththesuccessofLTS,theincreasedproductivitygainshaveallowedthe
agencytoreallocate100VeteransclaimsexaminersfromEducationServicetoCompensation
Servicetoworkoneliminatingthedisabilityclaimsbacklog.
Housing
Despitechallengesinthenationwidemortgageindustry,theVAHomeLoanprogramcontinued
tomaintainthelowestforeclosureratesinthemortgageindustry(forthelast21quarters)
throughthelastquarterofdataavailability(Q2CY2013). VAguaranteedloansachieveda
lowerforeclosureratethanevenprimeloans. Thisstrongperformancecanbeattributedto
VAspracticeofmakingcontactwithborrowersearlyinthedefaultprocesstoensuretheyhave
everypossiblechancetosavetheirhome. In2013,VAhelped79.4percentofborrowersin
seriousdefaulttoretaintheirhomeoravoidforeclosure(over73,000borrowerstotal).
Insurance
Since2009,VeteranshavebeenabletoapplyforVeteransGroupLifeInsurance(VGLI)online.
Sincethen,onlineenrollmentrateshavesteadilyincreased,whileenrollmentviapaper
applicationshasdecreased. ThereareseveralbenefitstoenrollingforVGLIonline:

ItissecureStrongsecuritysoftwarehelpssafeguardmembersinformation.
ItisconvenientMemberscanenrollforVGLI24hoursaday,7daysaweek,from
anywheretheyhaveanInternetconnection.
ItisuserfriendlyClearinstructionsguidemembersstepbystepthroughtheenrollment
process.
ItisgreenApaperlessprocessmeanslessclutterforthemember,andtheplanet.
In2013,64percentofallVGLIapplicationswerecompletedonline. TheVGLIonlineenrollment
Websiteiscurrentlybeingrevampedtohelpcreateanevenmoreuserfriendlyandintuitive
process.
Part I - 23 Management Discussion and Analysis










IntegratedDisabilityEvaluationSystem(IDES)
VAandDoDsignedamemorandumofunderstandingforthepurposeofprovidingVocational
RehabilitationandEmployment(VR&E)servicesattheearliestopportunitytoactiveduty
Servicemembers. Theseservicesinclude: acomprehensiveevaluationtodetermineabilities,
skills,andinterestsforemployment;anddevelopmentofarehabilitationplanoftrainingand
otherneededassistanceandcasemanagement. ByphysicallyplacingVR&EcounselorsatIDES
locations,qualityandtimelinessofbenefitsdeliverywillimprovebybeginningtheprocessof
developinganewcareerthatisuniquelyappropriateforeachindividualsdesiresandabilities
duringthetransitionprocess. Attheendof2013,75IDESsiteshaveaVR&Ecounseloron
location.
VetSuccessonCampus
TheVetSuccessonCampusprogramprovidesoncampussupporttoVeteranstudentsto
assistinthepursuitandsuccessfulcompletionofeducationalandcareergoals. Theprogramis
currentlylocatedon94collegecampuses;servingapproximately94,000Veteranstudents.
Servicesincludecareerandacademiccounseling,adjustmentcounseling,mentalhealth
treatment,benefitsassistance,jobreadiness,andjobplacementassistance.
IncreasingAccesstoaBurialOption
In2013,theNationalCemeteryAdministration(NCA)continuedworkingtoincreaseand
improveVeteransaccesstoaburialoptioninanational,state,ortribalVeteranscemetery
throughvariousstrategies:
Developingfivenewnationalcemeteriesthatwillservemorethan550,000currently
unservedVeteransintheareasofCentralEastFlorida;Tallahassee,Florida;Western
NewYork;Omaha,Nebraska;andSouthernColorado. Asoftheendof2013,NCAhas
acquiredlandfortheTallahasseeandCentralEastFloridasitesandtheOmaha,
Nebraskasite. Constructionactivitiesforthesenationalcemeteriesareplannedto
beginin2014.
EstablishingcolumbariacemeteryfacilitiesclosetotheVeteranpopulationinlarge
urbanareaswherethelocationoftheexistingnationalcemeteryhasproventobea
barriertoburialandvisitation. TheseurbaninitiativefacilitieswillbelocatedinNew
York,NewYork;LosAngeles,California;SanFrancisco,California;Chicago,Illinois;and
Indianapolis,Indiana.
EstablishingnationalVeteransburialgroundsthroughaRuralVeteransBurialInitiative
toimproveaccesstoaburialoptionforVeteranswhoresideinsparselypopulatedareas
whereaccesstoanationalorstateVeteranscemeterydoesnotexist. Newnational
Veteransburialgroundswillbelocatedwithinexistingpublicorprivatecemeteriesand
operatedbyNCAinMaine,Wisconsin,NorthDakota,Montana,Wyoming,Nevada,
Idaho,andUtah.
Part I - 24 Management Discussion and Analysis






















TribalCemeteryGrants
VAcontinuestopartnercloselywiththetribalVeterancommunity,andtodate,hasawardeda
totaloffivegrantstotribalorganizationsfortheconstructionofnewVeteranscemeterieson
tribaltrustlands.VAawardedoneadditionalgranttoatribalorganizationin2013tothe
SeminoleNationofOklahomaandiscurrentlyreviewingfivenewtribalpreapplications
submittedforfundingconsiderationin2014.VAapproveditsfourthgranttoestablisha
Veteranscemeteryontribaltrustlandsin2012,asauthorizedinP.L.109461. Ofthefour
grantsfortribalVeterancemeteriesawarded,threebeganconstruction. Thefourthone,anew
tribalVeteranscemeteryservingtheVeteransoftheRosebudSiouxTribe,wasdedicatedin
2012andopenedin2013inRosebud,SouthDakota.
HomelessVeteransCemeteryCaretakerApprenticeProgram
NCAfullyimplementedtheHomelessVeteransCemeteryCaretakerApprenticeprogramin
collaborationwiththeVeteransHealthAdministrationandVALearningUniversity. In2013,29
VeteranswereselectedtoparticipateintheCemeteryCaretakerApprenticepilotprogramat6
nationalcemeteries. Veteransthatsuccessfullycompletethe12monthcompetencybased
trainingareexpectedtograduateinNovember2013,andwillbeofferedpermanent
employmentascemeterycaretakersataVAnationalcemetery. NCAhasincorporatedlessons
learnedfromthisinauguralyeartoimproveVeteransparticipationandgraduationsuccess
rate. NCAexpectstoacceptupto25homelessVeteransin2014.
OpenSourceElectronicHealthRecordCommunity
WehavefocusedeffortstoenablehealthcareprojectstoaccommodateideasfromoutsideVA,
acceptopensourcedevelopmentfromoutsideVA,andacceleratetheabilitytomergewithan
openintegratedElectronicHealthRecord,oriEHR. OurCodeinFlightprogramreleases
unfinishedsoftwareanddesigndocumentsforsharingworksinprogress,whichhelpsaddress
theincreasedneedformoresoftwaredesignstandardsthatsupportisolationofsensitiveand
restrictedpartsfromnonsensitiveparts. Wehavebeenreducingdependenciesonclosed
architectureandcommercialtoolsandfocusingonadoptionofopensourcetoolsandopen
architecture. VistAstandardizationhasreturnedallVAmedicalcenterstoasinglenational
baselineinonethirdofourproducts.
NetworkSecurity
VAcontinuedtomakeprogressinimprovingitsinformationsecurityposturein2013. Thishas
resultedinamorecomprehensivesecurityprogramthatbetterprotectssensitiveinformation.
In2013,VAhaseitherinitiatedorcompletedenterprisewideactionsaddressingsecurity
management,segregationofduties,accesscontrols,contingencyplanning,andconfiguration
management. VAcontinuedtoimplementtheContinuousReadinessinInformationSecurity
Program(CRISP)program,whichhasresultedinsignificantimprovementinremediationof
manyoftheinformationsecuritydeficienciesassociatedwithitsinformationsecurity
program. AspartofCRISP,VAensuredthatover98percentofVAstaffhasreceivedthe
mandatoryinformationsecuritytrainingtheyneedtoprotecttheinformationofVeteransand
theirfamilies. VAisalsoimplementingtheVisibilityintoEverythinginitiative,whichallowsVA
Part I - 25 Management Discussion and Analysis
























toseeandview,measure,andsecureallinformationtechnology(IT)assetsacrosstheVA
enterprise.
ImprovedVeteranOwnedSmallBusiness(VOSB)Verification
2013markedamajorturningpointintheverificationprogramattheCenterforVeterans
Enterprise(CVE). Theexpansionoftheverificationassistanceprogramandsimplifiedrenewal,
alongwiththeintroductionofthepredeterminationsfindingprogramcompletelyeliminated
thebacklogofverificationapplications. AsofFebruary2013,allfirmslistedintheVendor
InformationPagesdatabaseofverifiedVOSBswereverifiedundertheexpandedverification
processrequiredbytheVerificationAct(P.L.111275,Section104).
NationalVeteransSmallBusinessConference
ThecenterpieceoftheNationalVeteransSmallBusinessConferencewasaplantoconnect
smallbusinessownerswithprocurementdecisionmakersfromFederalagenciesandprivate
industries. Over361trainingandbusinessrequirementsessionswereheldanddirectand
onlinenetworkingopportunitieswereprovidedwithseniorgovernmentprocurementdecision
makersfromacrossthecountry. Morethan2,200VeteranOwnedSmallBusiness
representativeswereabletodiscusstheircapabilitieswithnearly500governmentparticipants
at1,300networkingroundtablesessions.Participantsmademorethan54,690contactsusing
technologythatenabledthemtocollectprofiledatatofacilitatefutureconnections.
StandardizingEndtoEndConstructionProgramManagement
AspartofVAscontinuingcommitmenttodeliverhighqualityfacilities,atbestvalue,toserve
ourNationsVeterans,VAanditspartnershavesuccessfullyimplementedseveralkeyinitiatives
toimproveVAconstructionoffacilities. First,VAinstitutedarequirementthatmajor
constructionprojectshave35percentofthedesigncompletebeforeVArequestsmajor
constructionfunding. The35percentdesignthresholdleveragesindustrybestpracticesand
minimizestheriskofsignificantchangesandpotentiallylengthydelaysandcostincreases.
Second,toimprovethespeedofactivationsoffacilities,VAestablishedamechanismto
incorporatethevariousfundingstreams,particularlymedicalandITequipment,andcoordinate
thevariousfundingprocesses. Third,VAsuccessfullycompletedasevenprojectpilotof
TRIRIGAsoftwareforthemanagementofmajorconstruction,minorconstruction,non
recurringmaintenance,andmajorleaseprojects. TRIRIGAisacommercialprojectmanagement
softwarepackagethatreplacesVAsprevioustoolformanagingmajorconstruction,and
providesamorerobustcapabilitytoestablishandmoretightlyintegrateprojectmanagement
controls,whichhelpsreduceprojectcostandschedulerisk.
HiringVeteranswithinVA
TheVeteranEmploymentServicesOffice(VESO)supportsVeteranrecruitment,retention,and
reintegrationthroughthedevelopmentandimplementationofinnovativeandcomprehensive
programs,services,andprocedures. VAhiredmorethan15,000Veteransin2013andnow
employsmorethan108,000Veterans. ThetotalnumberofVeteransintheworkforce
increasedbymorethan4,600in2013(103,638for2012and108,319for2013). VAforVetsis
Part I - 26 Management Discussion and Analysis













thehightech,hightouchprogramthatVESOsponsorstohelpmeetitsmission. TheVAfor
VetsWebsiteprovidesasuiteofonlinetoolstohelpVeteransbecomecareerready,includinga
militaryskillstranslator,resumebuilder,careerassessment,andjobsearchengine. VESOalso
signedseveralagreementswithagenciestoutilizetheVAforVetsprogramtohireVeteransin
theirworkforces.
ContingencyandReconstitutionPlanning
VAparticipatedintheannuallymandatedEagleHorizon2013ContinuityExercise. Thefocusof
thenational,fullscaleexercisegaveVAanopportunitytoexerciseitsplanonhowVAwould
reoccupyWashington,DCafteranevacuation(VAReconstitutionPlan)andtrainReconstitution
EmergencyRelocationGroupmembers. VAisregardedasaleaderintheFederalcommunity
concerningreconstitutionplanningandwasgiventheopportunitytodirectlycollaboratewith
theAdministratorofGeneralServicesAdministration(GSA)asanoutcomeofthisexercise.
TheseopportunitiesresultedintherefinementofVAsreconstitutionplanningprocessand
overallVAReconstitutionPlan.
GoingGreen
Thisyear,morethan150megawattsofrenewablepowerisoperating,underconstruction,or
awarded,representinga67percentincreasefrom2012. About54percentofVAsfleetofover
17,000vehiclesisalternativelyfueled. VAfacilitiesareoperating30newpluginelectric
vehicles,andwillreceiveanadditional53vehiclesunderthenewGSAelectricvehiclepilot
program. VAiscompletingitsGreenRoutinepilotprogramtoengageVAemployeesin
greeningactivities,andwillimplementtheprogramnationally. Theseandother
accomplishmentscreatecostsavingsandoperationalefficiencies.
VAalsocontinuestoinvestingreentechnologiesatnationalcemeteries. Throughtheuseof
photovoltaicsystemsandwindturbines,VAreceivescreditforgenerating16percentofits
energythroughrenewablesourcesinaccordancewiththeEnergyPolicyActof2005,whichis
wellinexcessofFederaltargets. SeveralVAnationalcemeterieswererecognizedfortheir
environmentallyfriendlyeffortsin2013. Ft.BlissTexasNationalCemeteryreceivedTheTexas
CommissiononEnvironmentalQualityenvironmentalawardforwaterconservation,
Bakersfield,California,NationalCemeteryreceivedtheVASustainabilityAwardinthecategory
ofwaterconservation,andRiverside,CaliforniaNationalCemeteryreceivedanhonorable
mentionintheVASustainabilityAwardcategoryofgreenpurchasingforeliminatingall
petroleumbasedcleanersandusingonlybiobasedcleaningproducts.
VA/DoDCollaboration
In2013,theOfficeofInteragencyCollaborationandIntegrationsupportedeffortstoestablish
anagreementbetweenVAandDoDtoimplementacommonseparationhealthassessment
thatwouldimproveVAsabilitytoadjudicatedisabilityclaimsandhelppreventfuturebacklogs.
Thatprocessisanticipatedtobeimplementedin2014. Theofficesupportedadditional
improvementsintheprocesstotransitionServicememberstoVeteranstatusthroughthe
VeteransEmploymentInitiativeTaskForceandhelpedmeettheNovember21,2012,deadline
Part I - 27 Management Discussion and Analysis













forcompliancewiththeVeteransOpportunitytoWorktoHireHeroesActof2011. Theoffice
continuedtosupporttheimplementationofIDESthroughcontinuedprocessimprovements.
SocialMediaandOutreachInitiatives
VAisaleaderinsocialmedia. Inthelastyear,VAhasmorethandoubledthenumberof
individualsconnectedwiththeDepartmentonsocialmediachannels. VAhasmorethan150
Facebookpages,mostofwhichbelongtoindividualVAmedicalcenters,withacombined
subscribershipofmorethan975,000fans. VAsextensiveonlinepresencealsoincludesthe
VAntagePointblog,aFlickrpagecontainingmorethan17,000photos,andaYouTubechannel
withnearly700videos,whichhasamassedover2.4millionviews. TheDepartmentalsousesits
nearly90Twitterfeedstoreachalmost240,000peopleeveryday. Atthelocallevel,VA
medicalcenterFacebookpagesreachover167,000Veterans,theirfamilymembers,and
dependents.
ImprovingNationalVeteransSportsPrograms
VAprovidedamonthlyassistanceallowancetoover130VeteranstrainingfortheU.S.
ParalympicTeamachieving36percentgrowthinrecipientsduringtheyear,aswellas
establishingnewallowancestandardsandprocessestoenhancepartnershipsandcapabilities
withtheNationalGoverningBodiesandsubordinateentitiesnationwideforall27Paralympic
sports. WealsodevelopedanewadaptivesportsWebsite,onlineandsocialmediaoutreach,
andtrainingcapabilitiesprovidingnewtoolsandresourcestoVeterans,clinicians,andfamily
members.WiththeU.S.OlympicCommittee,VAcohostedtheNationalAdaptiveSports
TrainingConferenceandParalympicLeadershipConference,whichtrained90VAofficialsand
cliniciansfromeveryVISNandlinkedinover300officialsfromdiverseparalympicandadaptive
sportentitiesatthenational,regional,andcommunitybasedlevelstofacilitateestablishing
therapeuticadaptivesportprogramsfordisabledVeteransanddisabledmembersoftheArmed
Forces.
InpartnershipwiththeU.S.OlympicCommittee,SPIREInstitute,VAsmentalhealth
community,andtheCenterforposttraumaticstressdisorder(PTSD),createdtheNational
VeteransHealthandWellnessProgramtoincorporateadaptiveexercise,competitivesports
andlifestyleskillsintoamorecomprehensivetherapyprogramforVeteranswithactivePTSD.
WomenVeteransTaskForce
OnSeptember11,2012,theCenterforWomenVeteransassumedresponsibilityforthenewly
formedWomenVeteransProgram(WVP). UsingthedefinedpriorityissuesfromtheStrategies
forServingOurWomenVeteransReportCapacityandCoordinationofServices,Environment
ofCareandExperience,EmploymentandTraining,DataCollectionandEvaluationofServices,
andOrganizationalAccountability,Collaboration,andTransparencyasthefoundationforthe
WVP,theCentersetaboutdevelopingaDepartmentwideintegratedactionplanformeeting
theneedsofwomenVeterans. In2013,VAfinalizedaninternaloperating/actionplan,which
establisheddeliverablesandmilestonesandservesastheroadmaptotheWVPfuturesstate
until2015. WVPalsomadenewtrainingforVAemployeesavailableonVAsTalent
Part I - 28 Management Discussion and Analysis






ManagementSystemthatspecificallyaddresseswomenVeteransissues. ServingWomen
Veterans,a20minutetrainingmodule,wasacollaborativeeffortthatincludesvignettesfor
employeestobetterservewomenVeteransintheareasofhealthcare,benefits,andmemorial
affairs.
Part I - 29 Management Discussion and Analysis


MostImportantAchievementsandChallenges
TheDepartmentsmostimportant2013achievements,aswellasitscurrentchallengesare
summarizedbelow.
MostImportantAchievements
CareDelivery/Access
VAcontinuestoleadthenationincaredeliverythatimprovespopulationhealth,as
evidencedbyperformanceinPreventionandChronicDiseaseManagementthatis
concordantwithClinicalPracticeGuidelines
IncreasingVeteranAccesstoHealthcarethroughMajorLeases
VAawarded15leasecontractsfor$1.567billionintotalcontractvalue;delivered19
newlyleasedfacilitieswithatotalcontractvalueof$533million;andacquired10
parcelsofland,includingbaserealignmentandclosuretransfersfromDoD,suchasthe
OutpatientClinic(OPC)inLaredo,Texas. TheLaredoOPCopenedonMay7,2013,and
has18,464netusablesquarefeet(nusf)and151parkingspaces. Theclinic,which
replaceda10,000nusffacility,providesVeteranswithprimarycare,mentalhealth,
specialtycare,socialwork,nutrition,andwomenshealthcare.
MajorConstruction: IncreasingVeteranAccessandMakingSmartInfrastructure
Investments
VAawarded37majorconstructioncontractsworth$934millionintotalcontractvalue.
VAhassuccessfullycompletedprojects,suchasthethe
NewAdministrationbuildingattheSanJuan,PuertoRico
VACaribbeanHealthcareSystem. Thenewadministration
buildingproject,withapproximately170,072squarefeet
ofnewconstruction,willimprovetheadministrative
operationsoftheVAmedicalcenterbyprovidinganew
centralofficebuildingtoconsolidateexistingemployees,
whocurrentlyarelocatedthroughoutthecomplex.
Approximately1,400employeesandvisitorsareexpected
tousethebuilding. San Juans New Administration
Building
LandAcquisitionforNewCemeteries
Findingsuitablelandforthesenewcemeteries,urbanfacilities,andruralburialgrounds
isachallenge. Potentialsitesmustbelargeenoughtomeetcurrentandfutureburial
needsofVeteransandtheirfamilies. Location,liensandencumbrances,environmental
concerns,historicalorarcheologicalsignificance,andtheavailabilityofnatural
resources,suchaswater,areotherimportantfactors. NCAhasacquiredlandforthree
ofthefivenewnationalcemeteriesandhasidentifiedpotentiallysuitablepropertiesfor
Part I - 30 Management Discussion and Analysis















theremainingtwonationalcemeteriesandallfiveurbaninitiativesites. NCAisalso
workingtoidentifysuitablesitesfornationalVeteransburialgrounds.
HomelessVeterans
Substantialprogresshasbeenmadewithhomelessoutreachandprovisionof
permanentandsupportivehousing,aswellasaccesstocomprehensivehealthcare.
During2013,146,557VeteranshavebeenservedbyVAhealthcareforhomeless
Veteransoutreachinitiatives,anincreaseof23percentfrom2012. Inpartnershipwith
theDepartmentofHousingandUrbanDevelopment(HUD),45,153Veteranswerein
permanenthousingthroughtheHUDVASHprogramasofSeptember30,2013. These
Veteranshavealsobeenassigneddedicatedcasemanagersandprovidedaccessto
comprehensivehealthservices. Althoughmethodsforestimatingthetotalnumberof
streetandshelteredhomelesshavelimitations,mostrecentdata(HUD,December
2012)showeda20percentdeclineinhomelessnessamongVeteranssinceJanuary
2010.
HomelessVeteransCemeteryCaretakerApprenticeProgram
NCAfullyimplementedtheHomelessVeteransCemeteryCaretakerApprenticeprogram
incollaborationwiththeVHAandVALearningUniversity. In2013,29Veteranswere
selectedtoparticipateintheCemeteryCaretakerApprenticepilotprogramat6national
cemeteries. Veteransthatsuccessfullycompletethe12monthcompetencybased
trainingareexpectedtograduateinNovember2013andwillbeofferedpermanent
employmentascemeterycaretakersataVAnationalcemetery. NCAhasincorporated
lessonslearnedfromthisinauguralyeartoimproveVeteransparticipationand
graduationsuccessrate. NCAexpectstoacceptupto25homelessVeteransin2014.
MentalHealth
MoreVeteransthaneverarereceivingmentalhealthservicesfromVA,andtomeetthe
demand,VAhasincreasedthenumberofmentalhealthprovidersin2013bymorethan1,600
staff.
Telehealth
VHAstelehealthprogramscontinuetobethelargestandmostsophisticatedinthe
Nation. In2013,VAspecifictelehealthservicesweredeliveredto603,532Veteranswith
medicalandmentalhealthconditions,enablingtheseVeteranstoliveindependentlyin
theirownhomesandlocalcommunities.
VHAhasseena24percentexpansionin2013inthenumberofVeteranpatients
receivingcareviaclinicalvideotelehealthbasedtelementalhealthservicesthat
supported95,059Veterans.
Part I - 31 Management Discussion and Analysis















VAAppealsProcess
TheVAappealsprocesshasmultiplestages,andthesestepsaresharedbetweenVBA
andtheBoardofVeteransAppeals(Board). TheBoardcontinuedtoleverage
technologytobetterserveVeteransthroughthepromotionanduseofvideo
teleconferencehearings,whichhasreducedcostsandhearingwaittimeforVeterans.
TheBoardexecutedanaggressivehiringplanin2013,whichwillpositiontheBoardto
meettherisingappealsinventoryinupcomingfiscalyears.
Burial/CemeteryOptions
IncreasingAccesstoaBurialOption
In2013,NCAcontinuedworkingtoincreaseandimproveVeteransaccesstoaburial
optioninanational,state,ortribalVeteranscemeterythroughvariousstrategies:
Developingfivenewnationalcemeteriesthatwillservemorethan550,000currently
unservedVeteransintheareasofCentralEastFlorida;Tallahassee,Florida;Western
NewYork;Omaha,Nebraska;andSouthernColorado. Asoftheendof2013,NCAhas
acquiredlandfortheTallahasseeandCentralEastFloridasitesandtheOmaha,
Nebraskasite. Constructionactivitiesforthesenationalcemeteriesareplannedto
beginin2014.
EstablishingcolumbariacemeteryfacilitiesclosetotheVeteranpopulationinlarge
urbanareaswherethelocationoftheexistingnationalcemeteryhasproventobea
barriertoburialandvisitation. TheseurbaninitiativefacilitieswillbelocatedinNew
York,NewYork;LosAngeles,California;SanFrancisco,California;Chicago,Illinois;and
Indianapolis,Indiana.
EstablishingnationalVeteransburialgroundsthroughaRuralVeteransBurialinitiative
toimproveaccesstoaburialoptionforVeteranswhoresideinsparselypopulatedareas
whereaccesstoanationalorStateVeteranscemeterydoesnotexist. Newnational
Veteransburialgroundswillbelocatedwithinexistingpublicorprivatecemeteriesand
operatedbyNCAinMaine,Wisconsin,NorthDakota,Montana,Wyoming,Nevada,
Idaho,andUtah.
VeteransCemeteryGrantsProgram
In2013,VAawardedatotalof18cemeterygrantstostateandtribalorganizations,2
grantstoestablishnewVeteranscemeteries,and9grantstoexpandexistingcemeteries
toensuretherearenointerruptionsinburialserviceforVeteransandtheirfamilies. In
addition,VAawardedatotalofsevengrantstostatecemeteriestofundimprovements
tophysicalinfrastructureandcemeteryappearance. In2013,VAtraveledtoparticipate
inthededicationofthreenewstateandtribalVeteranscemeteries.
Part I - 32 Management Discussion and Analysis






















TribalCemeteryGrants
VAcontinuestopartnercloselywiththetribalVeterancommunityandtodatehas
awardedatotaloffivegrantstotribalorganizationsfortheconstructionofnew
Veteranscemeteriesontribaltrustlands. VAawardedoneadditionalgranttoatribal
organizationin2013totheSeminoleNationofOklahomaandiscurrentlyreviewingfive
newtribalpreapplicationssubmittedforfundingconsiderationin2014.
VAapproveditsfourthgranttoestablishaVeteranscemeteryontribaltrustlandsin
2012,asauthorizedinP.L.109461. OfthefourgrantsfortribalVeterancemeteries
awarded,threebeganconstruction. Thefourthone,anewtribalVeteranscemetery
servingtheVeteransoftheRosebudSiouxTribe,wasdedicatedin2012andopenedin
2013inRosebud,SouthDakota.
Benefits
ReducingtheVBAClaimsBacklog
All56regionalofficestransformedtheirorganizationalstructurebyestablishing
segmentedprocessinglanesandintegratedteamstoimproveefficiency,9months
aheadofschedule.
Wecompletedthedeploymentofournewpaperlesselectronicclaimsprocessing
system,VBMS,inJune2013afull6monthsaheadofschedule.
OnApril19,2013,VBAimplementedaninitiativetoexpediteprocessingofdisability
claimsforVeteranswhohavewaitedlongerthan1yearforadecision. VBAinitially
focuseditseffortsonclaimspendingover2years,completingover67,000ofthese
claimsin2months.
SinceJune20,2013,VBAhasfocusedonclaimspendingover1year. Asaresult,in
2013,theinventoryofdisabilityclaimswas722,013thelowestsinceNovember2010.
Claimsover125daysoldaredown 31percentin2013fromtheirhighonMarch25,
2013.(611,073versus418,472)
VBAcompleted1,169,085ratingclaimsin2013. Thisrepresentsa12percentincrease
overclaimscompletedinFY12anda13percentincreaseoverFY11.
ImprovingAccuracy
Thenationalqualitydatanowcontainsinformationatbothaclaimandanissuelevel.
Previously,VAonlyevaluatedratingdecisionsattheclaimlevel,findingacasetobe
eithercompletelycorrectorinerror. VAnowalsoevaluateseachclaimeddisability
(issue)separatelybecauseoftheirincreasingcomplexityandnumber.
Part I - 33 Management Discussion and Analysis






























Issuebasedqualityallowsamoreaccurateassessmentofactualratingquality,timely
feedbacktoregionaloffices,andgreaterabilitytoconducttargetedtrainingtocorrect
deficiencies.
Issuebasedquality,ona3monthcumulativebasis,is96.7percentasofSeptember
2013.
NationalDeploymentofVBMS
VBMSisaWebbasedclaimsprocessingsolutioncomplementedbyimprovedbusiness
processes. Itassistsineliminatingtheclaimsbacklogandservesasthetechnology
platformforfaster,moreaccurateclaimsprocessing.
VBAcompletednationaldeploymentofVBMSinJune2013,6monthsaheadof
schedule,withover22,000endusers. 2013releasesfocusedonbuildingadditional
systemcapabilitieswhileleveragingsimpleautomationfeatures.
VeteransRelationshipManagement(VRM)
VRMexpandedselfservicefeaturesavailableviatheeBenefitsportal;withover3
millionregisteredusersand50selfservicefeatures.
VRMprovidestheabilitytoapplyforbenefitsonlineviaguidedinterviewquestions;
receivingsinceinceptionover26,116claimsfororiginal/supplementalcompensation
and41,092claimsinvolvingdependentinformation.
VRMreleasedtheSEP,whichprovidesVSOstheabilitytofileclaims,submit
information,andviewrecordsforclaimantstheyrepresent. SEPhasatotalof1,041
registeredusers.
PensionandFiduciary
PensionIncomeVerification
VBAwasabletoeliminatetheannualEVRrequirementbecauseitworkedwiththeIRS
andSSAtoimproveinteragencydatasharingforpurposesofverifyingincomeeligibility
foritsneedsbasedbenefits. Undertheimprovedprocess,IRSandSSAwillprovideVBA
incomeinformationonaweeklybasisforthoseapplyingforneedsbasedbenefits. By
providingVBAwiththecapabilitytoverifytheincomeofapplicantsatthetimeof
application,thedatasharinginitiativewillpreservetheintegrityofthepensionprogram
forthosewithgenuineneed,reduceoverpayments,andreduceVAsrelianceonself
reporteddata.
Part I - 34 Management Discussion and Analysis






Education
VAsLTSsystemprocessesover44percentofsupplementalclaimswithin1dayof
receipt. Inaddition,over80percentofallPost9/11GIBillsupplementalclaimsare
automatedpartiallyorfully.SinceactivationofautomationinSeptember2012
throughSeptember2013,approximately1,236,210claimshavebeenfullyprocessed
endtoendwithouthumanintervention.
VAidentified6,337campuseswhovoluntarilyagreedtocomplywithExecutiveOrder
13607,calledthePrinciplesofExcellence. VAsoutreacheffortsdisseminated
informationthatstrengthensoversight,enforcement,andaccountabilitywithinVeteran
andmilitaryeducationalbenefitprograms.
VAmadegreatstridesinthedevelopmentoftheComparisonTool/GIBillBenefit
Estimator. Thistoolwillenableprospectivestudentstocompareeducational
institutionsusingkeymeasuresofaffordabilityandvaluethroughaccesstoschool
performanceinformation,andconsumerprotectioninformation. Deploymentofthe
ComparisonToolisanticipatedin2014.
VeteranOutreach
Attheendofthe2013,MinorityVeteransProgramCoordinators(MVPC)fromthethreeVA
Administrationsconducted12,427outreachactivities,andcontacted1,011,306Veteran
stakeholders,ofwhich40percentwereminorityVeterans. Thisworkaddressesthelackof
awarenessVeteranshaveregardingtheirbenefitsandservicesandexposesthemtothose
services,whichinturnincreasesVeteransaccess.
VAsCenterforFaithBasedandNeighborhoodPartnerships(CFBNP)developspartnerships
withandprovidesrelevantinformationtofaith,nonprofitandcommunityorganizations. The
goalistoexpandtheirparticipationinVAprogramsinordertoservetheneedsofourVeterans,
theirfamilies,Survivors,andcaregivers. VACFBNPusesthefollowingoutreacheventseach
fiscalyeartoeducate,engageandinformfaithbased,nonprofit,communityleaders,and
organizations. VACFBNPachievedthefollowingduring2013:
VACFBNPcohostedthreeregionalVeteransoutreacheventsforfaithbased,nonprofit,
andcommunityleaders,andorganizationsinpartnershipwithVBAVR&EServiceand
theVR&Eregionalofficeofthehostcity. TworegionalVeteransoutreacheventswere
cohostedinMuskogee,OklahomaandSyracuse,NewYork,whicharerural
communities.
VACFBNPparticipatedintheWhiteHouseofFaithBasedandNeighborhood
Partnerships(WHOFBNP)eventsentitledConnectingCommunitiesfortheCommon
GoodConferences,alongwiththeCentersat12otherFederalagencies.
VACFBNPcollaboratedwithlocalfaithbasedandcommunitybasedpartnersto
facilitateVeteransinformationalworkshops.
Part I - 35 Management Discussion and Analysis












VACFBNPhostedworkshopsanddisseminatedVAprogramandservicesmaterialsat
majorandminorfaithbaseddenominationsconventions.
VACFBNPleveragedfaithbasedandcommunityorganizationsresourcestoservicethe
needsofVeteransandeligibledependents.
VACFBNPparticipatedintheFaithandNeighborhoodsinAction: ASymposiumto
AddressEconomicRecoveryThroughStrongCommunitiesandJobCreationatNorfolk
StateUniversityNorfolk,Virginia. VACFBNPcollaboratedwiththeWHOFBNPandthe
SmallBusinessAdministrationCenterforFaithBasedandNeighborhoodPartnerships
andcohostedacommunitysymposium. Approximately200Pastorsandcommunity
leadersparticipated.
TheVAOfficeofSurvivorsAssistance(OSA)servesasaresourceregardingbenefitsandservices
furnishedbyVAtoSurvivorsanddependentsofdeceasedVeterans. OSAensuresthatsurviving
spouses,children,andparentsofdeceasedVeteranshaveknowledgeofandapplyforbenefits
towhichtheymaybeentitled. OSAusesthefollowingoutreachactivitiestopromoteand
increaseawarenessofSurvivorbenefits: conductingpresentations/briefings,servingaspanel
members,participatinginconferencecalls,andhostingandstaffingexhibitbooths,aswellas
othereventsasrequested. OSAachievedthefollowingduring2013:
OSAcontinuedtofacilitate,coordinate,andactivelyattendandparticipateinavariety
ofoutreacheventswithinternalandexternalpartnerstopromoteopenandongoing
dialoguewithVAanditsstakeholderstoincreaseawarenessofavailablebenefitsand
servicesforeligibleSurvivors.
OSAcommenceddistributionofthenewSurvivorBenefitsandServicesQuickSeries
MobileeGuide,leveragingtechnologytoimproveinformationdeliverytocustomers.
OSAincreasedparticipationintargetedoutreachandfaithbasedeventswiththeCenter
forMinorityVeterans.
OSAcontinuestoleveragethediversityofitspartnershipsthroughcooperativeefforts
tofacilitateachievingorganizationalgoalsandobjectivesofpromotingandincreasing
knowledgeofbenefitsandservicesforSurvivors.
TheFedsforVetsinitiativewascreatedbyVESOtoextendtheVAforVetssolutiontoother
Federalagenciesandnonprofitorganizations. FedsforVetswasdesignedtoserveasthesingle
talentexchangeforVeterans,transitioningServicemembers,GuardandReservemembers,HR
professionals,andhiringmanagerstoincreaseVeteranhiringGovernmentwide. AsofJuly31,
2013,VAemploys108,319Veterans,whichis32.50percentofourworkforce. VAhired12,524
Veteransin2013,whichis34.2percentofnewhires.
Part I - 36 Management Discussion and Analysis



































InformationTechnology
OnMarch18,2013,VAsOfficeofInformationandTechnology(OIT)heldthegrand
openingdedicationceremonyforthenewHoteling/CollaborativeCenterattheTech
WorldBuildinginWashington,DC. ThecentercomplieswithmandatesbythePresident
andOfficeofManagementandBudget(OMB),requiringFederalagenciestoreduce
leasespace. ITSpaceandFacilitiesManagementmanagedtheremodelingofthe5,000
squarefeetarea,furnishing,anddevelopmentofthedesignconceptsthatallowsfor
comfort,functionality,increaseinspaceusage,andstateofthearttechnology.
TheOfficeofEmergencyManagement:
SupportedVAseffortsinresponsetoHurricaneSandybycoordinatingbothintraVAand
Federalinteragencyeffortsforresponseandrecovery. IntraVA,theVAIntegratedOperations
CentersupportedtheresponseeffortsattheManhattanVAMedicalCenter,whichsustained
extensivewaterdamageduringthehurricane. Additionally,theOfficeofOperations,Security,
andPreparednessrepresentedVAinthePresidentsHurricaneSandyRecoveryTaskForce,
ensuringVAsresponseandrecoveryeffortswerealignedwiththePresidentsprioritiesfor
HurricaneSandyrebuilding.
GeneralCounsel
AchievedVAsstandardsforcompletingregulationsinatimelymanner:completing
proposedandfinalrulesinlessthan22.4monthsandfinalrulesnotsubjecttopublic
commentinlessthan10.8months,withactualperformanceaveraging19.7monthsand
7.2months,respectively. VAsregulatoryprocessingtimesarenowmuchshorterthan
mostotherFederalagencies.
PublishedanumberofimportantregulationsforAmericasVeteransandtheirfamilies,
includingregulationsthatextendedthestatutoryperiodforcompensationforcertain
disabilitiesduetoundiagnosedillnessesandmedicallyunexplainedchronicmulti
symptomillnesses;implementedlegislationtoexcludeslayersfromServicemembers
GroupLifeInsuranceproceeds;extendedtheperiodoftimedisabledVeteranscanapply
forVeteransGroupLifeInsurancewithoutproofofinsurability;automatedcontractor
paymentrequests;implementedlegislationthatauthorizedVAtoenterintocontracts
orprovideragreementswithStatehomesforthenursingcareofcertaindisabled
Veterans;implementedlegislationprovidingtentativepresumptiveeligibilityfor
psychosisandothermentalillnesses; preventedincreasesincopaymentsfor
medications;implementedVAsauthoritytosharedruginformationandparticipatein
stateprescriptiondrugmonitoringprogramstoreducenegativehealthoutcomes;
providedgrantsandperdiempaymentstopublicandnonprofitprivateentitiesthat
assisthomelessVeterans;establishedapilotprogramtoprovidegrantstoeligible
communitybasedorganizationsandlocalandstateentitiestoassistVeteransin
transitionfromthemilitaryinruralorunderservedcommunities;implemented
legislationtoprovidegrantstoassistVeteransinhighlyruralareaswithinnovative
Part I - 37 Management Discussion and Analysis













transportationservicestoreceiveVAmedicalcare;removeda30dayresidency
requirementbeforeVApaysperdiemforVeteranswhodonotstayovernight;
prioritizedgrantsforstatesconstructingoracquiringstatehomeswhenremedyinglife
orsafetydeficiencies;establishedapilotprogramtoprovideprivatedentalinsurance
foreligibleVeterans;authorizedcompliancewaiversforminordeficienciesat
communityresidentialcarefacilities;andeliminatedaregulatoryprocedurethatdenied
patientaccesstotheirrecords.
CompletedVAs21
st
proposedrulefortheCompensationandPensionregulation
rewriteproject,consolidating20previouslyproposedrulesintoasingledocumentthat
willgiveVeterans,thepublic,andVSOsanadditionalopportunitytosubmitcomments
toimproveVAsclaimsadjudicationregulations.
GreenVA
VAsgreenmanagementactivitiesresultedincarefulstewardshipofenergy,environmental,
andvehiclefleetresources,andreducedtheDepartmentscosts,therebyallowingmore
resourcestobeavailabletoserveVeteransandtheirfamilies.
VAcontinuestoinvestinprojectsthatimproveitsinternalcapacitytoserveVeterans,enhance
securityandemergencyresponse,anddemonstrateresponsiblestewardshipoftaxpayer
resourcesthrough:
IncreasingthenumberofalternativelyfuelingstationsatVAmedicalcenters;
Pioneeringtheuseof30pluginelectricvehicles;
Increasingrenewablefueledonsiteelectricgenerationcapacityto150megawatts;
PilotingGreenRoutineprogramstoreducetheenvironmentalfootprintattwo
additionallocations;and
ContinuingtoaddsustainablecertificationstobuildingsintheVAportfolio.
StrategicandCapitalPlanning
TheStrategicCapitalInvestmentPlanning(SCIP)processisaninnovativeDepartmentwide
capitalplanningandprioritizationprocessdesignedtoimprovethedeliveryofservicesand
benefitstoVeterans,theirfamilies,andtheirSurvivors,withinthesafestandmostsecure
infrastructurepossiblebyaddressingVAsmostcriticalcapitalneedsfirst,investingwiselyin
VAsfuture,andsignificantlyimprovingtheefficiencyofVAsfarreachingandwiderangeof
activities.
VAtookthefollowingactionsinsupportofcapitalinvestmentplanningduring2013:
CompleteditsthirdcompleteSCIPprocessandresultswerepublishedinVAs2014
budgettoCongress. SCIPhelpstoensurecriticalinfrastructureissuesareaddressed.
ImplementedenhancementstotheSCIPAutomationTool(SAT)includingafully
automatedbudgetexecutionmodule.
Part I - 38 Management Discussion and Analysis


The2015SCIPprocessscoredover1,500businesscases,resultinginaprioritizedlistof
capitalprojectsandapreliminarylongrangeactionplantosupportthedevelopmentof
the2015capitalbudget.

VAtookthefollowingactionsinsupportofimprovedrealpropertyportfoliomanagement:
VAimplementedanumberofchangesinsupportofOMBsFreezetheFootprint(FTF)
initiativerelatedtoofficeandwarehousesquarefootage.Newguidanceandpolicywas
putintoplacetoestablishinternalcontrolstomanageFTF.Inaddition,VAisworkingto
implementanewVAwidespacestandardforadministrativeofficespace.
ContinuedenhancementstotheCapitalAssetInventory(CAI)systemthatimproved
dataintegrity,datavalidation,usernavigation,andreportingfeaturesandfunctionality.
Inaddition,SCIPSATwasupdatedtolinkdirectlytoCAI,allowingrealtimeinventory
dataforuseinthecapitalplanningprocess.
Completeddisposalorreuseactionsforapproximately39assets,accountingformore
than144,000squarefeetand22acresofvacantandunderutilizedpropertysofarthis
year.

VAenhanceuseleasing(EUL)authoritycontinuestosupporttheDepartmentsinitiativeto
eliminateVeteranhomelessnessby2015.
In2013,VAidentified16additionalsitesnationwidewithhighpotentialforrepurposing
housingforVeteransandtheirfamilieswhoarehomeless,oratriskofhomelessness.
Roseburg,OregonTheRoseburgEULprojectwithTheEagleLandingwasfinalizedon
October5,2012.Theprojectwillinclude54unitsofpermanenthousingforhomeless
andatriskVeteransandtheirfamiliesand1managersunit.Preleasinghasbegunand
thedeveloperanticipatesthefirstqualifiedVeteransmovedinonNovember25,2013.
ThededicationceremonywasheldonNovember22,2013.
Leavenworth,KansasThisprojectislocatedattheDwightD.EisenhowerVAMedical
CenterinLeavenworth.Theproject,knownasRidgeTopApartments,willprovide49
unitsandmorethan64,600squarefeetofaffordablehousingwithpriorityplacement
forVeteransintheLeavenwortharea.Thefirstoccupancyoccurredasscheduledon
September5,2013.
Tuscaloosa,AlabamaThisprojectislocatedattheTuscaloosaVAMedicalCenter.The
projectincludesbothrenovationandnewconstructiontodeliver50unitsofpermanent
housingforhomelessandatriskVeteransandtheirfamilies.Thetotalsquarefootof
thefacilitywillbeapproximately76,000withpriorityplacement,andisscheduledto
openinlate2014.
TheOfficeofDataGovernanceandAnalysisdevelopedandimplementedasystemto
recordnewVAclientswhoenrolled,registered,orusedVAserviceseachmonth.This,
alongwiththecompletionofthefourthgenerationoftheintegratedUnitedStates
VeteransEligibilityTrendsandStatisticsmultidimensionaldatabaseenhancesthe
DepartmentsknowledgeofthegeographicanddemographicdistributionofVeterans.
Management Discussion and Analysis Part I - 39


Theofficealsodevelopedahealthcarescenariobasedpredictivemodelforsupporting
futurepolicyplanningandanalysis.
Challenges



HomelessVeterans
WhilewecanmeasurethenumberofhomelessVeteransweserve,itisdifficulttoobtainan
accuratecountofhomelessVeteranslivingonthestreetorinshelters.

MentalHealth
Whileitsmentalhealthworkforcehasexpanded,VHAcontinuestoassesstheoptimalsizeand
themannerinwhichtobestdeployitsworkforce.Astaffingmetricandamodelfor
interdisciplinaryteambasedcarewithinmentalhealthprogramsisbeingpilotedtoensure
readyaccesstohighqualitycare.VHAmakesover80millionappointmentsayear.Whileour
aggregateperformanceinappointmenttimelinessisfavorable,itisstillthecasethatasmall
butsignificantfractionofpatientswaittoolongfortheirappointments,tests,orprocedures.
Whiletheissueishamperedbyveryoldschedulingsoftware,VHAhasbeenabletodevelop
betterdashboardsandreportsforcliniciansandmanagerstouseinimprovingaccess.

Benefits
DisabilityClaimsBacklog
WhileVAreducedthebacklogofdisabilityclaimsin2013,itsgoalistodecideallclaims
within125daysofreceiptandwith98percentaccuracyin2015.Tomeetthis
challenge,itmustfullyfundandtimelyimplementallthetechnologyprogramsthat
supportclaimsprocessing,suchasVBMSandVRM.
VAexpectstoreceiveasignificantnumberofnewcompensationclaimsasaresultof
thebenefitsbriefingsmandatedbytheVeteransOpportunitytoWorktoHireHeroes
Act(VOWAct)andtheVeteransEmploymentInitiative(VEI).
ClaimsProcessingAccuracy
Toachieve98percentaccuracyofclaimsprocessingbytheendof2015,VAmusttimely
implementallofthequalityandtrainingprograms,andsoftwareautomationplannedfor
VRM/VBMS.Automationiscriticaltoachieving98percentaccuracy.VBAbegantrackingissue
basedqualitymeasuresinOctober2012.Reportingonbothissuebasedandclaimsbased
qualityallowsVBAtotargetspecificareasforwhichtheworkforceneedsremedialandfor
moreeffectivetraining.

Management Discussion and Analysis Part I - 40








VBMS/VRMChallenges
TomaximizetheefficienciesofVBMS/VRM,claimsandsupportingdocumentsmustbe
filedelectronically,receivedelectronically,andprocessedelectronically. Thisrequires
Veterans,VSOs,DoD,andotherstakeholderstransferand/orsubmitinformation
electronically. VAmustcontinuetoworkwithallstakeholderstoachievecompletely
electronicprocessing.
Education
WhileVAhasmadeprogressonthedeploymentanddevelopmentofthePostsecondary
EducationComplaintSystem(PECS),challengesremainwhendeterminingthetimeline
forfulldeploymentofPECS.
InformationTechnology
TheOfficeofDataGovernanceandAnalysisisworkingwithDepartmentstakeholdersto
integrateVAsinformationarchitecture,removingstovepipedsystemsacrossVA
organizations,whichnegativelyimpactVAinformationqualityandmanyongoing
initiatives,suchasVLER,VRM,andiEHR. Thiswork,doneinconcertwithorganizations
acrossVA,isdevelopingandimplementingcustomerdataintegration(CDI)framework
inVA. ACDIframeworkwillenableVAtocapture,store,andsharevalidatedcommon
dataelements(identity,demographic,militaryservicehistory,etc.)acrossmultipleVA
businessoperations. Tothisend,CDImusthavedefinedprogrammanagement
responsibilities,agreement,andparticipationfromallVAwidestakeholders.
Burial/Cemetery
GravesiteAccountability
TheNCAHeadstoneandMarkerReviewthefirstconductedinthe150yearhistoryofnational
cemeteriesreviewedheadstonesandmarkersforall3.2milliongravesitesat131national
cemeteriesand33soldierslotsadministeredbyNCA. Thepurposeoftheselfinitiated,
comprehensivereviewwastoconfirmthatallheadstonesandmarkersaresetattheproper
locationandtoensureVAadministerednationalcemeteriescontinuetooperateunderthe
higheststandardsasnationalshrines. NCAleadersadministeredthereviewintwophasesand
thereviewtookslightlyoverayeartocomplete,fromOctober2011,toDecember2012. Phase
IIofthereview,whichconcludedonDecember31,2012,identified527correctiveactions: 520
headstone/markererrorsand7potentialreburials. CombinedwithPhaseIresults,NCA
reportedatotalof778errors,representinglessthan.0003percentofallheadstones/markers
inthesystem. AspartofthePhaseIIcorrectiveactions,NCAconductedfivereburialsand
determinedthattworeburialswerenotnecessary. Therefore,intotal,NCAconducted13
reburialsasaresultofmismarkedgravesidentifiedinthePhaseIandPhaseIIaudits. Allerrors
reportedintheNCAHeadstoneandMarkerReviewhavebeencorrected.
Management Discussion and Analysis Part I - 41




Appeals
The Board of Veterans Appeals greatest current challenges include:
IncreasingAppealsWorkload AstheDepartmentprocessesmoreclaimsfor
benefits,thereisaproportionalgrowthinthenumberofappeals. Toaddressthis
challenge,VBAandtheBoardwillcontinuetocollaborateonefficienciesinthe
appellateprocess,suchasreducingavoidableremands,encouragingVeteransto
leverageVTCtechnology,andadvocatingforlegislativeproposalsaimedat
streamliningtheappealsprocess.
Outreach
TheminorityVeteranpopulationisprojectedtoincreasefromitspresentlevelof
approximately21percenttoapproximately34percentby2040. Additionally,approximately33
percentofwomenVeteransareminorities,andthisgroupisalsoprojectedtoincrease. The
currentchallengeistoobtaindatathatwillfacilitatetargetedoutreachtominorityVeteransto
enhancetheiraccesstoVAbenefitsandservices,andtopositiontheDepartmenttomeetthe
needsofamorediverseVeteranbase.
ChallengeswithintherealmofservingourwomenVeteransinclude: collaborativeoutreach
effortstobuildawarenessamongwomenVeteransofthebenefitsandservicesprovidedbyVA,
andtochampionculturaltransformationwithinVA;datacollectiongaps,whichhamperour
understandingofwomenVeterans'needsandtheirutilizationofVAbenefitsandservices;
underutilizationofservices;andlackofawarenessofbenefitsoreligibility.
Security/EmergencyPreparedness
SecurityInvestigationsCenter:
ChallengeswithintheCenterinclude: developmentanddeploymentforaVAenterprise
softwareapplicationanddatabase(thePersonnelSuitabilityandSecuritySystem)forall
VAemployees,contractors,andaffiliates.
StrategicandCapitalInvestmentPlanning(SCIP)
VAscapitalinfrastructureislargeandagingwithover170Msquarefeetandanaverage
buildingageofabout58years. Also,thelocationofthisinfrastructuredoesnotalways
alignwithcurrentVeteranneeds. AlthoughSCIPprovidesadatadriven,longtermplan
tomodernizeandrightsizetheVAinventory,thelargescopeoftheproblemremainsa
challengegivenongoingfiscalconstraints.
Significantprogresshasbeenmadeoverthelast6yearsinreducingVAsvacant
propertyinventory. WhatremainsinVAsinventoryfordisposalpresentschallenges.
Manyremainingassetsareeitherinsuchpoorconditionthatenvironmental
Part I - 42 Management Discussion and Analysis


remediationmustbecompletedbeforetheassetcanbedemolishedortheyare
designatedhistoricalandVAhasnoneedfortheasset.

VAsEULauthorityexpiredonDecember31,2011;however,legislationwaspassed
August6,2012,givingVAauthoritytopursueEULsforsupportivehousingtypeprojects
only.VAs2014Budgetincludedalegislativeproposaltoreturntoamoreexpansive
authoritytomaximizetheopportunitiesthatcanbepursuedviaEUL.Whereprojects
arepursuedunderthecurrentauthority,marketconditionsforfinancingcanoftenbea
challengeandenvironmentalconditionsorhistoricalpreservationissuesmustbe
addressedbeforetheprojectcanbecompleted.


Management Discussion and Analysis Part I - 43












FinancialHighlights
Theprincipalfinancialstatementshavebeenpreparedtoreportthefinancialpositionandresultsof
operationsoftheDepartmentofVeteransAffairs(VA)pursuanttotherequirementsof31U.S.C.
3515(b). WhilethestatementshavebeenpreparedfromthebooksandrecordsofVAinaccordance
withgenerallyacceptedaccountingprinciplesforFederalentitiesandtheformatsprescribedbyOMB,
thestatementsareinadditiontothefinancialreportsusedtomonitorandcontrolbudgetaryresources,
whicharepreparedfromthesamebooksandrecords. Thefinancialstatementsshouldbereadwiththe
realizationthatVAisacomponentoftheU.S.Government,asovereignentity.
VAreceivedanunqualified(clean)opinionontheDepartmentsfinancialstatementsfor2013
and2012fromtheexternalauditingfirmofCliftonLarsonAllenLLP(CLA). Asaresultofitsaudit
work,CLAreportedonematerialweaknessininternalcontrols. Thesolematerialweaknesswas
forInformationTechnology(IT)SecurityControls,arepeatcondition. In2013,VAsuccessfully
remediateditssignificantdeficiencyfrom2012,UndeliveredOrders.
Throughitsleadershipandguidance,VAsOfficeofFinancialProcessImprovementandAuditReadiness
(FPIAR)hassignificantlyaidedVAsauditremediationefforts. TheFPIARofficecontinuestoprovide
guidanceintheremediationofauditfindingsandimprovementstointernalcontrols. VAsfinancial
improvementsuccessesin2013reflectthededicationandhardworkofstaffthroughoutVAs
Administrationsandstaffoffices. In2014,VAwillfocusoncontinuingprogresstowardremediatingthe
remainingmaterialweaknessidentifiedbytheexternalauditorsandmanagementsassessmentprocess.
VAprogramsoperatedatanetcostof$354billionin2013comparedtoanetcostof$355.9billionin
2012oranoveralldecreaseinnetcostof$1.9billionor0.52percent. Theoveralldecreaseisduetoa
decreaseintheChangesinActuarialLiabilityAssumptionsforVeteranscompensationandburialcosts
of$35.2billionsubstantiallyallofwhichwasoffsetbyanincreaseof$33.3billioninNetProgramCosts
byAdministrationbeforeChangesinVeteransBenefitsActuarialLiabilityAssumptions.
ThedecreaseintheChangesinActuarialLiabilityAssumptionsof$35.2billionincludedinnetcostwas
primarilyattributabletothelowerincreaseindisabilityclaimsrateassumptions.Thecostsassociated
withthedisabilityclaimsrateassumptionsfor2013were$70.4billion,oradecreaseof$53billion
comparedto2012. Thedisabilityclaimsrateassumptionsincludelongtermfactorsforfuturedisability
claimsandshorttermfactorsassociatedwiththeacceleratedprocessingoftheexistingbacklogof
claimsthrough2015.
NetProgramCostsbyAdministrationbeforeChangesinVeteransBenefitsActuarialLiability
AssumptionsintheConsolidatedStatementsofNetCosttotaled$239.9billionand$206.6billionfor
2013and2012,respectively. Ofthis$33.3billion,or16.1percentincreaseinnetcosts,approximately
$30.0billionisrelatedtoVeteransBenefitsAdministration(VBA),approximately$3.1billionisrelatedto
VeteransHealthAdministration(VHA)andapproximately$0.2billionisrelatedtoIndirect
AdministrativeProgramCosts.
TheVBAincreaseinnetcostswasprimarilyaresultofthe$20.5billionincreaseinExperienceChanges
inVeteransBenefitsActuarialLiability. The2013increaseinexperiencechangesarebasedprimarilyon
theprocessingofthedisabilitycasebacklogwhichishigherthanpreviouslyprojected.
Part I - 44 Management Discussion and Analysis









ThebalanceofthechangeinVBAwasanetincreaseinprogramcostsof$9.5billion. Theprogramcost
increaseprimarilyrelatestoadditionalpaymentstoVeteransandsurvivorsreceivingcompensationand
pensionpayments,additionalpaymentstoVeteransparticipatinginthenewPost9/11GIBill, and
increasedloanguaranteesubsidycoststocoveradditionallossesintheprogram.
TheVHAincreaseinnetcostof$3.1billionrelatesprincipallytoanincreaseinMedicalCare
expenses. Theincreasewasprimarilyduetoa$2.3billionincreaseinMedicalServices,consisting
mainlyofincreasedmedicalpersonnelanddirectpatientcarecosts,andincreasedpurchasesofmedical
equipmentandpharmaceuticals. In2013,64,000morePriority16patientsweretreatedand9,000
morenonveteranpatientsweretreated. Thiswasinadditiontoa9.6%(53,000)patientincreasefrom
OperationEnduringFreedom,OperationIraqiFreedomandOperationNewDawnVeterans. Also,2,000
fulltermnursesand500fulltermphysicianswerehired. InadditiontoincreasesinMedicalServices,
medicalfacilityconstructionandadministrativesupportcostsincreasedby$287millionand$204
million,respectively.
AssetsandliabilitiesreportedinVA'sbalancesheetsdonotshowsignificantchangefromyeartoyear
withtheexceptionofFederalEmployeeandVeteransBenefitsLiabilities.
The$213.4billionincreaseintheFederalEmployeeandVeteransBenefitsLiabilitiesin2013relatesto
changesinexperienceandchangesinactuarialliabilityassumptions. Thechangesinexperience
principallyconsistofincreaseddisabilityclaimsfiledandprocessed,includingAgentOrangerelated
disabilitiesandincreasedinterestcostsassociatedwiththehigherVeteransCompensationandBurial
ActuarialLiabilitiesatthebeginningof2012and2013,partiallyoffsetbyincreasedbenefitamounts
paid. Thechangesinactuarialliabilityassumptionsrelateprimarilyto:theincreaseassociatedwiththe
decreaseinthesingleweightedaveragediscountrateusedtocomputetheactuarialbalanceof
VeteransBenefitsLiability;decreasesintheCOLAratesusedtoprojectfuturecashflows;andthe
upwardrevisioninclaimsprocessingrequiredtocompletethecurrentpendingclaimsbacklogbythe
targetdateof2015duetothehigherongoingincidencerateandprevalenceofpresumptiveconditions.
ThroughSeptember2013,theDepartmenthascollected$1.2billionindelinquentbenefitdebt.In
addition,wehavecollected$48.2millionthroughadministrativeoffsetondelinquentfirstpartymedical
debtduring2013.
In2010,VAdevelopedasetof11financialmanagementinitiatives. Sevenofthesewerecompletedin
2011. In2013,VAcontinuedworkonthefourremainingmultiyearinitiatives. VAmadesignificant
progressonitscentralizedWebbasedTimeandAttendancesystemthisyear. Systemdevelopmentwas
completedanditwaspilotedatseveralVAfacilities.
In2013,VAalsocompletedafinalrulemandatingelectronicinvoicingforpaymentsmadebyVAs
FinancialServicesCenter(FSC)helpingtoeliminatetheerrorsandexpenseassociatedwithtraditional
paperinvoicesubmissionandimprovingcosteffectiveness,paymentaccuracy,andtimelinessforboth
VAandvendors.
SignificantprogressisexpectedonthemultiyearinitiativetomodernizeFeeBasispaymentcapabilities.
Thesefinancialmanagementprioritiesdroveoureffortsduring2013,andcontinuetohelpusmeetour
financialmanagementgoalsof:ReducingOperatingCosts,EliminatingImproperPayments,
StrengtheningInternalControls,andEnhancingDataandAnalysis.
Part I - 45 Management Discussion and Analysis







In2013,VAcontinuedtoensurethatallRecoveryActtransparency,reporting,andaccountabilitygoals
weremet. BySeptember30,2012,VAhadmadeoutlaystotalingover$1.83billion(98percent)of
RecoveryActfunds. ForUSAspending.gov,VAreported100percentofallrequiredcontract,grant,loan,
andotherassistanceprogramspending,totaling$106.3billion.
During2013,theDepartmentcontinuedtheaggressiveuseoftheGovernmentwidepurchasecard
program,processingover5.8milliontransactionsrepresenting$3.5billioninpurchases. Thisgenerated
over$72.5millioninrefundsforVAcomparedto$75millionduring2012. VAsdailyelectronicbilling
andpaymentprocessforcentrallybilledaccounts,alongwithahighernegotiatedrefundrate,allowVA
tomaximizerefundsthatarereturnedtoVAentitiesforuseinVeteransprograms.
Throughout2013,VAcontinuedtomakeoperationalenhancementswhichresultedinimprovementsin
interestpaid,discountsearned,andimproperpaymentcollections. Interestimprovementsoccurred
largelybecausetheDepartmentcentralizedpaymentofVHAcertifiedpaymentsattheFinancialServices
Center(FSC)inAustin,Texas,whilethepercentageofdiscountsearnedremainedhighbecauseof
ongoingoperationalimprovementsimplementedattheFSC. Interestpenaltiespaidpermilliondollars
disbursedimproved41percentfrom$38permillionin2012to$23permillionin2013. Atthesame
time,VAearnedover95percent($5.5million)ofitsavailablediscounts.
TheFSCalsoleveragedtechnologytoexpeditepaymentofcommercialinvoices. Attheendof2013,FSC
helpedVApay97percentofsmallbusinesseswithin15daysofreceiptofproperpayment
documentation. Additionally,during2013VApaid99.9percentofallcommercialvendorpayments
withinthePromptPaymentActtimelinessstandard.
ImprovementsweremadeinVHAfinancialmanagementthroughouttheyearinprovidingadditional
andclarifyingfinancialpolicies,procedures,andguidancetoVHAsfiscalcommunity,particularlyinthe
areaofinternalcontrols. VHAcontinuestomonitorandimproveitsfinancialreportingandoversight
process.
During2013,severalnationalfinancialtrainingsessionswereconductedthroughlivemeetingfor
Engineering,Finance,andLogisticsstafftoaddressauditfindingsrelatedtoProperty,Plant,and
Equipment,ConstructionWorkinProcess,EnvironmentalLiabilities,andDeferredMaintenance.
AdditionaltrainingsessionswereconductedforFinanceandPharmacystafftoaddressinternalcontrol
issuesrelatedtothereconciliationofthePharmacyPrimeVendoraccountactivity.
During2013,thefinancialoversightassistanceprogram,whichwasinitiatedin2011,providedonsite
assistanceandtrainingtofinancestaffatfiveVHAfacilities. Trainingcenteredonresearchingand
correctingaccountingerrors,andonreviewingandimprovingfacilityaccountingpractices. Inaddition,
theprogramprovidedcustomizedtrainingonprocessingaccountingtransactionsinthefinancial
managementsystems.
VHAcontinuestobeactivelyengagedinaddressingfinancialmanagementissuesatalllevelsof
managementandinallactivitiesthathavedirectorindirectimpactonfinancialreporting.
Throughout2013,VBAsOfficeofResourceManagementaddresseditsprioryearfinancialaudit
significantdeficiencies. VBAdevelopedcorrectiveactionplansandmonitoredtheprogressaspartofits
Part I - 46 Management Discussion and Analysis




financialprocessimprovementprogram. Thefollowingimprovementshighlighteffortstoenhancethe
qualityoffinancialreporting:
CreatedanImproperPaymentsEliminationandRecoveryActteamwithinVBA,aidedthe
administrationbyprovidingprudentreportingwhichfacilitatedmattersrelatedtoOMBCircular
A123AppendixC.
VBAmadesignificantchangestoitsstatisticalsamplingmethodology,andacquiredtheservices
ofcontractedstatisticianstovalidatetheresults. Therefinedsamplingmethodeliminatedthe
previousyearssignificantdeficiency.
VBAmadegreatstridesinreducingthebalancesofagedundeliveredorders(UDO). VBA
achieveda66.5percentreductioninbalancesofagedUDOsfrom$59.6millionto$20
million. Ongoingfocusedeffortswillcontinuetomitigatethissignificantdeficiency.
VBAreengineeredandupdateditsrecertificationprocess. Theseimprovementsincludedthe
creationofawebbasedsystemthattracksallincomingreturnedpayments,reclamations,
paymentovercancellations,andlimitedpayabilitychecks. TheRecertificationAccountingand
TrackingSystem(RATS)willbeoperationalbyfiscalyear2015. RATSprovidesagreaterlevelof
internalcontrolsovertheprocessofreturningfundstoboththeappropriationandVeterans.
Theautomationofobsoletemanualprocesseswillalsoprovidefasterresolutionofoutstanding
items.
Part I - 47 Management Discussion and Analysis




ManagementControls,Systems,andComplianceWith
LawsandRegulations
VAmanagementisrequiredtocomplywithvariouslawsandregulationsinestablishing,maintainingand
monitoringinternalcontrolsoveroperations,financialreportingandfinancialmanagementsystemsas
discussedbelow. VAisrequiredtoprovideassurancesrelatedtotheFederalManagersFinancial
IntegrityAct,theFederalFinancialManagementImprovementAct,andtheGovernmentChargeCard
AbusePreventionActof2012(ChargeCardAct)inthesectionentitledManagementAssurances.
FederalManagersFinancialIntegrityAct
TheFederalManagersFinancialIntegrityAct(FMFIA)requiresagenciestoestablishmanagement
controlsovertheirprogramsandfinancialsystems. VAmanagersmonitorandimprovethe
effectivenessofmanagementcontrolsassociatedwiththeirprogramsandfinancialsystemsthroughout
theyear. Theresultsofmonitoringandconductingotherperiodicevaluationsprovidethebasisforthe
Secretarysannualassessmentof,andreporton,managementcontrols. VAmanagersarerequiredto
identifymaterialweaknessesrelatingtotheirprogramsandoperationspursuanttosections2and4of
theFMFIAasdefined:
Section2requiresagenciestoassessinternalcontrolsnecessarytoensurecompliancewith
applicablelawsandregulations;protectagainstlossfromwaste,fraud,andabuse;andensure
receivablesandexpendituresareproperlyrecorded.
Section2alsorequiresmanagementsassessmentofinternalcontroloverfinancialreporting.
Section4requiresagenciestoassessnonconformancewithGovernmentwidefinancialsystems
requirements.
FederalFinancialManagementImprovementAct
TheFederalFinancialManagementImprovementAct(FFMIA)requiresagenciestohavesystemsthat
generatetimely,accurate,andusefulinformationwithwhichtomakeinformeddecisionsandtoensure
accountabilityonanongoingbasis. TheDepartmentfaceschallengesinbuildingandmaintaining
financialmanagementsystemsthatcomplywithFFMIA.
UnderFFMIA,VAissubstantiallycompliantwithapplicablefederalaccountingstandardsandtheU.S.
StandardGeneralLedgeratthetransactionlevel,butVAhasarepeatmaterialweakness(MW)for
InformationTechnology(IT)SecurityControlsandisnoncompliantwiththeDebtCollection
ImprovementAct. TheITMWresultsinVAsfinancialmanagementsystemsnotbeingincompliance
withtheFederalfinancialmanagementsystemsrequirementsasrequiredbyFFMIASection803(a). VA
continuestoworktoremediatethisremainingmaterialweakness.
GovernmentChargeCardAbusePreventionActof2012
TheChargeCardAbusePreventionAct(ChargeCardAct)requiresagenciestoestablishandmaintain
safeguardsandinternalcontrolsforpurchasecards,travelcards,integratedcards,andcentrallybilled
accounts;toreportpurchasecardviolations;andrequiresInspectorsGeneraltoconductperiodicrisk
assessmentsofGovernmentchargecardprograms.
Part I - 48 Management Discussion and Analysis

















ManagementAssurances
During2013,theSecretaryofVeteransAffairsemphasizedtheimportanceofmanagersimplementing
stronginternalcontrolsthatwillenhancetheDepartmentsdiligentstewardshipandwiseapplicationof
taxpayersassetsandprogramstodelivertimelyandhighqualitybenefits.
OMBCircularA123,AppendixA,ManagementsResponsibilityforInternalControl,definesthe
requirementsforconductingmanagementsassessmentofinternalcontroloverfinancialreportingin
Federalagencies. In2013,VAcompletedacomprehensiveassessmentofinternalcontrolsoverfinancial
reportingthatcoveredapproximately41keybusinessprocessesthatdirectlyaffectspecificfinancial
managementstatementaccountsandimpacttheinternalcontroloverfinancialreporting.
Managementsassessmentofinternalcontroloverfinancialreportingincludedanevaluationofsuch
elementsasthedesignandoperatingeffectivenessofkeyfinancialreporting,controls,process
documentation,accountingandfinancepoliciesandouroverallcontrolenvironment. VAengagedan
independentpublicaccountingfirmtoassistinaninternalcontrolassessmentpursuanttoOMBCircular
A123AppendixA.
VAusedariskbasedapproachforidentifyingkeyinternalcontrolsoverfinancialreportingformaterial
financialstatementaccounts. VAtestedallinternalcontrolsratedhighriskandonethirdofcontrols
ratedmoderaterisk. Lowriskcontrolsareevaluatedona3yearcyclethroughselfassessment
proceduresconductedbyDepartmentmanagers.
OMBCircularA123,AppendixB,ImprovingtheManagementofGovernmentChargeCardPrograms
prescribespoliciesandprocedurestoagenciesregardinghowtomaintaininternalcontrolsthatreduce
theriskoffraud,waste,anderroringovernmentcharge. Correctiveactionshavebeentakentomitigate
theriskoffraudandinappropriatechargecardpracticesatVA.
AfterreviewingtheresultsoftheassessmentsoutlinedintheStatementsofWrittenAssuranceprovided
bytheUnderSecretaries,AssistantSecretaries,andOtherKeyOfficials,theSecretaryofVeteransAffairs
providedaqualifiedstatementofassuranceincludingtheannualcertificationforcompliancewiththe
GovernmentChargeCardAbusePreventionActof2012,P.L.112194. Onematerialweaknesswas
identifiedunderFMFIA,InformationTechnology(IT)SecurityControls,whichcarriedforwardfrom
2011through2013andwillbecarriedforwardinto2014. Thisisdiscussedinmoredetailbelow.
BasedontheresultsofVAsinternalcontrolassessment,noadditionalmaterialweaknesseswere
identifiedin2013. Astheinternalcontrolprogramsmature,VAisincreasinglyabletoimproveits
internalcontrolenvironmentandassessmentofrisk.
SummaryofAuditorsInternalControlAssessment
Theauditorsreportoninternalcontrolsreportedonematerialweakness: "InformationTechnology(IT)
SecurityControls." Inthe"InformationTechnology(IT)SecurityControls,"materialweakness,the
auditorsnotedprogressandimprovementintheITcontrolsenvironmentbutalsoobservedseveral
areaswhichcontinuetoneedenhancements.
Part I - 49 Management Discussion and Analysis














ProgressonMaterialWeakness
The2013IndependentAuditorsReportonInternalControlOverFinancialReportingdisclosedone
materialweakness,InformationTechnologySecurityControls,asaweaknessunderFMFIA. VA
managerscontinuetomakeprogressincorrectingthismaterialweakness. During2013,VAOIT
developednewpolicyandproceduresaswellascontinuedintheformulationofanenterprisewide
remediationplan.
Althoughnotamaterialweakness,VAwasalsononcompliantwiththeDebtCollectionImprovement
Act. Theauditorsreportoncompliancewithlawsandregulations,alsopreparedasaresultofthe2013
financialstatementaudit,determinedthattheDepartmentsfinancialmanagementsystemsdidnot
substantiallycomplywiththeFederalFinancialManagementImprovementAct(FFMIA)requirements.
Theremediationofthisnoncomplianceisbeingaddressedthroughcorrectiveactionsidentifiedforthe
materialweakness,InformationTechnology(IT)SecurityControls.
Part I - 50 Management Discussion and Analysis
Part I - 51 Management Discussion and Analysis



Theoneauditrelatedmaterialweaknessreportedattheendof2013isshowninthetablebelow,which
providesthecurrentstatusoftheDepartmentsmaterialweaknesses.
AuditMaterialWeaknessIdentifiedbyManagement
Description StatusasofSeptember30,2013
Resolution
Target
Date


Information
Technology
(IT)Security
Controls
(Audit/FMFIA
Section4
weakness)
VAsassetsand
financialdata
arevulnerable
toerroror
fraudbecause
ofweaknesses
ininformation
security
management,
access
controls,
segregationof
duties,
configuration
management
and
contingency
planning.
VAcontinuestoimplementtheremediationplandefinedin2012to
addresstheITSecurityControlsmaterialweaknessandwillreassess
itsapproachinresponsetofeedbackasaresultoftherecentaudit.
Theapproachwillincludeprioritizationofremediationeffortsto
focusonareasofhighestrisk. Additionalfinancial,systemsand
personnelresourceshavebeenrequestedbothtofurthersupport
thecorrectiveactionplanandtosustaintheprogramlongterm.
TheContinuousReadinessinInformationSecurityProgram(CRISP)
teamisresponsibleforimplementationofthecorrectiveaction
plan. Theteamisactivelydevelopingits2014programandwill
haveatimelineandprojectplancompletedinJanuary2014.
Improvementstosystems,proceduresandcontrolsinthespecific
areascitedinthefindingareongoing:
TheSecurityManagementandAnalytics(SMA)Officewas
establishedin2013. Thepurposeofthisoffice,inpart,isto
ensuremanagerialoversightoftheBaselineConfiguration
ManagementProgram. BaselineConfigurationshavebeen
establishedformanysystemsandtheSMAofficewill
continuetodeterminewhereabaselineisneeded,initiate
andoverseeactionstomodify/maintain,implement
baselines,establishbaselinereviewschedules,review
baselinecompliance,andoverseethebaseline
configurationsforVAinitsentirety. InJanuary,2013OIT
introducedaMonthlyEnterpriseWideVulnerability
scanninginitiativewhichallowsVAtoaddresscontinualand
everchangingthreatstoitsinformationsystems. VA
continuestoimproveitspatchandvulnerabilityprocesses
throughtheexpansionofthePatchVulnerabilityTeam
(PVT)toprotectVASystemsandInformation. TheSMA
Officewasestablishedtoanalyzeexistingscanning,
patching,remediation,andcompliancereportingtools,
processesanddependenciesandimplementastandard
patchmanagementandcompliancereportingprogram.
2014
Part I - 52 Management Discussion and Analysis


FinancialManagementSystemsFramework
Overview
TheDepartment'sstrategyisbasedongoalstoreplaceoutdatedandnoncompliantsystemswithmore
modern,commercialofftheshelf(COTS)systemswhichmeetOfficeofFederalFinancialManagement
corefinancialsystemrequirements. Thisstrategywasenhancedtoincorporatebusinessprocess
reengineeringintherequirements,acquisition,anddevelopmentandimplementationphasesof
projects.
TheOfficeofBusinessOversightsInternalControlsService(ICS)providestheCFOwithindependent
reviewofandadvisoryservicesforallaspectsofVAsinternalcontrolsoverfinancialreporting,toadd
valueandimprovethemanagement,acquisition,development,andmaintenanceofVAfinancial
systems. TheDepartment'sscopeofworkistoensureitscompliancewithregulatoryrequirementssuch
asthoseprescribedbyOMBCircularA123,AppendixAandtheOpenGovernmentDirective.
ICSisresponsibleforplanningandconductingDepartmentwidereviewsofinternalcontrolsover
financialreportinginaccordancewithOMBCircularA123,AppendixA. ICSalsoengagesin
managementdirectedprogramactivitiesandsystemmanagementreviewsofprojectmanagement
processesandresults,andmonitorscorrectiveactiontoaddressdeficienciesidentifiedinreviews. For
example,in2013,ICSworkedcloselywithprocessownersoncorrectiveactionplansforremediating
findingsfromthe2012testingcycle.
VA'sfinancialsystemsinventoryprovidesdetailsonallmajorfinancialandmixedsystems. Themajor
financialsysteminitiativesfundedbytheDepartmentoverthelast15yearstoachieveVAsstrategic
goalsincludethefollowing:
FinancialManagementSystem
TheFinancialManagementSystem(FMS)wasdesignedtoreplaceVA's1970'scentralaccounting
system. IntheFMSinitiative,completedin1995,VAsuccessfullymetitsstatedobjectivesand
implementedFMSasitssingle,coreaccountingsystembasedonacertifiedCommercialOfftheShelf
(COTS),withinterfacestoallotherVApaymentandaccountingsystems. Inthesucceeding,post
implementationyears,VAcompletedseveralstudiesanddeterminedtherewereremaining
inefficienciesintheoverallfinancialmanagementprocesses,areasofnoncomplianceinitsmixed
systems,andnewmissionbusinessrequirementsthatcouldnotbesupportedeconomicallyinthe
currentsystems.
RecentaccomplishmentsinVAsfinancialsystems,aswellasplansforthenextfiveyearsaredetailedas
follows.
VAcontinuedproductionsupportandmaintenanceofFMSduring2013. VAwillcontinuetooperate
FMSasthecorefinancialsystemintheforeseeablefuture.
VAscurrentfinancialsystemframeworkconsistsofFMSasthecorefinancialsystemandavarietyof
subsidiaryandfeedersystemswhichprocesstransactionsofvarioustypes. Transactionsthathavea
financialimpactaresenttothecorefinancialsystem. Systemssuchaspayroll,benefitssystems,
procurementandothersystemssenddatatothecoresystemforbudgetexecution,monitoringand
reporting.
Part I - 53 Management Discussion and Analysis



PersonnelandAccountingIntegratedDataSystem(PAID)
VAcontinuedproductionsupportandmaintenanceofthePersonnelandAccountingIntegratedData
System(PAID)during2013. PlansareunderwaytoreplacethePAIDsystemwithanewHuman
Resources(HR)LineofBusinesssolution. PrimarysupportandmaintenanceofPAIDrelatestoHR
processingand,asrequired,enhancementsthatimpacthowdataflowsovertoVAspayrollprovider,
theDefenseFinanceandAccountingService(DFAS).
VATimeandAttendanceModernization
VAmadesignificantprogressonitscentralizedWebbasedtimeandattendancesystem(VATAS)this
year. SystemdevelopmentwascompletedanditwaspilotedatseveralVAfacilities.
FederalInformationSecurityManagementAct(FISMA)
VAcontinuestoworkonremediationoftheITSecurityControlsMaterialWeaknessbydevelopingand
executingtheContinuousReadinessinInformationSecurityProgram(CRISP).
TheSecurityManagementandAnalytics(SMA)Officewasestablishedin2013. Thepurposeofthis
office,inpart,istoensuremanagerialoversightoftheBaselineConfigurationManagementProgram.
BaselineconfigurationshavebeenestablishedformanysystemsandtheSMAofficewillcontinueto
determinewhereabaselineisneeded,initiateandoverseeactionstomodify/maintain,implement
baselines,establishbaselinereviewschedules,reviewbaselinecompliance,andoverseethebaseline
configurationsforVAinitsentirety.
InJanuaryof2013,aMonthlyEnterpriseWideVulnerabilityscanninginitiativebeganwhichallowsVAto
addresscontinualandeverchangingthreatstoitsinformationsystems. VAcontinuestoimproveits
patchandvulnerabilityprocessesthroughtheexpansionofthePatchVulnerabilityTeam(PVT)to
protectVASystemsandInformation. TheSMAOfficewasestablishedtoanalyzeexistingscanning,
patching,remediation,andcompliancereportingtools,processesanddependenciesandimplementa
standardpatchmanagementandcompliancereportingprogram.
In2014,VAplanstoaggressivelyexecutetheenterpriseremediationplansdevelopedin2013for
remediationofitsmaterialweaknessbycontinuingtoimproveprogramsandinitiativeswhichare
foundationallygearedtowardsabetterprotectedVAenvironment.
IGActAmendmentsof1988
TheInspectorGeneralActof1978,asamended,requirestheOfficeofInspectorGeneral(OIG)to
identifyrecommendationspendingimplementationover1yearinitsSemiannualReporttoCongress
untilfinalactioniscompleted. AsofSeptember30,2013,OIGreportsthat47reportswith136
recommendationsremainunimplementedover1yearfromissuancewithatotalmonetaryvalueofover
$1.3billion. (Source: OfficeofInspectorGeneral)
AuditFollowUp
VAcontinuestomakeimprovementsandroutinelyassessesitsprograms,financialmanagement,and
financialsystems. Inaddition,VAismakingprogressinresolvingtheoneremainingmaterialweakness.
TheprimaryresponsibilityoftheOfficeofFinancialProcessImprovementandAuditReadiness(FPIAR)is
todefineandsupportastrategytoidentifyrootcausesofdeficienciesandtoimprovefinancial
Part I - 54 Management Discussion and Analysis










managementandinternalcontroldeficiencies. TheFPIARofficeisresponsibleforauditfollowupand
takestheleadinaddressingdeficiencies. FPIARcoordinatesthedevelopmentofcorrectiveactionplans,
monitorsremediationprogress,andprovidesguidanceandsupporttotheAdministrationsandstaff
offices. ThestatusofremediationeffortsarereportedtoVAsSeniorAssessmentTeam.
Accordingly,VAmanagementateverylevelhasbeentaskedtosustaintheeffortinresolvingprogram
andfinancialrelatedweaknessesaswellasimplementsoundsolutionsforallauditrecommendations.
Inordertoensurecontinuedsuccessinremediatingauditfindings,VAhascontractedwithan
IndependentPublicAccountingfirmtoprovideauditsupportandfinancialimprovementservices
designedtoresolveVAsmaterialweaknessrelatedtoInformationTechnologySecurityControls. VAhas
enhanceditscommunicationandcoordinationwithVAAdministrationsandstaffofficesinvolvedin
strategicplanning,budgetformulation,budgetexecution,performance,andfinancialmanagement.
PromptPaymentAct
In2013,VAsFinancialServicesCenter(FSC)continuedtoserveasVAscentralizedpaymentofficefor
certifiedandmatchedinvoicesforpurchasedgoodsandservicesaswellasconstructionpayments.
Performanceresultsreflectimprovementsinpaymentprocessingtimeliness,accuracy,andcostsavings.
VendorPaymentSystem
VAcontinuedtoenhanceitsvendorpaymentprocessesthroughout2013. Interestpenaltiespaidper
milliondollarsdisbursedimproved41percentfrom$38permillionin2012to$23permillionin2013.
Atthesametime,VAearnedover95percent($5.5million)ofitsavailablediscounts.
ElectronicInvoiceSystem
FSCcontinueditsexpansionofatechnologicalsolutiontofacilitatethetransitionfrompaperto
electronicinvoicesubmissionusingtheeInvoiceformat. TheFSCeInvoicinginitiativeisbeing
performedinpartnershipwithA&TSystems,Inc.,andOB10Inc.(OB10). Thisinitiativegoesbeyond
traditionalelectronicdatainterchangemethodsbyofferingasolutionthatdoesnotrequirevendorsto
purchaseanyadditionalsoftwareorhardware. Additionally,allvendorscaneasilyparticipatewithout
changingexistinginvoicingformats. OB10hasthecapabilitytoacceptanyinvoiceformatorlayout
directlyfromthevendorsexistingbillingsystemandutilizetheelectroniccommunicationmethodof
thevendorschoice. TheelectronicinvoicedataarethenpassedtotheFSCtoautomaticallypopulate
theappropriatepaymentapplications. Theerrors,expense,andtimedelaysassociatedwithtraditional
paperinvoicesubmissionsareeliminated,resultinginimprovedcosteffectiveness,paymentaccuracy,
andtimelinessforVAandthevendor.
During2013,theDepartmentcontinuedtheaggressiveuseoftheGovernmentwidepurchasecard
program,processingover5.8milliontransactionsrepresenting$3.5billioninpurchases. Thisgenerated
over$72.5millioninrefundsforVAcomparedtoapproximately$75millionduring2012. VAsdaily
electronicbillingandpaymentprocessforcentrallybilledaccountsalongwithahighernegotiated
refundrateallowVAtomaximizerefundsthatarereturnedtoVAentitiesforuseinVeteransprograms.
FeeBasisPurchaseCard
VAsFeeBasispurchasecardprogramautomatesHealthCareFeeBasispayments,eliminatesprocessing
ofpaperchecks,andearnsVApurchasecardrefunds. In2013,VAsFeeBasiscreditcardprocessedover
201,000transactionsrepresentingover$60millioninpayments,andgeneratedover$1millionin
refunds. ThelackofgrowthinthisprogramwasattributedtoabrieflapseintheprogramasVA
Part I - 55 Management Discussion and Analysis











transferredpaymentprocessingresponsibilitiestoUSBank. USBankaddedtheservicetoVAscontract
atnoadditionalcharge,thussavingVAover$500,000annually. VAexpectstheprogramtogrowfrom
hereasadditionalFeeBasismedicalprovidersagreetoreceivepaymentviatheFeeBasisPurchaseCard
andasmoreVAMedicalCentersjointheprogram.
PrimeVendorPaymentSystem(PowerTrack)PowerTrackautomatespaymentsunderanationwide
pharmaceuticalprimevendorcentralizedpurchasingcontract. During2013,147VAmedicalcenters
usedthePrimeVendorPaymentSystemtoelectronicallyprocessover627,000transactionsworthover
$4.0billion. TheFSCensuresvendorswhoparticipateinVAsmultibilliondollarPrimeVendor
procurementprogramarepaidontime. ThesevendorsprovideVAmedicalcenterswithanefficient
waytoordersuppliesatlow,negotiatedcontractpricesandguaranteedeliverywithin24hours,
eliminatingtheneedforwarehousinglargevolumesofsupplies.
EGovTravelService
TheEGovTravelService,alsoknownasFedTraveler.com,givesapproximately100,000VAfrequent
travelersandVAmanagersanefficientandaccountablewaytoplan,book,andtracktravel
arrangementsaswellasrequestandapproveexpensereimbursement. Thissystemwhichisoperating
atasteadystate,eliminatedfourseparatelegacytravelsystemswithitsonestop,selfservice,Web
basedsite. OneofthekeyperformancemeasurementstheGeneralServicesAdministration(GSA)
monitorsistheonlineadoptionrate,whichmeasuresthepercentageoftravelplanswithair
reservationsmadeusingtheonlinebookingengine. VAsonlineadoptionratein2013averaged75
percent. For2013,VAtravelersprocessedapproximately161,771vouchersinFedTraveler.com.
TheFSCwillcontinuetoprovidesupportforVAwidetravel. TheFSCprovidesthefollowingservicesfor
programsustainment: GlobalSystemAdministration;supportforlocalsystemadministrators;sponsor
forsuperuserconferencecalls;useracceptancetestingofnewsoftwarereleases;trainingonnew
softwarereleases;servingasContractingOfficersTechnicalRepresentative;andparticipationin
meetingshostedbytheGeneralServicesAdministration(GSA)suchasFedTravelerUserGroup
meetings,ProgramChangeControlBoardmeetings,andExecutiveChangeControlBoardmeetings.
TheFSCisalsoleadingthetransitionfromtheexistingEGovTravelService(ETS)totheETS2. InJuly
2013,VAawardedataskordertoConcurTechnologies,Inc. ConcursofferingisConcurGovernment
Edition(CGE). TheFSCmetwithConcurandkickedoffworkshopstofinalizetheprojectscheduleand
beginsystemconfiguration.
VAsTravelManagementCenters(TMC)servesVeteransandemployeeswhotravelfrequently. The
billingsaretransmittedelectronicallyfromeachTMC,andpaymentissentdailythroughthe
DepartmentoftheTreasurysElectronicCertificationSystem. During2013,thetravelmanagement
programprocessedover494,000transactions,disbursedpaymentsofover$55million,andearnedover
$985thousandinrefunds.
VendorInquirySystem
TheFSCstaffcontinuedtoprovidevendorpaymenthistoryontheInternet. TheVendorInquirySystem
(VIS)Internetapplicationstoresover7yearsofinformation. Oncevendorscompleteanauthentication
process,theycanaccessasecureWebsitetoviewpaymentinformationfortheircompany. Currently
thereareover51,000activeregisteredvendors. VISprovidesFSCvendorsaneasytousetoolfor
immediateaccesstotheirpaymentinformation24hoursaday. VIShasalsoimprovedcustomerservice
Part I - 56 Management Discussion and Analysis










efficiencyofFSCstaffbyhandlingmanyroutineinquiriesandfreeingstafftoworkcustomersmore
difficultissues.
RegisteredVISusershavetheabilitytosubmitelectronicinvoicesdirectlytotheFSC. Vendorscomplete
easytouseformstocreatetheirinvoicesandcanmanageandtrackthem. Thisonlinesystemprovides
thevendorswithalistofvalidpurchaseorders,virtuallyeliminatingthenumberoneerrorthatcauses
paymentdelays. ErrorsidentifiedbythesystemareimmediatelyreturnedtotheVISuser,whocan
instantlycorrectthempriortosubmission. Thispreventspaymentdelaysandresultsinquickerand
moreaccuratevendorpayments.
Part I - 57 Management Discussion and Analysis







PerformanceOverview
PurposeofThisReport
TheDepartmentofVeteransAffairs2013PerformanceandAccountabilityReport(PAR)describesVAs
accomplishmentsandprogressduring2013towardfulfillingitsmission. Thereportisdesignedto
enableDepartmentmanagement,ourstakeholders,andouremployeestoassessVAsprogramand
financialperformance,ascomparedtoitsgoals,andtousethisinformationtomakenecessary
assessmentsandimprovements.
2013PerformanceADepartmentLevelSummary
PerformanceResults: ThechartbelowshowshowwellVAperformedinmeetingitsperformance
targets. Asshown,VAachievedthetargetfor57percentofallmeasures.
*Note: 28 of 135 Measures (N = 107 for 2012) are neutral measures; meaning they have no FY11-12 year-to-year
comparison, or they base-lined in the FY 2012 Performance Plan.
**Note : 19 of 111 Measures (N = 92 for 2013) are neutral measures; meaning they have no FY12-13 year-to-
year comparison, or they base-lined in the FY 2013 Performance Plan.
2013PerformanceMeasuresbyProgram
Thefollowingtabledisplays111VAperformancemeasureswhichincludeourkey25(identifiedbyan
asterisk)andsupportingmeasuresbyorganizationandprogram. Foreachmeasure,weshowavailable
trenddatafor4years. (N/Avmeansdatanotavailable.) Thisreporthighlightstheactual2013resultas
comparedtothe2012target. Formeasuresinwhichthetargetwasnotmet,weprovideabrief
explanationofwhytherewasasignificantdeviationbetweentheactualandplannedperformancelevel
andbrieflyidentifythestepsbeingtakentoensuregoalachievementinthefuture. Followingthetable
of111measuresaredetaileddescriptionsofthekey25performancemeasures.
Part II - 1
Organization/Program/Measure
(Key Measures in Bold)
Past Fiscal Year Results 2013
Strategic
Targets 2009 2010 2011
2012
(Final)
Results Targets
Medical Care Programs
*Prevention Index V
(The 2008 result is PI III. The 2009-2011 results are PI
IV. The 2012-2014 targets are PI V.) (see page II-18)
89% 91% 92% 94% 93% 93% 95%
*Clinical Practice Guidelines Index IV
(The 2008 result is CPGI II. The 2009-2011 results are
CPGI III. The 2012-2014 targets are CPGI IV.) (see
page II-19)
91% 92% 91% 94% 93% 92% 94%
*Percent of new primary care appointments
completed within 14 days of the create date for the
appointment (New)
[1] In 2012, VHA began measuring the four
appointment performance measures using a 14-day
standard. (see page II-20)
N/Av N/Av N/Av N/Av 41%
TBD
(Baseline)
TBD
*Percent of new specialty care appointments
completed within 14 days of the create date for the
appointment (New) (See [1] above) (see page II-21)
N/Av N/Av N/Av N/Av 40%
TBD
(Baseline)
TBD
Percent of new mental health appointments
completed within 14 days of the create date for the
appointment (New)
N/Av N/Av N/Av N/Av 66%
TBD
(Baseline)
TBD
Causes: The three main causes of low performance are: 1) Inadequate tools/transparency to both account for and manage provider capacity; (for example, there
are over 24,000 grids for scheduling in Primary Care, making national level tracking virtually impossible) 2) Lack of provider capacity (for example there is an 8
percent vacancy rate for Primary Care providers, but we dont have numbers for other specialties); and/or 3) Suboptimal clinic operations function. (Data suggest
about 2/3 of access issues could be related to team roles, function, and teamwork. Recent qualitative evidence from pilot sites shows BHIP in MH is associated with
staff estimates of improved access, continuity, and overall Veteran health status.
Resolution Strategies: Establish network and facility growth plans as part of the planning and budgeting process. As resources will not be in an ever-expanding state,
these plans will require adjustments to meet growth scenarios. Customize facility goals for those needing to improve clinic operations function vs. those that need
resources. Standardize clinic profile (grid) set up rules to define appointment types, identify total available clinic slots, and other factors. This will increase
transparency in expensive staff capacity and allow better oversight and management. Standardize implementation of strategies known to improve clinic function
such as: use the available predictive model to reduce no-shows; make clinic cancellation line easy with one call; Establish regular site visits to VISNs in order to
assess access management and scheduling practices. These site visits will then be extended by the VISNs, following the blueprint established by the ACAP team.
Expand Access Educational efforts. Data shows education is highly valued by employees, decreases burnout and improves clinic function.
Performance Information Part II - 2
Organization/Program/Measure
(Key Measures in Bold)
Past Fiscal Year Results 2013
Strategic
Targets 2009 2010 2011
2012
(Final)
Results Targets
*Percent of established primary care appointments
completed within 14 days of the desired date for
the appointment (New) (See [1] above) (see page II-
22)
N/Av N/Av N/Av N/Av 93%
TBD
(Baseline)
TBD
*Percent of established specialty care appointments
completed within 14 days of the desired date for
the appointment (New) (See [1] above) (see page II-
23)
N/Av N/Av N/Av N/Av 93%
TBD
(Baseline)
TBD
Percent of established mental health patients with a
scheduled appointment within 14 days of the desired
date for the appointment (New)
N/Av N/Av N/Av N/Av 95%
TBD
(Baseline)
TBD
*Percent of patients rating VA health care as 9 or 10
(on a scale from 0 to 10) (see page II- 24-25)
(VHA has moved to a nationally standardized tool, a
family of surveys known as Consumer Assessment of
Health Care Plans and Systems (CAHPS). 2009 was a
re-baseline year to determine both annual and
strategic targets. The 2009 results are not
comparable with prior years and cannot be
compared to 2010 due to additional changes to the
survey instrument and administration protocol that
were implemented in 2010.)
Inpatient
(1) Corrected
63%
(Baseline)
(1) 64% 64% 64% 65% 66% 75%
Outpatient
57%
(Baseline)
55% 55% 55% 54% 58% 70%
Percent of total HUD-VASH vouchers that resulted in
a Veteran achieving resident status (Supports Agency
Priority Goal)
N/Av 88% 100% 92% 92% 88% 90%
Performance Information Part II - 3
Organization/Program/Measure
(Key Measures in Bold)
Past Fiscal Year Results 2013
Strategic
Targets 2009 2010 2011
2012
(Final)
Results Targets
Percent of targeted population of OEF/OIF Veterans
with a primary diagnosis of PTSD who receive a
minimum of 8 psychotherapy sessions within a 14-
week period
N/Av 11% 15% 15% 53% 67% 97%
Causes This metric involves a highly complex set of rules . Work on the rules and the resulting formal definitions for this metric were not completed until late in
November 2012 and there was also a delay in capturing and posting the initial data. Facilities did not obtain performance results until the end of the 2nd Quarter of
FY 2013. As the facilities were unaware of their performance on this metric for the first two quarters of the fiscal year, they were at a disadvantage to address
changes needed to overcome less than optimal performance. Facilities identified the need for a case finder to assist them in locating Veterans requiring
psychotherapy sessions under the metric. A case finder was developed and tested by the field, but was not available to all for use until late in the 3rd Quarter of
FY2013.
Resolution Strategies VHA facilities all have the current definitions of this metric. The definition of the numerator and denominator of the metric will not be
different in 2014. VHA will continue to have monthly conference calls about the mental health (MH) performance measures. Calls will address both technical aspects
of the metric, as well as best practices. There will also be ongoing educational conference calls provided on a regular basis throughout the fiscal year that include
dissemination of best practices. VHA will continue to monitor performance on this metric. Sites remaining significantly below the target at the end of the 1st
Quarter of 2014 will be expected to provide a specific action plan related to this metric and technical assistance will be provided. Some Veterans and providers
make a mutual decision to end therapy earlier than the recommended 8 treatment sessions if treatment goals have been achieved. Engagement in treatment for
OEF/OIF/OND Veterans continues to be an issue.
Percent of Veterans being discharged from an
inpatient Mental Health unit who receive outpatient
mental health follow-up care within 7 days of
discharge
N/Av N/Av N/Av N/Av 78% 68% 85%
Percent of NonVA claims paid in 30 days (VHA) N/Av N/Av 79% 80% 79% 90% 90%
Causes Facilities report they struggle to balance incoming claims and backlogged claims. In some instances, facilities have a large volume of backlog that they are
working towards reducing, and focus on those backlog claims can affect their ability to address new claims.
Facilities have reported that staffing deficiencies are a main contributor to not being able to process claims within 30 days.
Claims processing software / Technical issues:
o Phantom Claims in the Fee Basis Claims System (FBCS), also referred to as orphaned claims, account for approximately 3% of stations backlog. Orphan claims
are created when front end staff attempt to disposition, edit or delete the FBCS claim in the Veterans Health Information Systems and Technology Architecture (VistA)
system and not in FBCS.
o VHA has implemented a comprehensive set of Program Integrity Tools (PIT) to reduce fraud, waste and abuse and improve payment accuracy in a pre-payment
status. Stations consistently report a 48-72 hour delay in claims returning from PIT which has affected timeliness by up to 13%.
o New patch roll outs along with IT migrations from Windows XP to Windows 7 has resulted in numerous latency concerns and periodic system aborts. There have
also been Electronic Data Interchange (EDI) Technical issues and Backup server shutdowns that caused claims re-transmission or a major loss of claims data that
required new server installations and claims recovery or re-processing.
Resolution Strategies As more facilities continue to adopt and implement FBCS Optimization, it is expected that timeliness will improve.
Continued Automation Implementation of Medicare Pricing Methodology within our Claims processing system (also referred to as Patch 12) has been found to
reduce errors attributed to the improper application of payment methodologies. It is anticipated that improper payments due to payment methodology errors will
continue to be reduced. As a result, proper pricing will reduce claims re-work which in-turn will support more timely claims processing.
Percent of Veterans who report "yes" to the Shared
Decision-making questions in the Inpatient Surveys of
the Health Experiences of Patients (SHEP)
(2011 was a re-baseline year after measure validation
was completed in 2010.)
N/Av 71% 72% 72% 74% 72% 75%
Performance Information Part II - 4
Organization/Program/Measure
(Key Measures in Bold)
Past Fiscal Year Results 2013
Strategic
Targets 2009 2010 2011
2012
(Final)
Results Targets
The average proportion of patients responding
"Always" to receiving timely appointments, care
and information (New)
N/Av N/Av N/Av N/Av 39% baseline TBD
Medical Research
Percent of Veterans participating in telehealth N/Av N/Av N/Av 9% 11% 15% 75%
Veterans Benefits Administration
Compensation and Pension
Performance Measures
*BACKLOG: Percentage of disability compensation
and pension claims pending inventory that is more
than 125 days old (Supports Agency Priority Goal)
(see page II-26)
N/Av 36% 60% 66% 58% 40% 0%
Causes: Factors that have resulted in the submission of more disability claims, and hence contributed to the backlog, include VBA initatives to increase access, and
other conditions that increased demand for VBA to address unmet disability compensation needs: Increased Access: (1) Increased use of technology and social
media by Veterans to inform themselves about available benefits and resources. (2) Creation of additional presumptions of service connection resulting in more
claims for exposure-related disabilities. (3) Extensive and successful use of VBA outreach programs to inform more Veterans of their earned benefits, which can
include compensatin claims. (4) Improved access to benefits through the joint VA and DoD Pre-Discharge programs. Increased Demand: (1) 12 years of war with
increase survival rates for our wounded. (2) Aging population of Veterans from previous eras, such as Vietnma and Korea, whose conditions are worsening. (3) Impact
of a difficult economy. (4) Growth in the complexity of claims decisions as a result of the increase in the average number of medical conditions for which each
claimant files.
Resolution Strategies: In 2013, VBA focused on completing 1- and 2- year old claims, thereby decreasing the inventory that is more than 125 days old from 72 to 59
percent. Continued processing of older compensation rating claims will achieve the 40 percent target for 2014 as well as the Secretary's goal of having no rating
claim over 125 dats in 2015 (Q4). The deployment of future VBMS releases will result in increased efficiencies, resulting in a lower ADC and backlog. (Ongoing)
*National accuracy rate - compensation entitlement
claims (see page II-27)
(Supports Agency Priority Goal)
84% 84% 84% 86% 89% 90% 98%
Compensation maintenance claims - average days to
complete
N/Av 99 106 128 166 110 60
Causes: Because VBA focused on processing older claims, the ADC for maintenance claims rose; however, this focus on older claims will improve future
performance.
Resolution Strategies: As VBA reduces its compensation rating backlog, it will reallocate resources to process its maintenance compensation inventory. (Q4)
Rules-based applications will lead to greater automation of maintenance workload, such as dependency claims. (Ongoing)
Performance Information Part II - 5
Organization/Program/Measure
(Key Measures in Bold)
Past Fiscal Year Results 2013
Strategic
Targets 2009 2010 2011
2012
(Final)
Results Targets
*Compensation entitlement claims - average days
to complete (Supports Agency Priority Goal) (see
page II-28)
161 166 188 287 378 250 90
Causes: Increased completion of 1- and 2-year old claims increases the average days to complete (ADC). This focus on older claims will improve future
performance.
Resolution Strategies: Continued processing of older compensation entitlement claims will achieve the Secretary's goal of having no rating claims over 125 days old
in 2015. The deployment of Veterans Benefits Management System (VBMS) will result in increased efficiencies, resulting in a lower ADC. (Ongoing)
Burial claims processed -
(Pension)
average days to complete
78 76 113 178 174 140 21
Causes: VBA received over 140,000 burial claims in each of the last three years (2010-2012), and received over 150,000 claims for burial benefits in 2013. The
current design of the burial program is labor and paper intensive and requires VA employees to review receipts and other documents to determine the precise
amount of reimbursement for a relatively small one-time payment that VA nearly always pays at the maximum rate permitted by law.
Resolution Strategies: VBA is working to streamline the burial program by simplifying evidentiary requirementsd, paying eligible surviving spouses without
application based on evidence in VBA systems at the date of the Veteran's death, and establishing flat-rate payments for certain burial benefits. Implementations of
such a plan requires amendments of VA's burial regulations; a proposed regulation was recently received by the Office of Management and Budget (OMB). VBA has
since resubmitted to OMB a revised version of the proposed regulation and will determine the way forward after reviewing any new OMB Comments (Q2-Regulation)
National accuracy rate -- compensation maintenance
claims
95% 96% 97% 95% 95% 97% 98%
National accuracy rate - burial claims processed
(Compensation) 93% 96% 97% 100%
Error in data
collection
98% 98%
Pension and Fiduciary (P&F) Service is unable to report an accuracy figure for burial claims because we identified an error in our sampling methodology. In addressing
issues with State plot payments during the year, we determined that our methodology for tracking and reporting burial accuracy did not include all of the relevant
burial claims. Previous accuracy reports measured only the accuracy of consolidated State plot payments worked under end product (EP) 160; however, the majority
of burial claims were actually worked under EPs 161 and 167. P&F service has corrected the issue by revising the scope of the sample, and will now track for accuracy
purposes burial claims worked under EPs 161 and 167.
*National accuracy rate - pension maintenance
claims (see page II-29)
95% 96% 97% 98% 98% 98% 98%
Number of registered eBenefits users (Supports
Agency Priority Goal)
N/Av N/Av
1M
(Baseline)
1.93M 3.06M 2.5M
3.5M
*Percentage of DIC Claims Inventory Pending Over
125 Days (see page II-30)
N/Av N/Av N/Av 41.0% 26% 38% 0
National accuracy rate - o
pension claims
riginal and reopened
95% 96% 98% 97% 98% 98% 98%
*Percentage of Original and Reopened Pension
Claims Inventory Pending Over 125 days (see page II-
31)
N/Av N/Av N/Av 34% 37% 36% 0
*Average Days to Complete Pension Maintenance
Claims (see page II-32)
N/Av N/Av N/Av 135 184 100 60
Average days to complete original survivors p
claims
ension
N/Av N/Av N/Av
231
(baseline)
251 230 90
Performance Information Part II - 6
Organization/Program/Measure
(Key Measures in Bold)
Past Fiscal Year Results 2013
Strategic
Targets 2009 2010 2011
2012
(Final)
Results Targets
*Original and reopened pension claims - average
days to complete (Supports Agency Priority Goal)
(new) (see page 33)
N/Av N/Av N/Av 113 140 115 90
Causes: Because statutory program design requires dollar-for-dollar income adjustments, VBA continues to experience a consistently high volume of pension
maintenance work, which limits our ability to redirect Pension Management Center (PMC) resources to other work including original claims for pension. VBAs
pension maintenance work accounts for more than half of all PMC workload. VBA received an average of 312,000 pension maintenance work items annually between
2010 and 2012 and expects to receive over 283,000 maintenance work items in 2013.
Resolution Strategies: VBA has reduced pension maintenance work by eliminating annual Eligibility Verification Reports and reducing numbers of Income
Verification Matches. VBA is able to make these reductions based on its pension verification initiative. (Q1) VBA is implementing a PMC realignment plan that will
leverage existing best practices and produce efficiencies in claims processing that will enable VBA to more timely complete these claims. (Q1) VBA will publish
guidance reducing or eliminating inefficient and redundant procedures relying on information in VBA systems whenever possible to grant benefits without further
development. (Q2)
National accuracy rate - Fiduciary work 82% 85% 88% 86% 90% 92% 98%
Causes: Current appeals system is open ended, allowing unlimited submission of evidence, which prolongs appeals resolution. Decision Review Officers (DROs)
provide layered reviews that add steps to processing.
Resolution Strategies: VBA formed the Appeals Design Team, streamlining the appeals process and more efficiently using DRO. On September 24, 2013, VBA
released guidance for implementing the Appeals Design Team recommendations. These recommendations reduce the average number of days to resolve appeals.
Implementing Section 501 of PL 112-154 will result in more prompt processing of appeals, as the Board of Veterans Appeals may receive some evidence without the
need for regional offices to consider it first. (Q1)
National Call Center Client Satsifaction Index Score
(New) N/Av N/Av N/Av
744
(baseline)
758 754 765
Percent of IDES participants who will be awarded
benefits within 30 days of discharge
N/Av N/Av N/Av 31% 16% 60% 90%
Causes: The Army referred a large number of National Guard and Reserve Component members to IDES, which increased the estimated total caseload from 27,000
to 30,000 to 35,000 cases. In July 2012, it was determined that 156 additional personnel were needed to effectively manage the increase in projected workload;
however, funding for the additional staffing was unavailable. Benefit Notification receipts per month increase by 211% from an average of 499 in 2012 to an
average of 1,552 in 2013, and Preliminary Rating receipts per month increased by 100%, from an average of 1,228 in 2012 to an average of 2,455 in 2013, due to
increased MEB and PEB process improvements.
Resolution Strategies: Brokering of 250 Preliminary ratings per month to the Providence Disability Rating Activity Site (DRAS). (To reassess strategy in December
2013). 20 hours of mandatory overtime for 167 IDES employees at the Seattle DRAS. (Ongoing to end of FY13).
Additional RVSRS to DRAS from D1BC; 60% of rating resources dedicated to final ratings and benefit notification. Additional personnel from Day 1 Brokering
Center to help DRAS with final ratings and benefit notification. Increase in rating production - 4000 ratings per month by October 2013 and 5000 ratings per month
by May 2014.
Performance Information Part II - 7
Organization/Program/Measure
(Key Measures in Bold)
Past Fiscal Year Results 2013
Strategic
Targets 2009 2010 2011
2012
(Final)
Results Targets
Education
Performance Measures
*Average days to complete original Education
claims (see page II-34)
26 39 24 31 26 28 28
*Average days to complete supplemental Education
claims (see page II-35)
13 16 12 17 10 14 14
Percent of Montgomery GI Bill or Post 9/11 GI Bill
participants who successfully completed an
education or training program (See (1) above)
N/Av N/Av N/Av Baseline N/Av TBD TBD
Education Claims Completed Per FTE (See (1) above) N/Av N/Av N/Av Baseline N/Av TBD TBD
Payment accuracy rate (Education) 96% 95% 98% 99% 99% 97% 97%
Education Call Center Client Satisfaction Index Score N/Av N/Av N/Av 753 754 754 765
Percent of beneficiaries very satisfied or somewhat
satisfied with the way VA handled their education
claim
N/Av N/Av N/Av Baseline N/Av TBD TBD
Percent of beneficiaries that believe their VA
educational assistance has been either very helpful
or helpful in the attainment of their educational or
vocational goal
(See (2) above)
N/Av N/Av N/Av Baseline N/Av TBD TBD
Vocational Rehabilitation and Employment
Performance Measures
*Rehabilitation Rate (General) (see page II-36) 74% 76% 77% 77% 68% 77% 80%
Causes: In 2013, VR&E reported an increase in the number of Veterans that were discontinued from the program fo reasons such as finances, disability issues,
family issues, or simply a lack of interest in continuing to receive services due to personal choice. As more Veterans discontinued their participation, the
rehabilitation rate declined, despite a slight increase in the total number of rehabilitations from 2012.
Resolution Strategies: In the process of updating performance standards to establish measurements where achieving success is both clear and definitive and
eliminate measures that encourage holding inactive cases. (Ongoing) Continued communication with the case managers to ensure that cases are discontinued timely
and accurately thorughout the fiscal year. (Ongoing)
Performance Information Part II - 8
Organization/Program/Measure
(Key Measures in Bold)
Past Fiscal Year Results 2013
Strategic
Targets 2009 2010 2011
2012
(Final)
Results Targets
Employment Rehabilitation Rate Baseline 73% 74% 74% 65% 77% 80%
Causes: Although the labor marker condition improved slightly over the past year, there was still a lack of career opportunities for Veterans completing training and
ready to enter the workforce. As more Veterans discontinued their participation, the rehabilitation rate declined, despite a slight increase in the total number of
rehabilitations from 2012.
Resolution Strategies: Continue to focus on Veteran placement, outreach, job development, and community re-entry to assist Veterans obtain and maintain
employment. (Ongoing) Continue collaboration with key partners to create employment opportunites for Veterans. (Ongoing) Continue to enhance job-seeking
tools and training to better equip Veterans to enter suitable careers. (Ongoing)
Accuracy Rate of Vocational Rehabilitation Program
Completion Decisions
96% 97% 97% 97% 97% 97% 99%
Veterans' satisfaction with the Vocational
Rehabilitation and Employment Program
N/Av N/Av N/Av N/Av N/Av Baseline TBD
Housing
Performance Measures
*Default Resolution Rate (see page II-37) 71.5% 76.3% 83.0% 80.9% 79.4% 82.0% 85.0%
Program Review Accuracy Rate (Housing) N/Av N/Av Baseline 98.40% 99.2% 98.0% 99.0%
Rate of homeownership for Veterans compared to
that of the general population
117.2% 117.2% 122.98% 123.1% 124.5% 120.5% 122.0%
Specially Adapted Housing (SAH) grantees who
believe adaptations obtained under the program
have helped themlive more independently
N/Av N/Av N/Av N/Av baseline baseline TBD
Veterans' Satisfaction Level with the VA Loan
Guaranty Program
92.3% N/Av N/Av N/Av baseline baseline TBD
Insurance
Performance Measures
*Rate of high client satisfaction ratings on Insurance
services delivered (see page II-38)
96% 95% 95% 95% 93% 95% 95%
Number of disbursements (death claims, loans, and
cash surrenders) per FTE (Insurance)
1,755 1,714 1,786 1,775 1,785 1,750 1,800
Performance Information Part II - 9
Organization/Program/Measure
(Key Measures in Bold)
Past Fiscal Year Results 2013
Strategic
Targets 2009 2010 2011
2012
(Final)
Results Targets
National Cemetery Administration
Burial Program
Performance Measures
*Percent of graves in national cemeteries marked
within 60 days of interment (see page II-41)
95% 94% 93% 89% 95% 95% 95%
*Percent of Veterans served by a burial option
within a reasonable distance (75 miles) of their
residence (see page II-42)
87.4% 88.1% 89.0% 89.6% 89.5% 89.5% 95.0%
*Percent of respondents who rate the quality of
service provided by the national cemeteries as
excellent (see page II-43)
95% 95% 95% 96% 96% 98% 100%
*Percent of respondents who rate national
cemetery appearance as excellent (see page II-44)
98% 98% 98% 99% 99% 99% 100%
*Percent of applications for headstones and
markers that are processed within 20 days for the
graves of Veterans who are not buried in national
cemeteries (see page II-45)
93% 74% 93% 88% 79% 90% 90%
Causes: President Obama signed S. 3202, Dignified Burial and Other Veterans Benefits Improvement Act of 2012, on January 10, 2013. Section 104 of the new
public law prohibits burial in a national cemetery or memorialization of certain individuals who committed sex crimes. This law is in addition to the 1997 Capital Crime
prohibition. Reviews of the government headstone, marker, medallion and Presidential Memorial Certificate application processes in relation to the new law revealed
a need to revise not only the application forms, but to immediately implement a screening of applicants to comply with both laws. To ensure compliance, NCAs
Memorial Programs Service (MPS) Case Managers began calling each applicant in to verify this information. Implementation of the new screening process has
doubled processing times, despite the implementation of overtime at all processing sites, negatively impacting the timeliness of benefit delivery in this area.
Resolution Strategies: MPS has revised its application forms to obtain written verification from the applicant that the Veteran for whom the benefit is sought has
not committed a capital or sex crime. While these applications are amended, MPS will continue to utilize overtime at all MPS processing sites to mitigate the
increased processing time. NCA is also exploring partnerships to leverage capabilities in other parts of VA to assist in this effort. NCA expects that the new application
forms and processes will be fully implemented by the spring of 2014 at which time processing performance is expected to return to normal levels.
Percent of respondents who would recommend the
national cemetery to Veteran families during their
time of need
98% 98% 98% 99% 99% 99% 100%
Percent of gravesites that have grades that are level
and blend with adjacent grade levels
90% 89% 91% 93% 94% 87% 95%
Percent of headstones and markers that are
delivered undamaged and correctly inscribed
96% 96% 95% 96% 96% 97% 98%
Percent of headstones, markers, and niche covers
that are clean and free of debris or objectionable
accumulations
82% 85% 82% 82% 84% 83% 95%
Performance Information Part II - 10
Organization/Program/Measure
(Key Measures in Bold)
Past Fiscal Year Results 2013
Strategic
Targets 2009 2010 2011
2012
(Final)
Results Targets
Percent of headstones and/or markers in national
cemeteries that are at the proper height and
alignment
64% 67% 70% 69% 70% 71% 90%
Percent of respondents who agree or strongly agree
that the quality of the headstone or marker received
from VA was excellent
N/Av 94% 95% 91% 90% 96% 100%
Percent of respondents who agree or strongly agree
that the quality of the Presidential Memorial
Certificate received from VA was excellent
N/Av 96% 94% 90% 89% 97% 100%
Board of Veterans' Appeals
Performance Measures
Appeals resolution time (From NOD to Final Decision)
(Average Number of Days) (Joint BVA-VBA
Compensation and Pension measure)
709 656 747 675 923 650 400
Causes: Most appeals are addressed by the Board since most come in completed by VBA. Nevertheless, for appeals not resolved to the Veterans satisfaction, the
appeal may be transferred to the Board for a final agency decision. As the number of cases processed by VBA increases, the number on the Board expands, and this
leads to longer average times to resolve appealed claims.
Resolution Strategies: The Board is working with VBA and the other organizations to develop more robust indicators to determine which phases of the claims /
appeals process require greater attention. (Q1) Once developed, the Board, VBA and other organizations will develop and deploy plans to reduce ART. (Q4)
BVA Cycle Time (Excludes Representative Time)
(Average Number of Days)
100 99 119 117 130 140 104
Percent of Total Hearings that are Conducted via
Video Conference 29% 29% 29% 40% 50% 46% 50%
BVA pending inventory 17,713 21,112 20,287 25,599 46,974 41,098 21,000
Causes: The Boards workload is directly tied to VBA workload, which continues to grow.
Resolution Strategies: The Board will continue to focus on reducing its pending inventory of appeals through a multi-pronged approach, to include full budget
execution (95 percent of the Boards budget is allocated to labor costs), executing a robust training program for all new hires, collaborating closely with VBA and the
Veterans Health Administration (VHA) to reduce avoidable remands, encouraging Veterans to leverage Video Teleconference (VTC) technology, and advocating for
legislative proposals aimed at streamlining the appeals process.
Performance Information Part II - 11
Organization/Program/Measure
(Key Measures in Bold)
Past Fiscal Year Results 2013
Strategic
Targets 2009 2010 2011
2012
(Final)
Results Targets
Supporting Program Measures
Performance Measures
Percent of total procurement dollars awarded to
service-disabled Veteran-owned small businesses
(OSDBU)
(1) VA's data reported may differ from data reported
by the Small Business Administration (SBA) due to
the timing of when SBA runs its report.
16.96% 20.0% 18.3% 20.0% 19.8% 10.0% 10.0%
Percent of total procurement dollars awarded to
Veteran-owned small businesses (OSDBU) (See (1)
above)
19.30% 23.0% 20.5% 22.0% 22.2% 12.0% 12.0%
Percent of total procurement dollars awarded to
businesses located in Historically Underutilized
Business Zones (OSDBU). (See above)
2.00% 2.1% 2.2% 1.7% 1.8% 3.0% 3.0%
Causes: VA is required by law to give small business contracting preferences to service-disabled and other Veteran-owned small businesses. The preferences
provided under the HUBZone program apply only when Service Disabled Veteran Owned Small Business (SDVOSB) or Veteran Owned Small Businesses (VOSB) are
unavailable to perform the contract work.
Resolution Strategies: OSDBU is conducting outreach to identify SDVOSBs and VOSBs that may also be eligible for the HUBZone program. Such firms would
continue to receive preferences due to their Veteran status, but their qualified HUBZone status would also count toward that goal as well.
Percent of complete verification applications in the
Vendor Information Pages (VIP) database that are
processed within 60 days (OSDBU) (Measure revised
from 90 to 60 days in FY 2013).
N/Ap N/Ap 93.0% 95.0% 100.0% 90.0% 95.0%
Percent of annual major construction operating plan
executed
N/Av N/Av 82% 44% 87% 85% 85%
Percent of facilities customers that are satisfied with
services being provided (OALC)
N/Av N/Av 85% 83% 82% 85% 90%
Number of audit qualifications identified in the
auditor's opinion on the VA Supply Fund (OALC)
0% 0% 0% 0% 0% 0% 0%
Percent of contracts competitively awarded (OALC
Supply Fund)
N/Av 74% 75% 65% 79% 65% 65%
Percent of contracts that meet the established
procurement action lead times/milestone dates.
(Procurement Action Lead Time)(OALC)
N/Av N/Av 71% 90% 96% 90% 90%
Performance Information Part II - 12
Organization/Program/Measure
(Key Measures in Bold)
Past Fiscal Year Results 2013
Strategic
Targets 2009 2010 2011
2012
(Final)
Results Targets
Percent of contracts that are awarded within
required procurement action timeframes (number of
weeks between technical clearance of the final
construction documents and award of contracts)
(OALC)
N/Av N/Av 53% 85% 60% 85% 90%
Causes: Measure reports below target due to delayed awards for West Los Angeles, Bay Pines, Seattle, Palo Alto (Demolition and Recreation Therapy) and Central
East FL (New Cemetery) projects.
Resolution Strategies: Estimate that this will be yellow by the end of the fiscal year 2013.
Percent major lease acquisitions that meet final
direct lease acquisition target date (OALC)
N/Av N/Av 76% 78% 94% 80% 90%
Number of Homeless Veterans on any given night
(Supports Agency Priority Goal) (Joint VHA-OPIA
measure)
75,609 76,329 67,495 62,619 57,849 47,000 0
Causes: The 2013 Point-in-Time (PIT) Count estimates there were 57,849 homeless Veterans on a single night in January 2013, continuing the downward trend in
homelessness among Veterans. While VA did not reach its joint goal with HUD of lowering the number of homeless Veterans to 47,000 as measured by the January
2013 PIT Count, there was an 8 percent reduction from 2012-2013. The number of homeless Veterans has declined by more than 23 percent since 2009 as compared
to a 5 percent decline in homelessness among the general population.
Resolution Strategies: Leverage private sector skills, know-how, and best practices among grass roots organizations, neighborhood groups, and local community
agencies to enable partnerships that foster a no wrong door philosophy as Veterans access an increasing array of federal-community programs and services. Drive
and enable close cooperation between VA Medical Centers and HUDs local Continuum of Care systems. Continued strong interagency collaboration resulting in
successful policies and procedures such as Housing First, Rapid Re-Housing, Housing and Urban Development-Veterans Affairs Supportive Housing (HUD-VASH), and
Supportive Services for Veterans and Families (SSVF) are critical to achieving the reduction achieved thus far.
Percent of visitors to VA's website that indicated that
they are satisfied/highly satisfied with information
presented (OPIA)
N/Av N/Av 67% 67% 74% 73% 80%
Increase percent of Veterans aware of using benefits,
reached through advertising and marketing efforts
(OPIA)
N/Av N/Av N/Av 5% 15% 10% 15%
Number of Material Weaknesses (OIT) 4 1 1 1 1 1 0
Percent of milestones achieved towards deployment
and implementation of a paperless disability claims
processing system (Supports Agency Priority Goal)
(OIT)
N/Av N/Av 100% 100% 100% 100% 100%
Percent of milestones achieved in deploying and
implementing the Veterans Relationship
Management System (VRMS) (Supports Agency
Priority Goal) (OIT)
N/Av N/Av 30% 70% 97% 100% 100%
Percent of milestones achieved in deploying and
implementing the Virtual Lifetime Electronic Record
(VLER) (Supports Agency Priority Goal) (OIT)
N/Av N/Av 88% 60% 100% 100% 100%
Percent of VA IT projects delivering functionality on 6-
month or less intervals (OIT)
N/Av N/Av 80% 80% 82% 80% 80%
Performance Information Part II - 13
Organization/Program/Measure
(Key Measures in Bold)
Past Fiscal Year Results 2013
Strategic
Targets 2009 2010 2011
2012
(Final)
Results Targets
The enterprise VA American Customer Service Index
for internal customer satisfaction with VA IT services
(OIT)
N/Av N/Av 71 73 69 74 76
Causes: Emerging national communication strategy for IT customers Significant changes in operations within the service delivery organization
Resolution Strategies: Organizational and functional alignment of National Service Desk (NSD) Analysis of emerging software solutions to improve NSD
performance Analysis of staffing workforce models
Percent of employees in mission critical and key
occupations who participated in a competency-based
training program within the last 12 months (HRA)
*HRA will continue working with customers to
determine which occupations are considered mission
critical
N/Av 20% 45% 50% 42.2% 55% 75%
Causes: Goals were established without benefit of a baseline.
Due to training and travel reductions, training opportunities have decreased. Although virtual opportunities exist for some Mission Critical Occupations (MCOs),
learning can be compromised if the participant is not removed from the work environment making virtual training a less attractive option for learning by MCO
employees.
Resolution Strategies: Consider current level a baseline and re-establish target of closer to 50%. Establish baselines for each mission critical occupation and
Human Capital Strategic Planning strategy to address gaps e.g., design and provide consultant services to tailor skill/competency gap planning efforts for each MCO
owner, implement MCO skill gap metrics for each MCO including leadership positions for 2014, and measure progress via HRstat quarterly reviews. VA will continue
to look at ways to improve employee learning experiences in competency-based training opportunities.
Percent of Title 5 employees hired through
competitive examining process within 80 days
64% 46% 48.0% 51.0% 66.0% 55% 75%
Percentage of VA employees who are Veterans (HRA) 30% 31% 32% 32% 32% 35% 40%
Weighted Satisfaction Index related to: (1) timeliness
of legal services (VA client-organization-centered) (2)
responsiveness of legal sesrvices (VA client-
organization-centered) (3) tort processing times
(Veteran-centered), and (4) Office of General Counsel
employee satisfaction
N/Av N/Av baseline 89.7% 90.9% 89.7% 95.0%
Average number of months to process VA regulations
(OGC)
(1) These targets are stretch goals because they
accelerate individual project completion dates from
Departmental standards of 22.4 months and 10.8
months, respectively. The strategic and interim goals
are identical because actual processing times cover
multi-years and are measured as performance data
only when rulemakings are completed.
-Requiring advance notice and public
comment (2-stage)
19.4 19.6 19.5 19.9 19.7 19.6 19.6
-Without advance notice and public comment
(1-stage)
7.8 7.5 7.4 7.3 7.2 7.5 *7.5
Performance Information Part II - 14
Organization/Program/Measure
(Key Measures in Bold)
Past Fiscal Year Results 2013
Strategic
Targets 2009 2010 2011
2012
(Final)
Results Targets
Percent of current year (CY) electricity consumption
generated with renewable energy sources (OAEM)
**The Office of Asset Enterprise Management
(OAEM) develops VA policy that governs the
Departments Capital Asset Management. Policy
execution is done by VAs business lines (Veterans
Health Administration, Veterans Benefits
Administration, and National Cemetery
Administration), and annual performance results are
reported by OAEM.
5% 7% 5% 13% TBD 15% 16%
Percent of Veterans or beneficiaries who contacted
VA Debt Management Center's toll-free phone line
without a busy signal. (OM)
N/Av 5% 74% 90% 99% 95% 98%
Commericial Small Business Payment Timeliness (%
of Small Businesses Paid within 15 days of receipt of
proper documentation. (OM)
N/Av N/Av N/Av 87% 95% 91% 92%
Overall Commericial Vendor Payment Timeliness (%
of commericial Vendors Paid within 15 days of
receipt of proper documentation) (OM)
N/Av N N/Av 51% 86% 91% 92%
Performance Information Part II - 15
Organization/Program/Measure
(Key Measures in Bold)
Past Fiscal Year Results 2013
Strategic
Targets 2009 2010 2011
2012
(Final)
Results Targets
Office of Inspector General
Performance Measures
Number of reports (audit, inspection, evaluation,
contract review, and CAP reports) issued that identify
opportunities for improvement and provide
recommendations for corrective action
235 263 301 299 349 275 300
Number of arrests, indictments, convictions, criminal
complaints, pretrial diversions, and administrative
sanctions
2,250 1,929 1,939 2,683 2,491 1,900 2,300
Monetary benefits (dollars in millions) from audits,
investigations, contract reviews, inspections, and
other evaluations
$2,931 $1,914 $7,122 $3,477 $3,589 $1,500 $2,000
Return on investment (monetary benefits divided by
cost of operations in dollars)
Beginning in 2009, the cost of operations for the
Office of Healthcare Inspections, whose oversight
mission results in improving the health care provided
to Veterans rather than saving dollars, is not included
in the return on investment calculation (see OIG's
September 2011 Semiannual Report to Congress,
page 5, www.va.gov/oig/publications/semiannual-
reports.asp)
38 to 1 20 to 1 76 to 1 36 to 1 36 to 1 15 to 1 20 to 1
Percentage of:
Prosecutions successfully completed 94% 97% 99% 94% 94% 94% 95%
Recommendations implemented within 1 year to
improve efficiencies in operations through legislative,
regulatory, policy, practices, and procedural changes
in VA
94% 86% 87% 87% 81% 90% 95%
Recommended recoveries achieved from postaward
contract reviews
N/Av N/Av 100% 100% 100% 96% 98%
Causes: VA Administrations and staff offices do not take the necessary actions to implement recommendations within the performance measures guidelines. In
some instances, Administrations and staff offices do not initiate any effort until after the 1-year period has elapsed despite quarterly status requests by OIG to VA
offices on implementation efforts.
Resolution Strategies: OIG's goal is for all report recommendations to be implemented within 1 year of report issuance to improve VA programs and operations for
the benefit of Veterans, their families, and taxpayers. Despite the best efforts of VA Administrations and staff offices to achieve their implementation plans, timelines
to complete actions are often delayed. VA should initiate efforts in a more timely fashion to achieve the 1-year milestone for recommendation implementation.
OIG Customer satisfaction survey scores (based on a
scale of 1 - 5, where 5 is high):
Investigations 4.9 4.9 4.9 4.9 4.95 4.5 5.0
Audits and Evaluations 4.0 4.0 4.4 4.0 3.9 4.0 5.0
Healthcare Inspections 4.7 4.6 4.6 4.4 4.5 4.3 5.0
Contract Review 4.6 4.7 4.8 4.7 4.7 4.2 5.0
Performance Information Part II - 16
Veterans Health Administration
Performance Measures



Dropped Measures
Organization/Program/Measure
(Key Measures in Bold)
Past Fiscal Year Results 2013
Strategic
Targets 2009 2010 2011
2012
(Final)
Results Targets
Medical Care Programs
Non-institutional, long-term care average daily
census
113,254 109,923 113,254 103,923 N/A N/A N/A
Percent of milestones completed leading to the
use of genomic testing to inform the course of
care (prevention, diagnosis, or treatment) of
patients with mental illness (including PTSD,
schizophrenia, and mood disorders)
45% 42% 45% 42% N/A N/A N/A

Part II - 17

PerformanceSummariesbyProgram
VAsStrategicPlanidentifiestheDepartmentsgoals,objectives,andperformancemeasuresfora5year
period. Specificperformancetargetsthatwillbeusedtomonitor,assess,andreportonprogress
towardthestrategicgoalsareshowninthePerformanceTrendsasStrategicTargets(ST).
MedicalServices
KeyMeasure
PREVENTIONINDEXV
PerformanceTrends ImpactonVeterans
(1)Actualdataarefinal
(2)The2008resultsisPIIII. The2009and2011resultsare
PIIV.
(3)ST=StrategicTarget
HowVAVerifiesResultsDataforAccuracy
VAiscommittedtodataaccuracyforreporting
ontheclinicalqualityofcare. Samplingofthe
patientpopulationforevaluationofthequalityof
careindicatorsfortheClinicalPracticeGuidelines
Index(CPGI)andthePreventionIndex(PI)are
donethroughastandardizedsampling
frameworkbyastatistician. Dataarethen
abstractedthroughtrained,thirdparty,
contractedstaffmembers(ExternalPeerReview
Program)whoreviewthemedicalrecordforthe
qualitymetricsVAtracks.
Desired
Direction
Thismeasureisanindicatorofhow
wellVApromoteshealthylifestyle
changessuchasimmunizations,
hyperlipidemia,smokingcessation,
andearlyscreeningforcancer.

AhigherscoremeansthatVA
treatedVeteransarereceiving
preventioncareandaretakingthe
necessarystepstodevelopor
maintainhealthylifestyles.
HowVALeadershipUsesResultsData
MonitoringandtrackingPIresultshelpsVA
medicalstaffwithearlyidentificationofdisease
riskandinterventionforriskybehaviors. VA
medicalstaffalsodothefollowing:
Targeteducation,immunizationprograms,
andclinicaccesstopreventorlimit
potentialdisabilitiesresultingfromthese
activitiesand/ordiseases.
Identifypatientsinneedofprevention
screeningforcancer.
HelpidentifycancersbeforetheVeteran
developssymptoms,andprovidethe
opportunityforearlierintervention.
Inaddition,asamatterofpolicyand
practice,VAtargetsalloutpatientsforits
preventionmeasureswiththegoalof
promotingandmaintainingahealthy
population.
Part II - 18
















KeyMeasure
CLINICALPRACTICEGUIDELINESINDEXIV
PerformanceTrends ImpactonVeterans
(1)Actualdataarefinal
(2)The2008numbersareClinicalPracticeGuidelinesIndex
(CPGI)II. The2009,2010,and2011numbersareCPGIIII.
(3)ST=StrategicTarget
HowVAVerifiesResultsDataforAccuracy
VAiscommittedtodataaccuracyforreporting
ontheclinicalqualityofcare. Samplingofthe
patientpopulationforevaluationofthequalityof
careindicatorsforCPGIandthePIaredone
throughastandardizedsamplingframeworkbya
statistician. Dataarethenabstractedthrough
trained,thirdparty,contractedstaffmembers
(ExternalPeerReviewProgram)whoreviewthe
medicalrecordforthequalitymetricsVAtracks.
Desired
Direction
Thismeasureisanindicatorofhow
wellVAperformsregardingearly
identificationandtreatmentof
potentiallydisablingordeadly
diseasessuchasacutemyocardial
infarction,inpatientcongestiveheart
failure,hypertension,diabetes,and
pneumonia.
Theindexfocusesprimarilyonthe
careprovidedtoinpatientsandis
usedtoassessthequalityofhealth
carebeingdeliveredtoitspatientsin
accordancewithindustrystandards.
HowVALeadershipUsesResultsData
Dataareusedbyleadershiptodothefollowing:
Identifyandassessopportunitiesforearly
identificationofacuteandpotentially
disablingchronicdiseases.
Identifyopportunitiesformanagingentire
chronicdiseasepopulations.
Provideinterventionsbasedonclinical
practiceguidelines.
Overall,CPGIdataenableVAtotargetpatientand
employeeeducation,focusondisease
management,andprovideaccesstocareto
preventorlimittheeffectsofpotentiallydisabling
diseases. Thegoalofdiseasemanagementisto
improvethequalityoflifeforVeterans.
Part II - 19

KeyMeasure
PERCENTOFNEWPRIMARYCAREAPPOINTMENTSCOMPLETEDWITHIN14DAYSOF
APPOINTMENTCREATIONDATE
PerformanceTrends ImpactonVeterans
*Actualdataisanestimate.Finaldataareexpectedin
November2013.
**Becausemeasurementmethodschanged,notargetswere
establishedduringthe2013baselineyear
HowVAVerifiesResultsDataforAccuracy
VAsVeteransHealthInformationSystemsand
TechnologyArchitecture(VistA)scheduling
softwareautomaticallycapturesthedatethe
appointmentisinitiallycreatedandthedatethe
appointmentiscompleted.FacilityVistAreports
enablelocalmanagerstofindandcorrecterrors.
Multipleotheraccessdataelementsareavailable
forcrossreferencingperformance.VAsdataare
publishedontheVHASupportServiceCenter
(VSSC)Websiteonthe5
th
and20
th
ofeach
month.
VSSCutilizesseveralmechanismstoauditand
verifytheaccuracyofdata.Forexample,data
aretestedwithusergroupsinthefieldand
reconciledwiththedatasourceandother
productsandreportsinternalandexternalto
VSSC.
Desired
Direction
Deliveryofprimarycareiscritical
topreventivehealthcareand
timelydiseaseidentificationand
management.
Avisittoaprimaryhealthcare
providerisalsoapatientspointof
entryforspecialtycare.Assuch,
timelyaccesstoprimaryhealth
careservicesiscriticaltoproviding
highqualitycaretoVeterans.
HowVALeadershipUsesResultsData
Leadershipusesthisinformationtomake
assessmentsofclinicfunctionandresource
decisions.VAclinicleadersusetheresultsto
managedaytodayclinicoperationactivitiesthat
improvepatientaccess.
Theresultsarecomparedacrossmedicalcenters
andclinics.OneofthewaysVAdrives
improvementsisbyidentifyinghighperformers
andsharingtheirbestpracticeswithother
facilities.
VAalsousestheresultstoexaminevariability
amongmedicalcentersandclinics.Ifafacilityis
performingpoorly,VAtakesactiontoimprove
performance.
AftertheresultsofaVHAsponsoredstudy
becameavailablethisyear,themeasurement
methodsusedforthismeasurechanged.New
methodswereutilizedandnewbaselineswere
establishedin2013.Forthisreason,notarget
wassetin2013,andthedataisnotcomparable
to2012.
Part II - 20

KeyMeasure
PERCENTOFNEWSPECIALTYCAREAPPOINTMENTSCOMPLETEDWITHIN14DAYSOF
THEAPPOINTMENTCREATIONDATE
PerformanceTrends ImpactonVeterans
*Actualdataisanestimate. Finaldataareexpectedin
November2013.
**Becausemeasurementmethodschanged,notargetswere
establishedduringthe2013baselineyear.
HowVAVerifiesResultsDataforAccuracy
VAsVistAschedulingsoftwareautomatically
capturesthedatetheappointmentisinitially
createdandthedatetheappointmentis
completed.FacilityVistAreportsenablelocal
managerstofindandcorrecterrors.Multiple
otheraccessdataelementsareavailablefor
crossreferencingperformance.VAsdataare
publishedontheVSSCWebsiteonthe5
th
and
20
th
ofeachmonth.

VSSCutilizesseveralmechanismstoauditand
verifytheaccuracyofdata.Forexample,data
aretestedwithusergroupsinthefieldand
reconciledwiththedatasourceandother
productsandreportsinternalandexternalto
VSSC.
Desired
Direction
Specialtycareappointmentsarethe
vehiclebywhichVAtreatsVeterans
withdiseasesanddisabilities
requiringspecializedmedical,
rehabilitation,surgical,orother
uniqueresources.
TimelyaccesstoVAmedicalstaff
andfacilitiesisthereforecriticalto
thoseVeteransinneedofspecialty
care.
HowVALeadershipUsesResultsData
Leadershipusesthisinformationtomake
assessmentsofclinicfunctionandresource
decisions.VAclinicleadersusetheresultsto
managedaytodayclinicoperationactivitiesthat
improvepatientaccess.
Theresultsarecomparedacrossmedicalcenters
andclinics. OneofthewaysVAdrives
improvementsisbyidentifyinghighperformers
andsharingtheirbestpracticeswithother
facilities.
VAalsousestheresultstoexaminevariability
amongmedicalcentersandclinics. Ifafacilityis
performingpoorly,VAtakesactiontoimprove
performance.
AftertheresultsofaVHAsponsoredstudy
becameavailablethisyear,themeasurement
methodsusedforthismeasurechanged. New
methodswereutilizedandnewbaselineswere
establishedin2013. Forthisreason,notarget
wassetin2013,andthedataisnotcomparable
to2012.
Part II - 21

KeyMeasure
PERCENTOFESTABLISHEDPRIMARYCAREAPPOINTMENTSCOMPLETEDWITHIN14DAYSOF
THEDESIREDDATE
PerformanceTrends ImpactonVeterans
*Actualdataisanestimate. Finaldataareexpectedin
November2013.
**Becausemeasurementmethodschanged,notargetswere
establishedduringthisbaselineyear.
HowVAVerifiesResultsDataforAccuracy
Schedulersenteronereferencepoint(the
VeteransAppointmentDesiredDate)andVAs
VistAschedulingsoftwareautomaticallycaptures
thesecondreferencepoint(timeofthe
scheduledappointment).Schedulerperformance
forentryofdesireddateisregularlyaudited.
FacilityVistAreportsenablelocalmanagersto
correctdataentryerrors.Multipleotheraccess
dataelementsareavailableforcrossreferencing
performance.VAsdataarepublishedonthe
VSSCWebsite.Waittimedataarepublishedto
theVSSCWebsiteonthe5
th
and20
th
ofeach
month.
VSSCalsoutilizesseveralmechanismstoaudit
andverifytheaccuracyofdata.Forexample,
dataaretestedwithusergroupsinthefieldand
reconciledwiththedatasourceandother
productsandreportsinternalandexternalto
VSSC.
Desired
Direction
Deliveryofprimarycareiscriticalto
preventivehealthcareandtimely
diseaseidentificationand
management.
Avisittoaprimaryhealthcare
providerisalsoapatientspointof
entryforspecialtycare. Assuch,
timelyaccesstoprimaryhealthcare
servicesiscriticaltoprovidinghigh
qualitycaretoVeterans.
HowVALeadershipUsesResultsData
Leadershipusesthisinformationtomake
assessmentsofclinicfunctionandresource
decisions. VAclinicleadersusetheresultsto
managedaytodayclinicoperationactivitiesthat
improvepatientaccess.
Theresultsarecomparedacrossmedicalcenters
andclinics. OneofthewaysVAdrives
improvementsisbyidentifyinghighperformers
andsharingtheirbestpracticeswithother
facilities.
VAalsousestheresultstoexaminevariability
amongmedicalcentersandclinics. Ifafacilityis
performingpoorly,VAtakesactiontoimprove
performance.
AftertheresultsofaVHAsponsoredstudy
becameavailablethisyear,themeasurement
methodsusedforthismeasurechanged. New
methodswereutilizedandnewbaselineswere
establishedin2013. Forthisreason,notarget
wassetin2013,andthedataisnotcomparable
to2012.
Part II - 22

KeyMeasure
PERCENTOFESTABLISHEDSPECIALTYCAREAPPOINTMENTSCOMPLETEDWITHIN14DAYSOF
THEDESIREDDATE
PerformanceTrends ImpactonVeterans
*Actualdataisanestimate. Finaldataareexpectedin
November2013.
**Becausemeasurementmethodschanged,notargetswere
establishedduringthisbaselineyear.
HowVAVerifiesResultsDataforAccuracy
Schedulersenteronereferencepoint(the
VeteransAppointmentDesiredDate)andVAs
VistAschedulingsoftwareautomaticallycaptures
thesecondreferencepoint(timeofthe
scheduledappointment).Schedulerperformance
forentryofdesireddateisregularlyaudited.
FacilityVistAreportsenablelocalmanagersto
correctdataentryerrors.Multipleotheraccess
dataelementsareavailableforcrossreferencing.
VAsdataarepublishedontheVSSCWebsite.
WaittimedataarepublishedtotheVSSCWeb
siteonthe5
th
and20
th
ofeachmonth.
VSSCutilizesseveralmechanismstoauditand
verifytheaccuracyofdata.Forexample,data
aretestedwithusergroupsinthefieldand
reconciledwiththedatasourceandother
productsandreportsinternalandexternalto
VSSC.
Desired
Direction
VAtrackswaittimesforVeterans
beingseeninits50highestvolume
clinicswiththegoalofenhancing
qualityofcarebyensuringserviceis
deliveredwhentheVeteranwants
andneedstobeseen.
HowVALeadershipUsesResultsData
VAusestheresultsofthismeasuretomanage
processimprovementactivitiesthatimprove
patientaccess. Leadershipalsousesthis
informationtomakeresourcedecisions.
Theresultsarecomparedacrossmedicalcenters
andclinics. OneofthewaysVAdrives
improvementsisbyidentifyinghighperformers
andsharingtheirbestpracticeswithother
facilities.
VAalsousestheresultstoexaminevariability
amongmedicalcentersandclinics. Ifafacilityis
performingpoorly,VAtakesactiontoimprove
performance.
AftertheresultsofaVHAsponsoredstudy
becameavailablethisyear,themeasurement
methodsusedforthismeasurechanged. New
methodswereutilizedandnewbaselineswere
establishedin2013. Forthisreason,notarget
wassetin2013,andthedataisnotcomparable
to2012.
Part II - 23







KeyMeasure
PERCENTOFPATIENTSRATINGVAHEALTHCAREAS9OR10ONA SCALEFROM0TO10(INPATIENT)
PerformanceTrends ImpactonVeterans
(1)ActualdatathroughJune2013. Finaldataareexpectedin
January2014.
(2)VHAtransitionedtoanewquestionnairein2009andtoa
newsurveysamplein2010. Thequestionnaireand
methodologyhaveremainedconsistentsince2010,thus
allowingfortrendableresults.Trendingwithprioryearsisnot
valid. Onthe0to10scale,0representstheworsthospital
and10representthebesthospital.
(3)ST=StrategicTarget
HowVAVerifiesResultsDataforAccuracy
DataarecollectedthroughtheVAissued
ConsumerAssessmentofHealthcarePlansand
Systems(CAHPS).Informationgatheredmeasures
VeteransperceptionsofVAhealthcare.
TheCAHPSsurveyisadministeredusinga
standardized,documented,consistent
methodology.Patientsarerandomlyselectedfor
inclusionintheCAHPSsamplefromthe
populationofeligiblepatientseachmonth.
Resultsareweightedtoaccuratelyaccountfor
populationsizedifferencesacrossthesystemand
varyingratesofnonresponsetothesurvey.
Desired
Direction
VeteranswhoreceiveVAcareare
entitledtohealthcarethatincludes
emotionalsupport,education,shared
decisionmaking,safeenvironments,
familyinvolvement,respect,and
managementofpainanddiscomfort.
TheVeteranslevelofoverall
satisfactionisimpactedbytheextentto
whichhisorherneedsaremet.
Satisfactionisthereforeakeyindicator
ofhowwellVAmeetsthese
expectations.Thismeasureaddresses
howwelltheseexpectationsaremetin
theinpatientsetting.
HowVALeadershipUsesResultsData
AkeystrategicgoalisprovidingVeteranswith
personalized,proactive,andpatientdrivencare. VA
leadershipusesresultsfromthismeasureto
optimizethedesignofservicesandproductsbased
ofVeteransneeds,preferences,andperspectives.
Theresultsarecomparedacrossmedicalcenters
andclinics. OneofthewaysVAdrives
improvementsisbyidentifyinghighperformersand
sharingtheirbestpracticeswithotherfacilities.
SpecializedreportssuchasAttributableEffects
identifykeydriversoftheOverallRatingofVA
Healthcare. Staffusestheseresultstoidentify
opportunitiesforchangingandimprovingthe
personalizeddeliverymodelofcare.
Part II - 24

KeyMeasure
PERCENTOFPATIENTSRATINGVAHEALTHCAREAS9OR10ONA SCALEFROM0TO10(OUTPATIENT)
PerformanceTrends ImpactonVeterans
(1)ActualdatathroughJune2013.Finaldataareexpected
inJanuary2014.
(2)VHAtransitionedtoanewquestionnairein2009andto
anewsurveysamplein2010.Thequestionnaireand
methodologyhaveremainedconsistentsince2010,thus
allowingfortrendableresults.Trendingwithprioryearsis
notvalid.Onthe0to10scale,0representstheworst
hospitaland10representsthebesthospital
(3)ST=StrategicTarget
HowVAVerifiesResultsDataforAccuracy
DataarecollectedthroughtheVAissuedCAHPS.
InformationgatheredmeasuresVeterans
perceptionsofVAhealthcare.
TheCAHPSsurveyisadministeredusinga
standardized,documented,consistent
methodology.Patientsarerandomlyselected
forinclusionintheCAHPSsamplefromthe
populationofeligiblepatientseachmonth.
Resultsareweightedtoaccuratelyaccountfor
populationsizedifferencesacrossthesystem
andvaryingratesofnonresponsetothesurvey.
Desired
Direction
VeteranswhoreceiveVAcareare
entitledtohealthcarethatincludes
emotionalsupport,education,
shareddecisionmaking,safe
environments,familyinvolvement,
respect,andmanagementofpain
anddiscomfort.
TheVeteranslevelofoverall
satisfactionisimpactedbythe
extenttowhichhisorherneedsare
met.Satisfactionisthereforeakey
indicatorofhowwellVArisesto
theseexpectations.Thismeasure
addresseshowwellthese
expectationsaremetinthe
outpatientsetting.
HowVALeadershipUsesResultsData
AkeystrategicgoalisprovidingVeteranswith
personalized,proactive,andpatientdrivencare.VA
leadershipusesresultsfromthismeasureto
optimizethedesignofservicesandproductsbased
ofVeteransneeds,preferences,andperspectives.
Theresultsarecomparedacrossmedicalcenters
andclinics.OneofthewaysVAdrives
improvementsisbyidentifyinghighperformersand
sharingtheirbestpracticeswithotherfacilities.

SpecializedreportssuchasAttributableEffects
identifykeydriversoftheOverallRatingofVA
Healthcare.Staffusestheseresultstoidentify
opportunitiesforchangingandimprovingthe
personalizeddeliverymodelofcare.
Part II - 25


BenefitServices
KeyMeasure
PercentofdisabilityCompensationandPensionPendingInventorythatisMoreThan125DaysOld
PerformanceTrends ImpactonVeterans
ActualdataareasofOctober2013
ST=StrategicTarget
HowVAVerifiesResultsDataforAccuracy
DataextractedfromVBAsystemsofrecord
(includingBenefitsDeliveryNetwork,VETSNET,
andVBMS)arecapturedelectronicallythrougha
fullyautomatedreportingprocessandimported
intoanEDW.

VBAsPA&Istaffmembersassessthedata
monthlytodetectdiscrepanciesthatwould
indicateanerrorintheautomateddata
collectionsystem.Thisreviewensuresaccurate
reporting,consistency,andabsenceof
anomalies.AllreportsproducedfromtheEDW
weredevelopedusingbusinessrulesprovided
byeachofVBAsbusinesslines.
Desired
Direction
VBAsgoalistoprocessall
compensationandpensionrating
claimswithin125daysofreceipt.This
willensureallVeteransreceiveatimely
decisionontheirclaim.
TheVBAbacklogof66percentatthe
endof2012,decreasedto58percentin
2013.
HowVALeadershipUsesResultsData
VAleadershipusesdataresultstomanagethe
compensationandpensionprogramsandto
implementperformancestrategiessuchastraining
needs,qualityenhancementopportunities,improved
procedures,changesinpolicytoimprovetimeliness,
workloadrealignment,andstaffinglevels.
ToachieveprocessingefficienciesthatwillenableVA
toreducetheclaimsbacklogandimprovedecision
quality,VAisemployingasynchronizedand
integratedtransformationstrategythatincorporates
people,processandtechnologyinitiatives.Seethe
majoraccomplishmentsfordetails.
Part II - 26



KeyMeasure
NATIONALACCURACYRATEFORCOMPENSATIONENTITLEMENTCLAIMS
PerformanceTrends ImpactonVeterans
(1)Actualfinaldata
(2)ST=StrategicTarget
HowVAVerifiesResultsDataforAccuracy
VBACompensationServicesqualitystaffis
trainedbyexpertsthroughtheQualityReview
Team(QRT)Challengetrainingsessions.In
2013,VBAheld6QRTChallengesessionsto
educateandexpandthequalityassurancestaff.
CompensationServiceconductsSystematic
TechnicalAccuracyReviews(STAR).STAR
qualityteamsconductreviewsofclaims
completedbytheregionaloffices.
Usingarandomsampleofclaimsgeneratedby
VBAsPerformanceAnalysis&Integrity(PA&I)
staff,

completedcasesareselectedforreview
andsenttotheSTARqualityassurancestaffona
monthlybasis.Thestaffmembersthoroughly
reviewthecompletedcasesensuringaccuracy,
quality,andconsistencyofratingand
authorizationissues.Acodedspreadsheet
databaseidentifiesthetypeoferrorandhowit
shouldbecorrected.
Desired
Direction
Veteransareentitledtoanaccurate
decisionontheircompensationclaims.
Monitoringaccuracyhelpsensurethat
VAprovidesthecorrectlevelofbenefitto
theVeteran.Overthepasttwofiscal
yearsVBAhasseenasteadyincreasein
thenationalaccuracyratefor
compensationclaims.Increaseinclaims
accuracycanleadtoincreasedVeterans
satisfactionwiththeirinitialrating
decisions.
HowVALeadershipUsesResultsData
VBAsleadershipiscommittedtothecontinued
increaseofthenationalaccuracyrate.Higherquality
willensurebetter,moreefficientservicetoVeterans
andcontributetoVBAsgoalofeliminatingtheclaims
backlogby2015.Leadershipandthequalityassurance
teamusethenationalaccuracyratetotrackthe
nationalaccuracytrendanderrorcategorytrendat
eachindividualstation.Thenationalaccuracyrate
helpsthequalityassurancestaffdetermineiftraining
orclarificationofpolicyguidanceisneededtomeet
monthlyqualitygoals.VBAanticipatestheaccuracy
ratewillcontinuetoincreasewiththeintroductionof
qualityreviewteamsineachregionalofficeandtheuse
ofissuebasederroranalysisatthelocalandnational
level.
Performance Information Part II - 27











KeyMeasure
AverageDaystoComplete(ADC)CompensationEntitlementClaims
PerformanceTrends ImpactonVeterans
ActualdataareasofOctober2013
ST=StrategicTarget
Targetsfrom20092012arecombinedCompensationand
Pensiontargets
HowVAVerifiesResultsDataforAccuracy
DataextractedfromVBAsystemsofrecord
(includingBenefitsDeliveryNetwork,VETSNET,
andVBMS)arecapturedelectronicallythrougha
fullyautomatedreportingprocessandimported
intoanEDW.
VBAsPA&Istaffmembersassessthedata
monthlytodetectdiscrepanciesthatwould
indicateanerrorintheautomateddata
collectionsystem. Thisreviewensuresaccurate
reporting,consistency,andabsenceof
anomalies. AllreportsproducedfromtheEDW
weredevelopedusingbusinessrulesprovided
byeachofVBAsbusinesslines.
Desired
Direction
VBAsgoalistoprocess,onaverage,
allcompensationratingclaims90
daysfromreceipt.Thiswillensure
allVeteransreceiveatimely
decisionontheirclaim.
TheVBAADCof287daysduring
2012,increasedto378daysin2013
duetotheagencysfocuson
eliminatingclaimsolderthan1year
fromitsinventory.Inthelongrun
thiswillpayoffsincethepending
inventoryiscomingdown,which
willeventuallyresultintimelier
decisionsforVeterans.
HowVALeadershipUsesResultsData
VAleadershipusestheresultstomanagethe
compensationprogramsandtoimplement
performancestrategiessuchastrainingneeds,
qualityenhancementopportunities,improved
procedures,changesinpolicytoimprove
timeliness,workloadrealignment,andstaffing
levels.
Toachieveprocessingefficienciesthatwillenable
VAtoreducetheclaimsADCandimprovedecision
quality,VAisemployingasynchronizedand
integratedtransformationstrategythat
incorporatespeople,processandtechnology
initiatives.Seethemajoraccomplishmentsfor
details.
In2013,VBAtrained1,264newclaimsprocessors.
Astheseemployeesbecomefullyproficientin
theirroles,theywillfavorablyimpactprocessing
timeandloweringtheADC.
Performance Information Part II - 28

KeyMeasure
NATIONALACCURACYRATEFORPENSIONMAINTENANCECLAIMS
PerformanceTrends
ImpactonVeterans
(1)Actualdatathrough9/30/13
(2)ST=StrategicTarget
HowVAVerifiesResultsDataforAccuracy
Dataareanalyzeddaily,andtheresultsare
tabulatedmonthly.PensionandFiduciary
STARqualityteamsconductperformance
qualityandconsistencyreviewsofclaims
completedbythePensionManagement
Centers.
Usingarandomsampleofclaimsgeneratedby
VBAsPA&Istaff,completedcasesareselected
forreviewandsenttotheSTARstaffmonthly.
Thestaffthoroughlyreviewsthecompleted
casesensuringaccuracy,quality,and
consistencyofratingandauthorizationissues.
Adatabaseidentifiesthetypeofeacherror
andhowitshouldbecorrected.
Desired
Direction
Status
Despiteincreasedworkload,VAhas
continuedtoimproveitsaccuracy
rateinpensionmaintenancework,
therebyensuringthatthoseVeterans
andsurvivorsmostinneedof
financialresourcesreceivethe
correctbenefit.
Theimportanceofmakingtimely
paymentstoVeteransforpension
claimsiscriticaltohelpingthemmeet
theirbasicfinancialneeds.
HowVALeadershipUsesResultsData
VAleadershipiscommittedtoincreasingthe
accuracyofdecisions.Basedon2013
performanceresults,VAexpandedthefour
tieredqualityassuranceprogramtoimprove
itsaccuracyrateforcompensationand
pensionclaims:
TierOneAccuracy;expandingtheSTARstaffto
increasereviewsampling.
TierTwo Oversight;expandingsitevisitstaff
andreviewofinternalcontrols.
TierThree Specialfocusreviews;reviewof
AppealsManagementCenterdecisions,and
providingreviewofadministrativeerror
decisionsover$25,000.
TierFour Consistency;expandingratingdata
analysesandincreasingthefocusondisability
decisionconsistencyreviews.
Performance Information Part II - 29



KeyMeasure
PercentofDICClaimsInventoryOver125Days
PerformanceTrends ImpactonVeterans
ActualdataareasofOctober2013
ST=StrategicTarget
HowVAVerifiesResultsDataforAccuracy
DataextractedfromVBAsystemsofrecord
(includingBenefitsDeliveryNetwork,VETSNET,
andVBMS)arecapturedelectronicallythrougha
fullyautomatedreportingprocessandimported
intoanEDW.

VBAsPA&Istaffmembersassessthedata
monthlytodetectdiscrepanciesthatwould
indicateanerrorintheautomateddata
collectionsystem.Thisreviewensuresaccurate
reporting,consistency,andabsenceof
anomalies.Allreportsproducedfromthe
enterprisedatawarehouseweredeveloped
usingbusinessrulesprovidedbyeachofVBAs
businesslines.Reportingrequirementsare
regularlyreviewedandmodifiedwhen
anomaliesarenoted,orwhenchangesaremade
totheunderlyingbusinessapplications.
Desired
Direction
VBAsgoalistoprocessall
DependencyandIndemnity
Compensation(DIC)claimswithin
125daysofreceipt.Thiswillensure
allsurvivorsreceivetimelydecisions
ontheirclaims.
Workloadprioritizationand
streamlinedadjudicationprocedures
significantlydecreasedthebacklog
ofDICclaimsfrom41percentin
2012to26percentin2013.
HowVALeadershipUsesResultsData
VAleadershipusestheresultstomanagePMC
programsandtoimplementperformance
strategiessuchasstreamlinedadjudication,
realignedworkload,andrevisedstaffinglevels.
Toachieveprocessingefficienciesthatwillenable
VAtoreducetheclaimsbacklogandimprove
decisionquality,VAisemployingasynchronized
andintegratedtransformationstrategythat
incorporatespeople,processandtechnology

initiatives.
In2013,VBArevieweditsadjudicationprocedures
andeliminatedunnecessaryproceduresforDIC
claims.Inaddition,VBAprioritizedtheprocessing
ofDICclaims.Takentogether,thesesteps
producedasignificantperformanceimprovement
inDICtimeliness.
Performance Information Part II - 30




KeyMeasure
PercentageofOriginalandReopenedPensionClaimsInventoryPendingOver125Days
PerformanceTrends ImpactonVeterans
ActualdataasofOctober2013
ST=StrategicTarget
HowVAVerifiesResultsDataforAccuracy
DataextractedfromVBAsystemsofrecord
(BenefitsDeliveryNetworkandVETSNET)are
capturedelectronicallythroughafully
automatedreportingprocessandimportedinto
anEDW.
VBAsPerformanceAnalysisandIntegrity(PA&I)
staffmembersassessthedatamonthlytodetect
discrepanciesthatwouldindicateanerrorinthe
automateddatacollectionsystem.Thisreview
ensuresaccuratereporting,consistency,and
absenceofanomalies.Allreportsproduced
fromtheenterprisedatawarehousewere
developedusingbusinessrulesprovidedbyeach
ofVBAsbusinessrulesprovidedbyeachof
VBAsbusinesslines.Reportingrequirements
areregularlyreviewedandmodifiedwhen
anomaliesarenoted,orwhenchangesaremade
totheunderlyingbusinessapplications.
Desired
Direction
VBAsgoalistoprocessallOriginal
andReopenedPensionratingclaims
within125daysofreceipts.Thiswill
ensureallVeteransreceivetimely
decisionsontheirclaims.
ThebacklogofOriginaland
ReopenedPensionclaimsincreased
slightlyfrom34percentattheend
of2012to37percentattheendof
2013.
HowVALeadershipUsesResultsData
VAleadershipusestheresultstomanagethe
pensionprogramsandtoimplementperformance
strategiessuchaspoliciestostreamline
adjudication,workloadrealignment,andstaffing
levels.
Toachieveprocessingefficienciesthatwillenable
VAtoreducetheclaimsbacklogandimprove
decisionquality,VAisemployingasynchronized
andintegratedtransformationstrategythat
incorporatespeople,processandtechnology
initiatives.
VBAisreducingtheamountofPMCnonrating
workasameanstofreeupresourcesforworking
thebacklogofPensionclaimsandotherPMC
ratingwork. In2013,VBAeliminatedtheEligibility
VerificationReport,whicheliminatedtheseasonal
surgeof140,000workitemsintoPMCsduringthe
JanuaryApriltimeframe.
Performance Information Part II - 31



KeyMeasure
AverageDaystoCompletePensionMaintenanceClaims
PerformanceTrends ImpactonVeterans
ActualdataareasofOctober2013
ST=StrategicTarget
HowVAVerifiesResultsDataforAccuracy
DataextractedfromVBAsystemsofrecord
(includingBenefitsDeliveryNetwork,VETSNET,
andVBMS)arecapturedelectronicallythrougha
fullyautomatedreportingprocessandimported
intoanEDW.
VBAsPA&Istaffmembersassessthedata
monthlytodetectdiscrepanciesthatwould
indicateanerrorintheautomateddata
collectionsystem.Thisreviewensuresaccurate
reporting,consistency,andabsenceof
anomalies.Allreportsproducedfromthe
enterprisedatawarehouseweredeveloped
usingbusinessrulesprovidedbyeachofVBAs
businesslines.Reportingrequirementsare
regularlyreviewedandmodifiedwhen
anomaliesarenoted,orwhenchangesaremade
totheunderlyingbusinessapplications.
Desired
Direction
VBAsgoalistoprocessallPension
Maintenanceclaimswithin100days
ofreceipt.ThiswillensurethatVA
timelyadjustspensionbenefitsfor
bothVeteransandsurvivors,
therebyreducinganyunder or
overpaymentofbenefits.
AverageDaystoCompletePension
Maintenanceclaimsexceedsthe
targetof100days.
HowVALeadershipUsesResultsData
VAleadershipusestheresultstomanagethe
pensionprogramsandtoimplementperformance
strategiessuchasstreamlinedadjudication,
realignedworkload,andrevisedstaffinglevels.
Toachieveprocessingefficienciesthatwillenable
VAtoreducetheclaimsbacklogandimprove
decisionquality,VAisemployingasynchronized
andintegratedtransformationstrategythat
incorporatespeople,processandtechnology
initiatives.
VBAisreducingtheamountofPMCnonrating
(maintenance)workasameanstofreeup
resourcesforworkingotherPMCratingwork.In
2013,VBAeliminatedtheEligibilityVerification
Report,whicheliminatedtheseasonalsurgeof
140,000workitemsintoPMCsduringtheJanuary
Apriltimeframe.
Performance Information Part II - 32















KeyMeasure
AverageDaystoCompleteOriginalandReopenedPensionClaims
ActualdataareasofOctober2013
ST=StrategicTarget
HowVAVerifiesResultsDataforAccuracy
DataextractedfromVBAsystemsofrecord
(includingBenefitsDeliveryNetwork,VETSNET,
andVBMS)arecapturedelectronicallythrougha
fullyautomatedreportingprocessandimported
intoanEDW.
VBAsPA&Istaffmembersassessthedata
monthlytodetectdiscrepanciesthatwould
indicateanerrorintheautomateddata
collectionsystem.Thisreviewensuresaccurate
reporting,consistency,andabsenceof
anomalies. Allreportsproducedfromthe
enterprisedatawarehouseweredeveloped
usingbusinessrulesprovidedbyeachofVBAs
businesslines. Reportingrequirementsare
regularlyreviewedandmodifiedwhen
anomaliesarenoted,orwhenchangesaremade
totheunderlyingbusinessapplications.
ImpactonVeterans
Desired
Direction
VBAsgoalistoprocessclaimsfor
pensionfromVeteranswithin115
days.Thisgoalwillensureall
Veteransreceivetimelydecisionson
theirclaims.
AverageDaystoCompleteOriginal
andReopenedPensionclaims
increasedfrom113daysattheend
of2012to140daysattheendof
2013.
HowVALeadershipUsesResultsData
VAleadershipusestheresultstomanagethe
pensionprogramsandtoimplementperformance
strategiessuchasstreamlinedadjudication,
realignedworkload,andrevisedstaffinglevels.
Toachieveprocessingefficienciesthatwillenable
VAtoreducetheclaimsbacklogandimprove
decisionquality,VAisemployingasynchronized
andintegratedtransformationstrategythat
incorporatespeople,processandtechnology
initiatives.
VBAisreducingtheamountofPMCnonrating
workasameanstofreeupresourcesforworking
thebacklogofPensionclaimsandotherPMC
ratingwork. In2013,VBAeliminatedtheEligibility
VerificationReport,whicheliminatedtheseasonal
surgeof140,000workitemsintoPMCsduringthe
JanuaryApriltimeframe.
Performance Information Part II - 33
KeyMeasure
AVERAGEDAYSTOCOMPLETEORIGINALEDUCATIONCLAI MS
PerformanceTrends ImpactonVeterans
ActualdataareasofOctober2013
ST=StrategicTarget
HowVAVerifiesResultsDataforAccuracy
Qualityreviewstaffmembersverifythedata
quarterly. Thereviewusesastatisticallyvalid
samplingofcasestodeterminereliabilityof
automateddatareports.
Therearedocumentedprocedurestoguidestaff
responsibleforverifyingtheaccuracyof
timelinessdataandforenteringthesourcedata.
Dataarecapturedelectronically,andreportson
theDistributionofOperationalResourcesare
automaticallygenerated. Dataareanalyzed
monthlyandverifiedquarterly.
Desired
Direction
Thetimelinessofcompleting
originaleducationclaimsdecreased
from31daysin2012,to26daysin
2013. Comparedwith2012,
Veteranswaitedonaverage5fewer
daystoreceivetheirinitialaward
notificationandpayment.
Theimportanceofmakingpayments
toVeteransforeducationclaimsis
criticaltohelpingthemmeettheir
educationalgoals.
VAmanagementusesperformanceresultsto
pinpointareasofperformanceweaknessandthen
takesappropriatecorrectiveactions.
In2013suchactionsincludedaggressive
monitoringofworkloadandjudiciousapplication
ofovertimeproductioncapacity. VAroutinely
reviewsclaimsprocessingpoliciestostreamline
theentireclaimsprocessbasedoncasereviews
identifyingduplicationofeffortsandredundantor
unnecessarydevelopment. Additionalenhanced
functionalitiescontinuetobeaddedtoTheLong
TermSolutiontoimprovePost9/11GIBillclaims
processingsystem.
Educationclaimsintakeiscyclicwithpeaksatthe
beginningofthefall,spring,andsummer. This
dataisusedtodeterminewhenmandatory
overtimemaybeneededtoaddressthecyclical
intakepeaks.
Performance Information Part II - 34
KeyMeasure
AVERAGEDAYSTOCOMPLETESUPPLEMENTALEDUCATIONCLAIMS
PerformanceTrends ImpactonVeterans
Actualdatafinal
ST=StrategicTarget
HowVAVerifiesResultsDataforAccuracy
Qualityreviewstaffmembersverifythedata
quarterly. Thereviewusesastatisticallyvalid
samplingofcasestodeterminereliabilityof
automateddatareports.
Therearedocumentedprocedurestoguide
staffresponsibleforverifyingtheaccuracyof
timelinessdataandforenteringthesource
data. Dataarecapturedelectronically,and
reportsontheDistributionofOperational
Resourcesareautomaticallygenerated. Data
areanalyzedmonthlyandverifiedquarterly.
Desired
Direction
Thetimelinessofcompleting
supplementaleducationclaims
decreasedfrom17daysin2012to10
daysin2013. Comparedwith2012,
Veteranswaitedonaverage7lesser
daystoreceivetheiraward
notificationandpayment.
Theimportanceofmakingtimely
paymentstoVeteransforeducational
claimsiscriticaltohelpingthemmeet
theireducationalgoals.
HowVAUsestheResultsData
VAmanagementusesperformanceresultsto
pinpointareasofperformanceweaknessandthen
takesappropriatecorrectiveactions.
In2013,suchactionsincludedaggressive
monitoringofworkloadandjudiciousapplication
ofovertimeproductioncapacity. VAroutinely
reviewsclaimsprocessingpoliciestostreamline
theentireclaimsprocessbasedoncasereviews
identifyingduplicationofeffortsandredundantor
unnecessarydevelopment. Additionalenhanced
functionalitiescontinuetobeaddedtotheLong
TermSolutiontoimprovePost9/11GIBillclaims
processingsystem.
Educationclaimsintakeiscyclicwithpeaksatthe
beginningofthefall,spring,andsummer. This
dataisusedtodeterminewhenmandatory
overtimemaybeneededtoaddressthecyclical
intakepeaks.
Performance Information Part II - 35






KeyMeasure
REHABILITATI ONRATE(GENERAL)
PerformanceTrends ImpactonVeterans
Actualdatafinal
ST=StrategicTarget
HowVAVerifiesResultsDataforAccuracy
Dataareverifiedmonthlyagainstthesourcedata
byVocationalRehabilitationandEmployment
(VR&E)Serviceanalystsanddistributedto
regionaloffices. Theregionalofficesreviewthe
datatoensurealignmentwithactivities
performedandthatthedataagreewiththeraw
datasubmittedforanalysis.
Thedatacollectionstaffiscomprisedofskilled
professionalstrainedintheproperproceduresfor
collectingandanalyzingrawdata. Alldata
collectionproceduresaredocumentedand
followed.
Desired
Direction
A"rehabilitated"Veteranisonewho
successfullycompletesthe
rehabilitationprogramplanandis
equippedwiththerequiredskills
andtoolsneededtoobtainand
maintainsuitableemploymentor
gainindependenceindailyliving.
HowVALeadershipUsesResultsData
VAleadershipusestherehabilitationrateto
assesstheperformanceofvocational
rehabilitationcounselors,counseling
psychologists,VR&Eofficers,andregionaloffice
directorsaswellastheoveralleffectivenessof
theprogramandservicesprovided.
Toimproveperformanceinthisarea,VA
leadershipcontinuestoplaceanincreased
emphasisondevelopingaculturethatisforward
looking,resultsdriven,andVeterancentric.
Therefore,withinthecontextoftheabovecited
tenets,VBAleadershiphasidentifiedseveral
areasofemphasis:
ProvidingservicestoenableVeteranstocontinue
tocompletetheprogramandbecomecareer
employed.
EnhancetheVetSuccess.govWebsitebecauseit
providesVeteranswithaVAemploymentportal
thatemployerscanusetomatchskilledVeterans
withemployerstaffingneeds.
Continuetosponsorcareerfairsgearedtoward
todaysVeterantoprovideexposuretoemployers
seekingtohireVeterans.
TrainVocationalRehabilitationCounselorsand
EmploymentCoordinatorsinthebestmethodsfor
preparingandplacingVeteransincareers.
Fordetailedinformationonhowthismeasureis
calculated,pleaseseethedefinitionssectionin
PartIV.
Performance Information Part II - 36




KeyMeasure
DEFAULTRESOLUTIONRATE
PerformanceTrends ImpactonVeterans
Actualdataarefinal
ST=StrategicTarget

HowVAVerifiesResultsDataforAccuracy
VAguaranteedloanservicingpersonnelare
skilledandtrainedinproperdatareporting
procedures,whichensuresdocumenteddata
reportingproceduresarefollowed.

VALoanAdministrationstaffisalsoskilledand
trainedinloanservicingandproperdata
reportingprocedures.Allservicinganddata
reportingproceduresaredocumentedinboth
theVAServicerandVALoanTechnicianguides.
Theseguidesareupdatedregularlybasedon
loanservicingindustrybestpractices.

Submittedloanservicingdataareverified
throughsamplingagainstloandata.The
accuracyofloanservicingdataisalso
establishedviatheVeteransAffairsLoan
ElectronicReportingInterface(VALERI)systems
businessrulesscreeningprocess.Additionally,
proceduresformakingchangestopreviously
enteredloandataaredocumentedand
followed.

Desired
Direction
The2013defaultresolutionrateof79.4
percent(FYTDthroughJuly)meansthat
oftheVeteranswhodefaultedontheir
VAguaranteedloans,VAandloan
servicerswereabletoassist79.3
percentineitherretainingownershipof
theirhomesorinlesseningtheimpactof
foreclosurebytenderingadeedinlieu
offoreclosureorarrangingaprivatesale
withaVAclaimpaymenttohelpclose
thesale.
HowVALeadershipUsesResultsData
VAusesthedatatomeasuretheeffectivenessofjoint
servicingeffortsofprimaryservicersandVAstaffto
assistVeteransinavoidingforeclosurethrough
defaultresolution.SinceVeteransbenefit
substantiallyfromavoidingforeclosurethrough
defaultresolutionand,atthesametime,VArealizes
costsavingsVAredesigneditsdataprogramin
December2008topromotegreaterlossmitigation
effortsbyprimaryservicers.

Thisredesigneffortincludeddevelopmentofanew
Webenabledandrulesbased"smart"system,
VALERI.

VALERIsstandardizedservicingcriteria,whichareon
paroraheadofindustrynorms,enableinstantaccess
toacquisitionandclaimpaymentstatusandmakeit
easierforservicerstoworkandcommunicatewith
VA.
Performance Information Part II - 37















KeyMeasure
RATEOFHIGHCLIENTSATISFACTIONRATINGSONSERVICESDELIVERED(INSURANCE)
PerformanceTrends ImpactonVeterans
Actualdataarefinal
ST=StrategicTarget
HowVAVerifiesResultsDataforAccuracy
VAreviewsandtabulatestheclientsatisfaction
surveyresponseseachmonthperwritten
guidelines. VAvalidatestheresultsbyre
enteringrandomlyselectedmonthlyresponses
todetermineifsimilarresultsarecalculated.
Desired
Direction
VAsInsuranceProgramachieves
highlevelsofclientsatisfactionby
providingqualityserviceand
implementingandadministering
insuranceprogramsthatmeetthe
needsofVeteransandtheir
beneficiaries. Resultsoverpast
yearshaveconsistentlyconfirmed
thatVeteransinsuranceneedsare
beingmet.
HowVALeadershipUsesResultsData
Leadershipanalyzestheresultsofthemonthly
clientsatisfactionsurveysof11insuranceservices
andaddressesanyproblemsidentified. One
questionthesurveysaskis,"Whatcouldwedo
better?" VAtakesactiononthesurveyresultsand
thecomments,includingreviewingprocessesand
implementingrefreshertrainingoncustomer
serviceasneeded.
InsuranceCustomerServiceCenter. Client
satisfactiondeclinedduetolongertelephonewait
timesandblockedcallrates. VAmanagement
tookseveralmeasurestoincreasephone
coverage,includingputtingtraineesonthephones
forhalfofthedayandrecruitingInsurance
volunteerstoanswerphonesduringbusytimes.
Performance Information Part II - 38



AdditionalPerformanceInformation
ProgramEvaluations
In2012,VR&ElaunchedaskillcertificationtestforVocationalRehabilitationCounselorsandCounseling
PsychologistswithinVBA. Theskillcertificationtestisaninternalprofessionallevelexaminationwhich
measuresthepossessionoftechnicalandproceduralknowledgealongwithsituationaljudgment
associatedwiththejourneylevelcounselorposition. OnJuly30,2013,theskillstestwasadministered
to293counselorsresultinginan86percentpassrate.TheVRCsthatdidnotpasswillreceiveadditional
trainingandareeligibletoretakethetestin6months.
NewPolicies,Procedures,orProcessImprovementsandOtherImportantResults
InDecember2012,VBAeliminatedtheneedforpensionbeneficiariestofileanannualeligibility
verificationreport(EVR). Theworkassociatedwithannuallysendingandprocessinganestimated
150,000EVRs,includingthesuspensionandreinstatementofbenefits,burdenedpensionbeneficiaries
andsignificantlydisruptedtheabilityoftheVeteransBenefitsAdministration(VBA)totimelywork
pension,DIC,andburialbenefitclaimsduringtheannualEVRseason(JanuarythroughApril). VBAwill
continuetoamendawardsbasedonchangesinunreimbursedmedicalexpensesandreportedincome.
However,byeliminatingtheEVRrequirement,VBAwasabletoredirectresourceswithinthePMCsto
addressthebacklogofpensionandDICclaims.
VBAwasabletoeliminatetheannualEVRrequirementbecauseitworkedwiththeSocialSecurity
Administration(SSA)andInternalRevenueService(IRS)toimproveinteragencydatasharingfor
purposesofverifyingincomeeligibilityforitsneedsbasedprograms. Undertheimprovedprocess,VBA
verifiesclaimantsincomeatthetimeofreceiptoftheapplicationsforpensionbenefits. Byproviding
VBAwiththecapabilitytoverifytheincomeofpensionapplicantsatthetimeofapplication,thedata
sharinginitiativewillreducepensionoverpayments,preservethepensionprogramforthoseVeterans
andsurvivorswithgenuineneed,andallowVBAtoimplementalessburdensomepostawardauditing
programinlieuofthecurrentIncomeVerificationMatch. VBAbeganweeklydataexchangeswithIRS
andSSAinJune2013andbegantrainingthePMCsonitsuseinSeptember2013.
InMarch2013,VBAreviewedthepoliciesandproceduresapplicabletotheadjudicationofDICclaimsto
identifyobstaclestotimelyprocessing. ItdeterminedthatwecouldquicklygrantmanyDICclaimswith
littleornoadditionaldevelopment,andthatcertainclaimprocessingstepswereredundantand
appropriateforelimination. Asaresultoftheseefforts,onMarch22,2013,VBAissuedFastLetter13
04(FL1304),SimplifiedProcessingofDependencyandIndemnityCompensation(DIC)Claims,which
instructsVBAfieldstaffontheprocedurestofollowwhenprocessingclaims. Amongotherthings,the
newproceduresrequirescreeningofclaimsattheintakepointandlimitedornodevelopmentof
additionalevidencewheninformationinVBAsystemssupportsgrantingbenefits.
PublicLaw112154,HonoringAmericasVeteransandCaringforCampLejeuneFamiliesActof2012,
wasenactedonAugust6,2012,withimplementationonAugust6,2013. Ifanindividuallivesinanarea
Performance Information Part II - 39









whereanaturaldisasterisdeclaredbytheGovernorand/orthePresidentoftheUnitedStates,then
he/shemayqualifyfortheadditionalassistancecoveredinthelaw. ThelawallowstheDepartment
VR&EprogramtoprovidetwoadditionalmonthsofEmploymentAdjustmentAllowance(EAA)payments
toVeteranswhohavebeendisplacedbyanaturalorotherdisaster. Inaddition,thelawallowsfora
waiveroftheannuallimitationonnewindependentlivingprogramsforaVeterandisplaced,or
otherwiseadverselyaffectedby,anaturalorotherdisaster.
Performance Information Part II - 40

















BurialServices
KeyMeasure
PERCENTOF GRAVESIN NATIONALCEMETERIESMARKEDWITHIN60DAYSOFINTERMENT
PerformanceTrends ImpactonVeterans
Actualdataarefinal
ST=StrategicTarget
HowVAVerifiesResultsDataforAccuracy
Nationalcemeteryemployeesaretrainedand
skilledatenteringdataintoNCA'sBurial
OperationsSupportSystem(BOSS). Dataare
collectedandverifiedbyNCACentralOffice
employeeswhoareskilledandtrainedindata
collectionandanalysistechniques. Dataare
verifiedbysamplingagainstsourceinterment
datainBOSS.
Desired
Direction
Theamountoftimeittakestomark
thegraveafteranintermentis
extremelyimportanttoVeteransand
theirfamilies. Theheadstoneor
markerisalastingmemorialthat
servesasafocalpointnotonlyfor
presentdaysurvivors,butalsofor
futuregenerations. Inaddition,
havingapermanentheadstoneor
markeroftenbringsasenseof
closuretothegrievingprocess.
HowVALeadershipUsesResultsData
NCAfieldandCentralOfficeemployeeshave
onlineaccesstomonthlyandfiscalyeartodate
trackingreportsonthetimelinessofmarking
gravesinnationalcemeteries. Increasingthe
visibilityofandaccesstothisinformation
reinforcestheimportanceofmarkinggravesina
timelymanner.
Thisinformationisalsousedtodriveprocess
improvements,suchasthedevelopmentofNCAs
localinscriptionprogram. Thisprogramfurther
improvesNCAsabilitytoprovidesymbolic
expressionsofremembrancebyimprovingthe
timelinessofthegravemarkingprocess.
Performance Information Part II - 41


KeyMeasure
PERCENTOF VETERANSSERVEDBY A BURIALOPTIONWITHINAREASONABLEDISTANCE
(75MILES)OF THEIRRESIDENCE
PerformanceTrends ImpactonVeterans
Actualdataarefinal
ST=StrategicTarget
HowVAVerifiesResultsDataforAccuracy
VAstaffistrainedandskilledinproper
proceduresforcalculatingthenumberof
Veteranswholivewithintheserviceareaof
cemeteriesthatprovideafirstintermentburial
option.Changestothismeasureare
documentedandreportedthroughVA'sannual
PerformanceandAccountabilityReportandVA
MonthlyPerformanceReports.
Desired
Direction
Bytheendof2013,over19million
Veteransandtheirfamilieshad
reasonableaccesstoaburialoption.
OneofVAsprimaryobjectivesisto
ensurethattheburialneedsof
Veteransandeligiblefamilymembers
aremet. Havingreasonableaccessto
thisbenefitisintegraltorealizingthis
objective.
HowVALeadershipUsesResultsData
VAanalyzescensusdatatodetermineareasof
thecountrythathavethegreatestnumberof
Veteransnotcurrentlyservedbyaburialoption.
VAalsoanalyzescensusdatatoidentifyrural
areasofthecountrythatarenotcurrentlyserved
byaburialoption.
Thisinformationisusedinplanningfornew
nationalcemeteries,forgravesiteexpansion
projectstoextendtheservicelifeofexisting
nationalcemeteries,andforpotentialsitesfor
establishingNationalVeteransBurialGrounds.
Thisinformationisalsousedforprioritizing
fundingrequestsforStateandTribalVeterans
Cemeterygrants.
Performance Information Part II - 42


KeyMeasure
PERCENTOF RESPONDENTSWHORATETHEQUALITYOF SERVICEPROVIDEDBY THENATIONALCEMETERIESAS
EXCELLENT
PerformanceTrends ImpactonVeterans
ST=StrategicTarget
HowVAVerifiesResultsDataforAccuracy
Dataforthismeasurearecollectedbyan
independentcontractor.Thecontractorprovides
detailedwrittendocumentationofhowthesurvey
methodologydeliversanacceptablelevelof
accuracysystemwideandbyindividualcemetery.
Thenextofkinandservicingfuneraldirectorsatall
nationalcemeterieswithatleastoneinterment
duringthefiscalyeararesurveyed.Dataare
accurateata95percentconfidenceinterval.
Desired
Direction
Performancetargetsforcemetery
servicegoalsaresethighconsistent
withexpectationsofthefamiliesof
individualswhoareinterredand
othervisitorstothecemetery.High
quality,courteous,andresponsive
servicetoVeteransandtheir
familiesisreflectedinVAs2013
satisfactionratingof99percent.
HowVALeadershipUsesResultsData
NCA'sannualSurveyofSatisfactionwith
NationalCemeteriesisthesourceofdatafor
thiskeymeasure.Thesurveycollectsdatafrom
familymembersandfuneraldirectorswhohave
recentlyreceivedservicesfromanational
cemetery.
ThesedataaresharedwithVACentralOffice,
MemorialServiceNetworks(MSN),andnational
cemeterymanagerswhousethedatato
improvethequalityofserviceprovidedat
nationalcemeteries.
Toensurethatallvisitorstonationalcemeteries
receiveexcellentcustomerservice,NCAhas
institutedseveralmeasurestoaddresscustomer
concerns.Surveydataareannuallyreviewed
andusedtoformactionplansatnational
cemeteries.BestPracticesareidentifiedand
sharedthroughoutthenationalcemetery
systemandincorporatedintonationalcemetery
employeetrainingcurriculum.
Performance Information Part II - 43

KeyMeasure
PERCENT OF RESPONDENTS WHORATE NATIONAL CEMETERY APPEARANCE AS EXCELLENT
PerformanceTrends ImpactonVeterans
ST=StrategicTarget
HowVAVerifiesResultsDataforAccuracy
Dataforthismeasurearecollectedbyan
independentcontractor.Thecontractorprovides
detailedwrittendocumentationofhowthe
surveymethodologydeliversanacceptablelevel
ofaccuracysystemwideandbyindividual
cemetery.
Thenextofkinandservicingfuneraldirectorsat
allnationalcemeterieswithatleastone
intermentduringthefiscalyeararesurveyed.
Dataareaccurateata95percentconfidence
interval.
Desired
Direction
Performancetargetsforcemetery
servicegoalsaresethighconsistent
withexpectationsofthefamiliesof
individualswhoareinterredaswell
asothervisitors.
Highquality,courteous,and
responsiveservicetoVeteransand
theirfamiliesisreflectedinVAs
2013satisfactionratingof99
percent.
HowVALeadershipUsesResultsData
NCA'sannualSurveyofSatisfactionwithNational
Cemeteriesisthesourceofdataforthiskey
measure.Thesurveycollectsdatafromfamily
membersandfuneraldirectorswhohaverecently
receivedservicesfromanationalcemetery.These
dataaresharedwithNCAmanagersatCentral
Office,MSNs,andnationalcemeterieswhousethe
datatoimprovethequalityofserviceprovidedat
nationalcemeteries.

Performance Information Part II - 44

KeyMeasure
PERCENTOFAPPLICATIONSFORHEADSTONESANDMARKERSTHATAREPROCESSEDWITHI N20DAYSFORTHE
GRAVESOFVETERANSWHOARENOTBURIEDINNATIONALCEMETERIES
PerformanceTrends ImpactonVeterans
Actualdataarefinal.
ST=StrategicTarget
HowVAVerifiesResultsDataforAccuracy
EmployeesintheNationalCemetery
Administrations(NCA)MemorialPrograms
Servicearetrainedandskilledatenteringdata
intoNCA'sAutomatedMonumentApplication
System(AMAS).Paperapplicationsarescanned
andenteredelectronicallyintoAMAS.
Applicationsreceivedelectronically,eitherbyfax
orInternet,areautomaticallyenteredintoAMAS.
Dataareverifiedbysamplingagainstsourcedata
inAMAS.
Desired
Direction
Theamountoftimeittakestomark
thegraveafteranintermentis
extremelyimportanttoVeterans
andtheirfamilies.Theheadstoneor
markerisalastingmemorialthat
servesasafocalpointnotonlyfor
presentdaysurvivors,butalsofor
futuregenerations.
Inaddition,thereisoftenasenseof
closuretothegrievingprocesswhen
thegraveismarked.Ahighlevelof
performanceinthisareais
importantasroughly70percentof
headstonesandmarkersfurnished
byVAareforVeteransburiedin
cemeteriesotherthanaVAnational
cemetery.
HowVALeadershipUsesResultsData
Monthlyandfiscalyeartodatereportsare
sharedwithNCAmanagers,employeesandother
interestedparties,suchasVeteransService
Organizations,toensurevisibilityofthis
importantinitiativeanddemonstrateVAs
commitmenttoservingVeteransinatimely
manner.
NCAmanagersusethesedatatomanage
applicationprocessingworkloadandtoidentify
andcorrectpotentialproblemswithheadstone
andmarkerapplicationprocessing.Dataare
comparablebetweenyears,enablingNCAandits
stakeholderstoassessprogramprogressand
effectiveness.
Performance Information Part II - 45





AdditionalPerformanceInformation
ProgramEvaluations
InAugust2008,VAcompletedanindependentandcomprehensiveprogramevaluationofthefullarray
ofburialbenefitsandservicesthattheDepartmentprovidestoVeteransandtheirfamiliesin
accordancewith38USC527. TheevaluationwasperformedbyICFInternationaltoprovideVAwithan
objectiveassessmentoftheextenttowhichVAsprogramofburialbenefitshasreacheditsstatedgoals
andtheimpactthatthisprogramhashadonthelivesofVeteransandtheirfamilies.
Theevaluationshowedthat85percentofVeteransprefereitheracasketorcremationburialoption,
affirmingthatVAismeetingtheburialneedsofVeteransandtheirfamiliesbyprovidingtheseoptionsat
nationalcemeteries. TheevaluationalsovalidatedVApoliciesthatconsiderVeteranslivingwithin75
milesofanationalorStateVeteranscemeterywithavailablefirstintermentgravesitesforeither
casketedorcrematedremainstobeadequatelyservedwithaburialoptionwithinareasonabledistance
oftheirhome. Majorrecommendationsaddressedtheneedtocontinuebuildingnewnational
cemeteriesandsupportingStatecemeterydevelopmenttoserveVeteransnationwideandtoconsidera
newVeteranpopulationthresholdof110,000Veteranswithina75mileareaforestablishingnew
nationalcemeteries.
VAusedthisstudyasastartingpointtodevelopnewburialpoliciesthatresultedina2011proposalto
changecurrentpolicyandlowertheVeteranpopulationthresholdrequiredtoestablishanewnational
cemeteryfrom170,000to80,000. Basedonthenewpolicies,fivenewnationalcemeterieswillbebuilt,
thusincreasingthepercentofVeteransservedbyaburialoption. Inaddition,VAwillbuildfive
columbariumonlysatellitecemeteriesinurbanlocationswhereutilizationratesarelowandwhere
time/distancebarriersarecitedbyourclientsmorefrequentlyoncustomersatisfactionsurveys.
NewPolicies,Procedures,orProcessImprovementsandOtherImportantResults
ImprovingBurialAccess
In2013,NCAcontinuedactivitiestoidentifyandacquiresuitablepropertiestoestablishNational
VeteransBurialGrounds,aspartoftheRuralVeteransBurialInitiative,andtoestablishnewcremation
cemeteryfacilitiesundertheUrbanInitiative. Suitablepropertiesformanyoftheplannedsitesunder
theseinitiativeshavebeenidentified. NCAismeetingwithlandholdersandperformingduediligenceto
ensurethatthelandmeetslegalandenvironmentalrequirementsinadditiontoensuringthatthese
propertiesaresuitableforuseintermsofwaterandotherresourceneeds. NCAplanstoestablisheight
NationalVeteransBurialGroundstoservetheburialneedsofruralVeteransinstatesinwhichthere
currentlyisnotanationalcemeterywithavailablegravesitesforfirstinterments. UndertheUrban
Initiative,NCAplanstoestablishfivecremationcemeteryfacilitiestobetterserveVeteransindensely
populatedurbanareaswheredistancetotheexistingnationalcemeteryhasshowntobeabarrierto
access.
In2013,NCAcompletedconstructionprojectstoextendburialoperationsatSitka(AL),FortSmith(AR),
Riverside(CA),Sarasota(FL),Massachusetts,FortCuster(MI),FortMcPherson(NE),Dayton(OH),Eagle
Point(OR),Roseburg(OR),WashingtonCrossing(PA),BlackHills(SD),Chattanooga(TN),andHouston
(TX)NationalCemeteries. Inadditiontobuilding,operating,andmaintainingnationalcemeteries,VA
Performance Information Part II - 46














alsoadministerstheVeteransCemeteryGrantsProgram,whichprovidesgrantstostatesandtribal
organizationsforupto100percentofthecostofestablishing,expanding,orimprovingStateVeterans
Cemeteries. IncreasingtheavailabilityofStateandTribalOrganizationsVeteransCemeteriesisameans
toprovideaburialoptiontothoseVeteranswhomaynothavereasonableaccesstoanational
cemetery.
In2013,VAawardedatotalof18cemeterygrantstoStateandTribalOrganizations;twograntsto
establishnewVeteranscemeteriesandninegrantstoexpandexistingcemeteriestoensurethereareno
interruptionsinburialserviceforVeteransandtheirfamilies.Inaddition,VAawardedatotalofseven
grantstostatecemeteriestofundimprovementstophysicalinfrastructureandcemeteryappearance.In
2013,VAtraveledtoparticipateinthededicationofthreenewStateandTribalVeteransCemeteries.
Memorials
VAcontinuestofurnishheadstonesandmarkersforthegravesofVeteransinVAnationalcemeteries,
nationalcemeteriesadministeredbytheDepartmentoftheArmyandtheDepartmentoftheInterior,
columbarianicheinscriptionsatArlingtonNationalCemetery,StateVeteranscemeteries,andprivate
cemeteriesaroundtheworld. In2013,VAprocessednearly359,000applicationsforheadstonesand
markersforplacementinnational,state,otherpublicorprivatecemeteries. Since1973,VAhas
furnishedmorethan12millionheadstonesandmarkersforthegravesofVeteransandothereligible
persons.
In2013,VAissuedmorethan654,000PresidentialMemorialCertificates,bearingthePresidents
signature,toconveytothefamilyoftheVeteran,thegratitudeoftheNationfortheVeteransservice.
Toconveythisgratitude,itisessentialthatthecertificatebeaccuratelyinscribed. Theaccuracyratefor
inscriptionofPresidentialMemorialCertificatesprovidedbyVAisconsistently99percentorbetter.
ClientSatisfaction
In2013,96percentofsurveyrespondents(familymembersandfuneraldirectorscombined)agreedthat
thequalityofserviceprovidedbythenationalcemeterieswasexcellent. ThisresultdemonstratesVAs
continuedcommitmenttoprovidingadignifiedandrespectfulenvironmentatallnationalcemeteriesto
honortheserviceandsacrificeVeteranshavemade.
ThewillingnesstorecommendanationalcemeterytoVeteranfamiliesduringtheirtimeofneedisan
expressionofloyaltytowardthatnationalcemetery. In2013,99percentofsurveyrespondents(family
membersandfuneraldirectorswhorecentlyreceivedservicesfromanationalcemetery)indicatedthey
wouldrecommendthenationalcemeterytoVeteranfamiliesintheirtimeofneed.
NationalShrines
In2013,NationalShrineCommitmentprojectswereinitiatedat24nationalcemeteriesandtwosoldiers
lots. Theseprojectsraised,realigned,andcleanedmorethan137,000headstonesandmarkersand
renovatedgravesitesinmorethan280acres. Theseeffortsresultedin70percentofheadstonesand/or
markersinnationalcemeteriesareattheproperheightandalignment;84percentofheadstones,
markers,andnichecoversarecleanandfreeofdebrisorobjectionableaccumulations;and94percent
ofgravesitesinnationalcemeterieshadgradesthatwerelevelandblendedwithadjacentgradelevels.
Ninetyninepercentofsurveyrespondents(familymembersandfuneraldirectorscombined)ratedthe
overallappearanceofnationalcemeteriesasexcellentin2013.
Performance Information Part II - 47


















NCAsOrganizationalAssessmentandImprovementProgramidentifiesandprioritizesimprovement
opportunitiesandenhancesprogramaccountabilitybyprovidingmanagersandstaffatalllevelswitha
cemeteryspecificratingorscorebaseduponauniform,NCAwidesetofstandards. Aspartofthe
program,assessmentteamsconductsitevisitstoallnationalcemeteriesonarotatingbasistovalidate
performancereporting. In2013,NCAteamsconducted10sitevisitsassessing16nationalcemeteries.
Sincetheprogramsinceptionin2004,92sitevisitsassessing123ofNCAs131nationalcemeterieshave
beenconducted.
OperationalImprovements
In2013,NCAcontinuedtobroadenthescopeofitsFirstNoticeofDeath(FNOD)Officebyworkingwith
representativesfromVHAandNCAFNODtointegrateBOSSandAMAS,themajorsourcesofDateof
DeathdatawithinNCA,intotheexistingMasterVeteranIndex. Havingthisdataintegratedprovides
authoritativedatesofdeaththathavebeenverifiedthroughtheNCAFNODprocesses. Information
NCAprovidesissharedwithVHAEnrollmentSystemsatalltheVAMCsitesofrecord. Theuploadingof
theDateofDeathwillautomaticallyterminateanyactiveprescriptionsonfileanduponnotificationofa
dateofdeath,allowtheVAMCstafftocancelapatientsfutureappointments. In2013,NCAprocessed
nearly706,000noticesofdeath,avoidingnearly$57millioninoverpaidbenefits.
Performance Information Part II - 48

KeyMeasuresDataTable
ThefollowingdiscussionexplainshowVAsKeyMeasureshelpachieveVAsgoalofcaringforVeterans
andtheirfamilies. Itincludesthedefinition,measurevalidation,datasourceandfrequency,data
verification/quality,anddatalimitations.
PreventionIndexV
KeyPerformanceMeasureDefinition: ThePreventionIndexisanaverageofnationallyrecognized
primarypreventionandearlydetectioninterventionsforninediseasesorhealthfactorsthat
significantlydeterminehealthoutcomes. ThismeasureisanindicatorofhowwellVApromoteshealthy
lifestylechangessuchasimmunizations,hyperlipidemia,smokingcessation,andearlyscreeningfor
cancer. Eachindicator'snumeratoristhenumberofpatientsintherandomsamplewhoactually
receivedtheinterventiontheywereeligibletoreceive. Thedenominatoristhenumberofpatientsin
therandomsamplewhowereeligibletoreceivetheintervention. Aspreventionindicatorsbecomehigh
performers,theyarereplacedwithmorechallengingindicators. ThisIndexisnowinPhaseV.
MeasureValidation: ThePreventionIndexVdemonstratesthedegreetowhichVHAprovidesevidence
basedclinicalinterventionstoVeteransseekingpreventivecareinVA. Themeasuretargetselementsof
preventivecarethatareknowntohaveapositiveimpactonthehealthandwellbeingofourpatients.
DataSourceandFrequency: VHAbiostatisticiansdesignandobtainastatisticallyvalidrandomsample
ofmedicalrecordsforreview.Thefindingsofthereviewareusedtocalculatetheindexscores. Data
arereportedquarterlywithacumulativeaveragedeterminedannually.
DataVerification/Quality:
Accuracy: Datacollectionstaffisskilledandtrainedingatheringstatisticallyvalidrandom
samplesofmedicalrecordsforreview.
Reliability/Comparability: Datacanbeusedtoidentifypotentiallydisablingchronicdiseases.VA
canthenprovideeducation,diseasemanagement,andcareaccesstolimittheeffectsand
improvethequalityoflifefortheVeteran.
Consistency: Collectionstandardsaredocumented/available/used.
DataLimitations: None
ClinicalPracticeGuidelinesIndexIV
KeyPerformanceMeasureDefinition: TheClinicalPracticeGuidelinesIndexisacompositemeasure
comprisedoftheevidenceandoutcomesbasedmeasuresforhighprevalenceandhighriskdiseases
thathavesignificantimpactonoverallhealthstatus. TheindicatorswithintheIndexarecomprisedof
severalclinicalpracticeguidelinesintheareasofischemicheartdisease,hypertension,diabetes
mellitus,majordepressivedisorder,schizophrenia,andtobaccousecessation. Thepercentof
complianceisanaverageoftheseparateindicators. Asclinicalindicatorsbecomehighperformers,they
arereplacedwithmorechallengingindicators. TheIndexisnowinPhaseIV.
MeasureValidation: TheCPGIIVdemonstratesthedegreetowhichVHAprovidesevidencebased
clinicalinterventionstoVeteransseekingcareinVA. Themeasuretargetselementsofcarethatare
knowntohaveapositiveimpactonthehealthofourpatientswhosufferfromcommonlyoccurring
acuteandchronicillnesses.
DataSourceandFrequency: VHAbiostatisticiansdesignandobtainastatisticallyvalidrandomsample
ofmedicalrecordsforreview. Thefindingsofthereviewareusedtocalculatetheindexscores. Data
arereportedquarterlywithacumulativeaveragedeterminedannually.
Performance Information Part II - 49








DataVerification/Quality:
Accuracy: Datacollectionstaffisskilledandtrainedingatheringstatisticallyvalidrandom
samplesofmedicalrecordsforreview.
Reliability/Comparability: Datacanbeusedtoidentifypotentiallydisablingchronicdiseases.VA
canthenprovideeducation,diseasemanagementandcareaccesstolimittheeffectsand
improvethequalityoflifefortheVeteran.
Consistency: Collectionstandardsaredocumented/available/used.
DataLimitations: None
Percentofnewprimarycareappointmentscompletedwithin14daysoftheappointmentcreation
date.
KeyPerformanceMeasureDefinition: ThismeasuretracksthepercentageoftimethatVeteranswho
arenewtoPrimaryCarehaveacompletedappointmentwithin14daysoftheappointmentcreation
date. Thepercentiscalculatedusingthenumerator,whichisallappointmentscompletedwithin14
daysofcreatedate,andthedenominator,whichisallcompletedappointmentsinprimarycareclinicsas
postedintheschedulingsoftwareduringthereviewperiod.
MeasureValidation: Providesareliablemeasureoftimelinessofaccesstocareaswellas
responsivenesstothepatient'sstatedneeds.
DataSourceandFrequency: ThesourceofthisdataistheVeteransHealthInformationSystemsand
TechnologyArchitecture(VistA)schedulingsoftware. Thedataarecollectedmonthly.
DataVerification/Quality:
Accuracy: Datacollectionstaffisskilledandtrainedinproperproceduresofthescheduling
package. Theschedulingpackageentryproceduresarealsodocumentedandfollowed. Editsto
previouslyentereddataaredocumentedandfollowed.
Reliability/Comparability: VAusestheresultsofthismeasuretoinformanddrivequality
improvementactivitiesthatpromoteshorterwaitingtimesforprimarycareappointmentsby
improvingefficienciesandaddressingmissedopportunities.
Consistency: Sourcedataarewelldefinedanddocumented;definitionsareavailableandused.
DataLimitations: None
Percentofestablishedprimarycareappointmentscompletedwithin14daysofthedesireddate
KeyPerformanceMeasureDefinition: Thismeasuretracksthetimeindaysbetweenthedesireddate
enteredforanestablishedpatientappointmentandthedateonwhichtheappointmentisactually
completed. Thepercentiscalculatedusingthenumerator,whichisallappointmentscompletedwithin
14daysofdesireddate,andthedenominator,whichisallcompletedappointmentsinprimarycare
clinicsaspostedintheschedulingsoftwareduringthereviewperiod.
MeasureValidation: Providesareliablemeasureoftimelinessofaccesstocareaswellas
responsivenesstothepatient'sstatedneeds.
DataSourceandFrequency: ThesourceofthisdataisVistAschedulingsoftware. Thedataarecollected
monthly.
DataVerification/Quality:
Accuracy: Datacollectionstaffisskilledandtrainedinproperproceduresofthescheduling
package. Theschedulingpackageentryproceduresarealsodocumentedandfollowed. Editsto
previouslyentereddataaredocumentedandfollowed.
Reliability/Comparability: VAusestheresultsofthismeasuretoinformanddrivequality
improvementactivitiesthatpromoteshorterwaitingtimesforprimarycareappointmentsby
improvingefficienciesandaddressingmissedopportunities.
Performance Information Part II - 50





Consistency: Sourcedataarewelldefinedanddocumented;definitionsareavailableandused.
DataLimitations: None
Percentofnewspecialtycareappointmentscompletedwithin14daysoftheappointmentcreate
date.
KeyPerformanceMeasureDefinition: ThismeasuretracksthepercentageoftimethatVeteranswho
arenewtoPrimaryCarehaveacompletedappointmentwithin14daysoftheappointmentcreation
date. Thepercentiscalculatedusingthenumerator,whichisallappointmentscompletedwithin14
daysofcreatedate,andthedenominator,whichisallcompletedappointmentsinspecialtycareclinics
aspostedintheschedulingsoftwareduringthereviewperiod.
MeasureValidation: Providesareliablemeasureoftimelinessofaccesstocareaswellas
responsivenesstothepatient'sstatedneeds.
DataSourceandFrequency: ReportedmonthlyviaVistAschedulingsoftware.
DataVerification/Quality:
Accuracy: Datacollectionstaffisskilledandtrainedinproperproceduresofthescheduling
package.Theschedulingpackageentryproceduresarealsodocumentedandfollowed. Editsto
previouslyentereddataaredocumentedandfollowed.
Reliability/Comparability: VAusestheresultsofthismeasuretoinformanddrivequality
improvementactivitiesthatpromoteshorterwaitingtimesforspecialtycareappointmentsby
improvingefficienciesandaddressingmissedopportunities.
Consistency: Sourcedataarewelldefinedanddocumented;definitionsareavailableandused.
DataLimitations: None
Percentofestablishedspecialtycareappointmentscompletedwithin14daysofthedesireddate
KeyPerformanceMeasureDefinition: Thismeasuretracksthetimeindaysbetweenthedesireddate
enteredforanestablishedpatientappointmentandthedateonwhichtheappointmentisactually
completed. Thepercentiscalculatedusingthenumerator,whichisallappointmentscompletedwithin
14daysofdesireddate,andthedenominator,whichisallcompletedappointmentsinspecialtycare
clinicsaspostedintheschedulingsoftwareduringthereviewperiod.
MeasureValidation: Providesareliablemeasureoftimelinessofaccesstocareaswellas
responsivenesstothepatient'sstatedneeds.
DataSourceandFrequency: ReportedmonthlyviaVistAschedulingsoftware.
DataVerification/Quality:
Accuracy: Datacollectionstaffisskilledandtrainedinproperproceduresofthescheduling
package.Theschedulingpackageentryproceduresarealsodocumentedandfollowed. Editsto
previouslyentereddataaredocumentedandfollowed.
Reliability/Comparability: VAusestheresultsofthismeasuretoinformanddrivequality
improvementactivitiesthatpromoteshorterwaitingtimesforspecialtycareappointmentsby
improvingefficienciesandaddressingmissedopportunities.
Consistency: Sourcedataarewelldefinedanddocumented;definitionsareavailableandused.
DataLimitations: None
PercentofpatientsratingVAhealthcareas9or10(onascalefrom0to10): InpatientandOutpatient
KeyPerformanceMeasureDefinition: DataaregatheredforthesemeasuresviaaVAsurveythatis
appliedtoarepresentativesampleofinpatientsandasampleofoutpatients. Thedenominatoristhe
totalnumberofpatientssampledwhoansweredthequestion,Overall,howwouldyourateyour
Performance Information Part II - 51











qualityofcare?" Thenumeratoristhenumberofpatientswhoratedtheircareas9or10(onascale
from0to10).
MeasureValidation: Satisfactionsurveysarethemosteffectivewaytodeterminepatientexpectations
andprovideafocusedcritiqueonareasforimprovement.
DataSourceandFrequency: DataisobtainedfromtheSurveyofHealthExperiencesofPatients.
Surveysareconductedasfollows: Inpatient Semiannually;OutpatientQuarterly;
DataVerification/Quality:
Accuracy: Thedatacollectionprocessisdocumentedandfollowedwhensurveysarereceived.
Reliability/Comparability: DatacollectedareusedbyVHAtomeasurepatientsatisfaction. The
resultsareusedtoinformanddrivequalityimprovement.
Consistency: Collectionstandardsaredocumented,available,andused.
DataLimitations: None
Percentofdisabilitycompensationclaimspendinginventorythatismorethan125days
KeyPerformanceMeasureDefinition: Thepercentageofdisabilitycompensationclaimspendinggreater
than125daysismeasuredbythenumberofdayspendingforeachdisabilitycompensationclaim
requiringaratingdecision. Thisincludestheendproductsfor:initialdisabilitycompensationclaims;
supplementalcompensationroutinefutureexaminations;reviewsduetohospitalization;andNehmer
relatedcases. Themeasureiscalculatedbydividingthetotalnumberofclaimspending125daysor
greaterbythetotalnumberofcasespending.
MeasureValidation: Thismeasure'sfocusisimprovedservicedeliverytoclaimants. Additionally,it
ensuresthatclaimantsreceivethebenefitstowhichtheyareentitledinaconsistentandtimelymanner.
DataSourceandFrequency: ThesourceofthisdataisVETSNETOperationsReports(VOR). Dataare
collecteddailyasawardsareprocessed. Resultsaretabulatedattheendofthemonthandannually.
DataVerification/Quality:
Accuracy: Dataarecapturedelectronicallythroughanautomatedprocess;dataarereviewed
foranomalies;proceduresformakingchangestopreviouslyentereddataaredocumentedand
followed.
Reliability/Comparability: Datacanbeusedtomakedecisionssuchasthoseregarding
realignmentofresources;dataarereleasedmonthly;datacanbecomparedbetweenyearsto
assessprogressorprogrameffectiveness;andsupportingdocumentationismaintainedand
readilyavailable.
Consistency: Collectionstandardsaredocumentedandprogrammedelectronically;sourcedata
arewelldefinedanddocumented;anddataarereportedmonthly.
DataLimitations: None
Percentofdisabilitycompensationandpensionclaimspendinginventorythatismorethan125days
KeyPerformanceMeasureDefinition: Thepercentageofdisabilitycompensationandpensionclaims
pendinggreaterthan125daysismeasuredbythenumberofdayspendingforeachdisability
compensationandpensionclaimrequiringaratingdecision. Thisincludestheendproducts(EPs)for:
initialdisabilitycompensationclaims;supplementalcompensationclaims;routinefutureexaminations;
reviewsduetohospitalization;Nehmerrelatedcases;original/reopenedpensionclaims,andoriginal
andreopeneddependencyandindemnitycompensationclaims. Themeasureiscalculatedbydividing
thetotalnumberofclaimspending125daysorgreaterbythetotalnumberofcasespending.
MeasureValidation: Thismeasure'sfocusisimprovedservicedeliverytoclaimants. Additionally,it
ensuresthatclaimantsreceivethebenefitstowhichtheyareentitledinaconsistentandtimelymanner.
Performance Information Part II - 52









DataSourceandFrequency: ThesourceofthisdataisVETSNETOperationsReports(VOR). Dataare
collecteddailyasawardsareprocessed. Resultsaretabulatedattheendofthemonthandannually.
DataVerification/Quality:
Accuracy: Dataarecapturedelectronicallythroughanautomatedprocess;dataarereviewed
foranomalies;proceduresformakingchangestopreviouslyentereddataaredocumentedand
followed.
Reliability/Comparability: Datacanbeusedtomakedecisionssuchasthoseregarding
realignmentofresources;dataarereleasedmonthly;datacanbecomparedbetweenyearsto
assessprogressorprogrameffectiveness;andsupportingdocumentationismaintainedand
readilyavailable.
Consistency: Collectionstandardsaredocumentedandprogrammedelectronically;sourcedata
arewelldefinedanddocumented;anddataarereportedmonthly.
DataLimitations: None
Compensationentitlementclaimsaveragedaystocomplete(ADC)
KeyPerformanceMeasureDefinition: TheADCistheelapsedtime,indays,fromreceiptofa
compensationclaimintheDepartmentofVeteransAffairstoclosureofthecasebyissuingarating
decision. ThisincludestheEPsfor:initialdisabilitycompensationclaims;supplementalcompensation
claims;routinefutureexaminations;reviewsduetohospitalization;andNehmerrelatedcases. The
measureiscalculatedbydividingthetotalnumberofdaysrecordedfromreceipttocompletion(issuing
adecision)bythetotalnumberofcasescompleted.
MeasureValidation: Thismeasure'sfocusisimprovedservicedeliverytoclaimants. Additionally,it
ensuresthatclaimantsreceivethebenefitstowhichtheyareentitledinaconsistentandtimelymanner.
DataSourceandFrequency: ThesourceofthisdataistheVeteransServicesNetworkOperations
Reports(VOR). Dataarecollecteddailyasawardsareprocessed. Resultsaretabulatedattheendofthe
monthandannually.
DataVerification/Quality:
Accuracy: Dataarecapturedelectronicallythroughanautomatedprocess;dataarereviewed
foranomalies;proceduresformakingchangestopreviouslyentereddataaredocumentedand
followed.
Reliability/Comparability: Datacanbeusedtomakedecisionssuchasthoseregarding
realignmentofresources;dataarereleasedmonthly;datacanbecomparedbetweenyearsto
assessprogressorprogrameffectiveness;andsupportingdocumentationismaintainedand
readilyavailable.
Consistency: Collectionstandardsaredocumentedandprogrammedelectronically;sourcedata
arewelldefinedanddocumented;anddataarereportedmonthly.
DataLimitations: None
Nationalaccuracyrate compensationentitlementclaims
KeyPerformanceMeasureDefinition: Processingaccuracyforcompensationclaimsthatnormally
requireadisabilityordeathratingdetermination. Reviewcriteriainclude: addressingallissues,
VeteransClaimsAssistanceAct(VCAA)compliantdevelopment,correctdecision,correcteffectivedate,
andcorrectpaymentrateifapplicable. CurrentlyincludestheEPsfor:initialdisabilitycompensation
claims;supplementalcompensationclaims;routinefutureexaminations;andNehmerrelatedcases.
Accuracyrateisdeterminedbydividingthetotalnumberofcaseswithnoerrorsinanyofthese
categoriesbythenumberofcasesreviewed.
Performance Information Part II - 53





MeasureValidation: ThismeasureassessesthequalityofclaimsprocessingandassistsVBA
managementinidentifyingimprovementopportunitiesandtrainingneeds.
DataSourceandFrequency: FindingsfromCompensationServiceSystematicTechnicalAccuracyReview
(STAR)areenteredinanIntranetdatabasemaintainedbythePhiladelphiaLANIntegrationTeam. These
resultsaredownloadedmonthlytothePerformanceAnalysisandIntegrity(PA&I)informationstorage
database. Casereviewsareconducteddaily. Thereviewresultsaretabulatedmonthlyonamonthly,
3month,and12monthrollingbasis.
DataVerification/Quality:
Accuracy: Dataaccuracyismaintainedthroughthefollowingmechanisms: Dataanalysisstaffis
skilledandtrainedintheproperprocedures;dataentryproceduresaredocumentedand
followed;dataaresampledagainstsourcedatathroughqualityreviews;andproceduresfor
makingchangestopreviouslyentereddataaredocumentedandfollowed.
Reliability/Comparability: Datacanbeusedtomakedecisionssuchasthoseregardingtraining
needs;datacanbecomparedbetweenyearstoassessprogressorprogrameffectiveness;and
supportingdocumentationismaintainedandreadilyavailable.
Consistency: Collectionsamplingstandardsaredocumented,available,andused;sourcedata
arewelldefinedanddocumented;datareportingschedulesaredocumented,distributed,and
followed.
DataLimitations: Thereisaslightchanceofanerroneousentrybytheenduser.
PercentageofOriginalandReopenedPensionClaimsInventoryPendingOver125Days
KeyPerformanceMeasureDefinition: Thepercentageoforiginalandreopenedclaimspendinggreater
than125daysismeasuredbythenumberofdayspendingforeachpensionclaimrequiringarating
decision. ThisincludestheEPs: OriginalDisabilityPensionandReopenedPension. Themeasureis
calculatedbydividingthetotalnumberofclaimspending125daysorgreaterbythetotalnumberof
claimspending.
MeasureValidation: Thismeasure'sfocusisimprovedservicedeliverytoclaimants. Additionally,it
ensuresthatclaimantsreceivethebenefitstowhichtheyareentitledinaconsistentandtimelymanner.
DataSourceandFrequency: ThesourceofthisdataisVOR. Dataarecollecteddailyasawardsare
processed. Resultsaretabulatedattheendofthemonthandannually.
DataVerification/Quality:
Accuracy: Dataarecapturedelectronicallythroughanautomatedprocess;dataarereviewed
foranomalies;proceduresformakingchangestopreviouslyentereddataaredocumentedand
followed.
Reliability/Comparability: Datacanbeusedtomakedecisionssuchasthoseregarding
realignmentofresources;dataarereleasedmonthly;datacanbecomparedbetweenyearsto
assessprogressorprogrameffectiveness;andsupportingdocumentationismaintainedand
readilyavailable.
Consistency: Collectionstandardsaredocumentedandprogrammedelectronically;sourcedata
arewelldefinedanddocumented;anddataarereportedmonthly.
DataLimitations: None
PercentageofDICClaimsInventoryPendingOver125Days
KeyPerformanceMeasureDefinition: ThepercentageofDICclaimsinventorypendinggreaterthan125
daysismeasuredbythenumberofdayspendingforeachDICclaim. IncludestheEPs: OriginalService
ConnectedDeathClaim;ReopenedServiceConnectedDeathClaims;themeasureiscalculatedby
Performance Information Part II - 54








dividingthetotalnumberofsuchclaimspending125daysorgreaterbythetotalnumberofclaims
pending.
MeasureValidation: Thismeasure'sfocusisimprovedservicedeliverytoclaimants. Additionally,it
ensuresthatclaimantsreceivethebenefitstowhichtheyareentitledinaconsistentandtimelymanner.
DataSourceandFrequency: ThesourceofthisdataisVOR. Dataarecollecteddailyasawardsare
processed. Resultsaretabulatedattheendofthemonthandannually.
DataVerification/Quality:
Accuracy: Dataarecapturedelectronicallythroughanautomatedprocess;dataarereviewed
foranomalies;proceduresformakingchangestopreviouslyentereddataaredocumentedand
followed.
Reliability/Comparability: Datacanbeusedtomakedecisionssuchasthoseregarding
realignmentofresources;dataarereleasedmonthly;datacanbecomparedbetweenyearsto
assessprogressorprogrameffectiveness;andsupportingdocumentationismaintainedand
readilyavailable.
Consistency: Collectionstandardsaredocumentedandprogrammedelectronically;sourcedata
arewelldefinedanddocumented;anddataarereportedmonthly.
DataLimitations: None
AverageDaystoCompleteOriginalandReopenedPensionClaims
KeyPerformanceMeasureDefinition: Elapsedtime,indays,fromreceiptofaclaimintheDepartment
ofVeteransAffairstoclosureofthecasebyissuingadecision. ThisincludestheEPs: OriginalDisability
Pension;andReopenedPension. Themeasureiscalculatedbydividingthetotalnumberofdays
recordedfromreceipttocompletion(issuingadecision)bythetotalnumberofcasescompleted.
MeasureValidation: Thismeasure'sfocusisimprovedservicedeliverytoclaimants. Additionally,it
ensuresthatclaimantsreceivethebenefitstowhichtheyareentitledinaconsistentandtimelymanner.
DataSourceandFrequency: ThesourceofthisdataisVOR. Dataarecollecteddailyasawardsare
processed. Resultsaretabulatedattheendofthemonthandannually.
DataVerification/Quality:
Accuracy: Dataarecapturedelectronicallythroughanautomatedprocess;dataarereviewed
foranomalies;proceduresformakingchangestopreviouslyentereddataaredocumentedand
followed.
Reliability/Comparability: Datacanbeusedtomakedecisionssuchasthoseregarding
realignmentofresources;dataarereleasedmonthly;datacanbecomparedbetweenyearsto
assessprogressorprogrameffectiveness;andsupportingdocumentationismaintainedand
readilyavailable.
Consistency: Collectionstandardsaredocumentedandprogrammedelectronically;sourcedata
arewelldefinedanddocumented;anddataarereportedmonthly.
DataLimitations: None
AverageDaystoCompletePensionMaintenanceClaims
KeyPerformanceMeasureDefinition: Elapsedtime,indays,fromreceiptofaclaimintheDepartment
ofVeteransAffairstoclosureofthecasebyissuingadecision. Maintenanceclaimsarethoseclaimsnot
requiringaratingdecision. ThisincludestheEPs: HospitalAdjustment;Dependency;Income
Adjustment;IncomeVerificationMatch;EligibilityDeterminations;andPredeterminationclaims. The
measureiscalculatedbydividingthetotalnumberofdaysrecordedfromreceipttocompletionbythe
totalnumberofcasescompleted.
Performance Information Part II - 55
































MeasureValidation: Thismeasure'sfocusisimprovedservicedeliverytoclaimants. Additionally,it
ensuresthatclaimantsreceivethebenefitstowhichtheyareentitledinaconsistentandtimelymanner.
DataSourceandFrequency: ThesourceofthisdataisVOR. Dataarecollecteddailyasawardsare
processed. Resultsaretabulatedattheendofthemonthandannually.
DataVerification/Quality:
Accuracy: Dataarecapturedelectronicallythroughanautomatedprocess;dataarereviewed
foranomalies;proceduresformakingchangestopreviouslyentereddataaredocumentedand
followed.
Reliability/Comparability: Datacanbeusedtomakedecisionssuchasthoseregarding
realignmentofresources;dataarereleasedmonthly;datacanbecomparedbetweenyearsto
assessprogressorprogrameffectiveness;andsupportingdocumentationismaintainedand
readilyavailable.
Consistency: Collectionstandardsaredocumentedandprogrammedelectronically;sourcedata
arewelldefinedanddocumented;anddataarereportedmonthly.
DataLimitations: None
AveragedaystocompleteoriginalandsupplementalEducationclaims
KeyPerformanceMeasureDefinition: Elapsedtime,indays,fromreceiptofaclaimintheDepartment
ofVeteransAffairstoclosureofthecasebyissuingadecision. Originalclaimsarethoseforrequestsfor
aneligibilitydeterminationforaneducationbenefit. Subsequentschoolenrollmentsandenrollment
changesareconsideredasupplementalclaim.
MeasureValidation: Timelinessisdirectlyrelatedtothevolumeofworkreceived,theresources
availabletohandletheincomingwork,andtheefficiencywithwhichtheworkcanbecompleted,andis
thusthebestquantifyingmeasureforeducationprocessing.
DataSourceandFrequency: Educationclaimsprocessingtimelinessismeasuredbyusingdatacaptured
automaticallythroughVBAsBenefitsDeliveryNetwork(BDN). Thisinformationisreportedmonthly
throughVBA'sdatawarehouseusingtheDistributionofOperationalResources(DOOR)system.
DataVerification/Quality:
Accuracy: Morethanhalfofallclaimsarereceivedelectronically,anddateofclaimis
automaticallydetermined. ForclaimsreceivedviaU.S.Mail,imagingclerksandauthorization
personnelareskilledandtrainedindeterminingdateofclaimformanualinput. Proceduresfor
dateofclaiminput,completion,andchangearedocumentedandfollowed. Timelinessisan
elementreviewedduringthequarterlyQualityAssurancereview. Timelinesserrorratesof3
percentormoreonQualityAssurancereviewsresultinarecommendationofcorrective
refreshertraining. No3rdpartyevaluationsareconducted.
Reliability/Comparability: Timelinessdataarereceivedinatimelymannertofacilitateprogram
managementdecisionsandforothercriticalreporting. Itismaintainedineasilyaccessible
electronicstoragecoveringmorethanadecadeandcanbeextractedinbothstandardandad
hocreportformats. Thestoreddataincludesbothdetailedandsummaryinformationtoensure
reliabilityfordecisionmaking.
Consistency: Timelinessdataarecollectedaccordingtolongestablished,welldocumented,and
consistentlyusedstandards. Thedefinitionsforsourcedataareclearanddocumented,andare
availableandused. Datareportingschedulesaredocumented,distributed,andfollowed.
DataLimitations: Thenecessityformanualinputofdateofclaimopensthepossibilityofdataentry
errors. Whilebasicandrefreshertrainingcanreducethispossibility,theycannotentirelyeliminateit.
Althoughqualityreviewsidentifyproblemsinthisarea,theyareconductedafterthefact,andindividual
errorscannotbedetectedintimetopreventtheirinclusioninoveralldata.
Performance Information Part II - 56





DefaultResolutionRate
KeyPerformanceMeasureDefinition: ThismeasurerepresentsthejointeffortsofVAandVA
guaranteedloanservicersinassistingborrowerswithdefaultedVAguaranteedloans. TheDefault
ResolutionRateisthepercentofdefaultedVAguaranteedloansthataresuccessfullyresolvedviaaloss
mitigationoption.
MeasureValidation: TheprimarygoalofLoanGuarantyServiceistoassistVeteransinpurchasing,
retaining,andadaptinghomesinrecognitionoftheirservicetotheNation. TheDefaultResolutionRate
gaugesVA'sandLoanServicers'abilitytoassistVeteransinmaintaininghomeownershipduringtimesof
financialhardship.
DataSourceandFrequency: VAguaranteedloanservicingdataareextractedfromtheVeteransAffairs
LoanElectronicReportingInterface(VALERI)System. Thissystemisusedtomonitorandoverseethe
servicingofVAguaranteedloans. Loanservicingdataarecollectedonamonthlybasis.
DataVerification/Quality:
Accuracy: VAguaranteedloanservicingpersonnelareskilledandtrainedinproperdata
reportingprocedures,whichensuresdocumenteddatareportingproceduresarefollowed. VA
LoanAdministrationstaffareskilledandtrainedinloanservicingandproperdatareporting
procedures. Submittedloanservicingdataareverifiedthroughsamplingagainstloandata. The
accuracyofloanservicingdataisalsoestablishedviaVALERI'sbusinessrulesprocess.
Additionally,proceduresformakingchangestopreviouslyenteredloandataaredocumented
andfollowed.
Reliability/Comparability: VAguaranteedloanservicingdatacanbeusedtomakeprogram
decisionsandcanbecomparedbetweenyearstoassessprogressorprogrameffectiveness. VA
guaranteedloanservicingdataaretimelyandcanbeusedtomakecriticalpolicyandprogram
decisions.Supportingloanservicingdocumentationismaintainedandreadilyavailable.
Consistency: VAguaranteedloanservicingdataarewelldefinedanddocumented. Definitions
ofloanservicingdataelementsareavailableandused.Collectionstandardsanddatareporting
schedulesforloanservicingdataaredocumented,available,andused.
DataLimitations: None
RehabilitationRate(General)
KeyPerformanceMeasureDefinition: Therehabilitationratecalculationisasfollows: (1)thenumberof
disabledVeteranswhosuccessfullycompleteVAsVocationalRehabilitationprogramandacquireand
maintainsuitableemploymentandVeteranswithdisabilitiesforwhomemploymentisinfeasiblebut
whoobtainindependenceintheirdailylivingwithassistancefromtheprogramdividedby(2)thetotal
numberleavingtheprogramboththoserehabilitatedplusdiscontinuedcaseswithaplandevelopedin
oneofthreecasestatuses(IndependentLiving,RehabilitationtoEmployability,orEmploymentServices)
minusthoseindividualswhobenefitedfrombutlefttheprogramunderoneofthreeconditions:the
Veteran(a)reachedmaximumrehabilitationgainduetochoosingtobeemployedinajobthatisnot
suitable,(b)reachedmaximumrehabilitationgainduetobeingunemployedbutemployableandnot
seekingemployment,ornotemployableformedicalorpsychologicalreasons,or(c)electedto
discontinuehisorherVR&EplantopursueeducationalgoalsutilizingPost9/11GIBillBenefits(Chapter
33).
MeasureValidation: TheprimarygoaloftheVR&EprogramistoassistservicedisabledVeteransin
becomingemployable. Therehabilitationrateisthekeyindicatoroftheprogramssuccessinmeeting
thisgoal,asitrepresentsthenumberofVeteranssuccessfullyreenteringtheworkforcefollowing
completionoftheirVR&Eprogram.
Performance Information Part II - 57

DataSourceandFrequency: DataisobtainedfromVR&Emanagementreports. QualityAssurance


Reviewsevaluatetheaccuracyandreliabilityofdataandareconductedtwiceamonth.
DataVerification/Quality:
Accuracy: Dataiscollectedandverifiedbyskilledprofessionalstrainedintheproperprocedures
forcollectingandanalyzingrawdata.Alldatacollectionproceduresaredocumentsand
followed.
Reliability/Comparability: Dataarecollectedandcompiledonamonthlybasis. Datacollected
areusedbyVR&EManagement,VBAManagement,andRegionalOfficestomeasurethe
program'ssuccessandtoidentifyareasofconcernandprogress. Datacanbecompared
betweenyearstoassessprogressorprogrameffectiveness.
Consistency: Thesourcedataarewelldefinedanddocumented definitionsareavailableand
used. Datacollectionanddistributiononamonthlybasisareconsistentanddocumented.
DataLimitations: Thereisaslightchanceofanerroneousentrybytheenduser.
Rateofhighclientsatisfactionratingsonservicesdelivered(Insurance)
KeyPerformanceMeasureDefinition: Thismeasurerepresentsthepercentofinsuranceclientswho
ratedifferentaspectsofinsuranceservicesinthehighesttwocategories,basedona5pointscale,using
datafromtheinsurancecustomersurvey.
MeasureValidation: VA'sinsuranceprogramusestheresultsofthesurveystoidentifyopportunitiesfor
improvementinordertomaintainhighlevelsofclientsatisfactionbyprovidingqualityserviceand
implementingandadministeringinsuranceprogramsthatmeettheneedsofVeteransandtheir
beneficiaries.
DataSourceandFrequency: Insurancesendsclientsatisfactionsurveysto40randomlyselected
Veteransandbeneficiariespermonthforeachof11endproducts.
DataVerification/Quality:
Accuracy: InsuranceServicereviewsandtabulatessurveyresponsesandindependently
validatestheresultsofthetabulatedresponsesbyreenteringrandomlyselectedmonthly
responsesinordertodetermineifsimilarresultsarecalculated.
Reliability/Comparability: Datacollectedareusedtomeasureclientsatisfaction. VBAInsurance
managersusetheresultsofthismeasuretoinformanddrivequalityimprovement.
Consistency: Dataarecollectedonanongoingbasisthroughoutthemonthforrecordingand
verification. Dataresultsarereportedoncepermonth.
DataLimitations: Thenecessityformanualinputofsurveydataopensthepossibilityofdataentry
errors. Reenteringthedataasecondtimehelpstoidentifypossibledataentryerrors.
Percentofgravesinnationalcemeteriesmarkedwithin60daysofinterment
KeyPerformanceMeasureDefinition: Thenumberofgravesinnationalcemeteriesforwhicha
permanentmarkerhasbeensetatthegraveorthereverseinscriptioncompletedwithin60daysofthe
intermentdividedbythenumberofinterments,expressedasapercentage.
MeasureValidation: Theheadstoneormarkerisalastingmemorialthatservesasafocalpointnotonly
forpresentdaysurvivorsbutalsoforfuturegenerations. Inaddition,itmaybringasenseofclosureto
thegrievingprocesstoseethegravemarked. Theamountoftimeittakestomarkthegraveafteran
intermentisimportanttoVeteransandtheirfamilymembers.
DataSourceandFrequency: Source: BurialOperationsSupportSystem(BOSS);datainputbyfield
stationstaff. Dataarereportedmonthly.
Performance Information Part II - 58


DataVerification/Quality:
Accuracy:NationalcemeteryemployeesaretrainedandskilledatenteringdataintoNCA's
BOSSsystem.DataarecollectedandverifiedbyNCACentralOfficeemployeeswhoareskilled
andtrainedindatacollectionandanalysistechniques.Dataareverifiedbysamplingagainst
sourceintermentdatainBOSS.
Reliability/Comparability:DataareusedbyNCAmanagerstoidentifyandcorrectpotential
problemsintheheadstoneandmarkerordering,delivery,andsettingprocess.Dataare
availableatthebeginningofeachmonthandareavailableforuseinGPRAreportsandVA
internalMonthlyPerformanceReviews.Dataarecomparablebetweenyears,enablingNCAand
itsstakeholderstoassessprogramprogressandeffectiveness.
Consistency:DatacollectionstandardsforthismeasureareautomatedatVA'sQuantico
InformationTechnologyCenter(QITC).MonthlyreportsaregeneratedautomaticallybyQITCon
thefirstdayofeachmonth.SourcedataarewelldefinedinNCA'sBOSSusersguide.
DataLimitations: None
Percentofapplicationsforheadstonesandmarkersthatareprocessedwithin20daysforthegraves
ofVeteranswhoarenotburiedinnationalcemeteries
KeyPerformanceMeasureDefinition: Thismeasuresthetimelinessofprocessingapplicationsfor
headstonesandmarkers usingNCA'sAutomatedMonumentApplicationSystem(AMAS)forthe
gravesofVeteranswhoarenotburiedinnationalcemeteries. Thispercentagerepresentsthenumber
ofheadstonesandmarkersorderedwithin20daysofreceiptoftheapplicationdividedbythenumber
ofapplicationsforheadstonesandmarkersreceived.
MeasureValidation: Theheadstoneormarkerisalastingmemorialthatservesasafocalpointnotonly
forpresentdaysurvivorsbutalsoforfuturegenerations.Inaddition,itmaybringasenseofclosureto
thegrievingprocesstoseethegravemarked.Theamountoftimeittakestomarkthegraveafteran
intermentisimportanttoVeteransandtheirfamilymembers.
DataSourceandFrequency: Source: AutomatedMonumentApplicationSystem(AMAS);datainputby
fieldstationandCentralOfficestaff.Dataarereportedmonthly.
DataVerification/Quality:
Accuracy: Nationalcemeteryemployeesaretrainedandskilledatenteringandverifyingdatain
NCA'sAMASsystem. DataarecollectedandverifiedbyNCACentralOfficeemployeeswhoare
skilledandtrainedindatacollectionandanalysistechniques. Dataareverifiedbysampling
againstdatesassignedautomaticallybytheAMASsystemforsourceapplication.
Reliability/Comparability: DataareusedbyNCAmanagerstoidentifyandcorrectpotential
problemsintheheadstoneandmarkerapplicationprocessingprocess. Dataareavailableatthe
beginningofeachmonthandareavailableforuseinGPRAreportsandVAinternalMonthly
PerformanceReviews. Dataarecomparablebetweenyears,enablingNCAanditsstakeholders
toassessprogramprogressandeffectiveness.
Consistency: DatacollectionstandardsforthismeasureareautomatedatVA'sQuantico
InformationTechnologyCenter(QITC). MonthlyreportsaregeneratedautomaticallybyQITCon
thefirstdayofeachmonth. SourcedataarewelldefinedinNCA'sAMASusersguide.
DataLimitations: None
Performance Information Part II - 59








PercentofVeteransservedbyaburialoptionwithinareasonabledistance(75miles)oftheir
residence
KeyPerformanceMeasureDefinition: ThemeasureisthenumberofVeteransservedbyaburialoption
dividedbythetotalnumberofVeterans,expressedasapercentage. Aburialoptionisdefinedasafirst
familymemberintermentoption(whetherforcasketedremainsorcrematedremains,eitheringround
orincolumbaria)inanationalorstateVeteranscemeterythatisavailablewithin75milesofthe
Veteransplaceofresidence.
MeasureValidation: Reasonableaccesstoaburialoptionmeansthatafirstintermentoption(whether
forcasketedremainsorcrematedremains,eitheringroundorincolumbaria)inanationalorstate
Veteranscemeteryisavailablewithin75milesoftheVeteransplaceofresidence. VAestablisheda75
mileserviceareastandardbecauseNCAdatashowthatmorethan80percentofpersonsinterredin
nationalcemeteriesresidedwithin75milesofthecemeteryatthetimeofdeath.
DataSourceandFrequency: VAsVetPop2007model,basedon2000censusdata,isthesourcefor
determiningthetotalnumberofVeteransandthenumberofVeteransserved.Dataarerecalculated
annuallyorasrequiredbytheavailabilityofupdatedVeteranpopulationcensusdata. Projected
openingsofnewnationalorstateVeteranscemeteriesandchangesintheservicedeliverystatusof
existingcemeteriesalsodeterminetheVeteranpopulationserved.
DataVerification/Quality:
Accuracy: NCAstaffistrainedandskilledinproperproceduresforcalculatingthenumberof
Veteranswholivewithintheserviceareaofcemeteriesthatprovideafirstintermentburial
option. Changestothiscalculationmethodologyorotherchangestothemeasureare
documentedandreportedthroughVA'sannualPerformanceandAccountabilityReportandVA
MonthlyPerformanceReviews. ResultsofaVAOfficeoftheInspectorGeneralauditassessing
theaccuracyofdatausedforthismeasureaffirmedtheaccuracyofcalculationsmadebyNCA
personnel.
Reliability/Comparability: Dataonthismeasureareusedtodeterminepotentialareasofneed
forfuturenationalcemeteriesandtoguidefundingdecisionsforstateandtribalVeterans
cemeterygrants. Dataaretimely,areusedinVAMonthlyPerformanceReviewsandannual
GPRAreports,andenableVAstakeholderstoassessVA'sprogresstowardmeetingtheburial
needsofVeteransonanannualbasis.
Consistency: Currentdatasourcesandcollectionstandardsarewelldefined. Datasourcesand
collectionstandardshavebeendocumentedbyindependentprogramstudiesconductedin
2002and2008.
DataLimitations: Providesperformancedataatspecificpointsintimewhileatthesametime,Veteran
demographicsareconstantlychanging.
Percentofrespondentswhoratethequalityofserviceprovidedbythenationalcemeteriesas
excellent
KeyPerformanceMeasureDefinition: Thenumberofsurveyrespondentswhoagreeorstronglyagree
thatthequalityofservicereceivedfromnationalcemeterystaffisexcellentdividedbythetotalnumber
ofsurveyrespondents,expressedasapercentage.
MeasureValidation: NCAstrivestoprovidehighquality,courteous,andresponsiveserviceinallofits
contactswithVeteransandtheirfamiliesandfriends. Thesecontactsincludeschedulingthecommittal
service,arrangingforandconductinginterments,andprovidinginformationaboutthecemeteryandthe
locationofspecificgraves.
Performance Information Part II - 60





























DataSourceandFrequency: NCA'sSurveyofSatisfactionwithNationalCemeteries. Thesurveycollects
datafromfamilymembersandfuneraldirectorswhohaverecentlyreceivedservicesfromanational
cemetery. Dataarereportedannually.
DataVerification/Quality:
Accuracy: Dataarecollectedbyanindependentcontractorskilledindatacollectionand
analyticaltechniques. Thenextofkinandservicingfuneraldirectorsatallnationalcemeteries
withatleastoneintermentduringthefiscalyeararesurveyed. Dataareaccurateata95
percentconfidenceinterval.
Reliability/Comparability: DataforthismeasureareusedbyVAmanagementtoinformbudget
formulation,forVAinternalMonthlyPerformanceReviewsandannualGPRAreports,andto
enablestakeholderstoassessVA'sannualperformanceonprovidingqualityservicetoVeterans
andtheirfamilies.
Consistency: VA'scurrentmailoutsurveymethodologyhasbeeninplacesince2001. Data
collectionstandardsandreportingschedulesareclearlydefinedandincorporatedintoa
contractwiththefirmthatconductsthesurvey.
DataLimitations: Themailoutsurveyprovidesstatisticallyvalidperformancedataatthenationaland
MSNlevelsandatthecemeterylevelforcemeterieshavingatleast400intermentsperyear.
Percentofrespondentswhoratenationalcemeteryappearanceasexcellent
KeyPerformanceMeasureDefinition: Thismeasuretracksthenumberofsurveyrespondentswho
agreeorstronglyagreethattheoverallappearanceofthenationalcemeteryisexcellentdividedbythe
totalnumberofsurveyrespondents,expressedasapercentage.
MeasureValidation: NCAwillcontinuetomaintaintheappearanceofnationalcemeteriesasnational
shrinessothatbereavedfamilymembersarecomfortedwhentheycometothecemeteryforthe
interment,orlatertovisitthegrave(s)oftheirlovedone(s). OurNationsVeteranshaveearnedthe
appreciationandrespectnotonlyoftheirfriendsandfamilies,butalsooftheentirecountryandour
allies. Nationalcemeteriesareenduringtestimonialstothatappreciationandshouldbeplacestowhich
Veteransandtheirfamiliesaredrawnfordignifiedburialsandlastingmemorials.
DataSourceandFrequency: ThesourceofthisdataisNCA'sSurveyofSatisfactionwithNational
Cemeteries. Thesurveycollectsdataannuallyfromfamilymembersandfuneraldirectorswhohave
recentlyreceivedservicesfromanationalcemetery.
DataVerification/Quality:
Accuracy: Dataarecollectedbyanindependentcontractorskilledindatacollectionand
analyticaltechniques. Thenextofkinandservicingfuneraldirectorsatallnationalcemeteries
withatleastoneintermentduringthefiscalyeararesurveyed. Dataareaccurateata95
percentconfidenceinterval.
Reliability/Comparability: DataforthismeasureareusedbyVAmanagementtoinformbudget
formulation,forVAinternalMonthlyPerformanceReviewsandannualGPRAreports,andto
enablestakeholderstoassessVA'sannualperformanceonmaintainingnationalcemeteriesas
nationalshrines.
Consistency: VA'scurrentmailoutsurveymethodologyhasbeeninplacesince2001. Data
collectionstandardsandreportingschedulesareclearlydefinedandincorporatedintoa
contractwiththefirmthatconductsthesurvey.
DataLimitations: Themailoutsurveyprovidesstatisticallyvalidperformancedataatthenationaland
MSNlevelsandatthecemeterylevelforcemeterieshavingatleast400intermentsperyear.
Performance Information Part II - 61

AssessmentofDataQuality
VAsabilitytoaccomplishitsmissionisdependentonthequalityofitsdata. Eachday,VAemployees
usedatatomakedecisionsthataffectAmericasVeterans. Dataaccuracyandreliabilityareparamount
indeliveringmedicalcare,processingbenefits,andprovidingburialservices.
I. DataAccuracy
Healthcaredeliveryisarguablythemostdataintensiveofanybusiness,and,accordingly,qualityhealth
dataultimatelydependsontheactionsofthousandsofclinicalandadministrativestaffwhodocument
encounterswithVeteransinVAselectronichealthrecord,theComputerizedPatientRecordSystem
(CPRS). Assuringtheaccuracyofclinicaldocumentationisparticularlyrelevantbecauseitformsthe
basisofthemajorityofVAshealthperformancemeasuresaswellasallthemeasuresofquality,safety,
andproductivitythatwecompileandsharewithhealthsystemleadership,clinicians,stakeholders,and
thegeneralpublic. Clinicaldocumentationfurthermoreisthebasisofdiagnosticcodingandbilling,so
accuracyandadherencetoindustrywidestandardsarevitaltomaintainingpublictrust.
VHAlauncheditsnationalClinicalDocumentationImprovement(CDI)PrograminApril2013,toinclude
thepublicationofaCDIProgramGuideandthreenationaltrainingsessions. Theemphasisonimproved
clinicaldocumentationlaysthegroundworkforimplementationofInternationalClassificationof
Diseases,10thEdition(ICD10)whichrequiresevengreaterspecificityindocumentation. AVHACDI
Councilhasbeenestablishedconsistingofaninterdisciplinaryteamwithclinicalandadministrative
expertisetoensurequality,integrityandaccuracyofVHAclinicaldocumentationfortranslationinto
codeddata.
Tofacilitatefacilityreimbursementbythirdpartypayers,HealthInformationManagementcoders
validateallbillableencounterstoensurebillableclaimsareasaccurateandcompleteonthefrontend.
Additionally,randomcodingauditsareconducts;thisyearsauditindicatesthataccuracyofoutpatient
codingexceeds95percent,andthatinpatientcodingaccuracyhasincreasedfrom76.6percentlast
year,to83percentthisyear.
ThetransitiontoICD10isanindustrywideeventforhealthcareorganizationscoveredbyHealth
InsurancePortabilityandAccountabilityActbyOctober1,2014. VHAhasestablishedanICD10Program
ManagementOfficetooverseetheimplementationefforts,whichincludesoutliningtrainingneeds,
softwareremediation,andothertransitionactivitiesatthelocalandnationallevel. VHAhasprovided7
virtualtrainingsessionsforVAstaffthatcurrentlyuseICD9,andhasscheduled12additionalsessions
forthenext18months.
VBAsdatamanagementsystemshavebeensubstantiallyimprovedinrecentyearswithsuchprograms
astheVETSNETsuiteofapplicationsandothercorporatedatasolutions. Theseapplications,andthe
analyticaltoolsassociatedwiththedatawarehouse,provideleadershipwithmorerobustdataand
bettersupportforinformationmanagementandanalysis.
Informationiscollectedindefinedformatsandenteredintospecificfieldsofdatabaserecords. Dataare
checkedforcompletenessbysystemauditsandmanualverifications.
Performance Information Part II - 62

Certaindata,suchasSocialSecurityNumber,areverifiedwiththeSocialSecurityAdministration
periodically. PriortoawardofbenefitsbyVBA,theVeteransrecordismanuallyreviewedanddata
validatedtoensurecorrectentitlement.
Employeesareskilledandtrainedintheproperprocedures;dataentryproceduresaredocumentedand
followed;dataaresampledagainstsourcedatathroughqualityreviews;andproceduresformaking
changestopreviouslyentereddataaredocumentedandfollowed.
NCAdeterminestheannualdistributionoflivingVeteransandestimatedVeterandeathsfromdata
providedbytheVAOfficeoftheActuarybasedoncurrentcensusfigures. NCAsmethodologyfor
estimatingthepercentofVeteransservedbyaburialoptionwithinareasonabledistance(75miles)of
theirresidencewasreviewedina1999OIGauditassessingtheaccuracyofthedatausedforthis
measure. AuditresultsshowedthatNCApersonnelgenerallymadesounddecisionsandaccurate
calculationsindeterminingthepercentofVeteransservedbyaburialoption. Datawererevalidatedin
the2002reportentitledVolume1: FutureBurialNeeds,preparedbyanindependentcontractoras
requiredbytheVeteransMillenniumHealthCareandBenefitsAct,P.L.106117.
NCAutilizesanannualmailoutsurveytoassesscustomersatisfactionwiththeappearance,qualityof
serviceprovided,andotherimportantaspectsofVAnationalcemeteries. Thissurveyisadministeredby
anindependentcontractor. Thenextofkinandservicingfuneraldirectorsatallnationalcemeteries
withatleastoneintermentduringthefiscalyeararesurveyed.Dataareaccurateata95percent
confidenceinterval.
NCAalsoutilizesanannualmailoutsurveytoassesscustomersatisfactionwithVAsmemorial
programs. Thissurveyisadministeredbyanindependentcontractor. Dataareaccurateata95percent
confidenceinterval.
PerformancedataarecapturedinNCAsBurialOperationsSupportSystem(BOSS)andAutomated
MonumentApplicationSystem(AMAS)databases. ThesedataareentereddailybyNCApersonnelwho
aretrainedincemeteryandmemorialbenefitsdatacollectionandBOSSandAMASdataentry
procedures.
AutomatedmonthlyandfiscalyeartodatereportsareprovidedbyVAsQuanticoInformation
TechnologyCenterandareanalyzed,verified,anddistributedbytrainedNCAcentralofficepersonnelto
NCACentralOffice,MemorialServiceNetwork(MSN),andnationalcemeterymanagers. Afterreviewing
thedataforgeneralconformancewithpreviousreportperiods,headquartersstaffflagandresolveany
irregularitiesthroughcontactwiththereportingstationsandcomparisonswithsourcedatafromthe
BOSSandAMASsystems.
NCAestablishedanOrganizationalAssessmentandImprovementProgramin2004toidentifyand
prioritizeimprovementopportunitiesandtoenhanceprogramaccountability. Aspartoftheprogram,
assessmentteamsconductsitevisitstoallnationalcemeteriesonarotatingbasistoreviewcemetery
datacollectionsystemsandverifycollectionmethods. Thisreviewensuresthatcemeteryperformance
dataarecollectedandreportedinamannerthatisaccurateandvalid.
Performance Information Part II - 63





II. DataReliability/Comparability
VHAdirectlyextractsclinicaldatafromitselectronichealthrecordaspartofanationaldata
warehousingstrategywheredatacanbeaggregatedandanalyzedfordataquality. VHAsnational
systemsprocessdatathroughastrictsetofrulesandautomaticallyrejectdatathatfailtomeetdata
integrityrequirements. Stafflocatedthroughoutthecountryathealthcarefacilitiesreviewerror
reports,makecorrections,andresubmitcorrecteddataonadailybasis. Suchbidirectional
communicationhelpsensurethatdatacanmeetqualitystandardsatbothlocalandnationallevels.
VHAhasexpandedotherimprovementactivitiesthatfocusonproactiveassessmentandmeasurement
ofdataqualitywithincriticalclinicalinformationdomains. Theresultsoftheseanalysesaresharedwith
datastewardsandbusinessstakeholders,whoconfirmdataqualityissuesandtheirbusinessimpactand
executetargetedimprovementactivities. 2013accomplishmentsincludeddetailedassessmentof
qualitywithinthedomainsofImmunization,VitalSigns,Race,andDentalRecordManager.
CorporateDataWarehouse(CDW)datadomainimplementationactivitieshaveincludediterative
contentvalidationaswellasstakeholderidentification,collectionofmetadataandbusinessrules,and
establishmentofrepeatabledataqualityprocessestoidentifyissueswithprereleaseCDWdata
domains.
TheOfficeofPerformanceAnalysisandIntegrity(OPA&I)assessesdataforcompleteness,consistency,
accuracy,andappropriatenessofuseasperformanceandworkloadmanagementindicators. Thesedata
areextractedfromVBAssystemsofrecord,suchasVETSNET,andareimportedintoanenterprisedata
warehouse.
Allreportsemanatingfromtheenterprisedatawarehousearedevelopedusingbusinessrulesprovided
bytherespectiveVBAbusinesslines. Supportingdocumentationfortheenterprisedatawarehouseis
maintainedandreadilyavailable. Reportingrequirementsareregularlyreviewedandmodifiedwhen
anomaliesarenoted,orwhenchangesaremadetotheunderlyingbusinessapplications.
VBAleadershipusesperformancedatatomakeprogramdecisionsconcerningbenefitsprocessingand
otherorganizationalneeds. Thedecisiontoconsolidatefunctionssuchasoriginalpensionclaims
processingtoimproveserviceisoneexampleoftheuseofperformancedatainthedecision making
cycle. Totheextentpossible,performancedataiscomparablebetweenyears,andisroutinelyreported
duringVAsMonthlyPerformanceReview,inannualbudgetsubmissions,andinotherforums.
NCAusesdataonthepercentofVeteransservedbyaburialoptionwithinareasonabledistance(75
miles)oftheirresidencetodeterminetheneedforfuturenationalcemeteriesandtoprioritizefunding
decisionsforpotentialStateandTribalOrganizationVeteransCemeteries. Thesedataarecomparable
betweenyearsandshowtheimpactthatfundingfornewcemeterieshasmadetowardservingthe
burialneedsofVeterans.
DatafromrespondentstoNCAsannualnationalcemeteryclientsatisfactionmailoutsurveyare
collectedandreportedbyanindependentcontractor. Thesedataareaccurateata95percent
confidenceintervalatthenationalandMSNlevelsandforcemeterieshavingatleast400intermentsper
year. DataprovidedbythissurveyarereliableandareusedbyNCAmanagementtodevelopfunding
Performance Information Part II - 64






requestsanddetermineprioritiesfortheoperationandmaintenanceofnationalcemeteriesasnational
shrines.
DatafromrespondentstoNCAsannualmemorialprogramsclientsatisfactionmailoutsurveyarealso
collectedandreportedbyanindependentcontractor. Thesedataareaccurateata95percent
confidenceinterval. DataprovidedbythissurveyarereliableandareusedbyNCAmanagementto
assessclientsatisfactionwiththequalityandappearanceofmemorialproducts.
III. DataConsistency
ConsistencyandaccessibilityofpatientdataisvitaltoVHAdailyclinicaloperationsaswellassharingof
datawiththeDepartmentofDefenseandotherparties. In2013,VHAupdatedIdentityManagement
BusinessRequirementsGuidance,StandardOperatingProcedures,andBusinessUseCases. VHA
Directive1906,DataQualityRequirementsforHealthcareIdentityManagementandMasterVeteran
Index(MVI)Functionswasupdatedandpublished.
VHAworksactivelyonincreasingtheproofinglevelofassuranceoftheidentitiesofVeteransand
beneficiariesweservetoensuresecurityandintegrityoftheidentitieswithintheMasterVeteranIndex
(MVI). Today,thelevelofassuranceofproofingofVeteransidentitiesatRegistrationandEnrollmentis
compliantwithaNationalInstituteofStandardsandTechnology(NIST),SpecialPublication80063,Level
ofAssurance1. VAisexpandingproofingactivitiestosupportaLevel2identifyassurance,includinga
credentialissuanceprocesstosupportselfserviceactivitiesandpartoftheissuanceoftheVeterans
HealthIdentificationCard(VIC),thenewVIC. VHAhasspentsignificanttimeandeffortonimproving
theintegrityoftheMVIsuchasreducingandpreventingduplicates. Todaythenumberofpotential
duplicateshasbeenreducedtonegligiblelevels(lessthan.0001percent).
EachVBAbusinesslinesrequirementsfordatadefinitions,collectionanddocumentationarewell
documentedinusersguidesandmanuals.
DuringthemigrationtothecorporateenvironmentfortheCompensationandPension,Vocational
RehabilitationandEmployment,andLoanGuarantyPrograms,reportingconsistencyismaintained
throughsynchronizationofthelegacyandcorporatedatawithinthecorporatedatabase. Corporate
reportingrequirementsarewelldefined,butadditionalrequirementsandmodificationsarecontinually
underdevelopment. Asbusinessusersidentifynewrequirements,theyaredocumentedandtestedto
ensurereliability.
Reportsaregeneratedonregularschedules(daily,monthly,annually)toensureconsistencybetween
reportingperiods. DataarevalidatedmonthlybyallVBAbusinesslines,andmigratedintoMonthly
OperationsReportsbyOPA&IforusebyVBAleadershipaswellasatthelocalleveltomakeprogram
andoperationaldecisions.
Since1999,NCAhasconsistentlyuseda75milestandardfordeterminingthepercentofVeterans
servedbyaburialoptionwithinareasonabledistanceoftheirresidence. NCAusesthemostcurrent
VetPopmodelbasedoncensusdatadevelopedbytheVAOfficeoftheActuary,todeterminethe
demographicsoflivingVeteransforthismeasure. Theconsistencyofthemethodologyforcalculating
performanceonthismeasureisverifiedinboththe2002FutureBurialNeedsreportandinthe2008
Performance Information Part II - 65











reportentitledEvaluationoftheVABurialBenefitsProgram,preparedbyanindependentcontractoras
requiredby38U.S.C.527.
ThemethodologyforassessingcustomersatisfactiononNCAsannualnationalcemeteryclient
satisfactionmailoutsurveyhasremainedconsistentsinceitsinceptionin2001. Thesurveycollectsdata
annuallyfromfamilymembersandfuneraldirectorswhorecentlyreceivedservicesfromanational
cemetery. Toensuresensitivitytothegrievingprocess,NCAallowsaminimumof3monthsafteran
intermentbeforeincludingarespondentinthesamplepopulation.
ThemethodologyforassessingcustomersatisfactiononNCAsmemorialprogramsannualmailout
surveyhasremainedconsistentfromitsinceptionin2010. Theprocessisthesameasdescribedabove.
Thedatacollectionmethod,requirements,andprocessarespecifiedinthesurveycontract. Thesemeet
industrystandardsforsurveymethodology. VAheadquartersstaffoverseesthedatacollectionprocess
toverifythatthecontractorcomplieswithdatacollectionprocedures.
NCAsBOSSdatabasewasoriginallyimplementedintheearly1990sandcontinuestoserveasVAs
primarysourcefornationalcemeteryworkloaddata. BOSSdatafieldsandinputinstructionsarewell
documentedinBOSSUserGuides. Monthly,semiannual,andannualreportsgeneratedfromBOSSare
automatedandgeneratedonregulartimeschedulestoensuredataconsistencybetweenreporting
periods.
IV. DataSecurity
VAcontinuedtoimproveitsinformationsecurityin2013whichhasresultedinamorecomprehensive
securityprogramthatbetterprotectssensitiveinformation. TheContinuousReadinessinInformation
SecurityProgram(CRISP)hasresultedinsignificantimprovementinremediationofmanyofthe
informationsecuritydeficienciesassociatedwithitsinformationsecurityprogram. AspartofCRISP,VA
ensuredthatover98percentofVAstaffhasreceivedthemandatoryinformationsecuritytrainingthey
needtoprotecttheinformationofVeteransandtheirfamilies. VAisalsoimplementingtheVisibility
intoEverythinginitiative,whichallowsVAtoview,measure,andsecureallinformationtechnology(IT)
assetsacrosstheVAenterprise.
Performance Information Part II - 66








VeteransBenefitsAdministration
QualityAssuranceProgram(MillenniumAct)
VBAmaintainsanationalqualityassurance(QA)programindependentofthefieldstationsresponsible
forprocessingclaimsanddeliveringbenefits. Thefollowinginformationaboutourprograms,including
compensation,pension,fiduciary,education,vocationalrehabilitationandemployment,housing,and
insuranceisprovidedinaccordancewithTitle38,Section7734.
CasesReviewedandEmployeesAssignedbyProgram
Cases
Reviewed
Employees
Assigned
Compensation(STARAccuracyReviews) 28,294 25
Pension(STARAccuracyReviews) 1,511 2
Fiduciary 1,355 4
Education 2,887 4
VocationalRehabilitationandEmployment 8,089 12
LoanGuaranty(Housing) 18,309 17
Insurance 11,040 4
Thequalityassuranceprogramisadministeredusingamultifacetedapproachbasedonfour
tiersofnationalreviewfocusingon: programreview,programoperations,specialfocusreviews
andratingconsistency.
ProgramReviewstaffmembersconductmonthlySystematicTechnicalAccuracyReviews(STAR)
andotherqualityreviewstoassessandmeasurenationalaccuracyassociatedwith
compensationandpensionclaims. Thesereviewsareintendedtomonitorthelevelofservice
providedduringallphasesoftheclaimsprocess,andresultsareusedtoidentifyareas
warrantingfurtheroversightandfacilitatestationtrainingneeds.
Thesecondtierconsistsofregionalofficecomplianceoversight. ProgramOperationsstaff
membersmonitorstationoperations,conductsitevisits,identifybestpracticestoassiststations
inachievinghighperformance,andensureconsistencyinapplicationofpoliciesandprocedures
nationwide.
Thethirdtierofthequalityassuranceprogramconsistsofspecialfocusreviews. Consistencystaff
memberscompletereviewstovalidatepotentialtrendsidentifiedduringSTARreviews. Thesereviews
areconductedforaspecifiedpurposeandcanbeeitheronetimeorrecurringinnature.
Thefourthtierofthequalityassuranceprogramfocusesonratingconsistency. Reviewisconductedon
identifiedstatisticaloutlierstodeterminerootcausesofinconsistency.
STARaccuracyreportsarebasedonthemonthacasewascompleted,notwhenreviewed. Casesare
submittedforreviewnolaterthantheendofthemonthfollowingthecompletionoftheclaim.
Reviewsofratingrelateddecisionsandauthorizationrelatedactionshaveaspecificfocus:
Performance Information Part II - 67




Thebenefitentitlementreviewensuresallissueswereaddressed,dutytoassistwasprovidedand
allrelevantevidencewascollected,andtheresultingdecisionwascorrect,includingeffectivedates
andpaymentrates. Accuracyperformancemeasuresarecalculatedbasedontheresultsofthe
benefitentitlementreview.
Thedecisiondocumentation/notificationreviewensuresadequateandcorrectdecision
documentationandproperdecisionnotification.
Eachmonth,theProgramReviewstaffrequeststhefollowingcasesforqualityreview:
21ratingcasesfrom57regionaloffices,3pensionmanagementcenters(PMCs)and14
resourcecenters;
21authorizationcasesfrom57regionalofficesand3PMCs;
10ratingcasesprocessedbytheAppealsManagementCenter(AMC);
10ratingcasesprocessedundertheIntegratedDisabilityEvaluationSystem(IDES)
programatProvidenceandSeattle.
ToassureaccuracyofaSTARfinding,asecondlevelreviewofallcitederrorsisconductedby
theProgramReviewstaffsInternalQualityReviewTeam. Errortrendanalysisforeachstationis
completedonaquarterlybasis. Eachregionaloffice,PMC,andfiduciaryhubisrequiredtoprovidea
detailednarrativeresponsethatoutlinesallcorrectiveactionstakenforallerrorscited.Reliabilityofthe
reportsismonitoredduringcyclicalmanagementsitevisits. Areaofficescontinuetoprovideoversight
forregionaloffices,directingthedevelopmentandimplementationofwellnessplansasneedsarise.
SimilarbusinesslineSTARprogramscontainthesameaspects: stratifiedandrandomlysampledcase
reviewsforeachregionaloffice,sitevisitstoensurecompliance,andadhocreviews.
SummaryofFindingsandTrendsCompensationServiceandPensionandFiduciaryService
Resultsforcompensationandpensionclaimsreviewsforthe12monthperiodendingJune30,2013are
asfollows:
Compensation
Entitlement(Rating)
Reviews
Compensation
Maintenance
(Authorization)Reviews
PensionManagement
CenterEntitlement
(Rating)Reviews
PensionManagement
CenterMaintenance
(Authorization)
Reviews
Reviewed Accuracy Reviewed Accuracy Reviewed Accuracy Reviewed Accuracy
Benefit
Entitlement
14,170 89.10% 14124 94.59% 749 97.86% 762 97.90%
Notification 14,170 95.01% 14124 90.79% 749 95.06% 762 92.52%
Performance Information Part II - 68









Reviewed Accuracy
CompensationEntitlement(Rating)Issue
Based3MonthReviews(Jul13 Sep13) 17,944 96.65%
ThemajorityoferrorscontinuetobeintheBenefitEntitlement(BE)category B2subcategory,
DevelopmenttoObtainEvidence(Doestherecordshowdevelopmenttoobtainallindicatedevidence,
includingaVAExam(VAE),priortodecidingtheclaim? However,forthe12monthcumulativeperiod
endingJune2013,BenefitEntitlementqualityimprovedto89percentcomparedto86percentoverthe
sameperiodin2012. Forfiscalyear2012thiscategoryreflectedanerrorrateof24.6percentwhereas
currentdatareflectsa21.6percentageerrorrate.Theremainingcategoriesremainedalmostatthe
samelevelofaccuracyduringthisreportingperiod.
SincetheinceptionofP&FService,thequalityofpensionclaimsprocessinghasremainedsteadyat
approximately98percent. Theaccuracyrateforbothpensionentitlementandmaintenanceclaimsfor
2011and2012was98percent. Ouranalysisindicatesthatthisratewillcontinuefor2013. P&FService
hasnotexperiencedanycleartrendsastheyrelatetotheprocessingofpensionentitlementand
maintenanceclaims. P&FServiceusesSTARanalysistoidentifythoseareasthatneedimprovementand
employsitsNationalTrainingCurriculumandtheSTARnarrativestoaddressandcorrectdeficiencies.
ThefiduciaryqualityassuranceprogramtransitionedtotheNashvilleQualityAssuranceofficeinJanuary
2011. InMay2013,VAincreasedthenumberoffieldexaminationandaccountingcasesselectedfor
qualityassurancereviewfrom66to257. VAconductsmonthlyfiduciaryqualityreviewsonarandom
sampleofthefiduciaryworkloadateachfiduciaryhubandtheManilaRegionalOffice. Thequality
reviewresultsareusedtoincreaseawarenessofpolicyandproceduresandguidethedevelopmentof
trainingwhenneeded. CommonSTARerrorfindingsareusedfordiscussionitemsduringthemonthly
fiduciaryprogramteleconferencecalls.
Resultsforfiduciaryreviewsforthe12monthperiodendingJune30,2013areasfollows:
FiduciaryReviews
Reviewed Accuracy
EntitlementandProtection
1,355 89.67%
Thefiduciaryworkreviewfocusesontheappointmentoffiduciaries,thecontentoffieldexaminations,
andtheaccountingsbyfiduciaries. Mostoftheerrorswerefoundintheareaofprotection.
"Protection"includesoversightofthefiduciary/beneficiaryarrangement,analysisofaccounting,
adequacyofprotectivemeasuresfortheresidualestate,andanymeasurestakentoensurethatVA
fundsareusedforthewelfareandneedsofthebeneficiary.
Performance Information Part II - 69


ActionsTakentoImproveQualityCompensationService,andPensionandFiduciaryService
Trainingremainsapriorityandisconductedusingavarietyofmediumsincludingmonthlynational
QualityTeleconferenceCalls,trainingletters,andcomputerassistedtraining. VBAredesignedits
centralizedChallengetrainingprogramin2011toimproveemployeetrainingandquality. Challenge
trainingfocusesontheoverallskillsandreadinessoftheworkforce,whileimprovingproductivityof
bothnewandlongertenuredemployees. Duringtheirfirst6monthsonthejob,the2,638new
employeeswhoreceivedChallengetrainingthroughtheendofMay2013completed150percentmore
claimsperdaythanpriortrainees. Accuracyfromthesenewemployeesisalsosubstantiallyhigherthan
thenationalaverage,at94percentversus89percent.
QualityReviewTeams(QRTs)wereestablishedinallregionalofficesinMay2012. Theirresponsibilities
aretoevaluateindividualemployeelevelaccuracyandtoperforminprocessreviewstoeliminate
errorsattheearliestpossiblestageintheclaimsprocess. InApril2013aQRTChallengewascreatedto
delivertrainingtonewlyassignedRatingQualityReviewSpecialist. QRTChallengeforAuthorization
RatingQualitySpecialistswillbedeliveredbeginninginFY2014.
In2012,VBAinitiatedanewChallengecoursespecificallydesignedtofocusonimprovingdecision
accuracyandraisingtheskilllevelsofemployeesworkinginlowperformingregionaloffices. Station
EnrichmentTraining(SET)isintensive,instructorbasedtrainingbuiltonVBAshighlysuccessfuland
redesignedChallengetrainingforallnewcompensationclaimsprocessors. Itprovidesstandardized
traininginthetechnicalskillsrequiredofclaimsprocessors. AtthefirstofficeparticipatingintheSET
program,qualityincreasedbyeightpercentagepointsinthreemonths,andthenumberofclaims
processedpermonthincreasedbymorethan27percent. SinceSET,thisofficehasmetorexceededits
performancegoalseachmonth. BasedonthesuccessofSETinthefirstoffice,VBAhassinceexpanded
SETtotwoadditionalregionalofficesin2013.
Traditionally,theSTARprogramhastrackednationalqualityofratingdecisionsattheclaimlevel,finding
acasetobeeithercompletelycorrectorinerror,regardlessofthenumberofmedicalissuesclaimed. In
recentyears,claimshavebecomemorecomplexwithmostinvolvingmultipledisabilitiesclaimed,
requiringnumerousentitlementdecisionsineachcase. Determiningthequalityofratingdecisions
basedoneachissuewithintheclaimprovidesamoreaccurateassessmentofactualratingquality.
During2013,theProgramReviewstaffbegantrackingnationalqualitydatafrombothaclaimleveland
anissuebasedlevelforeveryregionaloffice.
Thefourthtierofthequalityassuranceprogramfocusesonratingconsistency. Reviewisconductedon
identifiedstatisticaloutlierstodeterminerootcausesofinconsistency.
VBAintroducedrulesbasedcalculatorslastyeartoassistdecisionmakersinassigningaccuratedisability
evaluations. VBAisnowdirectlyprogrammingthecalculatorsintotheVeteransBenefitsManagement
Systemasruleengines,therebyeliminatingmanualentryandhelpingtoensuregreaterconsistency.
Performance Information Part II - 70






SummaryofFindingsandTrends Education
EducationServicereviewed2,287casesin2013. Basedonthesereviews,paymentsaccuracyimproved
to98.8percentcomparedto98percentforthesameperiodin2012. Failuretoprocessadocument
was28percentofallpaymenterrors. Incorrecteffectivedatedeterminationswere34percentofall
paymenterrors. Incorrectdeterminationsofenddateoftrainingwere22percentofpaymenterrors.
Thesethreemaincausesaccountedfor85percentofallpaymenterrorsfortheFYTDin2013. The
remainingerrorswerefromawidevarietyofcauses,withonlyafewinstancesofeach.
TheincreaseofpaymentaccuracyinFY2013indicatesthattrainingandimprovedautomationsystems
arehavingapositiveeffectinreducingerrors.
ActionsTakentoImproveQuality Education
Inadditiontoperformingquarterlyqualityreviews,anindependentreviewwasestablishedtoexamine
improperpayments. The2013quarterlyqualityresultsidentifiederrortrendsandcauses. Thesethen
wereusedastopicsforrefreshertraininginregionalprocessingoffices. Annualappraisalandassistance
visitstotheregionalprocessingofficesarealsoconducted. In2013,EducationServicecontinuedto
updatethematerialsavailableforstandardizedtrainingforemployees. Additionally,EducationService
fieldedanautomatedclaimsprocessingfunctionalitywhichfullyprocessaportionofPost9/11GIBill
supplementalclaimswhichreducestheopportunityforhumanerror.
SummaryofFindingsandTrends VocationalRehabilitationandEmployment(VR&E)
VR&Ecompletedqualityassurance(QA)reviewson8,558casesfor2013,includingIndependentLiving
andMaximumRehabilitationGaincasereviews. ThenationalQAreviewsareconductedovera12
monthperiod,withasampleofcasesfromeachregionalofficereviewedeverymonth. Approximately
fivepercentoftheworkloadwasreviewedfromeachregionaloffice.
Performance Information Part II - 71


















VR&EAccuracyTargetsandActuals
AccuracyElements TargetScore2013 ActualScore2013
AccuracyofEntitlementDeterminations
96% 99%
AccuracyofFiscalDecisions
92% 89%
AccuracyofOutcomeDecisions
97% 98%
AccuracyofEvaluation,Planning,and
RehabilitationServices
85% 83%
Inadditiontoreviewofcasesfromeachregionaloffice,theSystematicTechnicalAccuracyReview
(STAR)conductedsitevisitsof10regionalofficesin2013.
ActionsTakentoImproveQuality VocationalRehabilitationandEmployment
TheVR&Eaccuracyscoresmetorexceededthetargetscoresfor2013intwoelements: Accuracyof
EntitlementDeterminationsandAccuracyofOutcomeDecisions. Thesescoresareattributedtothe
followinginitiativesimplementedoverthelast3years:
Eachregionalofficeconductsareviewof10percentofitscaseloadeachyear. Thisensures
consistencyintheQAreviewprocessandofficeprocedures.
TheQAreviewresultsfornationalandlocalreviewsareavailableontheVAIntranetWebsite. This
informationenablesregionalofficestoassessindividualqualityandtoidentifytrainingneeds.
TheSTARTeamcurrentlyworkswiththeTrainingTeamtoprovidetrenddataanddeveloptraining
thatclarifiesadministrationofVR&Ebenefits.
TheSTARTeammeetsregularlywiththeVR&EFieldAdvisoryCommitteetoaddressquestionsfrom
regionalofficesregardingQAreviews.
TheSTARTeammeetsregularlywiththeVR&EFieldAdvisoryCommitteetoaddressquestionsfrom
regionalofficesregardingQAreviews.
CurrentinitiativestoimproveperformanceincludecontinueddevelopmentoftheKnowledge
ManagementPortal;updatestothequalitystandardsofpractice;developmentofanewQAITsystem;
implementationofpolicyclarifyingservicerequirements;continueddevelopmentoftheElectronic
PerformanceSupportSystem;andextensivetrainingfornewandexperiencedcounselorsaswellasfor
newmanagers.
SummaryofFindingsandTrends LoanGuaranty(Housing)
TheLoanGuarantyhousingprogramredesigneditsqualityreviewprocessin2010andbegan
implementingthisnewprocessin2011. Asaresult,firstlevelqualityreviewsthatwerepreviously
performedonsitebyRegionalLoanCenterstaffarenowtheresponsibilityofLoanGuarantyCentral
Office. Theredesignedqualityreviewprocessprovidesanobjectivethirdpartyreviewofthework
beingdonebytheRegionalLoanCenterstaffandproducesamorerepresentativesamplethan
Performance Information Part II - 72

previouslyattained. LoanGuarantyCentralOfficestaffreviewed18,309casesunderitsqualityreview
processduring2013.
Thehousingqualityassuranceprogramincludeselementsbeyondthereviewofcases.TheVBALender
MonitoringUnitperformed4,244onsiteauditsand26inhouseauditsoflendersparticipatinginVAs
homeloanprogram.VAauditsoflendersduring2013amountedto$168,914liabilityavoidancevia
indemnificationagreements.VAhasalsocollected$539,377in2013asaresultofhaving
indemnificationagreementsinplace.
ContractAssurance(formerlyknownasPortfolioLoanOversightUnit(PLOU))conductstwotypesof
reviews:inhouseandonsite.ContractAssurancereviewed67billinginvoicesandcompleted47
associatedinvoicereviewsoftheportfolioservicescontractor,aswellas247noninvoicereviews
relatedtocontractcompliance.Additionally,ContractAssuranceconductedresearchandtrackingon
fundsduetheDepartmentbasedonmoniesflowingthroughtheDepartmentofJusticetoVA.
ActionsTakentoImproveQualityLoanGuaranty(Housing)
TheLoanGuarantyServicedisseminatestheresultsofitsqualityreviewstofieldofficesonamonthly
basis.TheServicepreparesandreleasestrendreportsthatidentifynegativetrendsandactionitems
foundduringonsitevisits.Thereportsarepublishedtoassistfieldpersonnelinidentifyingfrequent
problemsfacingloanguarantymanagement.Anynegativefindingsnotresolvedduringonsitevisitsare
tobeaddressedbyfieldmanagementwithin30daysastothecorrectiveactionstakenorplanned.
Conversely,anyproceduresdiscoveredduringonsitevisitsthatwouldbenefitotherfieldstationscan
bedeemedasbestpractices.Summariesofbestpracticesemployedbyindividualfieldstationsare
disseminatedtoallfieldstationswithloanguarantyactivity.
NationaltrainingisprovidedtoenhancethequalityofserviceprovidedtoVeteransandtoincrease
lendercompliancewithVApolicies.Forinstance,lenderswhosignificantlyfailtocomplywithVAsloan
underwritingpoliciesareeitherrequiredtoenterintoindemnificationagreementswithVAor
immediatelyrepaytheagencyforitslosses.
Thepropertymanagementserviceprovider(VendorResourceManagement)isauthorizedtomanage
andsellallVAacquiredpropertiesasaresultofforeclosureortermination.ThePropertyManagement
OversightUnit(PMOU)monitorsthemanagementandmarketingofthepropertiesbytheproperty
managementserviceprovider.Theseassetsarevaluedatapproximately$1.23billion.ThePMOU
monitorsthepropertymanagementserviceprovider'sperformancebyinspectingpropertiesnationwide
toensurecompliancewiththecontractrequirementsandperformsonsitecasereviewsattheir
operationscenter.
SummaryofFindingsandTrends Insurance
TheInsuranceprogramsprincipalqualityassurancetoolistheStatisticalQualityControl(SQC)review.
SQCassessestheongoingqualityandtimelinessofworkproductsbyreviewingarandomsampleof
completedandpendingwork.TencategoriesofworkfromthePolicyholdersServicesandClaims
divisionsarereviewed.

Performance Information Part II - 73





PolicyholdersServices,whoseworkproductsdealwithcustomerserviceandthemaintenanceofactive
insurancepolicies,hadanoverallaccuracyof90.6percentfor2013. Workproductsincluded
correspondence,applications,disbursements,recordmaintenanceandrefunds. ThePolicyholders
ServicesDivisionalsorespondstotelephoneinquiriesfromVeteransandtheirbeneficiaries. In2013,
theaveragespeedofanswerwas92seconds. Thepercentofabandonedcallswas2.0percent,andthe
percentofblockedcallswas7.8percent. InsuranceClaimsDivisionisresponsibleforthepaymentof
deathanddisabilityawards,theissuanceofnewlifeinsurancepolicies,andtheprocessingof
beneficiarydesignations. TheaccuracyrateforInsuranceClaimsworkproductswas94.3percent. Work
productsincludeddeathclaims,awardsmaintenance,beneficiarydesignationchanges,disabilityclaims,
andmedicalreinstatementapplications. Intotal,theaccuracyrateforall2013insuranceworkproducts
was92.8percent.
ThetimelinessrateforPolicyholdersServicesworkproductswas93.7percent,and84.5percentfor
InsuranceClaimsworkproducts. Theoveralltimelinessratefor2013insuranceworkproductswas88.2
percent.
Theinsurancequalityassuranceprogramalsoincludesinternalcontrolreviewsandindividualemployee
performancereviews. TheInternalControlstaffreviewsinsuranceoperationsforfraudthrougha
varietyofreportsandreviews. Reportsaregenerateddailyandidentifyvariousinsurancetransactions
basedonspecificcriteriathatindicatepossiblefraud. TheInternalControlstaffalsoreviews100
percentofallemployeeprepareddisbursements. Primaryendproductsprocessedbyemployeesinthe
operatingdivisionsareevaluatedbasedontheelementsidentifiedintheIndividualEmployee
PerformanceRequirements. Asaresultofthesecontrols,insurancedisbursementsare97percent
accurate.
VAutilizesaclientsatisfactionsurveyinstrumentforthepurposeofmeasuringsatisfactionandto
identifyareasthatneedimprovement. VAsurveys40randomlyselectedVeteransandbeneficiariesper
monthforeachof11insuranceendproducts. Veteransareaskedtoevaluatedifferentaspectsof
servicedeliveryonafivepointscale. Lowratingsinaparticularareaindicatetheneedforprocess
improvementsoradditionaltraining.
ActionsTakentoImproveQuality Insurance
SQCexceptionsarebroughttotheattentionoftheinsuranceoperationsdivisionchiefs,unit
supervisors,andemployeeswhoworkedthecase. VBAsInsuranceServiceevaluatestheSQCprograms
periodicallytodetermineiftheyarefunctioningasintended. Individualperformancereviewsare
conductedmonthly. Theperformancelevels criticalandnoncriticalelements areidentifiedinthe
IndividualEmployeePerformanceRequirements. Thesereviewsarebasedonarandomsamplingofthe
primaryendproductsproducedbyemployeesintheoperatingdivisions. Thoseitemsfoundtohave
errorsarereturnedtotheemployeeforcorrection. Attheendofthemonth,supervisorsinform
employeesoftheirerrorratesandtimelinesspercentagesascomparedtoacceptablestandards. VAs
InsuranceProgrammanagersalsousethesedatatoidentifytrainingneedsandopportunitiesfor
processimprovements.
Thesurveycontainsasectiontitled,Whatcouldwedobetter? VAanalyzestheresponsesto
determinewhereprocessimprovementscanbemade. VAmakesanefforttoimplementcustomer
suggestionswhereappropriatetoincreasetheeffectivenessandefficiencyofoperationsandincrease
customersatisfaction.
Performance Information Part II - 74








TheInternalControlStaffmonitors,reviews,andapprovesinsurancedisbursementsandcertainother
controlledtransactions,aswellasreviewspostauditreports. Workproductswithanydetectederrors
arereturnedforcorrection.
TheresultsofSQC,employeeperformancereviews,clientsatisfactionsurveys,andInternalControl
feedbackareusedtoaddressanyareaswhereimprovementisneededviacorrectivetrainingandother
stepstoimproveerrorratesandtimelinesspercentages.
TheInsuranceProgramhassuccessfullyimplementedfifteenjobaidsandtoolsundertheinitiative
calledSkills,KnowledgeandInsurancePracticesandProceduresEmbeddedinSystems. Thisprogram
capturesbestpracticesandstandardizedproceduresforprocessingvariousworkitemsandmakes
themavailableoneachemployeesdesktop. Thejobaidsareanimportanttoolinreducingerrorrates
andimprovingtimeliness. In2013,VAinstalledonlinetoolssuchasHelpfulHints,DirectoryAssistance,
CollectionDemo,AddressStandards,andLifeInsuranceStatementForm712,amongothers.
Performance Information Part II - 75





































Department of Veterans Affairs
Office of Inspector General
Washington, DC 20420
FOREWORD
Our Nation depends on VA to care for the men and women who have sacrificed so
much to protect our freedoms. These Servicemembers made a commitment to protect
this Nation, and VA must continue to honor its commitment to care for these heroes
and their dependents in a manner that is as effective and efficient as possible. VA
health care and benefits delivery must be provided in a way that meets the needs of
todays Veterans and Veterans from earlier eras. It is vital that VA health care and
benefits delivery work in tandem with support services like financial management,
procurement, and information management to be capable and useful to the Veterans
who turn to VA for the benefits they have earned.
Office of Inspector General (OIG) audits, inspections, investigations, and reviews
recommend improvements in VA programs and operations, and act to deter criminal
activity, waste, fraud, and abuse in order to help VA become the best-managed
service delivery organization in Government. Each year, pursuant to Section 3516 of
Title 31, United States Code, OIG provides VA with an update summarizing the most
serious management and performance challenges identified by OIG work as well as
an assessment of VAs progress in addressing those challenges.
This report contains the updated summation of major management challenges
organized by the five OIG strategic goalshealth care delivery, benefits
processing, financial management, procurement practices, and information
managementwith assessments of VAs progress on implementing OIG
recommendations.
OIG will continue to work with VA to address these issues to ensure the best
possible service to the Nations Veterans and their dependents.
GEORGE J. OPFER
Inspector General
Performance Information Part II - 76




MajorManagementChallengesIdentifiedbyOIG
VAsOfficeofInspectorGeneral(OIG),anindependententity,evaluatesVAsprogramsandoperations.
OIGsubmittedthefollowingupdateofthemostseriousmanagementchallengesfacingVA.
VAreviewedOIGsreportandprovidedresponses,whichareintegratedwithinOIGsreport. Our
responsesincludethefollowingforeachchallengearea:
Estimatedresolutiontimeframe(fiscalyear)toresolvethechallenge
ResponsibleAgencyOfficialforeachchallengearea
Completed2013milestonesinresponsetothechallengesidentifiedbyOIG
VAiscommittedtoaddressingitsmajormanagementchallenges. UsingOIGsperspectiveasacatalyst,
wewilltakewhateverstepsarenecessarytohelpimproveservicestoourNationsVeterans. We
welcomeandappreciateOIGsperspectiveonhowtheDepartmentcanimproveitsoperationstobetter
serveAmericasVeterans.
MajorManagementChallenge EstimatedResolution
Timeframe
No. Description(ResponsibleOffice) (FiscalYear) Page#
OIG1 HealthCareDelivery(VHA) II 79
1A QualityofCare(VHA) 2014 II79
1B AccesstoCare(VHALead) 2014 II81
1C
AccountabilityofProstheticSuppliesinVHAMedicalFacilities
(VHA)
2014
II 84
OIG2 BenefitsProcessing(VBA) II 85
2A ImprovingtheQualityofClaimsDecisions(VBA) 2015 II86
2B VARegionalOfficeOperations(VBA) 2015 II87
2C ImprovingtheManagementofVBAsFiduciaryProgram
(VBA)
2014
II88
OIG3 FinancialManagement(TSO,VHA) II89
3A
LackofAccountabilityandControloverConferenceCosts
(TSOLead,HRA,VHA,VBA,NCA)
2014
II90
3B
StrengthenFinancialControlsovertheBeneficiaryTravel
Program(VHA)
2014
II91
3C
ImproveCompliancewiththeImproperPaymentsElimination
andRecoveryAct,ReduceImproperPayments,and
WeaknessesinnonVAFeeCareProgram(VHA)
2014
II93
OIG4 ProcurementPractice(OALC) II94
4A
VACanAchieveSignificantProcurementSavings (VHALead,
OM,OALC)
2014 II94
4B
ImproveOversightofInteragencyAgreements(OALCLead,
HRA)
2014 II95
4C SoundITProcurementPractices(OIT) 2014 II 97
Performance Information Part II - 77


OIG5 InformationManagement(OIT) II 98
5A DevelopmentofanEffectiveInformationSecurityProgram
andSystemSecurityControls(OIT)
2014
II99
5B InterconnectionswithUniversityAffiliates(OITLead,VHA,) 2014 II102
5C StrategicManagementofOfficeofInformationTechnology
HumanCapital(OIT)
2014
II103
5D EffectiveOversightofActiveITInvestmentProgramsand
Projects(OITLead,VBA,VHA) 2014
II104
Appendix II 109
Performance Information Part II - 78



OIGCHALLENGE#1: HEALTHCAREDELIVERY(VHA)
StrategicOverview
Formanyyears,theVeteransHealthAdministration(VHA)hasbeenanationalleaderinthequalityof
careprovidedtopatientswhencomparedwithothermajorU.S.healthcareproviders. VHAsuseofthe
electronicmedicalrecord,itsNationalPatientSafetyProgram,anditscommitmenttousedatato
improvethequalityofcarehassustainedVHAsqualityofcareperformance. VHAsdecisiontoprovide
thepublicaccesstoextensivedatasetsonqualityoutcomesandprocessmeasuresisafurtherstep
forwardasanationalleaderinthedeliveryofhealthcare. Additionally,VHAsactiontodetermineeach
hospitalsabilitytohandlecomplexsurgicalcases,assignaratingclassification,andthenlimitthe
proceduresthatcanbeperformedateachclassoffacilityisfurtherevidenceofitsgroundbreaking
effortstomaintainandimprovethequalityofcarethatVeteransreceive.
However,VHAfacesparticularchallengesinmanagingitshealthcareactivities. Theeffectivenessof
clinicalcare,budgeting,planning,andresourceallocationarenegativelyaffectedduetothecontinued
yearlyuncertaintyofthenumberofpatientswhowillseekcarefromVA. Overthepast8years,OIGhas
investedabout40percentofitsresourcesinoverseeingthehealthcareissuesimpactingourNations
VeteransandhasconductedreviewsatallVAMedicalCenters(VAMCs)aswellasnationalinspections
andaudits,issuespecificHotlinereviews,andcriminalinvestigations. Thefollowingsubchallenges
highlightthemajorissuesfacingVHAtoday.
OIGSubChallenge#1A: QualityofCare(VHA)
VHAprovidesVeteranswithcomprehensivemedicalandspecialtycare;however,VHAcontinuestoface
challengeswithmatchingVeteransdemandsforspecifictypesofmedicalcarewiththeappropriate
careproviders. ThishasbeenevidentwithVHAsdifficultyinprovidingapropermixofinhousemental
healthprovidersandintegratingpurchasedcareprovidersseamlesslyintheplanofcareforVeterans
whoreceivetheirmentalhealthcarefromnonVAproviders. Matchingthesupplyofavailableproviders
tothedemandforhealthcareismademoredifficultbytheabsenceofstaffingstandardsformost
physicianspecialistandmentalhealthproviders,theinaccuraciesindatareportedfromthecurrent
appointmentsystemwithrespecttoappointmentmetrics,andthelackofoversighttoforceVA
managerstorigorouslyevaluatethebusinesscasethatdetermineshowtheproviderworkforceis
utilized.
Modernhealthcarerequiresthattimelydecisionsbemadeandthenexecutedwithprecision. VAisthe
largestintegratedhealthcareorganizationintheU.S.withapatientmedicalrecordsystemthatwas
originallyamodelforotherhealthcareorganizations. However,thesystemhasnotbeenupgradedas
necessarytokeeppacewithcompetingmedicalrecordsystemswithrespecttoappointmentscheduling
anddecisionsupport. Inaddition,VAhasnotbeenabletoprovideacoherentplanforwardtolink
DepartmentofDefenseandVAmedicalrecordsafterhavingspentconsiderablemoneyandeffort.
TherearemanyoutstandingfeaturestoVAsmedicalrecordsystem,butwithoutaclearandworkable
plangoingforwardVAwillhaveincreasingdifficultymanagingthedatarequiredbyprovidersand
administratorstoensurethatVeteranhealthcareretainsitsoutstandingvaluetoourcitizens.
VAprovidesnationwidehighqualitymedicalcaretoitspatients;however,inordertomaintainpatient
confidenceandthislevelofcare,VAmanagersmustfocusonoperationsoversighttoensurethatVA
Performance Information Part II - 79






hospitalsoperateinaccordancewithVAstandardsandthathealthcareisthenumberonepriority. A
lackofoversighthasresultedinqualityofcarelapses(lackofprogramoversight,poorcoordination,
communication,andeducation)thatwerereportedbyOIGthispastyear. Theseinstancesincludethe
misuseofinsulinpenswhichrequirednotificationtohundredsofVeteransthattheyareatriskofblood
borneinfectiousdisease,mismanagementofamentalhealthcarecontractwherethousandsof
Veteransmentalhealthcareneedsmaynothavebeenprovided,andlapsesintheprovisionofroutine
colonoscopiesforcancerscreening. Tocorrectthesequalitycarelapses,VAmustreviewthecurrent
methodsusedtofillinternalvacancies,reviewqualityoversightmechanismsusedbyVeterans
IntegratedServiceNetwork(VISN)andnationalleaders,andmaketherequiredchangestoaddress
theseerrantdecisions.
Veteranswhohavebeeninjuredduringtheirserviceoftensufferfromphysicalandmentalinjuries. The
useofnarcoticmedicationsforpainrelatedsymptomsintheUnitedStatesandwithinVAisof
staggeringproportions. Theuseofhighdosesofnarcoticsforindividualpatients,wherethemedication
hassignificantabusepotential,createssignificantsocietalstresseswithinVAscommunity. VAspolicy
withrespecttothemanagementofthepopulationofhighnarcoticusersmustberegularlyreviewed
andsupportedinordertoaffectthebestpossibleoutcomesforpatients.
VAsProgramResponse
EstimatedResolutionTimeframe: 2014
ResponsibleAgencyOfficial: UnderSecretaryforHealth
Completed2013Milestones
TheVAhealthrecord,ComputerizedPatientRecordSystem(CPRS),isacollectionofapatientsclinical
informationandisanimportantcommunicationtoolcontributingtohighqualitycare. Withrapid
changesinthestandardsforelectronichealthrecords,VAcontinuestoenhanceCPRSthroughagile
developmentandinnovation. Theuseofclinicalinformationtotriggerremindersandalertscontinues
tosupportimprovementsinclinicalqualityguidelinesandpatientoutcomes,suchasallergychecks,and
suggestingrecommendedactions. Withelectronicdatacaptureandstorageofpatienthealth
information,wecontinuetoworktowardtheseamlessexchangeofpatientdatawithexternal
authorizedusers,suchastheDepartmentofDefenseandprivatesectorproviders,andtoenhance
continuityofpatientcare.
VHAhasestablishedRelativeValueUnit(RVU)basedproductivitystandardsforvariousspecialtiesand
developedaprocessforthereviewofspecialtygrouppractices. Aspartofthisreviewprocess,VHAhas
establishedatemplateforconsistentapplicationofbusinessrulesforlabormappingforphysiciansand
hasdevelopedaQuadranttoolandPracticeManagementReportforevaluatingspecialtyproductivity,
access,staffing,andefficiency. AlgorithmsrelatedtotheQuadranttoolandPracticeManagement
Reporthavebeendeveloped. Thepurposeofthesealgorithmsistoassistfacilityleadersinthe
managementofspecialtycareresourcesandensureappropriatestaffingforspecialtycareservices
acrossallVHAsites.
VHAsOfficeofMentalHealthhasmadesignificantgainsindevelopingstaffingandproductivity
standardsaswellassubstantialhiringtoadequatelystaffVHAmentalhealthprograms. InJune2013,
VAannouncedthesuccessfulhiringof1,600mentalhealthcliniciansandadecreaseinthenational
vacancyratefrom12percentto11percent. Concurrently,productivitystandardsformentalhealth
providerswerepublished. InAugust2013,VHAbegannationalexpansionofitspilotguidancefor
Performance Information Part II - 80











staffinggeneraloutpatientmentalhealthprograms. Inaddition,VAdevelopedimprovedmetricsfor
assessingthetimelinessofcaredeliverythroughoutfiscalyear2013andbegandevelopmentof
outcomemetricsforevaluatingqualityofcare. ImplementationoftheseinitiativesisprovidingVA
managersatalllevelsoftheorganizationwithtoolstomakemoreaccuratedecisionsaboutresource
needs.
VHAisdevelopingandimplementingaseriesofeducationalsessionsforleadersandcliniciansthat
reinforceorganizationalexpectationsthatpatientsreceivepromptnotificationofcolorectalcancer
(CRC)screeningresultsandthatclinicianscounselpatientstoproceedwithdiagnostictestingwithin
60daysofapositiveCRCscreeningresult. CommunicationofCRCscreening,specificallyFecalOccult
BloodTest(FOBT)results,willbeincludedinnationalmonitors.
VHAfacilitieswillbeprovidedwithtoolstoassistinidentifyingandtrackingVeteranswithpositiveFOBT
results. Thesetoolswillalsoassistindeterminingtheproportionofpatientswhoundergodesired
diagnostictestingwithin60daysofthatpositiveresult. VHAPatientCareServiceswillcollaboratewith
OfficeofInformaticsAnalyticsinthedevelopmentofaquarterlyreportidentifyingthoseVeteranswith
positiveFOBTresultsandthosewhohaveundergonediagnosticcolonoscopywithin60daysofa
positivescreen.
Inearly2013,VHAlaunchedtheOpioidSafetyInitiativetomonitorthefrequencyanddosingofopioid
analgesicprescriptionsacrossallVAfacilities. ThisinitiativeidentifiesVeteranswithhighdose
prescriptionsandactivatesexpertconsultationtoensureappropriatepainmanagement. Theinitiative
institutescorrectiveeducationandtrainingofprovidersintheuseofopioidanalgesicsforpainandin
riskmanagementstrategiestoimprovesafeopioidprescribing. FY2013CombinedAssessmentProgram
(CAP)reviewsat30VHAfacilitiesincludedanassessmentofmedicationmanagementtodetermine
whetherfacilitiescompliedwithselectedrequirementsforopioiddependencetreatment. OIGfound
highcompliance(>95percent)initsreviewofwhethercontrolledsubstancepoliciesinfacilitieswere
consistentwithVHArequirements.
OIGSubChallenge#1B: AccesstoCare(VHA)
AsmentionedinSubChallenge1A,VeteransaccesstoVAhealthcareisamajorchallengeforVHA.
Herethefocusisontheparticularchallengesofprovidingtimelyaccesstohighqualitycareandservices
byincreasingtelemedicine,medicalstaffproductivity,feecareservices,accesstoqualitycontract
nursinghomes,andnursinghomecareservices.
InJanuary2002,PublicLaw(P.L.)107135mandatedthatVAestablishanationwidepolicytoensure
medicalfacilitieshaveadequatestafftoprovideappropriate,highqualitycareandservices. However,
OIGauditsandinspections,includingaDecember2012report,AuditofVHAsPhysicianStaffingLevels
forSpecialtyCareServices,continuetoidentifytheneedforVHAtoimprovetheirstaffingmethodology
byimplementingproductivitystandards. OIGdeterminedthatVHAhadnotestablishedproductivity
standardsfor31of33specialtycareservicesreviewed,andhadnotdevelopedstaffingplansthat
addressedthefacilitiesmission,structure,workforce,recruitment,andretentionissuestomeetcurrent
orprojectedpatientoutcomes,clinicaleffectiveness,andefficiency.
VHAslackofestablishedproductivitystandardsforspecialtycareservicesandstaffingplanslimitedthe
abilityofmedicalfacilityofficialstodeterminetheappropriatenumberofspecialtyphysiciansfor
Performance Information Part II - 81












patientcareneedsandtomeasureproductivityofspecialtycareservices. Productivitystandardshad
notbeendevelopedbecauseoflackofagreementwithinVHAonhowtodevelopamethodologyto
measureproductivity,andcurrentVHApolicydoesnotprovidesufficientguidanceondeveloping
medicalfacilitystaffingplans. Asaresult,VHAslackofproductivitystandardsandstaffingplanslimit
theabilityofmedicalfacilityofficialstomakeinformedbusinessdecisionsontheappropriatenumberof
specialtyphysicianstomeetpatientcareneeds,suchasaccessandqualityofcare. Thisissuewillbe
compoundedasVAbeginsintegratingtherequirementsoftheAffordableCareAct(ACA).
VAmusthaveaclearunderstandingofhowVAcarewillbeintegratedintotheACA. VAshould
anticipatemodifyingtheirpoliciestoaccommodatechangesrequiredbythislawandnotifystakeholders
accordinglyoftheiractions. CongresshasheldhearingsandVAhasengagedcontractorstoaddress
aspectsofthischange,yetmanyaspectsofVAsrolesandimplementationareunclear. The
fundamentalissueofhowVAhealthcare,whichisintendedtoprovidecareforVeterans,willbe
integratedintotheoptionsselectedbyfamiliesthroughhealthcareexchangesremainstobeclarified.
OIGsAuditoftheCommunityNursingHomeProgramreportedVeteranswereplacedincontract
nursinghomesthatdidnotmeetVHAstandardsfornursinghomeoperationandqualityofcare. VHA
renewedcontractsfornursinghomesthatwereineligibletoparticipateinVHAsCommunityNursing
Homeprogram. Specifically,inadequateVAmedicalfacilityreviewsofnursinghomeseligibilityresulted
intherenewalofineligiblenursinghomescontracts. VAmedicalfacilityreviewteamsdidnot
adequatelyreviewCentersforMedicareandMedicaidServices(CMS)profileinformationandState
SurveyReportsandapplyVHAexclusionarycriteriawhentheyassessednursinghomeeligibility. This
allowedthecontinuedparticipationofineligiblenursinghomesintheprogramandincreasedtheriskof
patientsafetyandqualityofcareproblems. OIGprojectedthatVHAplacesabout6,700patientsin
ineligiblenursinghomesatacostofabout$59.3millionannually. Ifprogramcontrolsarenot
strengthened,VHAwillplaceapproximately33,500patientsinineligiblenursinghomesatacostof
about$296.5millionoverthenext5years.
VHAneedstoestablishonestandardofcareforprovidingselectedpurchasedhomecareservicesto
ensurethatitisprovidingconsistentandequitableaccesstopurchasedhomecareservicestoeligible
VeteransacrosstheNation. OnSeptember30,2013,OIGreportedinitsAuditofVHAsSelectedNon
InstitutionalPurchasedHomeCareServicesthatVAmedicalfacilitiesusedvariousmethodsand
strategiestolimitVeteransaccesstohomemaker/homeaide,respite,andskilledcareservices.
Althoughthisreporthighlightsgapsinprovidingaccesstoservicesitalsoidentifiedsignificantvariation
inthequalityofcaredelivered.
VHAsnoninstitutionalcareprogramallowsVeteranstoreceiveVAandcontractor providedservicesin
theleastrestrictiveenvironmentpossible,suchasintheVeteranshome. OIGprojectedthatatleast
114VAmedicalfacilitieslimitedaccesstotheseservicesthroughtheapplicationofmorerestrictive
eligibilitycriteriaandreviewprocesses,and/ortheavoidanceofwaitinglists. Theseprocessesalso
allowedmanyofthesameVAmedicalfacilitiestoavoidplacingabout49,000Veteransonwaitinglists.
ThegapinservicedeliveryoccurredbecauseVAmedicalfacilitiestookactiontofundhigherpriorities,
suchasmentalhealth,andtoreducetheirfeeprogramexpenses. Additionally,VHAdisseminated
inaccurateeligibilityinformationforpurchasedskilledcareservicesandlackedadequatemonitoringand
evaluationmechanisms. VAMCsalsousedineligiblehomecareagenciestoprovideservices. OIG
estimatesthatVHAwillpayabout$893milliontoineligibleagenciesoverthenext5yearsunlessit
ensurestheseagenciesareadequatelyreviewedandmonitored.
Performance Information Part II - 82






VHAraisedanumberofconcernsaboutOIGestimatesandstatisticalprojectionsafterreviewingthe
draftreportonnoninstitutionalpurchasedhomecareservices. Therandomlyselectedsitesprovideda
statisticallyaccuraterepresentationofpurchasedhomecareservicesbecausetheywererepresentative
ofVAsuniverseofmedicalfacilities,theirpatientpopulations,andtheconditionsunderwhichthe
facilitiesoperate.
VAsProgramResponse
EstimatedResolutionTimeframe: 2014
ResponsibleAgencyOfficial: UnderSecretaryforHealth
Completed2013Milestones
VHAhasestablishedRVUbasedproductivitystandardsforthespecialtiesofdermatology,
gastroenterology,neurology,ophthalmology,orthopedics,andurology,anddevelopedaprocessforthe
reviewofspecialtygrouppractices.Aspartofthisreviewprocess,VHAhasestablishedatemplatefor
consistentapplicationofbusinessrulesforlabormappingforphysiciansandhasdevelopedaQuadrant
toolandPracticeManagementReportforevaluatingspecialtyproductivity,access,staffing,and
efficiency. AlgorithmshavebeendevelopedtoguidetheinterpretationandutilizationoftheQuadrant
toolandPracticeManagementReport. Thepurposeofthesealgorithmsistoassistfacilityleadersinthe
managementofspecialtycareresourcesandensureappropriatestaffingforspecialtycareservices
acrossallVHAsites.
Anypracticeamongthesesixspecialtiesthatfallsbelowthe25
th
percentileproductivitystandardor
abovethe75
th
percentileforaspecificspecialtyandmedicalcentercomplexitygroupmustundergoa
localreviewwhichaddressesdatainputsincludingpersonclassdesignationandphysicianlabor
mapping. Ifaspecialtypracticeproductivitylevelismorethanonestandarddeviationbelowthemean
foritsspecialtyandmedicalcentercomplexitygroup,facilityclinicalleaders workwiththespecialtyto
developaremediationplan. TheremediationplanundergoesfacilityDirectorandVISNDirectorreview
andconcurrence.
SincetheACAenactment,VAhasworkeddiligentlytounderstandtheimpactofthehealthcarelawby
examiningthekeyprovisionsandidentifyingtheimplicationsforVeteransandVA. Asaresult,VAhas
establishedacollaborativeenterprisewideapproachtoimplementingACA. VAseffortstoimplement
ACAfallintofourbroadcategories:(1)dataanalysis;(2)communications;(3)operations;and(4)
informationtechnology. InJuly2013,VAbeganusingvariousmodalitiestocommunicatewithVeterans,
staffandotherstakeholdersthatVeteranshealthcaredoesnotchangeasaresultofACA. VAwill
continuetoprovideVeteranswithhighquality,comprehensivehealthcareandbenefitstheyhave
earnedthroughtheirservice. AsthekeyprovisionofACAtohavehealthinsurancecoveragetakesinto
effectinJanuary2014,VAwillcontinuetoassesstheimpactofACAonVAandintegratetheseefforts
intocurrentVAbusinessprocessesandpoliciesasneeded.
VHAhasplansinplacetoimprovetheprovisionofnoninstitutionalpurchasedhomecareservicesto
Veterans.VHAisworkingtotightencontrolsforensuringonlyeligiblehomecareagenciesreceiveVHA
funds.VHAhasdevelopedimprovedmechanismstoassurethatVeteranswhoareenrolledwithVAfor
healthcareeitherreceivepurchasedhomehealthcarefortheirneedsorareplacedonawaitlistwhich
willbetracked.VHAwilladdressthebillingconcernsOIGidentifiedatoneoftheeightfacilitiesthey
Performance Information Part II - 83























auditedandwillprovideclearandcomprehensiveguidancetoappropriatepersonnelatallother
facilitiesonproperdocumentationofordersforpurchasedhomecareservices.
VHAhasconcernsaboutsomeoftheestimatesandprojectionspresentedinOIGsAuditofSelected
VHANonInstitutionalPurchasedHomeCareServicesbecausetheyarebasedonsamplingmethodology
thatdoesnotaccuratelyrepresentthecomplexityofnoninstitutionalpurchasedhomecarefor
Veteransnationwide.VHAdoesnotagreewithOIGsnationalestimateofthenumberofVAmedical
centerspotentiallylimitingaccesstoservices(114),theprojectedpotentialuseofineligibleagencies
(1,300),ortheprojectionthatVAcouldpay$893milliontoineligibleagenciesover5years.VHAdoes
notconcurwithOIGsnationalestimatethat49,000Veteransshouldhavebeenplacedonwaitlistsfor
purchasedhomeandcommunitybasedservicesbecausethisestimatedoesnottakeintoaccount
Veteransrightstochoosewheretheyreceivetheircare.
VHAappreciatesthatOIGcorrectlyidentifiedimproperpaymentsof$67,000atonefacilityanddidnot
identifyanysignificantproblemsattheothersevenfacilitiestheyaudited. HoweverVHAdoesnot
concurwithOIGsdecisiontoprojectthefindingsatonefacilityacrossallVHAfacilitiestoachieve5year
projectionof$13.2millioninimproperpayments.VHAfindsthereisinsufficientjustificationtosupport
theprojectionbeyondtheactualfinding,particularlyinlightofaforementionedconcernsaboutthe
samplingmethodologyusedinthisreport.
OIGSubChallenge#1C: AccountabilityofProstheticSuppliesinVHAMedicalFacilities(VHA)
VHAmaintainsinventoriesofabout93,000specificprostheticitemswithatotalvalueofabout$70
million. Everyyear,VAMCsprocesshundredsofmillionsofdollarsworthofprostheticsuppliesthrough
theseinventories. OIGreportedtoCongressinFY2012thatVHAneedstostrengthenVAMC
managementofprostheticsupplyinventoriestoavoidspendingfundsonexcesssuppliesandto
minimizerisksrelatedtosupplyshortages. Further,OIGidentifiedtheneedforVHAtoreplacethe
ProstheticandGenericInventoryPackageswithoneautomatedsystem. OIGrecommendedVHA
implementamoderninventorysystemandstrengthenthemanagementofprostheticsupply
inventories. TheUnderSecretaryforHealthagreedwithourFY2012recommendationsbutthe
recommendationsremainopen. AplantoreplaceProstheticandGenericInventorysystemsisin
developmentandcompletionisprojectedfor2015pendingavailabilityoffunds. OIGwillcontinueto
monitorthisareaandtherisksimposedbyrelianceonthelegacyinventorysystemsasamanagement
challengeuntilamoderninventorysystemisputinplace.
VAsProgramResponse
EstimatedResolutionTimeframe: 2014
ResponsibleAgencyOfficial: UnderSecretaryforHealth
Completed2013Milestones
VHApromotedtheProstheticServiceCard(PSC)programduringFY2013. VHAprovidededucationon
theprogramtoVeteransandVAstaff. AlleligibleVeteranswhohaveserviceconnectedamputations
(12,128Veterans)weresentaPSCinformationletterandprepaidresponsecard. AsofJuly2013,
Performance Information Part II - 84



65.2percentofidentifiedVeteranspossessaPSCfortheirqualifyingprostheticdevice. Thesecond
attempttoreachVeteranswhohavenotrespondedwascompletedinAugust2013. APSCinformation
letterandprepaidresponsecardwassenttoover2,700Veterans.
VHAhasundertakenseveralinitiativestoenhanceoversightofmanagementandacquisitionof
prostheticlimbs. InFebruary2013,VHAissuedamemorandumtothefieldprovidingguidanceonthe
useofMedicareLcodesandNotOtherwiseClassifiedcodes. Nationalpolicyonthedevelopmentofthe
HealthcareCommonProceduralCodingSystemlistforprostheticlimborcustomorthoticdevice
prescriptionhasbeendevelopedandisundergoingVHAreviewforconcurrence. VHAfinalizeda
nationalcontracttemplateforprostheticlimbs,nowunderreviewbytheOfficeofGeneralCounseland
theOfficeofAcquisitionandLogistics. AcomprehensiveassessmentofOrthoticandProstheticServices
solicitationwasissuedinMarch2013andthecontractwasawardedinAugust2013.
VHAdevelopedaneducationalcoursetitledPrinciplesinInventoryManagement(PIM),whichwillbe
providedtoprostheticssupplyinventorymanagersandlogisticsstaffinFY2014. Morethan100
fieldbasedstaffhavealreadytakenorwillsoontakethePIMcourse. Eightoftheinitiallyplanned10
classeshavebeenconducted,withplansfor15more. ProstheticsandSensoryAidsServicedeveloped
anonlineinventorymanagementcoursethatprovidesanoverviewoftheProstheticsInventoryPackage
(PIP);inJanuary2013,thiscoursewasmadeavailabletoallVHAstaffthroughtheTalentManagement
System.
OIGCHALLENGE#2: BENEFITSPROCESSING
StrategicOverview
PersistentlargeinventoriesofpendingclaimsforCompensationandPensionbenefitsposeacontinuing
challengeforVBA. AsofSeptember2013,thisinventoryofclaimsis722,013. Thisbacklogisattributed
toanincreaseinthedisabilityclaimsworkload,inpartduetoreturningIraqiandAfghanistanVeterans,
reopenedclaimsfromVeteranswithchronicprogressiveconditionsrelatedtoAgentOrange,relaxed
evidentiaryrequirementstoprocessposttraumaticstressdisorderclaims,andadditionalclaimsfroman
agingVeteranpopulationwithdeclininghealthissues. Complexbenefitslawsrelatedtotraumaticbrain
injury(TBI)claims,courtdecisions,technologyissues,workload,andstaffingissuesalsocontributeto
VBAsbenefitsprocessingchallenges.
Ineffortstoaddressthisbacklog,VBAhasadopted40transformationinitiatives,includingclaims
digitizationandautomatedprocessingusingtheVeteransBenefitsManagementSystem(VBMS). VBA
hasalsomovedtoinitiativessuchasclaimsbrokeringtoevenoutworkloadsacrossVAregionaloffices
(RO),provisionalratingsforclaimsover2yearsold,andmandatoryovertimeduringsummer2013for
claimsraters.
Inadditiontofallingshortofgoalsforclaimsprocessingaccuracy,OIGreportedVBAcontinuesto
experiencechallengesinensuringits56ROscomplywithVAregulationsandpoliciesanddeliver
consistentoperationalperformance. OIGalsofoundthatexpeditedrolloutofDisabilityBenefits
Questionnaires(DBQ)toreducetheclaimsbacklogwasputinplacewithoutadequatecontrols.
OIGcontinuestoreporttheneedforenhancedpoliciesandprocedures,training,oversight,quality
review,andothermanagementcontrolstoimprovethetimelinessandaccuracyofVBAsdisability
Performance Information Part II - 85




claimsprocessing. OIGreportsissuedin2013highlightcontinuingVAchallengesinmanagingtheclaims
backlog,ensuringaccuracyindisabilitybenefitsprocessingworkload,andclaimsstorageissuesat
certainROs.
OIGSubChallenge#2A: ImprovingtheQualityofClaimsDecisions(VBA)
ROstafffacedchallengesprovidingaccuratedecisionsonVeteransdisabilityclaims. FromOctober
2012throughJune2013,OIGinspected11ROsandreportedontheirperformancein3claimsareas:
temporary100percentdisabilityevaluationsforserviceconnectedconditionsrequiringsurgicalor
medicaltreatment,TBI,andGulfWarVeteransentitlementtomentalhealthcare. ROstaffdidnot
correctlyprocess47percentofthetotal762claimsOIGsampledprimarilyduetoalackofoversightand
training. Specifically,ROstaffincorrectlyprocessed:
60percentof324temporary100percentdisabilityevaluations,resultinginnearly$3millionin
improperpaymentswithinthissampleofnationalclaims.
32percentof197TBIclaimsreviewed. OIGfoundthatTBIclaimsprocessingerrorsresulted
fromstaffusingVHAmedicalexaminationreportsthatdidnotcontainsufficientinformationto
makeaccurateratingdeterminations. StaffgenerallyoverevaluatedtheseverityofTBIrelated
disabilitiesbecausetheydidnotproperlyinterpretthemedicalexaminationreports.
40percentof241claimsinvolvingGulfWarVeteransentitlementtomentalhealthcare.
VAsProgramResponse
EstimatedResolutionTimeframe: 2015
ResponsibleAgencyOfficial: UnderSecretaryforBenefits
Completed2013Milestones
VBAhasaggressivelypursueditsTransformationPlantoimplementaseriesoftightlyintegratedpeople,
process,andtechnologyinitiativesdesignedtoachievethe2015strategicgoalofcompletingall
ratingrelatedcompensationandpensionclaimswithin125daysat98percentaccuracylevel.
Significantprogresshasbeenmade. AsofSeptember30,2013,theclaimsinventorytotaled722,013,
downfromahighof883,930inJuly2012. AsofSeptember30,2013,thebacklogofclaimsolderthan
125daystotaled418,472. Thiswas192,601belowthepeakbackloginMarch2013anditslowestpoint
sinceMarch2011. AsofAugust2013,claimbasedaccuracywas89.1percentandaccuracymeasuredat
themedicalissuebasedlevelwas95.8percent.
VAdevelopedastrategyforthesecureelectronicsubmissionofDBQsreceivedoutsidetheVA
examinationprocess. Controlsforverifyingtheidentityandcredentialsofprivatephysicianssubmitting
DBQsonlinewilloccuroncetheDBQautomatedsolutionisintegratedwithVBMSandtheStakeholder
EnterprisePortal. Asaninterimcontrol,VBAsQualityAssurancestaffconductsDBQvalidationreviews
ofastatisticallyvalidsampleofDBQssubmittedbyprivatephysicians.
VBAcontinuestomonitorrecordsthatcontaintemporary100percentevaluationstoensuretheyhave
theappropriatecontrolsandindicatorsestablishedandtoensureafutureexaminationdateisinthe
Veteranselectronicrecord. Throughout2013,VBAconductedbiweeklyreviewsofall100percent
Performance Information Part II - 86



evaluationstoidentifyanyrecordswithoutthepropercontrolsandindicatorsforcorrectionbyregional
offices.
WiththeJune2013implementationoftheVBMSratingfunctionalityinallROs,systemicsafeguards
areinplacetopromptuserstoinputcontrolsandpreventusersfromcompletingassociatedactionsfor
all100percentevaluationswithoutpropercontrolsandindicatorsestablished.
VBAdevelopedaTBITrainingandPerformanceSupportSystem(TPSS)module. Thistrainingmodule
willbemandatoryin2014forallRatingVeteransServiceRepresentatives(RVSR)andDecisionReview
Officers(DRO). ThemodulecontainsguidanceforproperlyidentifyingresidualsofTBI,determiningif
evidenceissufficienttograntserviceconnection,andassigningappropriatepercentages.
VBAalsoaddedseveralclassesintheNationalTrainingCurriculumonratingmentalhealthconditions.
VBAupdatedthemedicalTPSSmoduleonmentaldisorders,specificallyPTSDandthemilitarysexual
traumatraining. ThesetrainingmodulesaremandatoryforallRVSRsandDROsin2013.
OIGSubChallenge#2B: VARegionalOfficeOperations(VBA)
VBAcontinuestoexperiencechallengesensuringits56ROscomplywithVAregulationsandpoliciesand
deliverconsistentperformanceoftheirVeteransServiceCenter(VSC)operations. OIGsBenefits
Inspectorsreportedalmosttwothirdsofthe11ROsinspectedfromOctober2012throughJune2013
didnotfollowVBApolicytoensureSystematicAnalysisofOperations(SAO)weretimelyandcomplete.
SAOsprovideanorganizedmeansofreviewingVSCoperationsannuallytoidentifyexistingorpotential
problemsinclaimsprocessingandproposecorrectiveactions. IfROmanagementhadensuredthe
completionofSAOs,theywouldhaveidentifiedweaknessesassociatedwiththeiroperationsandcould
havedevelopedplanstocorrecttheseshortcomings.
VAsProgramResponse
EstimatedResolutionTimeframe: 2015
ResponsibleAgencyOfficial: UnderSecretaryforBenefits
Completed2013Milestones
VBAstrivestofindnewwaystoimprovetheperformanceatallROs. VBAaggressivelymonitorsRO
performance,andifnegativeperformancetrendsdevelop,areadirectorsestablishimprovementplan
requirementsforRODirectors,ensuringappropriateattentiontoproblemareas. Areadirectorsvisit
eachROatleastannuallytoconductaninpersonreviewofoperations. Oversightisalsoprovided
throughonsitereviewofROoperationsconductedbyCompensationandPensionandFiduciary
Services. RODirectorsareheldaccountableforstationperformancethroughannualperformance
evaluations.
AllVBAROsarerequiredtoperformannualSAOstoprovideacomprehensiveoverviewofspecific
divisionalfunctionsaswellasidentifyareasforimprovement. Proceduresandaschedulefor
completingSAOsareavailableforeachVBAbusinessline. Also,eachRODirectorcanestablish
additionalSAOsforlocaloperationalissues.
SAOsarereviewedduringbothCentralOfficeandAreaOfficesitevisits. SAOcomplianceistrackedand
monitoredcloselyfortimelinessandcontentateverylevelofmanagement,toincludelocalbusiness
Performance Information Part II - 87


















lineandexecutivemanagementreviews. ReviewsensurecompliancewiththeelementscitedinM214,
Chapter5. AreaOfficesmayrequestcopiesoftheROSAOschedulesandspecificcompletedSAOsfor
furtherreview. SAOtrainingisprovidedtomanagementonsiteduringsitevisitsifdeficienciesare
present.
OIGSubChallenge#2C: ImprovingtheManagementofVBAsFiduciaryProgram(VBA)
AccordingtoVAs2012AnnualBenefitsReport,thebenefitsofmorethan134,000incompetentVA
beneficiariesarebeingmanagedbyfiduciaries. ThetotalestimatedamountofVAbenefitsunderthe
controloffiduciariesismorethan$2.3billion. FromApril1,2008,toMarch31,2013,OIGconducted
148investigationsinvolvingfiduciaryfraudandarrested91fiduciariesand/orassociates. OIG
investigationshighlightprogramvulnerabilitiesthatareexploitedbyunscrupulousindividualsatthe
expenseofincompetentVAbeneficiaries.
Tworecentexamplesillustrateweaknessesthatallowedfundstobeembezzled. Inthefirstexample,an
attorney,whowasthecourtappointedfiduciaryfor54Veterans,andhiswife,whoservedashislegal
assistantandofficemanager,wereeachsentencedto46monthsincarcerationand3yearssupervised
release. Inaddition,theywereorderedtojointlypayrestitutionofmorethan$2.3milliontoVAand
$282,112totheInternalRevenueService(IRS). AnOIGinvestigationdeterminedthatfromJanuary
2003throughDecember2008,thecouplestolemorethan$2.3millionfromtheincompetentVeterans
andsubmittedfalsifiedaccountingstoVAtoconcealthethefts. Inaddition,theyfailedtoreportthe
stolenfundstotheIRS. Inthesecondexample,aformerVAfiduciarywassentencedto41months
incarceration,36monthssupervisedprobation,andorderedtopay$639,618inrestitutionafter
pleadingguiltytotheftofGovernmentfunds. AnOIGinvestigationrevealedthatthedefendant,an
attorney,embezzled$460,679ofVAbenefitsand$176,246ofSocialSecurityAdministrationbenefits
fromanincompetentVeteran. Thedefendantadmittedtosubmittingfraudulentaccountingstoboth
VAandthecourtbyalteringreportsandcreatingfraudulentcertificatesofdeposit.
VAsProgramResponse
EstimatedResolutionTimeframe: 2014
ResponsibleAgencyOfficial: UnderSecretaryforBenefits
Completed2013Milestones
VAenhancedprocedurestopreventandidentifymisuseofbeneficiaryfunds. Proceduralimprovements
previouslyimplementedupthrough2012ledtoa2012misuseratethatwaslessthanonetenthofone
percent. VArequiredthatfiduciariesprovidedetailedfinancialdocuments,includingbankrecords,with
theirannualaccountings. ThisadditionalinformationallowsVAtoverifyreportedexpendituresand
identifypotentialmisuseoffunds. VAmandatedcriminalbackgroundchecksforproposedfiduciaries
priortoappointment. Theseprecautionaryrequirementsserveasadeterrentforfiduciaries. VAissued
proceduresforinstructingfiduciariestoprovideacopyofVAapprovedaccountingsto
beneficiaries. Thispolicyincreasestransparencyofthefiduciarysmanagementofthebeneficiarys
funds. VAissuedguidancetolimitcalculationoffiduciaryfeesbaseduponmonthlybenefitpayments
onlyandeliminatetherequirementthatfiduciariesseekVAapprovalofcertainexpendituresfrom
beneficiaryfunds. Thisguidanceemphasizestheneedforfiduciariestocommunicatewithbeneficiaries
anddeterminewhetherexpendituresareinthebeneficiary'sinterest. VAestablishedtelephoneunitsin
Performance Information Part II - 88






thefiduciaryhubstorespondtodirectinquiriesfrombeneficiariesandfiduciariesandensureconsistent
servicedelivery.
In2013,VAcompletedadraftrevisionofitsfiduciaryregulationsconsistentwithcurrentlawand
policiesandVBAsrecentconsolidationofitsfiduciaryactivitiesatsixfiduciaryhubs. Theproposedrules
wouldclarifytherightsofbeneficiariesintheprogramandtherolesofVAandfiduciariesinensuring
thatVAbenefitsaremanagedinthebestinterestofourmostvulnerablebeneficiaries. Theproposed
rulesareexpectedtobepublishedintheFederalRegisterforpubliccommentinearly2014.
InApril2013,VAimplementedastandardized,nationaltrainingcurriculumforfiduciarypersonnel,
which,amongotherthings,addressesapplicablefiduciaryprogrampoliciesandprocedures,file
documentation,accountauditsandappropriatefollowups,suretybonds,fiduciaryappointments,and
workloadmanagement.
InApril2013,VAdeployedCentralizedFieldExaminerTraining. Thistrainingprovidesconsistentand
standardizedinstructiontargetedatfieldexaminerswithlessthan1yearofexperience. Training
includesfieldexaminationtechniquesandcustomerservice,aswellastheresponsibilitiesofthe
fiduciary. VAisdevelopingadvancedtrainingmodulesforjourneylevelfieldexaminers. Thefirst
trainingmodulefocusesonmisuseproceduresandisexpectedtobereleasedinearly2014.
InMay2013,VAincreasedthenumberoffieldexaminationandaccountingcasesselectedforquality
assurancereview. VAconductsmonthlyfiduciaryqualityreviewsonarandomsampleofthefiduciary
workloadateachfiduciaryhub. Thequalityreviewresultsareusedtoincreaseawarenessofpolicyand
proceduresandguidethedevelopmentoftrainingwhenneeded.
InAugust2013,VAtestedtheBeneficiaryFiduciaryFieldSystem(BFFS),whichisthenewinformation
technology(IT)systemforthefiduciaryprogram. VAanticipatesnationaldeploymentattheendof
December2013. BFFSwillallowVAtoleverageexistingtechnologytocreateaninterfacewithVBAs
corporatedatabase,improvereportingprocessestoenhanceworkloadmanagementcapabilities,
integrateanautomatedfieldexaminationreportgeneratortool,andimprovemisusemonitoring. Itwill
greatlyimproveVAsabilitytotrackbeneficiaryvisits,fiduciariesannualaccountings,andfurtherdetect
potentialmisuse.
InAugust2013,VApublishedaGuidebookforVAFiduciaries. Thenewguidebookistargetedto
volunteerfiduciariesandwilladvisefiduciariesaboutbeneficiaryrights,fiduciaryresponsibilities,
managementoffunds,andaccountingandauditprocedures. Inconjunctionwiththeguidebook,VA
releasedanautomatedaccountingpreparationtooltoassistfiduciariesinpreparingtheirannual
accountings.
OIGCHALLENGE#3: FINANCIALMANAGEMENT
StrategicOverview
Soundfinancialmanagementrepresentsnotonlythebestuseoflimitedpublicresources,butalsothe
abilitytocollect,analyze,andreportreliabledataonwhichresourceuseandallocationdecisions
depend. InFYs2012and2013,asaresultofanOIGadministrativeinvestigationinvolvingwasteful
expendituresattwotrainingconferences,VAisredesigningcontrolsoverconferencemanagement
Performance Information Part II - 89







activities. Further,OIGidentifiedseverallapsesinsoundfinancialstewardshipimpactingVAsprograms
andoperations,includingitsBeneficiaryTravelProgram(BTP).
FailureinsomeinstancestoensuresufficientfundsareavailabletopayfornonVAcarefeeservicesfor
Veteransisonewayinwhichimproperpaymentsoccur. Addressingtheseandotherissuesrelatedto
financialsystems,information,andassetmanagementwouldpromoteimprovedstewardshipofthe
publicresourcesentrustedforDepartmentaluse.
OIGSubChallenge#3A: LackofAccountabilityandControloverConferenceCosts(Training
SupportOffice(TSO)intheOfficeoftheSecretary
1
Lead,HRA,VHA,VBA,NCA)
OIGconductedanadministrativeinvestigationuponreceivingallegationsofwastefulexpenditures
relatedtoHumanResources(HR)conferencesheldinOrlando,Florida,inJulyandAugust2011. The
lackofaccountabilityandcontrolspreventedOIGfromobtainingafullaccountingoftheexpenses
associatedwiththeseconferences. Morethanayearaftertheconferences,VAwasunabletoprovide
anaccurateandcompleteaccountingofcostsfortheseconferences. VAsestimatesoftheconference
expenditureschangedmultipletimesduringthecourseoftheadministrativeinvestigation. WhileVA
reportedlowerestimatesofconferencecoststoCongress,OIGreconstructedthecostsofthetwo
conferenceeventstobeapproximately$6.1million.
However,OIGcouldnotgainreasonableassurancethatthisfigurerepresentedacompleteaccounting
oftheconferencecosts. Overall,VAsprocessesandtheoversightweretooweak,ineffective,andin
someinstances,nonexistenttoensurethatconferencecostsidentifiedwereaccurate,appropriate,
necessary,andreasonablypriced. Accountabilityandcontrolswereinadequatetoensureeffective
managementandreportingofthedollarsspent. OIGquestionedabout$762,000asunauthorized,
unnecessary,and/orwastefulexpenses.
ThisadministrativeinvestigationwasfollowedbyOIGsauditofVAsuseofinteragencyagreementsto
fundfourFinancialManagementTrainingConferences(FMTC)in20102012.
VAsProgramResponse
EstimatedResolutionTimeframe: 2015
ResponsibleAgencyOfficial: ChiefofStaff
Completed2013Milestones
VAisimplementingacomprehensiveactionplantoreviseandstrengthenpoliciesandcontrolsonthe
planningandexecutionoftrainingconferencesandevents. Theseactionsareconsistentwiththe
recommendationsintheSeptember30,2012,InspectorGeneralReportandarereflectedinVApolicy
issuedonSeptember26,2012.
Stringentinternalcontrolsforconferencesandtrainingconferencesareinplaceandthesenior
executivesintheDepartmentprovideoversight. Further,thenewlyestablishedTSOensures
consistencyandadherencewithallappropriateregulationsandrequirementsastheDepartment
1
TSOmovedtotheOfficeofManagement,FinancialServicesCenter,inOctober2013.
Performance Information Part II - 90







































balancescriticaltrainingrequirementstoensureweachievestatedgoalsandobjectiveswhile
minimizingcosts.
Automatingdatacollectionisessentialtoprovideaccurateandtimelyinformationforseniorleadersso
theycanexecutetheirresponsibilitiesandrespondtoqueriesfortrainingrelatedeventsfrom
CongressionalandotherFederaloversightbodies. VAiscurrentlyengagedindevelopinganddelivering
anautomateddatacollectiontooltoincreaseaccountability,controlconferencespending,andproduce
congressionallyrequiredreports.
OIGSubChallenge#3B: StrengthenFinancialControlsOvertheBTP(VHA)
VHAsBTPpaystheactualnecessaryexpenseoftravel,includingmileagetraveled,toand/orfroma
Departmentfacilityorotherplaceinconnectionwithvocationalrehabilitationorcounseling,orforthe
purposeofexamination,treatment,orcareforcertaineligibleVeterans. In1978,VAsetthetravel
mileagereimbursementrateat11centspermile. TherateremainedunchangeduntilFebruary2008,
whenVAraisedtherateto28.5centspermile. InNovember2008,VAraisedthemileage
reimbursementrateto41.5centspermile. Asaresult,theBTPexperiencedasignificantgrowthinboth
usageandcost. Expendituresfortheprogramincreasedbyapproximately285percentfromFY2006
throughFY2010.
InFebruary2013,OIGsAuditofVHAsBeneficiaryTravelProgram,reportedseriousissuesregarding
lackofcontrolsoverbeneficiarytravelpayments. Specifically,VHAdidnotperformregular
reconciliationsofapprovedtravelreimbursementswithpaidreimbursements,accuratelycodefinancial
transactions,andreducetheriskoffraudulentpayments. ThisoccurredbecauseVHAhadnot
establishedpoliciesandmechanismsthataddressreconciliationsofBTPfinancialdata,provided
adequatetrainingtoensureaccuratecodingofbeneficiarytravelexpenses,andestablishedprocedures
tomitigatetheriskformakingduplicatepaymentsonapprovedtravelreimbursements. Inaddition,
currentinformationsystemlimitationspresentchallengestoperformingautomatedreconciliations.
OIGidentifiedmaterialdifferencesinmileagereimbursementspaidcomparedwithapprovedmileage
reimbursements. AccordingtoVHAdata,VAmedicalfacilitiespaidapproximately$89millionmorein
beneficiarytravelthanthefacilitiesapprovedduringtheperiodfromJanuary1,2010,throughMarch
31,2011. OIGdeterminedthatapproximately$46.5millionofthevariancewasinparttheresultof
miscodedcharges,butcouldnotdeterminethereasonforthevarianceoftheremainingapproximately
$42.5million. Thiswasbecauseofalackofanadequatefinancialaudittrailandsystemlimitations.
TheauditalsorevealedthatVHAdoesnothavesufficientprocedurestoreducetheriskofmaking
duplicatepaymentsonapprovedtravelreimbursements. Medicalfacilitystaffrecordonlytheaggregate
valueofbatchedcashreimbursementsinVAsFinancialManagementSystem(FMS). Staffcannot
electronicallyidentifyindividualcashpaymentsassociatedwithapprovedbeneficiarytravelclaims
whichincreasestheriskoffraudulentpayments. Forexample,afterreceivinganapprovedtravel
reimbursement,aVeterancanphotocopyitandprovidemultiplecopiesoftheapprovedtravel
reimbursementforpayment. SincenorecordexistsinFMSthatanagentcashiermadeaprevious
paymentfortheapprovedtravel,themedicalfacilityissusceptibleofpayingtheVeteranmorethan
onceforthesameapprovedtravelreimbursement.
Performance Information Part II - 91


Asaresultoftheseprogramvulnerabilities,thenumberofOIGcriminalinvestigationsincreasedasVA
raisedbeneficiarytravelmileagereimbursementrates. InFY2007,OIGconductedonebeneficiary
travelfraudinvestigation. Incomparison,inFY2010,OIGconducted44investigations. AsofJune2013,
OIGhas125openbeneficiarytravelinvestigations. Tworecentexamplesillustratethistypeoffraud. In
thefirstexample,twoVeteranswereindictedforbribery,conspiracytodefraudtheU.S.Government,
andfalseclaims. Previously,fiveotherVeteransandtwoSeattle,Washington,VAMCtravelclerkswere
chargedinthiscase. AnOIGinvestigationrevealedthatthesevenVeteransparticipatedinascheme
withtheVAMCtravelclerkstosubmitinflatedandfictitioustravelbenefitvouchers. TheVAemployees
processedthevouchersandthendemandedkickbacksfromtheVeterans. ThelosstoVAisestimatedto
beover$150,000. Inthesecondexample,16VeteranswerechargedwiththeftofGovernment
propertyandfalsestatements. AVAOIG,VAPoliceService,andDepartmentofHousingandUrban
DevelopmentOIGinvestigationrevealedthatthedefendantsfiledfraudulenttravelvouchersatthe
Cleveland,Ohio,VAMCinordertoobtaintravelbenefitstheywerenotentitledtoreceive. Thelossto
VAisover$242,000.
Todeterthisfraud,OIGhasencouragedprosecutorstoissuepressreleaseswhenjudicialactionoccurs,
developedadataanalytictooltoproactivelyidentifythisfraudinspecificfacilities,andworkedclosely
withVAtosignificantlyenhancetheirowndataminingeffortsanddesignnewwarningposters. VHA
agreedwithOIGrecommendationsandfindings. However,untilVHAfullyimplementsplannedchanges
andstrengthensauthorizationandpaymentcontrols,VHAwillcontinuetolackreasonableassurance
thatprogramcostsareaccurateandpaidonlytoeligibleVeterans.
VAsProgramResponse
EstimatedResolutionTimeframe: 2014
ResponsibleAgencyOfficial: UnderSecretaryforHealth
Completed2013Milestones
InOctober2012,VHAandtheFinancialServicesCenterusedVBApaymentinformationtocreate
VeteranrecordsinFMS. FMSrecordswillenablemoreefficientprocessingofVeteranspaymentsusing
directdeposit. AsofOctober2013,thecurrentnumberofVeteransthatcanreceivedirectdeposit
paymentis1,180,094.
Thisisadecreasefromthe1,213,523citedinMay2013,andistheresultofsomeVeteransrequesting
thattheyberemovedfromdirectdeposit. AlthoughfacilitiesareencouragingVeteranstoenrollfor
directdeposit,wedonothavetheabilitytoenforcecompliancewithelectronicfundstransfer(EFT)if
theVeterandeclines. Thecurrenttimelineforthedebitcard,whichisanalternativepayment
mechanismtodirectdeposit,iscurrentlyestimatedtobeimplementedlateFY2014. Whenthatoccurs,
VeteranswillhavetochooseanEFTpaymentmethodunlesstheyhavereceivedawaiverfromthe
Treasury.
Performance Information Part II - 92





OIG SubChallenge #3C: Improve Compliance with the Improper Payments Elimination and
Recovery Act, Reduce Improper Payments, and Weaknesses in NonVA Fee Care Program
(VHA)
VAneedstostrengthenitseffortstoreduceimproperpaymentstomeetImproperPayments
EliminationandRecoveryAct(IPERA)requirementsandreportstatisticallyvalidestimates. VAreported
about$2.2billioninimproperpaymentsinitsFY2012PerformanceandAccountabilityReport(PAR)and
didnotcomplywithfourofsevenrequirementsofIPERAinFY2012. VHAalsodidnotreportagross
improperpaymentratelessthan10percentormeetareductiontargetforitsNonVACareFee
program. Whilenotamatterofnoncompliance,VHAcouldalsoimproveitsestimationmethodologyto
achievetherequiredstatisticalprecisionforallofitsreportedprograms. Additionally,VBAdidnotuse
statisticallyvalidmethodologiestocalculateimproperpaymentestimatesforsomeprogramsorreport
amountscollectedthroughitsactivitiestorecaptureimproperpayments. VAofficialsprovided
appropriateactionplansandOIGwillfollowuponVAsprogressduringourannualreviewofVAs
compliancewithIPERA.
VAfailedtoensuresufficientfundswereavailabletopayfornonVAcareforVeteransresultingin
improperpayments. TheSouthTexasVeteransHealthCareSystem(STVHCS)authorized$29million
dollarsinfeecareinFYs2009and2010althoughitdidnothavesufficientfundsobligatedandavailable
topayfortheservicesVeteransreceived. ThisoccurredbecauseSTVHCSdidnotensureclinicalandfee
staffcompliedwithrequiredstepsforauthorizingthefeecare,andassignedstaffdidnottimelyprocess
feecarepayments. Also,STVHCSclinicalandfeestafflackeddefinedrolesandresponsibilities,
sufficienttraining,andadequatesupervision. Further,neitherSTVHCSnorVISN17managementhad
effectiveoversightmechanismsinplacetoensuresufficientfundswereavailabletopayforthenonVA
carereceivedbyVeterans. Asaresult,STVHCSlackedthenecessaryvisibilityovertheseunpaidclaims
whenvendorsinvoiceswerereceiveduntilfeestaffresearched,summarized,andprocessedthis
information.
VHAcontinuestofacesignificantchallengesinaddressingthehealthcareandfinancialvulnerabilities
associatedwiththeNonVAFeeCareprogram. OIGreportedthesechallengesinAuditofVeterans
HealthAdministrationsNonVAOutpatientFeeCareProgramandAuditofVeteransHealth
AdministrationsNonVAInpatientFeeCareProgramin2009and2010,respectively. OIGconcludedin
bothreportsthatcontrolsoverpreauthorizingfeecareservicesneededimprovement.
VAsProgramResponse
EstimatedResolutionTimeframe: 2014
ResponsibleAgencyOfficial: UnderSecretaryforHealth
Completed2013Milestones
VHAhascompleted100percentoftheactionitemsdescribedinthe2012PARtoreduceimproper
paymentsintheNonVAMedicalCare(NVC)program.
ForNVC,VHAisworkingaggressivelytoensureFY2013annualreductiontargetsaremet. VHAmetand
exceededthetargetgoalsinFY2012forreducingimproperpaymentsinallareareviewsexceptforthe
NVCprogram. In2013,VHAsChiefBusinessOffice(CBO)introducedaVirtualAuditTeamthatwill
performauditsoftheNVCprogramatallfacilitiesandVISNstoreduceerrorratesandachievereduction
Performance Information Part II - 93










targets. Inaddition,CBOdevelopedanddeployedaFeeBasisClaimsSystem(FBCS)patchtodeliver
electronicMedicarepricingofeligibleFBCSclaimswhichwillimprovepaymenttimeliness,eliminate
manualentryofthepaymentamounts,andreduceerrorrates.
VHAworkedtoestablishtheir2013samplingmethodology. VHAbriefedOIGandsubmittedthe
samplingmethodologytotheOfficeofManagementandBudget(OMB)whichapprovedVHAs
statisticalsamplingmethodologyinJune2013.
VHAhascompletedthe2013IPERAauditoftheNVCprogramandsuccessfullymetthereductiontarget.
TheauditresultswerereviewedandastatisticallyvalidanalysiswasperformedbythenationalIPERA
contractstaffinresponsetoacontractrequirement.
VBAalsoworkedwithVAtoestablishVBAs2013samplingmethodology. Thissamplingmethodology
wasdevelopedtoachieveastatisticalprecisionof90percentconfidenceintervalwitha2.5percent
marginoferrorasrequiredbyIPERA. ThesamplingmethodologywassubmittedtoOMBon
February11,2013. OMBapprovedVBAsstatisticalsamplingmethodologyonJune28,2013.
OIGCHALLENGE#4: PROCUREMENTPRACTICE
StrategicOverview
VAoperationsrequiretheefficientprocurementofabroadspectrumofservices,supplies,and
equipmentatnationalandlocallevels. OIGauditsandreviewscontinuetoidentifysystemicdeficiencies
inallphasesoftheprocurementprocesstoincludeplanning,solicitation,negotiation,award,and
administration. OIGattributesthesedeficienciestoinadequateoversightandaccountability.
Recurringsystemicdeficienciesintheprocurementprocess,includingthefailuretocomplywiththe
FederalAcquisitionRegulation(FAR)andVAAcquisitionRegulation,andthelackofeffectiveoversight
increasetheriskthatVAmayawardcontractsthatarenotinthebestinterestsoftheDepartment.
Further,VAriskspayingmorethanfairandreasonablepricesforsuppliesandservicesandmaking
overpaymentstocontractors. VAmustimproveitsacquisitionprocessesandoversighttoensurethe
efficientuseofVAfundsandcompliancewithapplicableacquisitionlaws,rules,regulations,and
policies.
OIGSubChallenge#4A: VACanAchieveSignificantProcurementSavings(VHALead,OM,
OALC)
InAugust2013,OIGsAuditofNonPurchaseCardMicroPurchases,reportedthatVAmedicalfacilities
missedopportunitiestoachievesignificantprocurementsavingsbymaximizingtheuseofpurchase
cardsformicropurchases. OIGestimatedVHAmissedopportunitiestodecrease
procurementprocessingcostsbyabout$20millionandobtainadditionalrebatesofabout$4million.
Medicalfacilitieshavetwoprimarymethodstomakemicropurchases: purchasecardsandpurchase
orders. PurchasecardusehelpsVHAquicklyprocuresuppliesandservicestoensureVeteransreceive
timelymedicalcare. Typically,processingpurchasecardprocurementsmaytakeupto3days,while
processingpurchaseorderprocurementscantakeupto30days. Obtainingsuppliesandservicesby
purchasecardstreamlinestheprocurementprocess,whileusingpurchaseordersismorecomplexand
Performance Information Part II - 94








timeconsuming. The$20millionsavingsrepresentsthedifferenceinlaborcostsforprocessing
purchasecardandnonpurchasecardtransactions. Byincreasingpurchasecarduse,VAmedical
facilitiescanincreaseproductivitybyshiftingstaffeffortsfromresourceintensivenonpurchasecard
processingcoststoothermedicalfacilityactivities. Inparticular,eliminatingthetimecontractingstaff
spendonprocessingmicropurchasesisimportantduetoareportedshortageofcontracting
specialists/officerspositionsthroughouttheFederalgovernment.
VHAalsomissedopportunitiestoobtainestimatedannualrebatesofalmost$4million. VAexecutives
haverecognizedrebatesandotherbenefitsrelatedtopurchasecarduseandhaveemphasizedpurchase
cardusetoprocuresuppliesandservices. Overthelast5fiscalyears,VHAsreportedrebatesincreased
51percentfromabout$43millioninFY2008tojustover$65millioninFY2012. AlthoughVHAhas
increasedtheamountofrebatesearnedthroughincreasedpurchasecarduse,opportunitiesstillexist
forVHAtoearnadditionalrebates. Bymaximizingtheuseofpurchasecardsformicropurchases,VHA
canincreasepurchasingefficiencyandcosteffectivenessby$24millionannuallyand$120millionover
thenext5years. TheseimprovementswillhelpVHAaddresschallengestocreateamoreefficient,
effective,andcoordinatedacquisitionprogramtoensureVHAprotectstaxpayersinterestwhen
procuringsuppliesandservices.
VAsProgramResponse
EstimatedResolutionTimeframe: 2014
ResponsibleAgencyOfficial: UnderSecretaryforHealth
Completed2013Milestones
OIGpublishedtheAuditofNonPurchaseCardMicroPurchasesonAugust9,2013. VHAhasdeveloped
anactionplaninresponsetoOIGsrecommendationsthatwillbeimplementedduring2014.
TheVHAProcurementandLogisticsOffice(P&LO)willgenerateareportthatidentifiesallpurchases
belowthemicropurchasethresholdlevelforFY2012. P&LOwillidentifythenumberandamountof
micropurchasesthathavebeenobligatedthroughVHAprocurement. P&LOwillestablishmonthly
monitorsofthetotaluniverseofmicropurchasethresholdsandthenumberofmicropurchases
effectedthroughtheprocurementorganizationP&LO,andinconjunctionwiththeVHAChiefFinancial
Officer,willestablishperformancetargetstoincreasethepercentofmicropurchasesmadewith
governmentpurchasecards. PerformanceofVISNswillbereviewedregularlywithVISNleadership
throughouttheyear. VHADeputyUnderSecretaryforHealthforOperationsandManagementwill
developrecommendedpoliciesforVISNstoperformperiodicreviewsofmicropurchasesutilizingthe
governmentpurchasecard. PeriodicreviewswillbeperformedbyVISNFinancialQualityAssurance
Managers.
OIGSubChallenge#4B: ImproveOversightofInteragencyAgreements(OALC Lead,HRA)
VAhasfundedseveralofitstrainingacademiesandworkforcetrainingunderADVANCE. OIGhas
reportedthelackofVAoversightofADVANCEsuseofinteragencyagreements(IA),whichrepresenta
significantportionofADVANCEspending. VAincurredalmost$2.8millionincostsunderIAswiththe
OfficeofPersonnelManagement(OPM)toholdtwoHRconferencesinOrlando,Florida. VAreliedupon
itsADVANCEprogramtomanagethefundingneededtoprovidemanyoftheconferencesupport
services. TheissuesassociatedwiththeHRconferenceexpendituresmagnifytheprocessfailures
reportedinanearlierOIGreport,AuditofVAsADVANCEandtheCorporateSeniorExecutive
Performance Information Part II - 95





















ManagementOfficeHumanCapitalPrograms. Duringthisprioraudit,OIGreportedthatVAneededto
strengthenitsmanagementofIAswithOPMandimproveitsmeasurestomoreaccuratelyassess
programimpact. VAdidnotestablishadequatecontrolsoverIAcostsandterms,lackedreasonable
assuranceiteffectivelyspentprogramfundsduringFYs2010and2011,anddidnotevaluatethe
reasonablenessofIAservicefees.
InJune2013,OIGreportedthatVAexpandedthetermsoftheirVeteranEmploymentServicesOffices
(VESO)IAwithOPMtoprovideVESOwithtwoVeteranemploymentcallcentersoperating24hoursa
day,7daysaweek. Thesecallcentershadcallvolumessolowduringa13monthperiodthatcallcenter
employeeseachhandledanaverageof2.4callsperday.
VAalsofundedtheIAtodevelopandmaintainaVeteranemploymentWebsiteforVESO,which
duplicatedkeycomponentsoftwoexistingVAVeteranemploymentWebsites. VESOawardeda$4.4
million1yearcontracttoacquireHRsupportservicesthatduplicatedVESOsowninternalHR
capabilitiesandcontractedforcertaininherentlyGovernmentalfunctions. Thesecostlyandexcessive
acquisitionsoccurredbecauseVESOdidnotconductathoroughanalysistojustifytheneedforthe
acquiredsupportservices. Asaresult,OIGestimatedVESOwillspendatleast$13.1millionduring
FYs2013through2015onexcesscallcentercapacityunlessactionistakentoaligncallcentercapacity
withVeteranuseanddemand.
Thesefunds,alongwiththeestimated$4.4millionthatwillbespentontheHRsupportservices
contractinFY2013,couldbebetterusedtoprovideVeteranemploymentserviceswithgreater
efficiencyandaccountability. Bystrengtheningitsmanagementcontrolsandimprovingitsprogram
impactmeasures,VAcouldimproveitsaccountabilityoverADVANCEprogramfunds. Implementation
ofthesecontrolswillbecriticalforVAtoeffectivelymanagetherisksassociatedwithfutureprogram
initiatives,especiallytheoversightofconferencemanagementandmanagementofactiveIAs.
InSeptember2013,OIGalsoreportedthatVAinappropriatelypaidabout$5.3millionofatotal$6.7
millionspentforseparatelypriceditem(SPI)purchasesandrelatedservicefeesforthreefinancial
managementconferencesheldin2010and2011. SPIscanbepurchasedasincidentalitemstosupport
tasksdevelopedunderIAs. VAandOPMlackeddocumentationofrequiredapprovalsforapproximately
$3.4millionofthe$6.7millionspent. Inaddition,VApaidthevendorabout$697,000ininappropriate
servicefeesandpaidOPMabout$132,000inservicefeesassociatedwithinappropriateSPIpurchases.
AmongtherecommendationsOIGmadetoVAinSeptember2013weretoconsiderdiscontinuingthe
useofassistedacquisitionIAswithOPM,providevisibilityandoversightoverSPIpurchasesbyapproving
proposedpurchasesinadvance,andimprovethetransparencyoverSPIcostsbyreviewingdetailed
invoicesbeforeapprovingpayments. SPIpurchasesunderIAshadnotbeenafocusinourprior
conferencemanagementreviews. However,strongoversightcontrolsareneededoverthesepurchases
andbetterassurancethattheseexpendituresareeconomicalandinthebestinterestofVA.
VAsProgramResponse
EstimatedResolutionTimeframe: 2014
ResponsibleAgencyOfficial: PrincipalExecutiveDirector
Completed2013Milestones
OALChasrevisedandissuedVApolicyonIAstoimplementchangestotheFARSubpart17.5,
InteragencyAcquisitions,whichbroadensthescopetoincludeanyIAincludingFederalSupply
Performance Information Part II - 96



Scheduleordersexceeding$500,000;requiresformaldeterminationofanIAasthebestprocurement
approach,developmentofabusinesscaseformultiagencycontracts,andwrittenagreements
stipulatingVAandservicingagencyrolesandresponsibilities;andsubmissionofanannualagencyIA
reporttoOMB.
OALCcoordinatedwithVAsOfficeofHumanResourcesandAdministration(HRA),aswellasOPMto
strengthenoversightofappropriatecostsanddeliverables. Specificactivitiesincludethefollowing:
OALCamendedalloftheIAstoincreasetheoversightcontrolswhenreceivingfinancialdata.
AdditionallyallIAmanagementplansatOPMhavebeenreviewedtospecificallyaddresstheseparately
priceditemsrequiredinP.L.112154.
OALCandOHRAareactivelyimplementingaplantotransitiontheOHRA/HumanCapitalInvestment
Plan(HCIP)requirementsawayfromIAs. OALCandOHRA,inconjunctionwithOPM,arerevisitingVAs
requiredsubmissionsonDepartmentofTreasuryFMSForms7600AandBfortheHCIPInitiativesto
ensurealignmentofthemanagementplanstotasksidentifiedintheFMSForm7600B. Further,
revisionstotheinformationrequiredforcompletionofFMSForm7600A,whichaddressgeneralterms
andconditions,willincludelanguagethatwillrequirethedeliveryofallOPMinvoicescorrelatingwith
OPMvendordeliverablereceiptforms. Therevisionsarescheduledtobecompletedin1
st
quarterFY
2014. OHRAs2014acquisitionstrategyistoworkallcontractawardefforts,otherthaninteragency
agreements,throughtheStrategicAcquisitionCenterFrederick(SACF).
ToaddressthefindingsfromtheOIGauditoftheVAforVetscallcenters,theActingAssistantSecretary
forHRAandrepresentativesfromVESOmetwithOPMtodiscusstheIAAforthecallcenters. OPM
conductedananalysisandconcludedthatthevendordeliveredproductstothestandardsofthe
requirementsspecifiedbyVA. TheIAwithOPMendedonSeptember29,2013. Subsequently,VA
reviewedtheneedsoftheVESOprogramandeliminatedthecallcenters. Althoughanewsolicitation
wasmadepublic,thesolicitationwaswithdrawn. Hadacontractbeenawarded,itwouldnothavebeen
anIA. Afterathoroughanalysisisconducted,decisionswillbemadein2014todetermineifanyscope
ofworkisrequired. AnysuchdecisionwillbebasedonthebestvaluetoVA,U.S.taxpayers,and
AmericasVeterans.
OIGSubChallenge#4C: SoundInformationTechnologyProcurementPractices(OIT)
AdatabreachinMay2006evokedheightenedandimmediateconcernregardingtheprotectionofVA
personallyidentifiableinformation(PII). InAugust2006,theVASecretarymandatedthatallVA
computerswouldbeupgradedwithenhanceddatasecurityencryptionsoftware. However,inOctober
2012,OIGsubstantiatedaHotlineallegationthatOIThadnotinstalledandactivatedanadditional
100,000licensespurchasedin2011. AsofJuly2012,OITofficialsstatedthatduetoinadequateplanning
andmanagement,theyhadinstalledandactivatedonlyasmallportion,about65,000(16percent),of
thetotal400,000licensesprocured. Specifically,OITdidnotallowtimetotestthesoftwaretoensure
compatibilitywithVAcomputers,ensuresufficienthumanresourceswereavailabletoinstallthe
encryptionsoftwareonVAcomputers,andadequatelymonitortheprojecttoensureencryptionofall
VAlaptopanddesktopcomputers.
Assuch,335,000(84percent)ofthetotal400,000licensesprocured,totalingabout$5.1millionin
questionedcosts,remainedunusedasof2012. GivenchangesinVAtechnologysince2006,VAlacked
Performance Information Part II - 97

assurancethattheremainingsoftwarelicenseswerecompatibletomeetencryptionneedsinthe
currentcomputerenvironment. Further,becauseOITdidnotinstallall400,000encryptionsoftware
licensesonVAlaptopanddesktopcomputers,VeteransPIIremainedatriskofinadvertentor
fraudulentaccessoruse.
In2013,OITperformedanassessmentanddecidedtomoveforwardwiththedeploymentofthe
encryptionsoftware. However,asofApril2013,OIThasonlymanagedtodeployapproximately47,000
ofthe335,000remainingencryptionsoftwarelicensesandmayfacechallengestomeetitsprojected
goalofcompleteimplementationoftheremainingsoftwareencryptionlicensesbytheendofFY2013.
Further,OIThasnotprovidedassurancesthatadequateITresourcesareavailabletobetterensurethe
implementation,asrecommended.
VAsProgramResponse
EstimatedResolutionTimeframe: 2014
ResponsibleAgencyOfficial: DeputyAssistantSecretaryforInformationSecurityandDeputy
AssistantSecretaryforServiceDeliveryandEngineering
Completed2013Milestones
Throughout2013,OITworkedtoimproveitsITprocurementpracticestoensurethatitmadesound
decisionsinregardstoITprocurementsandtocontinuetobeagoodstewardofitsfunding. Todothis,
aStrategicInvestmentToolwascreatedtoconductanalysesthatareusedtodeterminethemost
impactfulandcosteffectiveITsolutions.
Initially,whenthecontractwasexecutedtopurchasethelicenses,laptopsweretargetedfirstandwe
madesignificantprogressencryptingalllaptops. Desktopsweretargetedaswell,buttherewere
numerousissuesduetothediversityofthedevicesinthefield.Thetechnology,atthetime,was
relativelynewtotheFederalGovernmentandtoanenterprisethesizeofVA. Inaddition,VAsplanned
rolloutoftheWindows7OperatingSystemondesktopcomputersintroducedunforeseentestingand
compatibilityissueswiththeencryptionsoftware. ThatissuehasbeenresolvedandVAisnowrolling
outencryptionalongsideWindows7withatargetedcompletiondateofDecember2013.
AsoftheendofSeptember2013,293,640Windows7desktopsand34,237laptopswereequippedwith
SymantecEndpointEncryptionencryptioncapabilities.OIThasproactivelyimplementedatoplevel
policytoautomaticallyencryptlaptopsastheyareintroducedtothenetwork.
OIGCHALLENGE#5: INFORMATIONMANAGEMENT
StrategicOverview
TheuseofITiscriticaltoVAprovidingarangeofbenefitsandservicestoVeterans,frommedicalcareto
compensationandpensions. Ifmanagedeffectively,ITcapitalinvestmentscansignificantlyenhance
operationsandsupportthesecureandeffectivedeliveryofVAbenefitsandservices. However,when
VAdoesnotproperlyplanandmanageitsITinvestments,theycanbecomecostly,risky,and
counterproductive. Lackingpropersafeguards,computersystemsalsoarevulnerabletointrusionsby
groupsseekingtoobtainsensitiveinformation,commitfraud,disruptoperations,orlaunchattacks
againstothersystems.
Performance Information Part II - 98













UndertheleadershipoftheChiefInformationOfficer,VAsOITispositioningitselftofacilitateVAs
transformationintoa21
st
centuryorganizationthroughimprovementstrategiesinfivekeyITareas:
(1)qualitycustomerservice;(2)continuousreadinessininformationsecurity;(3)transparent
operationalmetrics;(4)productdeliverycommitments;and(5)fiscalmanagement. OITseffortsare
alsofocusedonhelpingaccomplishVAstopthreeagencyprioritygoalsofexpandingaccesstobenefits
andservices,eliminatingtheclaimsbacklogin2015,andendingVeteranhomelessnessin2015.
However,OIGoversightworkindicatesthatadditionalactionsareneededtoeffectivelymanageand
safeguardVAsinformationresourcesandprocessingoperations. AsaresultofourFY2012
ConsolidatedFinancialStatementsAudit,ourindependentauditorreportedthatVAdidnotsubstantially
complywithrequirementsoftheFederalFinancialManagementImprovementActof1996. While
providinganunqualifiedopinionontheconsolidatedfinancialstatements,forthe12
th
yearinarowthe
independentauditorhasidentifiedITsecuritycontrolsasamaterialweakness.
OIGworkindicatesVAhasonlymademarginalprogresstowardeliminatingthematerialweaknessand
remediatingmajordeficienciesinITsecuritycontrols. VAcouldnotreadilyaccountforthevarious
systemslinkagesandsharingarrangementswithaffiliateorganizations,leavingsensitiveVeteransdata
atunnecessaryriskofunauthorizedaccessanddisclosure. OITalsohasnotfullyimplemented
competencymodels,identifiedcompetencygaps,orcreatedstrategiesforclosingthegapstoensureits
IThumancapitalresourceswillsupportVAinaccomplishingITinitiativesandmissiongoalswellintothe
future. DespiteimplementationoftheProgramManagementandAccountabilitySystem(PMAS)to
ensureoversightandaccountability,VAisstillchallengedineffectivelymanagingitsITsystems
initiativestomaximizethebenefitsandoutcomesfromthefundsinvested.
OIGSubChallenge#5A: DevelopmentofanEffectiveInformationSecurityProgramand
SystemSecurityControls(OIT)
SecuresystemsandnetworksareintegraltosupportingtherangeofVAmissioncriticalprogramsand
operations. Informationsafeguardsareessential,asdemonstratedbywellpublicizedreportsof
informationsecurityincidents,thewideavailabilityofhackingtoolsontheinternet,andtheadvancesin
theeffectivenessofattacktechnology. Inseveralinstances,VAhasreportedsecurityincidentsinwhich
sensitiveinformationhasbeenlostorstolen,includingPII,exposingmillionsofAmericanstothelossof
privacy,identitytheft,andotherfinancialcrimes. Theneedforanimprovedapproachtoinformation
securityisapparent,andonethatseniorDepartmentleadersrecognize.
RecentworkontheConsolidatedFinancialStatementsAuditsupportsourannualFederalInformation
SecurityManagementAct(FISMA)assessment. DuringFY2012,whileourannualFISMAassessment
wasongoing,VAinstitutedtheContinuousReadinessinInformationSecurityProgram(CRISP)toensure
continuousmonitoringyearroundandestablishateamresponsibleforresolvingtheITmaterial
weakness. AsourFISMAworkprogressed,OIGnotedmorefocusedVAeffortstoimplement
standardizedinformationsecuritycontrolsacrosstheenterprise. OIGalsosawimprovementsinrole
basedandsecurityawarenesstraining,contingencyplantesting,reductiontothenumberof
outstandingPlansofActionandMilestones(POA&M),developmentofinitialbaselineconfigurations,
reductioninthenumberofITindividualswithoutdatedbackgroundinvestigations,andimprovementin
datacenterWebapplicationsecurity. However,theCRISPinitiativewasnotlauncheduntilMarch2012
andtheimprovedprocesseshavenotbeenimplementedforanentireFYwiththeopportunityto
demonstratesustainedimprovementsininformationsecurity.
Performance Information Part II - 99




Assuch,theFY2012FISMAauditreportdiscussedcontroldeficienciesinfourkeyareas: configuration
managementcontrols,accesscontrols,changemanagement,andservicecontinuitycontrols.
Improvementsareneededinthesekeycontrolstopreventunauthorizedaccess,alteration,or
destructionofmajorapplicationandgeneralsupportsystems. VAhadover4,000systemsecurityrisks
andcorrespondingPOA&Msthatstillneedtoberemediatedtoimproveitsoverallinformationsecurity
posture. Moreimportantly,OIGcontinuedtoidentifysignificanttechnicalweaknessesindatabases,
servers,andnetworkdevicesthatsupporttransmittingsensitiveinformationamongVAfacilities. Many
oftheseweaknessesmaybeattributedtoinconsistentenforcementofanagencywideinformation
securityprogramacrosstheenterpriseandineffectivecommunicationbetweenVAmanagementand
theindividualfieldoffices.
OIGsFY2012FISMAreportprovided27currentrecommendationstotheAssistantSecretaryfor
InformationandTechnologyforimprovingVAsinformationsecurityprogram. Thereportalso
highlighted5unresolvedrecommendationsfromprioryearsassessmentsforatotalof32outstanding
recommendations. Overall,werecommendedthatVAfocusitseffortsinthefollowingareas:
AddressingsecurityrelatedissuesthatcontributedtotheITmaterialweaknessreportedinthe
FY2012ConsolidatedFinancialStatementsAuditoftheDepartment.
SuccessfullyremediatinghighrisksystemsecurityissuesinitsPOA&Ms.
Establishingeffectiveprocessesforevaluatinginformationsecuritycontrolsviacontinuous
monitoringandvulnerabilityassessments.
OIGcontinuestoevaluateVAsprogressduringtheongoingFY2013FISMAauditandacknowledges
increasedVAeffortstoimproveinformationsecurity,butOIGisstillidentifyingrepeatdeficiencies,
albeittoalesserextent. UponcompletionoftheFY2013FISMAtestingandrelatedwork,OIGwillmake
adeterminationastowhetherVAsimprovementeffortsaresuccessfulinovercomingtheITmaterial
weakness.
ArangeofadditionalOIGauditsandreviewsoverthepast2yearshaveexemplifiedVAsinformation
securitycontrolsdeficiencies. Forexample,inMarch2013,theOIGreportedthatVAwastransmitting
sensitivedata,includingPIIandinternalnetworkroutinginformation,overanunencrypted
telecommunicationscarriernetwork. VAOITpersonneldisclosedthatVAtypicallytransferred
unencryptedsensitivedata,suchaselectronichealthrecordsandinternalInternetprotocoladdresses,
amongcertainVAMCsandCommunityBasedOutpatientClinicsusinganunencrypted
telecommunicationscarriernetwork. OITmanagementacknowledgedthispracticeandformally
acceptedthesecurityriskofpotentiallylosingormisusingthesensitiveinformationexchanged. VAhas
notimplementedtechnicalconfigurationcontrolstoensureencryptionofsensitivedatadespiteVAand
Federalinformationsecurityrequirements. WithoutcontrolstoencryptthesensitiveVAdata
transmitted,Veteransinformationmaybevulnerabletointerceptionandmisusebymalicioususersas
ittraversesunencryptedtelecommunicationscarriernetworks. Further,malicioususerscouldobtainVA
routerinformationtoidentifyanddisruptmissioncriticalsystemsessentialtoprovidinghealthcare
servicestoVeterans.
Further,inFebruary2012,OIGreportedthatVAdidnotadequatelyprotectsensitivedatahostedwithin
itsSystemtoDrivePerformance(STDP)application. Specifically,OIGdeterminedthatmorethan20
systemusershadinappropriateaccesstosensitiveSTDPinformation. Further,OIGreportedthatproject
Performance Information Part II - 100






managersdidnotreportunauthorizedaccessasasecurityeventasrequiredbyVApolicy. STDPproject
managerswerenotfullyawareofVAssecurityrequirementsforsystemdevelopmentandhadnot
formalizeduseraccountmanagementprocedures. InadequateInformationSecurityOfficeroversight
contributedtoweaknessesinuseraccountmanagementandfailuretoreportexcessiveuserprivileges
assecurityviolations. Asaresult,VAlackedassuranceofadequatecontrolandprotectionofsensitive
STDPdata. VAOITconcurredwithOIGsrecommendationandplanstoimplementaVAwideencryption
solutiontomitigatethesesecurityrisks.
InJuly2011,OIGreportedthatcertaincontractorsdidnotcomplywithVAinformationsecuritypolicies
foraccessingmissioncriticalsystemsandnetworks. Forinstance,contractorpersonnelimproperly
shareduseraccountswhenaccessingVAnetworksandsystems;didnotreadilyinitiateactionsto
terminateaccountsofseparatedemployees;anddidnotobtainappropriatesecurityclearancesor
completesecuritytrainingforaccesstoVAsystemsandnetworks. OIGconcludedthatVAhasnot
implementedeffectiveoversighttoensurethatcontractorpracticescomplywithitsinformationsecurity
policiesandprocedures. ContractorpersonnelalsostatedtheywerenotwellawareofVAsinformation
securityrequirements. Asaresultofthesedeficiencies,VAsensitivedataisatriskofinappropriate
disclosureormisuse.
VAsProgramResponse
EstimatedResolutionTimeframe: 2014
ResponsibleAgencyOfficial: DeputyAssistantSecretaryforInformationSecurity
Completed2013Milestones
OITcontinuedeffortstoimproveitsinformationsecurityprogramandsystemsecuritycontrols
throughout2013byaddressingfindingsinthe2012FISMAReportregardingconfigurationmanagement,
accesscontrols,changemanagement,andservicecontinuitycontrols. Wecontinuetoimproveour
securityposturethroughexistinginitiativessuchastheagencywideCRISP,andtheclosingoutof
POA&Ms.SinceOctober2012,thenumberofopenPOA&Mshasalmosthalvedandthetrendcontinues
todecline. HighseverityPOA&Mshavealsodecreasedbyonethird. Wehavealsoimplementednew
initiatives,suchastheGovernance,Risk,andCompliance(GRC)tool,AgilianceRiskVisionOpenGRC
(RiskVision),whichestablisheseffectiveprocessesforevaluatinginformationsecuritycontrolsbyfurther
institutingcontinuousmonitoringthroughoutVAsnetwork.
RegardingtheMarch2013OIGreportthatVAhasnotimplementedtechnicalconfigurationcontrolsto
ensureencryptionofsensitivedata,OITnonconcurredwiththisfinding.VADirective6609provides
policythatcanbeusedformailingpersonallyidentifiableandsensitiveinformationwhenencrypted
emailisnotavailable.Furthermore,whenemployeessigntheVARulesofBehavior,theyagreetouse
VAapprovedencryptiontoencryptanyemail,includingattachmentstotheemailthatcontainsVA
sensitiveinformationbeforesendingtheemail. Employeesagreethattheywillnotsendanyemailthat
containsVAsensitiveinformationinanunencryptedform.
RegardingtheFebruary2012OIGreportthatVAdidnotadequatelyprotectsensitivedatahostedwithin
itsSTDPapplication,OIThastakenthefollowingactions: OITensuresthatitsemployeesontheSTDP
projectreceivethenecessaryrolebasedsecuritytrainingtoaddresstheissueshighlightedinthe
February2012report.Inaddition,InformationSecurityOfficers(ISO)areassignedtooverseeSTDP
developmentactivities,ensureproperapprovalofrequestsforuseraccesstothesystematthe
Performance Information Part II - 101







appropriatelevels,performcheckslocallybeforesystemaccessisgranted,andreportinformation
securityeventsinaccordancewithVApolicy.
RegardingtheJuly2011OIGconclusionthatVAhasnotimplementedeffectiveoversighttoensurethat
contractorpracticescomplywithourinformationsecuritypoliciesandprocedures,OIThastakenthe
followingactions: First,VAholdsamandatoryannualtrainingstanddownwhereeveryVAfacilitymust
certify100percenttrainingcomplianceforVAPrivacyandInformationSecurityAwarenessTrainingand
RulesofBehaviorforallVAemployees,contractors,residenttrainees,andvolunteers/VeteransService
Organizationrepresentativeswithintheirareaofresponsibilityinthesettimeframe.Contractorsthat
arenotcompliantwithVAsPrivacyandInformationSecurityAwarenessTrainingandRulesofBehavior
requirementwillhavetheirVAnetworkaccessremoved.Also,newcontractorsmaynotbegivenaccess
toanyVAinformationorinformationsystemsuntiltheyhavecompletedthistrainingrequirement.
Actionitemsarebeingissuedapproximatelyevery6monthsforISOandservicedeliveryand
engineeringIToperationspersonneltoconductreviewsofseparateduseraccounts;thisincludesreview
ofcontractoraccounts.
OIGSubChallenge#5B: InterconnectionswithUniversityAffiliates(OITLead,VHA)
InOctober2012,OIGreportedthatVAhasnotconsistentlymanageditssystemsinterconnectionsand
dataexchangeswithitsexternalresearchanduniversityaffiliates. DespiteFederalrequirements,VA
couldnotreadilyaccountforthevarioussystemslinkagesandsharingarrangements. VAalsocouldnot
provideanaccurateinventoryoftheresearchdataexchanged,wheredatawashosted,orthesensitivity
levels. Innumerousinstances,OIGidentifiedunsecuredelectronicandhardcopyresearchdataat
VAMCsandcolocatedresearchfacilities.
OIGdeterminedthatVAsdecentralizeddatagovernanceapproachhasbeenineffectivetoensurethat
researchdataexchangedisadequatelycontrolledandprotectedthroughoutthedatalifecycle. VAand
itsresearchpartnershavenotconsistentlyinstitutedformalagreementsrequiringthathostingfacilities
implementcontrolscommensuratewithVAstandardsforprotectingthesensitivedata. Theresponsible
VHAprogramofficesdecentralizedapproachtoresearchdatacollectionandoversightatalocallevel
hasnotbeeneffectivetosafeguardsensitiveVAinformation. Forseveralyears,leadingFederaland
industrysourceshaveproposedamorecentralizedmodelforimprovinggovernanceofsensitivedata
throughoutthedatalifecycle. Federalandindustrysourcesalsoemphasizethateffectivedata
governanceshouldprovidecentralizedpolicies,procedures,andresourcestoeffectivelyidentify
importantdataandsecurelymanagethem. Becauseoftheseissues,VAdataexchangedwithits
researchpartnerswasconsideredtobeatriskofunauthorizedaccess,loss,ordisclosure.
VAsProgramResponse
EstimatedResolutionTimeframe: 2014
ResponsibleAgencyOfficial: UnderSecretaryforHealthandAssistantSecretaryforInformationand
Technology
Completed2013Milestones
AllMemorandaofUnderstanding(MOU)andInterconnectionSecurityAgreements(ISA)arecurrently
underreviewbytheOITandwillbeestablishedorupdatedtoreflectoperationalenvironments. The
reviewofallMOU/ISAsiscurrently79.5percentcomplete. Atotalof162airgappedconnectionshave
beenidentifiedanddocumentedaspartofthisprocess.
Performance Information Part II - 102











OIThasestablishedareviewgrouptoexaminethecurrenttemplatesinuseandtheprocessfor
updatingandreviewingMOU/ISAs. Targetdateforcompletionofthisreview,andtherevisionstothe
currentMOU/ISAtemplatesandprocess,isAugust30,2013.
OITandVHAcontinuetodevelopasetofguidelinesforconductingoversightofresearchlabs. A
workgroupconsistingofOITFieldSecurityServiceandVHAOfficeofResearchandDevelopmentsubject
matterexpertshasbeenconvenedtodraftguidelinesandoncematured,willbesenttoOITandVHA
leadershipforreview.Targetdateforcompletionoftheseguidelinesis1
st
quarterof2014. Anaction
planforconductingoversightreviewsofresearchlabswillbecompletedaftertheguidelinesare
developed.
VHAappreciatestheimportanceofanaccurateinventoryofcollectedresearchdata,compliancewith
researchprotocolrequirementsondatacollection,andsecuremanagementofresearchinformation
overthedatalifecycle. However,modalitiesforensuringtheseelementsofdatamanagementdonot
currentlyexistingovernmentorprivateresearchsettings. VHAcontinuestoconsiderwhetherthe
simplesolutionofacentralizeddatagovernanceandstoragemodelwouldachievetheneedsof
complexresearchdatamanagementandwhethersuchamodelwouldbefeasibleorappropriate. Such
agovernanceandmanagementmodelwouldtakeconsiderablehumanandmonetaryresources. Acost
benefitanalysishasyettobeperformedtodeterminewhetherthebenefittobegainedbysucha
systemisappropriatetothelevelofresourcingrequiredtodevelop,implement,andmanageitover
time. VHAhasbeenworkingwithOITtodevelopquestionsthatneedtobeansweredwithrespecttoa
centralizedrepository. Issuesassociatedwithcentralizationareintimatelyrelatedtoissuesassociated
withdatasharing.
OIGSubChallenge#5C: StrategicManagementofOfficeofInformationTechnologyHuman
Capital(OIT)
OITprovidesITsystemssupportintheprovisionofbenefitsandhealthcareservicestoourNations
Veterans. However,withinthenext5years,OITmayfacealossofover40percentofitsleadershipand
technicalemployees,whichcouldthreateninstitutionalknowledgeandmissioncriticalITcapabilitiesas
VAmovesforwardinthe21
st
century. Giventhepotentiallossofcriticalstaff,OIThasnotestablisheda
strategicapproachtomitigateandmanageitshumancapital. Instead,OIThasbeenmanagingits
humanresourcesinanadhocmannerwithnoclearvision. AlthoughOITrecognizestheimportanceof
strategichumancapitalmanagement,ithasnotmadeitapriorityanddoesnothavetheleadershipand
staffinplacetosupportimplementationofanOIThumancapitalstrategy.
OIThasnotfullyimplementedcompetencymodels,identifiedcompetencygaps,orcreatedstrategies
forclosingthegaps. OITalsohasnotcapturedthedataneededtoassesshowwellcontractorsupport
supplementsOITstaffingandfillscompetencygaps. Moreover,OITlacksassurancethatithasmade
costeffectivedecisionsregardinghowitspentmoneyoncontractors. Finally,OIThasnotestablisheda
mechanismtoevaluatethesuccessofitshumancapitalinitiatives. Asaresult,OIThasnoassuranceit
haseffectivelymanageditshumancapitalresourcestosupportVAinaccomplishingitsmission. Once
thestrategyandcompetenciesareinplace,OIGwillrevisitthisissuetodeterminetheoverall
effectivenessofOITshumancapitalmanagement.
Performance Information Part II - 103










VAsProgramResponse
EstimatedResolutionTimeframe: 2014
ResponsibleAgencyOfficial:Director,HumanCapitalManagement
Completed2013Milestones
OITdevelopedandimplementedtheOITHumanCapitalStrategicPlan(HCSP),FY2014 2020,and
releaseditasscheduledonOctober1,2013. TheplanwasdevelopedbyOITsHumanCapitalStrategic
WorkingGroup,withguidancefromVAsOfficeofHumanResourcesManagementOfficeofWorkforce
Planning. TheHCSPisalignedwithVAsmissions,goalsandobjectives,andtheperformancemeasures
andmilestonesoutlinedintheHumanCapitalAssessmentandAccountabilityFramework. TheHCSPis
alsolinkedtothefollowingVAPlans:
VAStrategicPlanDraft20142020
VAStrategicPlanRefreshFY20112015
VAInformationResourceManagementStrategicPlanDraft,May15,2013
OfficeofHumanResourcesandAdministration(HRA)StrategicPlanDraft20142020
ITStrategicPlanDraftFY20122015
DiversityandInclusionStrategicPlanFY20122016
OITsHCSPidentifiesgoalstoremovetheadhocnatureofmanaginghumanresourceswhile
establishinglinkagewithHRAandservicinghumanresourcestations. Whilewearemakingprogressin
identifyingcompetencygapswestillhaveprogresstomakeinfirstidentifyingthecompetencylevelof
eachemployee. AsofOctober31,2013,OIThascompletedindividualcompetencyassessmentson93%
ofthe7,579OITemployeesintheTalentManagementSystemandwillcontinueworkingtowards100%
completion. Thenumberwillcontinuallychangeasorganizationalgainsandlossesoccur.
OIGSubChallenge#5D: EffectiveOversightofActiveITInvestmentProgramsandProjects
(OITLead,VBA,VHA)
VAischallengedtoensureappropriateinvestmentdecisionsaremadeandthatannualfunding
decisionsforVA'sITcapitalinvestmentportfoliowillmakethebestuseofVA'savailableresources. In
2011,OITinstitutedPMAS,constitutingamajorshiftfromthewayVAhistoricallyhasplannedand
managedITdevelopmentprojects. PMASwasdesignedasaperformancebasedmanagementdiscipline
thatprovidesincrementaldeliveryofITsystemfunctionalitytestedandacceptedbycustomers
withinestablishedscheduleandcostcriteria. AsofMay2012,OITwasmanagingall134active
developmentprogramsandprojectsusingPMAS. Anadditional46projectswereintheplanningstage,
while30projectswereclassifiedasnewstarts.
However,our2011auditshowedthecurrentPMASframeworkdidnotprovideasoundbasisforfuture
success. OIGreportedthatalotmoreworkremainedtobedonebeforePMAScouldbeconsidered
completelyestablishedandfullyoperational. OIThadinstitutedthePMASconceptwithoutaroadmap
identifyingthetasksnecessarytoaccomplishitoradequateleadershipandstafftoeffectively
implementandmanagethenewmethodology. OITdidnotestablishkeymanagementcontrolsto
ensurePMASdatareliability,verifyprojectcompliance,andtrackprojectcosts. OITalsodidnotputin
placeguidanceonhowsuchcontrolsshouldbeusedwithintheframeworkofPMAStomanageand
overseeITprojects. Lackingsuchfoundationalelements,OIThasnotinstilledthedisciplineand
accountabilityneededforeffectivemanagementandoversightofITdevelopmentprojects. Untilthese
Performance Information Part II - 104











deficienciesareaddressed,VAsportfolioofITdevelopmentprojectswillremainsusceptibletocost
overruns,scheduleslippages,andpoorperformance.
VAhasalongstandinghistoryofchallengesineffectivelymanagingITdevelopmentprojects. For
example,theVeteransServiceNetwork(VETSNET)program,VAsefforttoconsolidateCompensation
andPension(C&P)benefitsprocessingintoasinglereplacementsystem,hasfacedanumberofcost,
schedule,andperformancegoalchallenges. InMay2009,VBAestimatedthetotalcostofVETSNETto
bemorethan$308millionmorethanthreetimestheinitialcostestimate. Aftermorethan15years
ofVBAdevelopment,includingmanagementandprocessimprovements,VETSNEThasthecore
functionalityneededtoprocessandpaythemajorityofC&Pclaims. However,workremainstomeet
theoriginalgoalsforVETSNET. Majorreleasesofthesystemwerealsodevelopedwithunstable
functionalrequirements,resultingininadequatetimetofullytestsoftwarechanges. Consequently,
majorreleasesofVETSNETcontainedfunctionsthatdidnotoperateasintendedandmanysystem
defectsweredeferredorcorrectedinsubsequentsoftwarereleases. Furthercomplicatingmatters,VBA
hasrecentlylaunchedseveralhighprofileITinitiativesthatwillleverageVETSNETtomakebenefit
payments. TheseoverlappingITinitiativesincreasetherisksthatVBAwillexperiencefurtherdelaysin
achievingtheoriginalVETSNETgoals.
AsofSeptember2012,VAhadnotfullytestedVBMS. Duetotheincrementalsoftwaredevelopment
approachVAchose,thesystemhadnotbeenfullydevelopedtotheextentthatitscapabilitytoprocess
claimsfrominitialapplicationthroughreview,rating,award,tobenefitsdeliverycouldbesufficiently
evaluated. AsVAexpected,thepartialVBMScapabilitydeployedtodatehadexperiencedsystem
performanceissues. Further,scanninganddigitizationofVeteransclaimslackedadetailedplanandan
analysisofrequirements. OIGidentifiedissueshinderingVBAseffortstoconverthardcopyclaimsto
electronicformatforprocessingwithinVBMS,includingdisorganizedelectronicclaimsfoldersand
impropermanagementofhardcopyclaims.
VAseniorofficialshavetakenrecentactionstoimprove. However,giventheincrementalsystem
developmentapproachusedandthecomplexityoftheautomationinitiative,VAwillcontinuetoface
challengesinmeetingitsgoalofeliminatingthebacklogofdisabilityclaimsprocessingby2015. Because
thesystemwasinanearlystageofdevelopmentatthetimeofOIGsreview,OIGcouldnotexamine
whetherVBMSwasimprovingVBAsabilitytoprocessclaimswith98percentaccuracy. However,OIG
continuestoexamineVBMSimplementation,functionality,andsecurityaspartofanongoingauditin
2013.
VAsProgramResponse
EstimatedResolutionTimeframe: 2014
ResponsibleAgencyOfficial: DeputyChiefInformationOfficer
Completed2013Milestones
ThecharacterizationbyOIGdoesnotreflectthatforthethirdyearinarowOIThasdeliveredongreater
than80percentofallincrementsforscheduledcommitmentsand98percentofallincrementsinunder
6months. ExamplesofOITeffectiveoversightincludetheInternationalClassificationofDiseases,10
th
edition(ICD10)ConversionofClass1ClinicalRemainingProducts,RevenueImprovementandSystems
Enhancements(RISE)NationalInsuranceFile,andVBMSPhase4. Theaccountabilityatthecoreofthe
Performance Information Part II - 105













PMASframeworkdrivesgreatercustomerengagementandexpectationforsmaller,moreincremental
deliveries. Asaresult,ratherthandeliveryoflargecodesetsmonthsafterbusinessrequirementsare
known,projectmanagersareincentivizedtodeliverearlyandoftentoensurecustomeracceptanceand
satisfaction. ProvidingontimedeliverycoupledwithnecessarysolutionsisindicativeofhowPMAS
engagesleadershipatalllevelsandfocusesprojectmanagerdeliveryefforts.
AsPharmacyRengineering(PRE)andPMAShaveevolved,projectteamshaveimprovedtheirabilityto
determineanachievableincrementsizedscope. Reviewsnowincludefunctionpointcountsaswellas
anassessmentofrisksanddependencies. OITrequiresMilestoneReviewsandprebriefsforeach
increment;aprojectwillnotbeapprovedifthemilestonedates,budgetandtechnicalapproacharenot
achievable. MilestoneReviewsrequireseniormanagementrepresentationfromeachoftheprimary
organizationsundertheCIO. EachoftheseMilestoneReviewsalsoinvolvesnotlessthanthreelevelsof
reviewbeforefullapproval:Level1IPTApproval,Level2PrebriefApproval,andLevel3Formal
MilestoneBriefApproval.
OITestablishedandimplementedtherecommendedcontrolstoensureITprojectshavesufficient
leadershipandstaffassignedthroughouttheprojectlifecyclepriortothereleaseofthedraftOIG
report. OITleadersareengagedintheIntegratedProjectTeam(IPT),MilestoneReview,and
competencyResourceManagementCouncil(RMC)processes. OIThasimplementedtheredflagand
Techstatprocessestogainseniormanagementassistancewhenaprojectmanagerhasresource
requirementsforanActivePMASprojectthatcannotbemetthroughtheRMC. RedFlagsserveto
escalatetheprioritylevelofaresourcerequestthatgoestothecompetencymodelforstaffing. OIT
nowusesthecompetencymodeltoprioritizeandallocatestaffingforeachprojectincrement. Under
thismodel,theprojectmanagerrequestsresourcesthroughtheProjectManagementCouncil(PMC)
andRMCbasedontheresourcerequirementsidentifiedintheirprojectplans. OncethePMCapproves
andprioritizesaresourcerequest,theRMCwillworkwithinthecompetencyorganizationtomatch
resourcestothehighestpriorityneeds.
OIThasalreadyaddressedfunding,untiladecisionismaderegardingtransferringthePREefforttothe
IntegratedElectronicHealthRecord(iEHR)project,prioritizationthroughtheITPlanning,Prioritization,
Budget,andExecution(ITPPBE),ITLeadershipBoard(ITLB),andtheBudgetOperatingPlan(BOP)
process. Theseprocessesensureadequateplansforresourcesandfundingbasedonthetransformation
prioritiesofthedepartment,andtheprioritizationinputoftheVAStaffOffices. OITmerelyexecutes
developmentfundsinaccordancewiththeprioritizationguidanceitreceivesfromtheITPPBE,ITLB,and
BOP. CurrentplansdonotcallforPREtobeabsorbedintoiEHRinFY2014.Instead,undercurrent
plans,PREwillmoveforwardasanindependentproject.TheFY2014fundingrequestforPREwas
submittedtotheBOP. DependingonthepriorityofthePREprojectamongotherOITprojects,itmayor
maynotbefundedinFY2014. Finally,itisalsolikelythattheFY2014continuingresolution,which
providessignificantlyreducedfundingthanwasrequestedinthePresidentsFY2014budget,maycause
fundingconstraintsthatundermineVAs planningefforts.
Performance Information Part II - 106



PREsrecordondeployment/implementationincrementsshowsPREhasbeenveryeffectiveat
completingtheminlessthan6months. TheschedulechallengesareoccurringintheperiodofInitial
OperatingCapabilities(IOC),beforedeploymentincrements. Becausecurrentpoliciesandprocedures
donotincludereportingfortheIOCperiod,thisdataisnottrackedonthePMASDashboard. OIGhas
misunderstoodthedifferencebetweentheIOCperiod(IOCentrytoIOCexit)andthePMAS
Deployment/ImplementincrementperiodwhichstartsafterIOCexit. OIGisfocusingontheincrement
segment,whichisnotthetrueproblem. TheIOCsegmentisthetrueproblem.
PMASisthedisciplinedapproachVAemploystoensureontimedeliveryofITcapabilities. PMAS
establishestheframeworkthatensuresthecustomer,ITprojectteam,vendorsandallstakeholders
engagedinaprojectfocusonasinglecompellingmissionachievingontimeprojectdelivery. Fromthe
veryinceptionofPMAS,VAleadershipplannedtosystematicallyexpandthescopeandfunctionof
PMASovertime. PMAScontinuestoevolveandnowincludesavarietyofaccountabilitystructuresto
ensurenotonlythatITdevelopmentprojectsareeffectivelymanaged,butalsotoensurethattheIT
productsthataredeliveredmeetstrict,welldefinedquality,functionalityandcustomerrequirements.
ThecurrentversionofPMAS(4.0)alreadyusesthePMASDashboardtotrackthetotaltimeneededto
deployanincrement. ThischangewasimplementedunderPMAS4.0asimplementationincrements
whichbeginafterIOCexitandafterMilestone2. AllcurrentandpastversionsofPMASandthePMAS
Dashboardalsotrackdevelopmentincrements. TheseincrementsendeitheratIOCentryorwhenthe
customersignsoffanddoesnotwanttoproceedtoIOCentrywithoutfirstworkingonasubsequent
developmentincrement. ForsomePMASprojects,thisperiodoftimeconsistsofrecursivetestingand
defectrepaircyclesuntilproductiontestingrevealsthatthefunctionalityisreadyforadditional
productionsites. ThisIOCperiodisnottrackedonthedashboard,exceptinrareexceptionstothe
currentPMAS4.0practices. ThePMASDashboardhasbeenenhancedtotrackallperiodsoftimewithin
aproject,includingtesting,andthisfunctionalitywillbeavailableaftertheFebruary2014
implementation.
PMASisanevolvingsetofpolicies,practices,andmethodologieswhichhaveprogressedthrough
lessonslearnedandbestpracticesoverthepast4years. Manyfindingsreflectlapsesindatacollection
andreporting,whichwerepresentinthepreviousiterationsofPMAS,butPMAShassincematuredto
providetailoredworkflowsandguidanceforthesoftwaredevelopmentlifecycle.
PMASDashboardhasalreadydevelopedrequirementstotrackIOC,testing,anddeployment,whichwill
ensuremonitoringwithinthePMASDashboardofthetimeneededtodevelopanddeployITsoftware.
OITimplementedallbuttheIOCperiodtrackinginFY2013.
Areliablemethodologyandguidanceforcapturingandreportingprojectcostsattheincrementlevel
wasestablishedbyOITsProductDevelopment(PD)organizationinFY2013,with86percentofeligible
PDcontractsexecutingattheincrementlevel. PREwilladapttothismethodologyandguidancein
FY2014.
OITestablishedguidanceonplanningwellthoughtoutandachievablesoftwaredevelopmentproject
incrementsaspartofthePMASMilestoneReviewprocess. OITpublishedthisguidanceinPMAS
Performance Information Part II - 107










Guide4.0inNovemberof2012.
ControlstoensureITprojectshavesufficientleadershipandstaffassignedthroughoutthelifecyclehas
alreadybeenestablishedthroughleadershipengagementintheIPT,Milestone,andcompetencyRMC
process. Intheeventthatinsufficientresourcesareavailable,theFlagandTechstatprocessesallowfor
rapidleadershipawarenessandengagementtoresolveresourcerequirements.
Incrementbaseddevelopment: Itisimportanttorecognizethedifferencebetweenthetimeperiod
coveredbyaPMASincrementandthetimeperiodcoveredbyafullsoftwaredevelopmentcycle. Afull
softwaredevelopmentcycleincludestheentireperiodfromplanningtofulldeploymentatallsites;a
PMASincrementcoversashorterperiod.
Healthdeploymentvariances: DuetothehighlycustomizedbusinessprocesseswithinVHA,aproject
teamdeclaresIOConceitreleasessoftwareintotheproductionenvironment. ThePMASdefinitionof
successiscustomerfacingfunctionalitydeliveredintotheproductionenvironment. OIGdocuments
PMASfailurewhenthePREprojectnationaldeploymentwasnotachievedwithin6monthsorless. The
6monthsoftwaredevelopmentincrementsintentionallydonotaccountfortheIOCtime,asitvaries
significantlyamongstincrements,dependingontheclinicalenvironment.
Presently,costsareoftenonlyknownreliablyataprojectorprogramlevel. OITistransitioningto
frameworkwhichwillexecutedevelopmentcontractsattheincrementlevel. InFY13,86percentof
eligiblePDcontractswereexecutedattheincrementlevel. However,itwilltaketimebeforelegacy
contractswithonlyprogramlevelcostsinformationexpireandcanbereplacedwithnewcontractsthat
requirecoststobetrackedattheincrementlevel. PREwillhavecontractsthatareallincrementbased
byFY2014. PREnowmeetsmonthlytoreconcileandreportactualcoststothePMASDashboard.
Performance Information Part II - 108


















APPENDIX
The Appendix lists selected reports pertinent to the five key challenges discussed.
However, the Appendix is not intended to encompass all OIG work in an area.
OIG MAJOR MANAGEMENT CHALLENGE #1: HEALTH CARE DELIVERY
Healthcare InspectionConsultation Mismanagement and Care Delays, Spokane
VA Medical Center, Spokane, Washington
9/25/2012 | 12-01731-284 | Summary|
Healthcare InspectionDelay in Treatment, Louis Stokes VA Medical Center,
Cleveland, Ohio
10/12/2012 | 12-01487-08 | Summary |
Healthcare InspectionDelays for Outpatient Specialty Procedures, VA North
Texas Health Care System, Dallas, Texas
10/23/2012 | 12-03594-10 | Summary |
Healthcare InspectionAlleged Clinical and Administrative Issues, VA Loma Linda
Healthcare System, Loma Linda, California
11/19/2012 | 12-01758-40 | Summary |
Healthcare InspectionInpatient and Residential Programs for Female Veterans
with Mental Health Conditions Related to Military Sexual Trauma
12/5/2012 | 12-03399-54 | Summary |
Audit of VHA's Physician Staffing Levels for Specialty Care Services
12/27/2012 | 11-01827-36 | Summary |
Healthcare InspectionAppointment Scheduling and Access Patient Call Center,
VA San Diego Healthcare System, San Diego, California
1/28/2013 | 12-04108-96 | Summary |
Healthcare InspectionMismanagement of Inpatient Mental Health Care, Atlanta
VA Medical Center, Decatur, Georgia
4/17/2013 | 12-03869-179 | Summary |
Healthcare InspectionPatient Care Issues and Contract Mental Health Program
Mismanagement, Atlanta VA Medical Center, Decatur, Georgia
4/17/2013 | 12-02955-178 | Summary |
Healthcare InspectionInappropriate Use of Insulin Pens, VA Western New York
Healthcare System, Buffalo, New York
5/9/2013 | 13-01320-200 | Summary |
Healthcare InspectionNursing Care in the Community Living Center for Spinal
Cord Injury, Louis Stokes VA Medical Center, Cleveland, Ohio
6/27/2013 | 12-02186-227 | Summary |
Healthcare InspectionProvider Availability, VA Roseburg Healthcare System,
Roseburg, Oregon
7/18/2013 | 13-01241-250 | Summary |
Healthcare InspectionAlleged Inadequate Oversight at a Contracted Homeless
Program, VA New Jersey Health Care System, East Orange, New Jersey
7/16/2013 | 12-01344-243 | Summary |
Performance Information Part II - 109


















Healthcare InspectionQuality and Patient Safety Concerns in the CLC, W.G. (Bill)
Hefner VA Medical Center, Salisbury, North Carolina
7/22/2013 | 13-01123-249 | Summary |
Healthcare InspectionReview of a Patient with Medication-Induced Acute Renal
Failure, Amarillo VA Health Care System, Amarillo, Texas
7/29/2013 | 13-01988-253 | Summary |
Healthcare InspectionFollow-Up Assessment of Radiation Therapy, VA Long
Beach Healthcare System, Long Beach, California
7/31/2013 | 13-00696-254 | Summary |
Healthcare InspectionReview of VHA Follow-Up on Inappropriate Use of Insulin
Pens at Medical Facilities
8/1/2013 | 13-01987-263 | Summary |
Healthcare InspectionPrevention of Legionnaires Disease in VHA Facilities
8/1/2013 | 13-01189-267 | Summary |
Healthcare InspectionReview of Circumstances Leading to a Pause in Providing
Inpatient Care, VA Northern Indiana Healthcare System, Fort Wayne, Indiana
8/2/2013 | 13-00670-265 | Summary |
Healthcare InspectionAlleged Patient Rights, Quality of Care, and Other Issues,
VA Puget Sound Health Care System, Seattle, Washington
8/13/2013 | 13-02235-277 | Summary |
Vet Center Contracted Care Program Review
8/16/2013 | 12-00040-268 | Summary |
Healthcare InspectionAlleged Sterile Processing Service Deficiencies, VA Puget
Sound Health Care System, Seattle, Washington
9/3/2013 | 13-01351-296 | Summary |
Healthcare InspectionGastroenterology Consult Delays, William Jennings Bryan
Dorn VA Medical Center, Columbia, South Carolina
9/6/2013 | 12-04631-313 | Summary |
Healthcare InspectionLaboratory Delays and Alleged Staff Training Issues,
Memphis VA Medical Center, Memphis, Tennessee
9/16/2013 | 13-02599-311 | Summary |
Healthcare InspectionAn Unexpected Death in a Mental Health Treatment
Program, VA New Jersey Health Care System, Lyons, New Jersey
9/17/2013 | 13-01498-318 | Summary |
Healthcare InspectionInadequate Staffing and Poor Patient Flow in the
Emergency Department, VA Maryland Health Care System, Baltimore, Maryland
9/18/2013 | 12-03887-319 | Summary |
Healthcare InspectionQuality of Care Issues, Erie VA Medical Center, Erie,
Pennsylvania, and VA Pittsburgh Healthcare System, Pittsburgh, Pennsylvania
9/25/2013 | 13-01855-336 | Summary |
Audit of Selected VHA Non-Institutional Purchased Home Care Services
9/30/2013 | 11-00330-338 | Summary |
Performance Information Part II - 110















Congressional Testimony 2/13/13
Statement of Office of Inspector General Department of Veterans Affairs to the Committee on
Veterans Affairs U.S. House of Representatives Hearing: Honoring The Commitment:
Overcoming Barriers To Quality Mental Health Care For Veterans, February 13, 2013 More
Congressional Testimony 3/13/2013
Statement of Linda A. Halliday Assistant Inspector General For Audits and Evaluations Office of
Inspector General Department of Veterans Affairs Before The Subcommittee on Health
Committee on Veterans Affairs U.S. House of Representatives Hearing: Meeting Patient Care
Needs: Measuring the Value of VA Physician Staffing Standards, March 13, 2013 More
Congressional Testimony 7/19/2013
Statement of Michael L. Shepherd, M.D., Before the Subcommittee on Health, Committee on
Veterans Affairs, U.S. House of Representatives Hearing: Care and Treatment Available To
Survivors of Military Sexual Trauma, July 19, 2013 More
Congressional Testimony 8/7/2013
Statement of Michael L. Shepherd, M.D., Before the Committee on Veterans Affairs, U.S.
Senate Hearing: Ensuring Veterans Receive the Care They Deserve: Addressing VA Mental
Health Program Management, August 7, 2013 More
OIG CHALLENGE #2: BENEFITS PROCESSING
Audit of Vocational Rehabilitation and Employment Program's Self-Employment
Services at Eastern and Central Area Offices
12/11/2012 | 11-00317-37 | Summary |
Audit of NCA's Internal Gravesite Review of Headstone and Marker Placement
2/7/2013 | 12-02223-98 | Summary |
Interim ReportParticipation in VBA's Veterans Retraining Assistance Program
4/15/2013 | 12-04524-171 | Summary |
Audit of VBAs Foreclosed Property Management Contractor Oversight
8/27/2013 | 12-01899-238 | Summary |
Audit of VBA's Pension Payments
9/4/2013 | 12-00181-299 | Summary |
Audit of VBA's Veterans' Retraining Assistance Program Participation
9/17/2013 | 12-04524-321 | Summary |
Congressional Testimony 2/15/2013
Statement of Linda A. Halliday Assistant Inspector General for Audits and Evaluations Office of
Inspector General Department of Veterans Affairs Before the Subcommittee on Disability
Assistance and Memorial Affairs Committee on Veterans Affairs U.S. House of Representatives
Hearing: The 100 Percent Temporary Disability Rating: An Examination of its Effective Use,
February 5, 2013 More
Performance Information Part II - 111

















Congressional Testimony 4/10/2013
Statement of Linda A. Halliday Assistant Inspector General For Audits and Evaluations Office of
Inspector General Department of Veterans Affairs Before the Subcommittee on Disability
Assistance and Memorial Affairs Committee on Veterans Affairs U.S. House of Representatives
Hearing: Sustaining the Sacred Trust: An Update on Our National Cemeteries, April 10, 2013
More
Congressional Testimony 4/18/2013
Statement of Richard J. Griffin Deputy Inspector General Office of Inspector General
Department of Veterans Affairs Before the Subcommittee on Military Construction Veterans
Affairs, and Related Agencies Committee on Appropriations U.S. Senate Hearing: VA
Challenges in Fiscal Year 2014, April 18, 2013 More
OIG CHALLENGE #3: FINANCIAL MANAGEMENT
Audit of VBA's Liquidation Appraisal Oversight in the Cleveland and Phoenix
Regional Loan Centers
10/4/2012 | 10-04045-124 | Summary |
Review of Allegations at VA Medical Center, Providence, Rhode Island
12/17/2012 | 10-01937-63 | Summary |
Review of VHA's South Texas Veterans Health Care System's Management of Fee
Care Funds
1/10/2013 | 11-04359-80 | Summary |
Audit of VA's Consolidated Financial Statements for Fiscal Years 2012 and 2011
1/18/2013 | 12-01284-13 | Summary |
Audit of VHA's Beneficiary Travel Program
2/6/2013 | 11-00336-292 | Summary |
Review of VAs Compliance with the Improper Payments Elimination and
Recovery Act for FY 2012
3/15/2013 | 12-04241-138 | Summary |
Audit of the Community Nursing Home Program
3/29/2013 | 11-00331-160 | Summary |
Independent Review of VAs FY 2012 Performance Summary Report to the Office
of National Drug Control Policy
3/31/2013 | 13-00680-142 | Summary |
Independent Review of VAs FY 2012 Detailed Accounting Submission to the
Office of National Drug Control Policy
3/31/2013 | 13-00682-143 | Summary |
Review of VA's Programs for Addressing Climate Change
6/28/2013 | 13-01846-235 | Summary |
Audit of Non-Purchase Card Micro-Purchases
8/9/2013 | 12-01860-237 | Summary |
Review of VHA's Management of Travel, Duty Stations, Salaries and Funds in the
Procurement and Logistics Office
9/30/2013 | 11-01653-300 | Summary |
Performance Information Part II - 112
















OIG CHALLENGE #4: PROCUREMENT PRACTICE
Review of VHA's Minor Construction Program
12/17/2012 | 12-03346-69 | Summary |
Review of VA's Acquisitions Supporting the Veteran Employment Services Office
6/25/2013|13-00644-231 | Summary|
Audit of NCA's Contracting Practices
9/26/2013 | 12-00366-339 | Summary |
Audit of VA's Technology Acquisition Center Contract Operations
9/27/2013 | 12-02387-343 | Summary |
Review of VA's Separately Priced Item Purchases for Training Conferences
9/30/2013 | 13-00455-345 | Summary |
OIG CHALLENGE #5: INFORMATION MANAGEMENT
Review of VA's Alleged Incomplete Installation of Encryption Software Licenses
10/11/2012 | 12-01903-04 | Summary |
Audit of VAs Systems Interconnections with Research and University Affiliates
10/23/2012 | 11-01823-294 | Summary |
Audit of VAs Office of Information Technology Strategic Human Capital
Management
10/29/2012 | 11-00324-20 | Summary |
Review of VBAs Transition to a Paperless Claims Processing Environment
2/4/2013 | 11-04376-81 | Summary |
Review of Alleged Transmission of Sensitive VA Data Over Internet Connections
3/6/2013 | 12-02802-111 | Summary |
Federal Information Security Management Act Audit for Fiscal Year 2012
6/27/2013 | 13-01712-229 | Summary |
Review of Alleged System Duplication in VAs Virtual Office of Acquisition
Software Development Project
9/18/2013 | 12-02708-301 | Summary |
Congressional Testimony 6/4/2013
Statement of Linda A. Halliday Before the Subcommittee on Oversight and Investigations,
Committee on Veterans Affairs, U.S. House of Representatives, Hearing: How Secure is
Veterans Private Information? June 4, 2013 More
Congressional Testimony 5/21/2013
Statement of the Office of Inspector General before the Subcommittee on Health, Committee on
Veterans Affairs, U.S. House of Representatives Hearing, May 21, 2013 More
Performance Information Part II - 113



HighRiskAreasIdentifiedbyGAO
GAOevaluatesVAsprogramsandoperations. InFebruary2013,GAOissuedanupdatetoitsHighRisk
Series(GAO13283). GAOidentifiedhighriskareas(specifictoVAaswellasGovernmentwide)are
summarizedbelow. Inresponsetoeachofthehighriskareas,theDepartmenthasprovidedthe
following:
Estimatedresolutiontimeframe(fiscalyear)forVAtoeliminateeachhighriskarea
ResponsibleAgencyOfficialforeachhighriskarea
Completed2013milestonesinresponsetothehighriskarea
Planned2014milestonesalongwithestimatedcompletionquarter
HighRiskArea EstimatedResolution
Timeframe(FiscalYear) Page# No. Description(ResponsibleOffice)
GAO1
ImprovingandModernizingFederalDisability
Programs(VBAlead,BVAtoprovideadditional
inputregardingappeals)
2016 II 115
GAO2 StrategicHumanCapitalManagement: A
GovernmentwideHighRiskArea(HRA)
2015 II 118
GAO3
ManagingFederalRealProperty: A
GovernmentwideHighRiskArea(OMOAEM)
2014 II 119
GAO4
ProtectingtheFederalGovernments
InformationSystemsandtheNationsCyber
CriticalInfrastructures(OIT)
2014 II 120
Appendix II 122
Performance Information Part II - 114






GAOHighRiskArea1: ImprovingandModernizingFederalDisabilityPrograms
(VBAlead,BVAtoprovideadditionalinputregardingappeals)
(BaseduponGAO13283,GAO1389andGAO11633T)
Federaldisabilityprogramsremaininneedofmodernization.NumerousFederalprogramsprovidea
rangeofservicesandsupportsforpeoplewithdisabilitiesincluding45employmentrelated
programsthattogetherrepresentapatchworkofpoliciesandprogramswithoutaunifiedstrategyor
setofnationalgoals.Further,threeofthelargestFederaldisabilityprogramsmanagedbytheSocial
SecurityAdministration(SSA)andVArelyonoutofdatecriteriatoagreatextentinmakingdisability
benefitdecisions.WhileSSAandVAhavetakenconcretestepstowardupdatingtheircriteria,these
disabilityprogramsemphasizemedicalconditionsinassessinganindividualsworkincapacitywithout
adequateconsiderationoftheworkopportunitiesaffordedbyadvancesinmedicine,technology,and
jobdemands.Finally,Federaldisabilitybenefitprogramsareexperiencinggrowingdisabilityclaim
workloadsasthedemandforbenefitshasincreasedunderadifficultjobmarket.Thus,challengesare
likelytopersist,despiteconcertedeffortstoprocessmoreclaimsannually.GAOdesignatedimproving
andmodernizingFederaldisabilityprogramsashighriskin2003.
VAsProgramResponse
EstimatedResolutionTimeframe: 2016
ResponsibleAgencyOfficial: UnderSecretaryforBenefits
Completed2013Milestones
VBAisaggressivelypursuingitsTransformationPlantoimplementaseriesoftightlyintegratedpeople,
process,andtechnologyinitiativesdesignedtoachievethe2015strategicgoalofcompletingallrating
relatedcompensationandpensionclaimswithin125daysat98percentaccuracylevel. VBAis
retraining,reorganizing,andstreamliningbusinessprocesses,whilebuildingandimplementing
technologysolutionsbasedonnewlyredesignedprocessestoimprovebenefitsdelivery. Theobjectives
oftransformationincludeachievingnewefficiencies,greatereffectiveness,improvedqualityand
consistency,andaworkplacethatisrecognizedasanemployerofchoice.
Significantprogressisbeingmade. AsofSeptember30,2013,theclaimsinventorytotaled722,013,
downfromahighof883,930inJuly2012. AsofSeptember30,2013,thebacklogofclaimsolderthan
125daystotaled418,472. Thiswas192,601belowthepeakbackloginMarch2013anditslowestpoint
sinceMarch2011. AsofAugust2013,claimbasedaccuracywas89.1percentandaccuracymeasuredat
themedicalissuebasedlevelwas95.8percent.
VBMSwassuccessfullydeployedtoall56ROsinJune2013,sixmonthsaheadofschedule. VBMSisa
Webbased,electronicclaimsprocessingsolutiondevelopedtoimprovebusinessprocessesthatwill
serveastheenablingtechnologyforquicker,moreaccurate,integratedclaimsprocessing. VBMS
Release5.0,deployedinthefourthquarterof2013,providesanenhancedapplicationsupportingthe
futureendstategoalofacomplete,electronicclaimsprocessingsystem.
VBAcontinuestoupdatetheentireVAScheduleforRatingDisabilities(VASRD)toensurecompliance
withcurrentmedicalscience. TheMentalDisorders,Respiratory,Skin,andMusculoskeletaland
Rheumatologybodysystemsenteredtheworkinggroupphase. Theworkinggroupphaseforthe
GynecologicalandBreast,Eye,Ear,NoseandThroat/Audiology,andNeurologicalandConvulsivebody
systemswascompletedandthesesystemshaveenteredthedevelopmentphase. Thedevelopment
Performance Information Part II - 115




phasefortheInfectiousDiseases,Cardiovascular,Genitourinary,Digestive,andDentalandOralbody
systemswascompletedandthesesystemshaveenteredtheconcurrencephase.
In2013,VBAandtheDoDagreedtorequirethemilitaryservicestocertifyeachservicetreatment
record(STR)ascompletewhentransferredtoVA. DoDpublishedthenewDoDForm2963Service
TreatmentRecord(STR)TransferorCertification. DoDcompletedtransitiontotheDDForm2963on
August1,2013. HavingthemilitaryservicescertifytheSTRatthepointofseparationorretirementwill
reducetimespentbyVBAadjudicatorsinlookingforSTRdocumentationthatdoesnotexist. Reducing
thetimespentlookingforSTRdocumentationwillassistindecreasingthedevelopmenttimefor
compensationclaims. ThisreductionindevelopmenttimeassistsVBAinachievingthe125daygoalfor
processingcompensationclaims.
VAandSSApartneredviatheSSAGovernmentServicesOnline(GSO)initiativetopilotaWebbasedtool
thatallowsVApersonneltocommunicatedirectlywithSSApersonnelregardingrecordrequests. In
addition,SSAagreedtoeliminateVAprovidedrecordsfromthematerialssenttoVA. SSAandVA
workedcollaborativelytostandardizethefilesizeandformatandimplementprocedurestoexcludeVA
medicalrecordsfromSSArecords. OnSeptember16,2013,theSSAGSOsystemwasdeployedto300
newusersacrossallROsandtheAppealsManagementCenter. Thislimitednationalrolloutincluded
trainingandfeedbacktoensurestationswerepreparedtotransmitmedicalrecordselectronically.
Additionaluserswillbephasedin,byarea,during2014. .
VBAdeliveredninenewWebbasedtrainingmodulestargetingtopicsthataddressqualityassuranceand
emergingtrendsin2013. TheWebbasedtrainingmodulesaretakenindividuallyandareavailabletoall
employees. ChallengeInstructorWebBasedTraining(IWT)fornewemployeesbeganwithapilotin
November2012. IWTisan8weekcoursefornewVeteransServiceRepresentatives(VSR)andRVSRs.
Consistent,highquality,andupdatedtrainingmaterialsaretargetedtoreducingerrorsandincreasing
production.
VBAprovidedQualityReviewTeam(QRT)ChallengeTrainingfornewandexistingQRTmembers. This
trainingconsistedofIWTfor3days,followedbya2weektrainingsessioninNashville,Tennesseeoron
siteatanROforpracticaltraining. ThisChallengeprogramwasdesignedtopromoteconsistencyin
errordetectionandreportingbetweenlocalandnationalqualityreviewers. Inaddition,thetraining
focusedondetectingandreportingerrortrendsatthelocallevel,providingtrainingtofieldpersonnelto
correctdeficienciesnotedduringqualityreviews,andprovidingproperoneononementoringofthe
claimsprocessorswhenerrorsaredetected.
VBAcontinuestoenhancetheVeteransRelationshipManagement(VRM)system,whichprovides
Veteranswithmultipleselfserviceoptionsthatincludethecapabilitytofileanonlineclaimthrougha
DoDVAsharedselfserviceportal.
VBAalsoacceleratedthenationalrolloutofanewTransformationOrganizationalModelby9months.
Thenewmodel,whichwasimplementedinallregionalofficesbytheendofthe2
nd
quarterin2013,
includessegmentedlanes,crossfunctionalteams,andintakeprocessingcenters.
NewlyappointedVSRsandRVSRscompletedanew8weeknationallevelChallengeTraining
curriculum,designedtoimprovethetimelinessandaccuracyofclaimsprocessing. Marked
improvementsinperformancewereachievedfollowingcompletionofthetraining.
Performance Information Part II - 116



TrainedQRTs,focusedonfixingthemostcommonsourcesoferrorsintheclaimsprocessingcycle,
substantiallyreducedthenumberofexamrelateddeficienciesthatimpacttheoutcomeofclaims
decisions.
VBAexpandedthePrivateMedicalRecordsinitiative,whichisdesignedtoreducethelengthofthe
evidencegatheringphaseofthedisabilityclaimsadjudicationprocess. Inaddition,aRulesBased
ProcessingsystemisbeingpilotedinSt.Paul,Minnesota,andVBAiscloselytrackingcurrentmetricsto
assessresults.
VBA,inpartnershipwiththeBoardofVeteransAppeals(Board),continuedtoparticipateinjoint
trainingtoaidinstandardizingadjudicationacrosstheVAbenefitssystem. Suchinteractivetrainingis
expectedtoleadtofuturereductioninthenumberofavoidableremands.
TheBoardalsosoughttoleveragetechnologytogainefficienciesinadministrativeprocessing. In
particular,theBoardpilotedaprogramtovirtuallyassociatemailandwrittenworkproductssubmitted
byacolocatedVeteransServiceOrganization(VSO)withclaimsfiles,whicheliminatesinefficiencies
associatedwithprocessingandhandlingpaper.
Planned2014Milestoneswithestimatedcompletionquarter
In2014,VBAwillenterthestabilizationandassessmentphaseofitsmultiyearapproachto
transformation. VBAwillcontinuetoleveragethecapabilitiesofVBMS,VRM,andtheVirtualLifetime
ElectronicRecordbyaddingincreasedfunctionalitytoprocessappeals. Additionalformstofacilitate
electronicfilingofclaimswillbemadeavailableintheeBenefitsPortaltofurtherexpeditethetransition
toapaperlessenvironment. SeparationHealthAssessmentsconductedforServicememberspriorto
leavingservicewillstreamlinetheprocessforthosewhointendtofileaclaimfordisabilitybenefits. The
StakeholderEnterprisePortalwillprovideVSOswithsecuremessaging,accesstoDoDservices,on
demandhelp,andclaimsstatusinformation. TheseplannedactionsandinitiativeswillsupportVBA
effortstoimprovethetimelinessandaccuracyofclaimsandappealsprocessing. (Q4)
AsapartoftheongoingVASRDupdateproject,VBAhasestablishedagoalforeachbodysystemwith
regardstotherulemakingprogress. VBAplanstocompletetheworkinggroupanddevelopmentphases
andenterallremainingregulationsintotheconcurrencephaseinaccordancewiththefollowingdates:
CardiovascularandInfectiousDiseases(Q2);SkinandRespiratory,andNeurologicalandConvulsive(Q3);
Ear,NoseandThroat/Audiology;Eye,GynecologicalandBreast,MentalDisorders,andMusculoskeletal
andRheumatology. (Q4)
AllSTRswillbesentintoDoDsHealthArtifactsandImagedManagementSolution,andthesystemis
expectedtobefullydeployedonDecember31,2013. VAandDoDarealsocollaboratingtoreceiveSTRs
electronicallyintoVBMSatthepointofseparationorretirementfrommilitaryservice. (Q1)
VAandDoDwillcontinuetodiscussthebestwayforwardfortransmittingSTRsfromDoDtoVAtomeet
therequirementsforVAsPreDischargeandIntegratedDisabilityEvaluationSystemprograms. VAand
DoDexpecttoidentifythechangesandimplementtheminbusinesspracticesbytheendof2014. (Q4)
VBAwilldelivermonthlyvirtualtrainingtargetingerrortrendsandemergingissuestoclaimsprocessors.
ThetargetaudienceswillbebroadenedtoincludeClaimsAssistants,QRTs,andMilitaryService
Performance Information Part II - 117


Coordinators. QRTmemberswillcontinuetoreceivemonthlytrainingforratingclaimsandquarterly
trainingforauthorizationclaimsduringtheMonthlyQualityCall. ChallengeIWTTrainingforVSRsand
RVSRswillcontinuethrough2014. (Q4)
GAOHighRiskArea2: StrategicHumanCapitalManagement(HRA)
(BaseduponGAO13283,GAO13188,GAO121023T)
Addressingcomplexchallengessuchasdisasterresponse,nationalandhomelandsecurity,and
economicstabilityrequiresahighqualityFederalworkforceabletoworkseamlesslywithother
agencies,levelsofgovernment,andacrosssectors.However,currentbudgetandlongtermfiscal
pressures,coupledwithapotentialwaveofemployeeretirementsthatcouldproducegapsinleadership
andinstitutionalknowledge,threatenthegovernmentscapacitytoeffectivelyaddresstheseandmany
otherevolving,nationalissues.Althoughprogresshasbeenmade,thearearemainshighriskbecause
moreworkisneededinimplementingspecificcorrectivestrategiesforaddressingcriticalskillsgapsand
evaluatingtheirresults.GAOaddedthisareatoitshighrisklistin2001.
VAsProgramResponse
EstimatedResolutionTimeframe: 2015
ResponsibleAgencyOfficial: AssistantSecretaryforHumanResourcesandAdministration
Completed2013Milestones
Streamline/standardizerecruitmentforFederaljobs. VAdevelopedandvalidated645customized
positiondescriptionsforusethroughoutVA. Inaddition,VAdevelopedandvalidated18customized
assessmentquestionnairesandconductedtrainingfor208HRprofessionalsfocusingonvalid
assessmentquestionnaires.
RetainPersonnel VAdeployedavirtualtrainingdeliverymethodtomaketrainingavailabletoallHR
Specialistswhileeliminatingtravelexpenses. VALearningUniversitydeliveredclassroom,Webinarand
asynchronousonlinetraininginsupportofdevelopingcurrentandfutureleaderstoover46,000
employees. Inaddition,theLeadershipProficiencyAssessmentprogramwasdevelopedtoprovide
onlinetoolsthatallowindividualstodeterminetheirstrengthsandareasfordevelopmentasaleader.
Enhanceopportunitiesforemployeestobecomemoreengagedatwork MyCareer@VAexpandedits
resourcestargetingseniorleadersandsupervisorstoincludeadditionalWebbasedtrainingcoursesand
resourcesspecificallyfortheseindividualstobetterunderstandhowtodevelopandretainemployees.
MyCareer@VAhasdevelopedadditionaltoolsandresourcesforuserstoenhancetheircareer
developmenteffortstoincludeWebbasedtrainings,CareerPrep,andCareerTalk.
ClosingMissionCriticalOccupations(MCOs)Staffing/CompetencyGaps. VAsMCOAgencyProject
Team,anagencyspecificspinoffoftheGovernmentwideMCOIntegratedProductTeamsteeredby
OPM,continuestoidentifytheemployeeworkforcegapsfortheagencystopMCOs. Actionsinclude
leveragingacademicaffiliationssuchasVAfacilitiespartneringwithlocalacademicinstitutionstooffer
medicaltechnologisttrainingprograms.
Performance Information Part II - 118




Planned2014Milestoneswithestimatedcompletionquarter
VAwilldrivetransformationthroughstrategichumancapitalengagement,development,andtalent
acquisition. Morespecifically,thisincludes:
Development. VAwillsustaintheTalentManagementSystemtoensureVAsabilitytodeliver
traininginconjunctionwithevaluationandreturnoninvestmentfunctionality. VAisalsoproducing
arequestforproposaltodevelopanHRtrainingcertificate/degreeatnocosttoVAandareduced
costtoemployees.VAwillalsobelaunchingatrainthetrainerinitiativewithtrainedsubjectmatter
expertsthroughoutVAtoaddressHRcompetencygaps. Lastly,VAwillcontinuetodevelop
strategiestocloseskillgapsinmissioncritical,leadershipandkeypositionstoalignwiththenewVA
StrategicPlanandOfficeofHRAsStrategicPlan.(Q4)
TalentAcquisition. VAwillplacecontinuedemphasisonrecruitingandretainingahighlyqualified,
diverseandinclusiveworkforceandreintegratingVeteransforopportunitiestoworkforVAthrough
VESO.(Q4)
GAOHighRiskArea3: ManagingFederalRealProperty(OMOAEM)
(BaseduponGAO13283,GAO12645,GAO12779,andGAO12646)
TheFederalGovernmentfaceslongstandingproblemsinmanagingFederalrealproperty,
includingeffectivelymanagingexcessandunderutilizedproperty,anoverrelianceonleasing,and
protectingFederalfacilities.Thegovernmenthasgivenhighlevelattentiontothisissueandhasmade
progressinrealpropertymanagement,buttheunderlyingchallengesthathamperreformremain.
Specifically,thegovernmentcontinuestolackconsistent,accurate,andusefuldatatosupportdecision
making.Inaddition,competingstakeholderinterestsregardingthedispositionofexcessrealproperty,
andlegalrequirementssuchasthoserelatedtoenvironmentalcleanupalsopresentchallenges.The
FederalProtectiveServicehasstruggledtoeffectivelytargetlimitedresourcesforprotectingfederal
facilities.
VAsProgramResponse
EstimatedResolutionTimeframe:2014
ResponsibleAgencyOfficial: Director,AssetEnterpriseManagement
Completed2013Milestones
TheCapitalAssetInventoryandStrategicCapitalInvestmentPlanningAutomatedTool(SAT)arethe
primarysystemsrelatedtoVAsrealproperty. Anumberofenhancementshavebeenimplementedin
bothsystemstoimprovetheoverallsystemuse,specificallyfocusedonimprovingdataquality,
eliminatingduplicateentries,andbetterlinkingassetsacrossvariousdatasets.
VAalsobeganimplementingchangesinsupportoftheGovernmentwideFreezetheFootprint(FTF)
initiative. TherequirementsassociatedwiththeStrategicCapitalInvestmentPlanning(SCIP)process
weremodifiedtoincludeFTFreviews. Specificinitiativeswerealsolaunchedtohelpreduceofficespace
acrossVAsportfolio,startingwithfootprintreductioneffortsinOITandVACentralOffice. Detailed
reviewsofcurrentinventoryutilizationandplansforfuturedisposalswerealsoinitiated.
Planned2014Milestoneswithestimatedcompletionquarter
VAwillcontinuetoenhancetheSCIPSATwithadditionalfeaturessuchasprojecttobuildinglinkageand
moredetailedfacilityconditiondata. TheSCIPSAT,beginningwithFY14,willbeusedforcreationand
Performance Information Part II - 119


approvalofoperatingplans.Thesefurtherenhancementswillresultinamoreefficientandrobust
managementofthecapitalassetplanningprocess. (Q2)
VAwillcontinueimplementationofrequirementsrelatedtoFTF. TheSCIPprocesswillbefullyutilized
toreviewfutureinvestmentsrelatedtoFTFandensureinternalcontrolsareinplace. TheSCIPSATwill
bemodifiedandutilizedtomonitor,report,andanalyzeFTFactions. Lastly,specificinitiativesfocused
ondisposingunneededFTFassetsandimprovingspacestandardsrelatedtoofficespaceand
warehousespacewillbeimplementedtoensureVAiswellpositionedforFTFinthefuture.(Q3)
GAOHighRiskArea4: ProtectingtheFederalGovernmentsInformationSystemsandtheNations
CyberCriticalInfrastructures(OIT)
(BaseduponGAO13183,GAO12816,andGAO12137)
Ascomputertechnologyhasadvanced,FederalagenciesandourNation'scritical
infrastructuressuchaspowerdistribution,watersupply,telecommunications,andemergencyservices
havebecomeincreasinglydependentoncomputerizedinformationsystemsandelectronicdatatocarry
outoperationsandtoprocess,maintain,andreportessentialinformation.Thesecurityofthesesystems
anddataisessentialtoprotectingnationalandeconomicsecurity,andpublichealthandsafety.
SafeguardingFederalcomputersystemsandthesystemsthatsupportcriticalinfrastructuresreferred
toascybercriticalinfrastructureprotection(cyberCIP)isacontinuingconcern.Federalinformation
securityhasbeenonGAO'slistofhighriskareassince1997;in2003,GAOexpandedthishighriskarea
toincludecyberCIP.Riskstoinformationandcommunicationsystemsincludeinsiderthreatsfrom
disaffectedorcarelessemployeesandbusinesspartners,escalatingandemergingthreatsfromaround
theglobe,theeaseofobtainingandusinghackingtools,thesteadyadvanceinthesophisticationof
attacktechnology,andtheemergenceofnewandmoredestructiveattacks.
VAsProgramResponse
EstimatedResolutionTimeframe: 2014
ResponsibleAgencyOfficial: DeputyAssistantSecretaryforInformationSecurity
Completed2013Milestones
In2013,OITcontinueditsvigilantprotectionofVAsinformationsystemsandcybercritical
infrastructures.OITprovidedcontinuousaroundtheclockmonitoringofVAsnetworkthroughVAs
NetworkandSecurityOperationsCenter(VANSOC),whichprotects,respondsto,andreportsthreatsto
informationsystems.VANSOCexaminesmorethan1.29billionWebrequestsperdayandprevents1.7
millionvirusesayearfrominfectingtheVAnetwork. InordertoensurethatVAscybercritical
infrastructuresareabletoremainfunctionalintheeventofadisaster,VAsOfficeofBusinessContinuity
(OBC)implementedacontingencyanddisasterrecoveryprocess,whichiscompliantwithNIST
standards80034and80084. OBCalsoimplementedaqualityassurancereviewofcompletedplans
andteststoensurethattheseprocessesaremonitoredandupdatedasappropriate. OITisafull
participantintheVAIntegratedOperationsCenter,andithasdevelopedaGeographicInformation
Systems monitoringprogramthatprovidessituationalawarenessoninfrastructuresystemsandassets
toensurethatVAcancontinueprovidingservicestoVeteransintheeventofadisaster. Additionally,as
of2013,twopercentofthetwofactorauthenticationimplementationstrategyhasbeencompleted.
Theaimofthisstrategyistoenhancesecurity,increasegovernmentefficiency,reduceidentityfraud,
andprotectpersonalprivacy,inaccordancewithHomeland Security Presidential Directive 12.
Performance Information Part II - 120


Planned2014Milestoneswithestimatedcompletionquarter
Planned2014milestonesIn2014,OBCplanstoimplementacyberCIPprogramconsistentwith
FederalguidanceandNISTstandards.
Inaddition,75percentofthetwofactorauthenticationimplementationstrategywillbecomplete.
EstimatedcompletionquarterFY2014
Performance Information Part II - 121


APPENDIX
TheAppendixlistsselectedreportspertinenttothehighriskareasdiscussed. However,theAppendixis
notintendedtoencompassallGAOworkinanarea.
ImprovingandModernizingFederalDisabilityPrograms
HighRiskSeries: AnUpdate,GAO13283,February2013.
MilitaryandVeteransDisabilitySystem: PilotHasAchievedSomeGoals,butFurtherPlanningand
MonitoringNeeded,GAO1169,December6,2010.
MilitaryandVeteransDisabilitySystem: WorldwideDeploymentofIntegratedSystemWarrantsCareful
Monitoring,GAO11633T,May4,2011.
StrategicHumanCapitalManagement
HighRiskSeries: AnUpdate,GAO13283,February2013.
ManagingFederalRealProperty
HighRiskSeries:AnUpdate,GAO13283,February2013.
VARealProperty: RealignmentProgressing,butGreaterTransparencyaboutFuturePrioritiesIsNeeded,
GAO11197,January31,2011.
FederalRealProperty: TheGovernmentFacesChallengestoDisposingofUnneededBuildings,
GAO11370T,February10,2011.
VARealProperty: RealignmentProgressing,butGreaterTransparencyaboutFuturePrioritiesIsNeeded,
GAO11521T,April5,2011.
ProtectingtheFederalGovernmentsInformationSystemsandtheNationsCriticalInfrastructures
HighRiskSeries: AnUpdate,GAO13283,February2013.
MedicalDevices:FDAShouldExpandItsConsiderationofInformationSecurityforCertainTypesof
Devices,GAO12816,August31,2012.
InformationSecurity:WeaknessesContinueAmidNewFederalEffortstoImplementRequirements,GAO
12137,October3,2011.
Performance Information Part II - 122
Letter from the CFO Part III - 1
Letter from the CFO Part III - 2


ConsolidatedFinancialStatements
DEPARTMENTOFVETERANSAFFAIRS
CONSOLIDATEDBALANCESHEETS(dollarsinmillions)
ASOFSEPTEMBER30, 2013 2012
ASSETS




INTRAGOVERNMENTAL
FundBalance with Treasury (Note3) $ 39,048 $ 40,574
Investments(Notes 5 and19) 8,564 9,309
Accounts Receivable, Net (Note6) 41 40
OtherAssets 540 799
TOTALINTRAGOVERNMENTALASSETS 48,193 50,722

PUBLIC
Cash (Note4) 8 16
Investments (Note5) 178 178
Accounts Receivable, Net (Note6) 2,040 1,789
Direct Loans and Loan Guarantees, Net (Note7) 2,147 1,996
Inventories andRelated Property, Net(Note8) 71 56
General Property, Plant and Equipment, Net (Note9) 21,976 20,631
OtherAssets 26 28
TOTAL PUBLICASSETS 26,446 24,694
TOTALASSETS $ 74,639 $ 75,416




Heritage Assets (Note 10)


LIABILITIES
INTRAGOVERNMENTAL
Accounts Payable $ 258 $ 342
Debt (Note11) 756 843
OtherLiabilities (Note15) 1,414 1,352
TOTALINTRAGOVERNMENTALLIABILITIES 2,428 2,537
PUBLIC
AccountsPayable 10,807 9,657
LiabilitiesforLoanGuarantees(Note7) 7,933 5,561
FederalEmployeeandVeteransBenefitsLiabilities(Note13) 1,977,020 1,763,614
EnvironmentalandDisposalLiabilities(Note14) 823 851
InsuranceLiabilities(Note17) 9,854 10,581
OtherLiabilities(Note15) 4,260 3,936
TOTALPUBLICLIABILITIES 2,010,697 1,794,200
TOTALLIABILITIES
2,013,125
1,796,737
2013125
CommitmentsandContingencies(Note18)
NETPOSITION
UnexpendedAppropriationsFundsfromDedicatedCollections(Note19)
UnexpendedAppropriationsAllOtherFunds 208 4,131
CumulativeResultsofOperationsFundsfromDedicatedCollections(Note19) 843 745
CumulativeResultsofOperationsAllOtherFunds (1,939,537) (1,726,197)













TOTALNETPOSITION

(1,938,486) (1,721,321)

TOTALLIABILITIESANDNETPOSITION $ 74,639 $ 75,416


TheaccompanyingnotesareanintegralpartoftheseConsolidatedFinancialStatements.

Consolidated Financial Statements Part III - 3






DEPARTMENTOFVETERANSAFFAIRS
CONSOLIDATEDSTATEMENTSOFNETCOST(dollarsinmillions)
FORTHEYEARSENDEDSEPTEMBER30, 2013 2012
NETPROGRAMCOSTSBYADMINISTRATION(Note21)
VeteransHealthAdministration
GrossCost $ 60,317 $ 56,888
LessEarnedRevenue (3,767) (3,460)
NetProgramCost 56,550 53,428
VeteransBenefitsAdministration
GrossCost
ProgramCosts 83,919 74,524
VeteransBenefitsActuarialCost,ExcludingChangesinActuarial
Assumptions(Note13) 99,200 78,700
LessEarnedRevenue (1,549) (1,666)
NetProgramCost 181,570 151,558
NationalCemeteryAdministration
GrossCost
ProgramCosts 305 294
VeteransBenefitsActuarialCost,ExcludingChangesinActuarial
Assumptions(Note13) (100) (100)
LessEarnedRevenue
NetProgramCost 205 194
IndirectAdministrativeProgramCosts
GrossCost 2,087 1,972
LessEarnedRevenue (507) (595)
NetProgramCost 1,580 1,377
NETPROGRAMCOSTSBYADMINISTRATIONBEFORE
CHANGESINVETERANSBENEFITSACTUARIALLIABILITYASSUMPTIONS 239,905 206,557
CHANGESINACTUARIALLIABILITY ASSUMPTIONS(Note13)
COMPENSATION:
ChangesinDiscountRateAssumption 39,600 66,100
ChangesinCOLARateAssumption (11,800) (40,300)
ChangesinDisabilityClaimsRates 70,400 123,400
ChangesinOtherAssumptions 15,700
TOTALCOMPENSATION 113,900 149,200
BURIAL:
ChangesinDiscountRateAssumption 100 200
ChangesinCOLARateAssumption (100)
ChangesinOtherAssumptions 100
TOTALBURIAL 200 100
NET(GAIN)/LOSSFROMACTUARIALLIABILITYASSUMPTIONS 114,100 149,300
NETCOSTOFOPERATIONS(Note21) $ 354,005 $ 355,857
TheaccompanyingnotesareanintegralpartoftheseConsolidatedFinancialStatements.
Consolidated Financial Statements Part III - 4





DEPARTMENTOFVETERANSAFFAIRS
CONSOLIDATEDSTATEMENTOFCHANGESINNETPOSITION(dollarsinmillions)
FORTHEYEARENDEDSEPTEMBER30,2013
Fundsfrom
Dedicated
Collections
(Note19)
AllOther
Funds Eliminations

2013
Consolidated
Total
CumulativeResultsofOperations
BeginningBalance $ 745 $ (1,725,997) $ (200) $ (1,725,452)
BudgetaryFinancingSources
AppropriationsUsed 138,876 138,876
NonexchangeRevenue 8 8
DonationsandForfeituresofCashandCashEquivalents 29 29
TransferIn/OutWithoutReimbursement (2,824) 2,806 (18)
OtherFinancingSources(Nonexchange)
DonationsandForfeituresofProperty 21 1 22
TransfersIn/OutWithoutReimbursement (5) 5
ImputedFinancing 1,971 1,971
Other (325) 200 (125)
TotalFinancingSources (2,779) 143,342 200 140,763
NetCost/(Benefit)ofOperations (2,877) 356,882 354,005
NetChange 98 (213,540) 200 (213,242)
EndingBalanceCumulativeResults 843 (1,939,537) (1,938,694)
UnexpendedAppropriations
BeginningBalance 3,931 200 4,131
BudgetaryFinancingSources
AppropriationsReceived 137,298 137,298
AppropriationsTransferredIn/Out 133 133
OtherAdjustments (2,278) (200) (2,478)
AppropriationsUsed (138,876) (138,876)
TotalBudgetaryFinancingSources (3,723) (200) (3,923)
TotalUnexpendedAppropriations 208 208
TotalNetPosition $ 843 $ (1,939,329) $ $ (1,938,486)
TheaccompanyingnotesareanintegralpartoftheseConsolidatedFinancialStatements.
Consolidated Financial Statements Part III - 5




DEPARTMENTOFVETERANSAFFAIRS
CONSOLIDATEDSTATEMENTOFCHANGESINNETPOSITION(dollarsinmillions)
FORTHEYEARENDEDSEPTEMBER30,2012

Fundsfrom
Dedicated
Collections
(Note19)
AllOther
Funds Eliminations
2012
Consolidated
Total

CumulativeResultsofOperations
BeginningBalance $ 899 $ (1,503,045) $ (200) $ (1,502,346)
BudgetaryFinancingSources
AppropriationsUsed 131,269 131,269
NonexchangeRevenue 8 8
DonationsandForfeituresofCashandCashEquivalents 23 23
TransferIn/OutWithoutReimbursement (2,830) 2,830
OtherFinancingSources(Nonexchange)
DonationsandForfeituresofProperty 22 1 23
TransfersIn/OutWithoutReimbursement
ImputedFinancing 1,795 1795
Other (367) (367)
TotalFinancingSources (2,785) 135,536 132,751
NetCost/(Benefit)ofOperations (2,631) 358,488 355,857
NetChange (154) (222,952) (223,106)
EndingBalanceCumulativeResults 745 (1,725,997) (200) (1725,452)
UnexpendedAppropriations
BeginningBalance 11,848 200 12,048
BudgetaryFinancingSources
AppropriationsReceived 125,255 125,255
AppropriationsTransferredIn/Out 185 185
OtherAdjustments (2,088) (2,088)
AppropriationsUsed (131,269) (131,269)
TotalBudgetaryFinancingSources (7,917) (7,917)
TotalUnexpendedAppropriations 3,931 200 4,131
TotalNetPosition $ 745 $ (1,722,066) $ $ (1,721,321)
TheaccompanyingnotesareanintegralpartoftheseConsolidatedFinancialStatements.
Consolidated Financial Statements Part III - 6






DEPARTMENTOFVETERANSAFFAIRS
COMBINEDSTATEMENTOFBUDGETARYRESOURCES(dollarsinmillions)
FORTHEYEARENDEDSEPTEMBER30,2013
Budgetary
NonBudgetary
CreditReform
Financing
Account
BudgetaryResources(Note22)
UnobligatedBalancebroughtforward,October1 $ 15,917 $ 4,006
RecoveriesofPriorYearUnpaidObligations 2,713
OtherChangesinUnobligatedBalance (301) (88)
UnobligatedBalancefromPriorYearBudgetAuthority,net 18,329 3,918
Appropriations 139,431
BorrowingAuthority 114
SpendingAuthorityfromOffsettingCollections 5,584 4,282
TotalBudgetaryResources $ 163,344 $ 8,314
StatusofBudgetaryResources
ObligationsIncurred $ 152,443 $ 3,147
UnobligatedBalance,endofyear:
Apportioned 6,984
Unapportioned 3,917 5,167
TotalUnobligatedBalance,endofyear 10,901 5,167
TotalStatusofBudgetaryResources $ 163,344 $ 8,314
ChangeinObligatedBalance
UnpaidObligations:
UnpaidObligations,broughtforward,October1 $ 24,906 $ 310
AdjustmenttoUnpaidObligations,startofyear(Note22)
ObligationsIncurred 152,443 3,147
Outlays(gross) (146,992) (3,111)




RecoveriesofPriorYearUnpaidObligations (2,713)
UnpaidObligations,endofyear $ 27,644 $ 346







UncollectedPayments:
UncollectedPaymentsFedSources,broughtforward,October1 (1,591)
AdjustmenttoUncollectedPymts,FedSources,startofyear(Note22)
ChangeinUncollectedPymtsFedSources (503)
UncollectedPayments,FedSources,endofyear, $ (2,094) $
Memorandumentries:
ObligatedBalance,startofyear $ 23,315 $ 310
ObligatedBalance,endofyear 25,550 346
(continuesonnextpage)
Consolidated Financial Statements Part III - 7





DEPARTMENTOFVETERANSAFFAIRS
COMBINEDSTATEMENTOFBUDGETARYRESOURCES(dollarsinmillions)(continued)
FORTHEYEARENDEDSEPTEMBER30,2013

Budgetary
NonBudgetary
CreditReform
Financing
Account
BudgetAuthorityandOutlays,net
BudgetAuthority,gross $ 145,015 $ 4,396
ActualOffsettingCollections (5,097) (4,397)
ChangeinUncollectedCustomerPaymentsfromFederalSources (503)
BudgetAuthority,net $ 139,415 $ (1)
Outlays,gross $ 146,992 $ 3,111
ActualOffsettingCollections (5,097) (4,397)
Outlays,net 141,895 (1,286)
DistributedOffsettingReceipts (3,238) (193)
AgencyOutlays,net $ 138,657 $ (1,479)
TheaccompanyingnotesareanintegralpartoftheseConsolidatedFinancialStatements.
Consolidated Financial Statements Part III - 8












































DEPARTMENTOFVETERANSAFFAIRS
COMBINEDSTATEMENTOFBUDGETARYRESOURCES(dollarsinmillions)
FORTHEYEARENDEDSEPTEMBER30,2012

Budgetary
NonBudgetary
CreditReform
Financing
Account
BudgetaryResources(Note22)
UnobligatedBalancebroughtforward,October1 $ 23,118 $ 3,430
AdjustmenttoUnobligatedBalancebroughtforward,October1 (10)
UnobligatedBalancebroughtforward,October1,adjusted 23,108 3,430
RecoveriesofPriorYearUnpaidObligations* 14
OtherChangesinUnobligatedBalance (327) (160)
UnobligatedBalancefromPriorYearBudgetAuthority,net 22,795 3,270
Appropriations 127,519
BorrowingAuthority 313
SpendingAuthorityfromOffsettingCollections 5,233 3,457
TotalBudgetaryResources $ 155,547 $ 7,040
StatusofBudgetaryResources
ObligationsIncurred* $ 139,630 $ 3,034
UnobligatedBalance,endofyear:
Apportioned 12,673
Unapportioned 3,244 4,006
TotalUnobligatedBalance,endofyear 15,917 4,006
TotalStatusofBudgetaryResources $ 155,547 $ 7,040
ChangeinObligatedBalance
UnpaidObligations:
UnpaidObligations,broughtforward,October1 $ 17,876 $ 292
AdjustmenttoUnpaidObligations,startofyear(Note22) 10
ObligationsIncurred* 139,630 3,034
Outlays(gross) (132,596) (3,016)
RecoveriesofPriorYearUnpaidObligations* (14)
UnpaidObligations,endofyear $ 24,906 $ 310
UncollectedPayments:
UncollectedPaymentsFedSources,broughtforward,October1 (1,355) (6)
AdjustmenttoUncollectedPymts,FedSources,startofyear(Note22)
ChangeinUncollectedPymts,FedSources (236) 6
UncollectedPayments,FedSources,endofyear $ (1,591) $
Memorandumentries:
ObligatedBalance,startofyear $ 16,531 $ 286
ObligatedBalance,endofyear 23,315 310
(continuesonnextpage)
Consolidated Financial Statements Part III - 9





DEPARTMENTOFVETERANSAFFAIRS
COMBINEDSTATEMENTOFBUDGETARYRESOURCES(dollarsinmillions)(continued)
FORTHEYEARENDEDSEPTEMBER30,2012

Budgetary
NonBudgetary
CreditReform
Financing
Account
BudgetAuthorityandOutlays,net
BudgetAuthority,gross $ 132,753 $ 3,770
ActualOffsettingCollections (5,004) (4,449)
ChangeinUncollectedCustomerPaymentsfromFederalSources (236) 6
BudgetAuthority,net $ 127,513 $ (673)
Outlays,gross $ 132,596 $ 3,016
ActualOffsettingCollections (5,004) (4,449)
Outlays,net 127,592 (1,433)
DistributedOffsettingReceipts (3,161) (304)
AgencyOutlays,net $ 124,431 $ (1,737)
*Estimatedrecoveriesofprioryearunpaidobligations(notrecorded)rangefrom$1,200million$2,300millionfor2012.The
effectofrecordingtheadjustmentswouldbetoincreaseRecoveriesofPriorYearUnpaidObligationsandincrease
ObligationsIncurred(seeNote22formoreinformation).
TheaccompanyingnotesareanintegralpartoftheseConsolidatedFinancialStatements.
Consolidated Financial Statements Part III - 10


















NotestoConsolidatedFinancialStatements
FortheYearsEndedSeptember30,2013,and2012(dollarsinmillions,unlessotherwisenoted)
1. SummaryofSignificantAccountingPolicies
Organization
ThemissionoftheDepartmentofVeteransAffairs(VA)istoprovidemedicalcare,benefits,social
support,andlastingmemorialstoVeterans,theirdependents,andbeneficiaries[(38U.S.C.Section
301(b)1997)]. TheDepartmentisorganizedundertheSecretaryofVA. TheSecretary'sofficeincludesa
DeputySecretaryandhasdirectlinesofauthorityovertheUnderSecretaryforHealth,theUnder
SecretaryforBenefits,andtheUnderSecretaryforMemorialAffairs. Additionally,sixAssistant
Secretaries,anInspectorGeneral,aGeneralCounsel,anExecutiveInChargeforHumanResourcesand
Administration,andthechairmenoftheBoardofContractAppealsandtheBoardofVeteransAppeals
supporttheSecretary.
ReportingEntityandBasisofPresentation
TheVAconsolidatedfinancialstatements,includingtheCombinedStatementsofBudgetaryResources,
reportallactivitiesofVAcomponents. VAcomponentsincludetheVeteransHealthAdministration
(VHA),VeteransBenefitsAdministration(VBA),NationalCemeteryAdministration(NCA),andIndirect
AdministrativeProgramCosts. Theconsolidatedfinancialstatementsmeettherequirementsofthe
ChiefFinancialOfficersAct(CFO)of1990andtheGovernmentManagementReformAct(GMRA)of
1994. Theprincipalfinancialstatementshavebeenpreparedtoreportthefinancialpositionandresults
ofoperationsofVA,pursuanttotherequirementsof31U.S.C.3515(b). Whilethestatementshave
beenpreparedfromthebooksandrecordsofVAinaccordancewithGenerallyAcceptedAccounting
Principles(GAAP)forFederalentitiesandtheformatsprescribedbytheOfficeofManagementand
Budget(OMB),thestatementsareinadditiontothefinancialreportsusedtomonitorandcontrol
budgetaryresources,whicharepreparedfromthesamebooksandrecords. Thestatementsshouldbe
readwiththerealizationthatVAisacomponentoftheU.S.Government,asovereignentity. VA
interactswithandisdependentuponthefinancialactivitiesoftheFederalGovernmentasawhole.
Therefore,theseconsolidatedfinancialstatementsdonotreflecttheresultsofallfinancialdecisions
applicabletoVAasthoughtheDepartmentwereastandaloneentity. VAsfiscalyearendisSeptember
30
th
.
BasisofAccounting
TheprincipalfinancialstatementsarepreparedinaccordancewithGAAPaspromulgatedbytheFederal
AccountingStandardsAdvisoryBoard(FASAB)andOMBCircularNo.A136,FinancialReporting
Requirements,asrevised. TheStatementofFederalFinancialAccountingStandards(SFFAS)34,The
HierarchyofGenerallyAcceptedAccountingPrinciples,IncludingtheApplicationofStandardsIssuedby
theFinancialAccountingStandardsBoard,establishesahierarchyofGAAPforFederalfinancial
statements. TheprincipalfinancialstatementspreparedinaccordancewithGAAPincludethe
consolidatedfinancialstatementspreparedonanaccrualbasisofaccountingandthecombined
statementsofbudgetaryresourceswhichreflecttheappropriationandconsumptionofbudgetand
spendingauthorityandotherbudgetaryresourcesbeforeeliminations.
Notes to the Consolidated Financial Statements Part III - 11





















Theconsolidatedfinancialstatementsincludethebalancesheets,statementsofnetcost,and
statementsofchangesinnetposition. Inordertopreparereliableconsolidatedfinancialstatements,
transactionsoccurringamongVAcomponentsmustbeeliminated. Allsignificantintraentity
transactionswereeliminatedfromVA'sconsolidatedfinancialstatements. However,toremain
consistentwiththeaggregateoftheaccountlevelinformationpresentedinbudgetaryreportsthe
statementsofbudgetaryresourcesarenotconsolidatedbutcombined,thereforeeliminationofintra
entitytransactionsisnotpermitted.
BudgetsandBudgetaryAccounting
Budgetaryaccountingmeasuresappropriationandconsumptionofbudget/spendingauthorityorother
budgetaryresources,andfacilitatescompliancewithlegalconstraintsandcontrolsovertheuseof
federalfunds. Underbudgetaryreportingprinciples,budgetaryresourcesareconsumedatthetimeof
purchase. Assetsandliabilitiesthatdonotconsumebudgetaryresourcesarenotreported,andonly
thoseliabilitiesforwhichvalidobligationshavebeenestablishedareconsideredtoconsumebudgetary
resources.
TheCombinedStatementsofBudgetaryResources(SBR)arethebasicfinancialstatementsthatreport
theDepartmentsBudgetaryResources,StatusofBudgetaryResources,ChangeinObligatedBalanceas
ofyearendandBudgetAuthorityandOutlays,Netfortheyearended. Specificformsofbudget
authoritythattheDepartmentreceivesareappropriations,borrowingauthorityandspendingauthority
fromoffsettingcollections. DetailsontheamountsshownintheCombinedStatementsofBudgetary
ResourcesareincludedintheRequiredSupplementaryInformationsectionontheScheduleof
BudgetaryActivityshownbymajoraccount. TheCombinedStatementsofBudgetaryResourcesare
preparedonacombinedbasis,notaconsolidatedbasisandtherefore,donotincludeintraentity
eliminations.
SeeNote22forfurtherdisclosureonBudgetsandBudgetaryAccounting.
RevenuesandOtherFinancingSources
Exchangerevenue,whichisprimarilymedicalrevenue,isrecognizedwhenearnedfromotherfederal
agenciesorthepublicasaresultofcostsincurredorservicesperformedontheirbehalf. Medical
revenueisearnedbyVAwhenservicesareprovidedandarebillabletothefirstparty(Veterans)and
thirdpartyinsurancecompanies. Underchapter17,title38,UnitedStatesCode,VHAisauthorizedto
billaVeteransthirdpartyhealthinsurerforhealthcareprovidedatVAandnonVAmedicalfacilities.
Generally,VAconsidersaVeteranshealthcarebillableifthetreatmentisnotforaserviceconnected
disability.
Billableamountsarebasedonreasonablechargesbylocalityforservicesprovidedasdeterminedunder
themethodologyprescribedby38CFRRegulation17.101. Underthismethodology,thebillable
amountsforservicesprovidedbyVArepresentthe80thpercentileofnationwideaveragerates
developedfromcommercialandMedicarestatisticaldatabylocalitythroughoutthenation. The
statisticaldataisadjustedbytheConsumerPriceIndex(CPI)toaccountforthehistoricalnatureofthe
databeingutilized. Thebillableamountsbyserviceprovidedaredevelopedbasedontheclassification
ofservicesasinpatient,outpatient,professionalandsurgicalornonsurgical. Thenationwideaverage
ratesusedtodeterminebillableamountsforservicesprovidedforinpatientcareareupdatedannually
effectiveOctober1standnationwideaverageratesforbillableamountsforoutpatientandprofessional
Notes to the Consolidated Financial Statements Part III - 12








careareupdatedannuallyeffectiveJanuary1st.TheupdatedchargesarepublishedbyaNoticeinthe
FederalRegisterandthechargesareavailableontheVHAChiefBusinessOffice(CBO)website
(http://www1.va.gov/CBO/apps/rates/). Revenueearnedbutunbilledisestimatedusinghistorical
averagedata. Anallowanceforcontractualadjustmentsfrominsurancecompaniesanduncollectible
amountsisdeterminedusinghistoricalaveragedata.
Exchangerevenuealsoconsistof:benefitsrevenuefromreimbursementofeducationbenefitprograms
fromservicemembercontributionsthataretransferredtothegeneralfundaccountwiththe
DepartmentoftheTreasury(Treasury);insurancerevenuefrominsurancepolicypremiumspaidby
policyholders;andhousingrevenuefrominterestearnedondirectloans.
Nonexchangerevenue(e.g.,donations)isrecognizedwhenreceived,andtherelatedreceivables,
refunds,andoffsetsarerecognizedwhenmeasurableandlegallycollectible. Nonexchangerevenuealso
consistof:benefitsrevenuefromreimbursementofeducationbenefitprogramsbyDepartmentof
Defense(DoD);insurancerevenuesfrominterestearnedfromTreasuryoninvestmentsofinsurance
policypremiums;andhousingrevenuefrominterestearnedfromTreasuryonuninvestedbalancesin
financingaccountsandreestimatesofsubsidy.
Imputedfinancingsourcesconsistofimputedrevenueforexpensesrelatingtolegalclaimspaidbythe
TreasuryJudgmentFundandpostretirementbenefitsforVAemployeespaidbytheOfficeofPersonnel
Management(OPM).
TransferringBudgetAuthoritytoOtherAgencies
VA,asthetransferring(parent)entity,isapartytoallocationtransferswithDoD,thetransferee(child)
entity. Allocationtransfersarelegaldelegationsbyonedepartmentofitsauthoritytoobligatebudget
authorityandoutlayfundstoanotherdepartment. Aseparatefundaccount(transferappropriation
account)iscreatedintheTreasuryasasubsetoftheparentfundaccountfortrackingandreporting
purposes. Allallocationtransfersofbalancesarecreditedtothisaccount,andsubsequentobligations
andoutlaysincurredbythechildentityarechargedtothistransferappropriationaccountasthey
executethedelegatedactivityonbehalfoftheparententity. Generally,allfinancialactivityrelatedto
theseallocationtransfers(e.g.budgetauthority,obligations,outlays)isreportedinthefinancial
statementsoftheparententity,fromwhichtheunderlyinglegislativeauthority,appropriationsand
budgetapportionmentsarederived.
FederalCreditReformActof1990
Directloanobligationsandloanguaranteecommitmentsmadeafter1991,andtheresultingdirectloans
orloanguarantees,aregovernedbytheFederalCreditReformActof1990(theCreditReformAct). The
financialstatementdisclosureshereinarealsoinaccordancewithStatementofFederalFinancial
AccountingStandards(SFFAS)2,AccountingforDirectLoansandGuarantees,asamended. TheCredit
ReformActprovidesthatthepresentvalueoftheestimatednetcashflowstobepaidbyVAforsubsidy
costsassociatedwithdirectloansandloanguaranteesberecognizedasacostintheyearthedirector
guaranteedloanisdisbursedasaresultofitsborrowingfromTreasury. Directloansandguaranteed
loansreceivablearereportednetofanallowanceforsubsidycostsatpresentvalue,andloanguarantee
liabilitiesarereportedatpresentvalue.
Notes to the Consolidated Financial Statements Part III - 13














Thesubsidycostsrelatedtodirectloansandguaranteedloansreceivableconsistoftheinterestrate
differentialbetweentheloanstoVeteransandtheborrowingfromTreasury,estimateddefaultcosts,
netofrecoveries,offsetsfromfeesandcollections,andotherestimatedsubsidycostsaffectingcash
flows. Adjustmentstotheallowanceforsubsidycostsaffectingcashflowsconsistoffeesreceived,
foreclosedpropertyacquired,loanswrittenoff,subsidyallowanceamortizationandreestimatesof
interestratesandapplicationofloantechnical/defaultprovisionsapprovedbyOMB.
WhenthepresentvalueofcashinflowstoVAislessthanthepresentvalueofcashoutflowsmadeby
VA,asubsidycostisincurredbyVAandreportedasanallowanceforsubsidycoststhatreducesdirect
loansandguaranteedloansreceivablereportedintheconsolidatedbalancesheet. However,anegative
subsidyoccurswhenthepresentvalueofcashinflowstoVAexceedsthepresentvalueofcashoutflows
madebyVA. Theresultingnegativesubsidyisreportedasanallowanceforsubsidycoststhatincreases
directloansandguaranteedloansreceivablereportedintheconsolidatedbalancesheet.
Thecashflowcostsusedtocalculatethepresentvalueoftheliabilityforloanguaranteesandloansale
guaranteesconsistoftheestimateddefaultcosts,netofrecoveries,feesandothercollections,
adjustmentsforfeesreceived,foreclosedpropertyandloansacquired,claimpaymentstolenders,
interestaccumulationontheliabilitybalance,modifications,changesinreestimatesofinterestrates
andapplicationofloantechnical/defaultprovisionsapprovedbyOMB.
DirectloansobligatedbeforeOctober1,1992,arenotsubjecttotheFederalCreditReformAct. Direct
loansobligatedbeforeOctober1,1992,arerecordedatnetrealizablevalueoftheremainingbalanceof
amountsdisbursedplusaccruedandunpaidinterestreceivable. Theallowanceforloanlossesondirect
loansobligatedbeforeOctober1,1992,isrecognizedwhenitismorelikelythannotthatthedirect
loanswillnotbetotallycollected. Theallowanceoftheuncollectibleamountsisreestimatedeachyear
asofthedateofthefinancialstatements. Loanlossesarereestimatedbyprogram.
Riskfactorsareevaluatedforeachprogramandseparateloanyeardisbursed. Riskfactorsinclude
historicalloanexperience,regionaleconomicconditions,financialandrelevantcharacteristicsof
borrowers,valueofcollateraltoloanbalance,changesinrecoverablevalueofcollateralandnewevents
thatwouldaffecttheloansperformance. Asystematicmethodologybasedonaneconometricmodelis
usedtoprojectdefaultcostsbyriskcategory. Actualhistoricalexperienceincludesactualpayments,
prepayments,latepayments,defaults,recoveries,andamountswrittenoff.
FundBalancewithTreasury
TreasuryperformscashmanagementactivitiesforallFederalGovernmentagencies. TheFundBalance
withTreasury(FBWT)representstherightofVAtodrawontheTreasuryforallowableexpenditures.
TrustfundbalancesconsistprimarilyofamountsrelatedtothePostVietnamVeteransEducational
AssistanceProgram(VEAP)TrustFund,theNationalServiceLifeInsurance(NSLI)Fund,theUnitedStates
GovernmentLifeInsurance(USGLI)Fund,theVeteransSpecialLifeInsurance(VSLI)Fund,theGeneral
PostFund,andtheNationalCemeteryGiftFund. Theuseofthesefundsisrestricted.
Revolvingfunds,usedbytheSupplyFundandFranchiseFund,financeacycleofbusinesslikeoperations
throughamountsreceivedfromthesaleofproductsorservices. Thecollectionsareusedtofinanceits
spending,usuallyonaselfsustainingbasis. Revolvingfundsrecordthecollectionsandtheoutlaysinthe
Notes to the Consolidated Financial Statements Part III - 14













sameTreasuryaccount. Arevolvingfundisaformofpermanentappropriationreceivingauthorityto
spendtheircollectionsanddonotgenerallyreceiveappropriations.
Appropriatedfundsaregeneralfundexpenditureaccountsestablishedtorecordamountsappropriated
bylawforthegeneralsupportofFederalGovernmentactivitiesandthesubsequentexpenditureof
thesefunds. Itincludesspendingfrombothannualandpermanentappropriations.
Specialfundsareanappropriationaccountestablishedtorecordappropriations,obligations,and
outlaysfinancedbytheproceedsofspecialfundreceiptswhicharededicatedcollectionsbylawfora
specificpurposeorprogram. MedicalCareCollectionsFundandLeaseofLandandBuilding(NCA
FacilitiesOperationFund)arespecialfunds.
TheStatusofFundBalancewithTreasuryshowninNote3representstheVAsunobligatedbalances,
obligatedbalancesanddepositandclearingaccounts. Theunobligatedandobligatedbalances
presentedinthatsectionmaynotequalrelatedamountsreportedontheCombinedStatementsof
BudgetaryResources(SBR).TheunobligatedandobligatedbalancesreportedontheSBRaresupported
byFBWT,aswellasotherbudgetaryresourcesthatdonotaffectFBWT,primarilyexpiredauthority.
Cash
CashconsistsofCanteenServiceandAgentCashieradvancesattheVAfieldstations. Treasury
processesallothercashreceiptsanddisbursements. Occasionally,cashincludesLoanGuaranty
Programamountsheldincommercialbanksandcashheldbynonfederaltrusts. Amountsrelatingto
theLoanGuarantyProgramrepresentdepositswithtrusteesforoffsetsagainstloanlossclaimsrelated
tosoldloanportfolios. Fundsheldbynonfederaltrustsarerestrictedandmaybeusedonlyin
accordancewiththetermsofthetrustagreements.
Investments
Investmentsarereportedatcostnetofamortizedpremiumsordiscountsandaccruedinterest,which
approximatesmarketvalue,andareredeemableatanytimefortheiroriginalpurchaseprice. Insurance
programinvestments,whichcomprisemostoftheVA'sinvestments,areinnonmarketableTreasury
specialbondsandcertificates. InterestratesforTreasuryspecialsecuritiesareinitiallysetbasedon
averagemarketyieldsforcomparableTreasuryissues. Specialbonds,whichmatureduringvarious
yearsthroughtheyear2028,aregenerallyheldtomaturityunlessneededtofinanceinsuranceclaims
anddividends. OtherprograminvestmentsareinsecuritiesissuedbyTreasury,withtheexceptionof
nonfederalTrustinvestmentsinmutualfundsandtheLoanGuarantyPrograminvestmentsinhousing
trustcertificates. Nosecuritieshavebeenreclassifiedassecuritiesavailableforsaleorearly
redemption. Additionally,nopermanentimpairmentsofsecuritieshaveoccurred. SeeNote19for
additionaldisclosureofintragovernmentalinvestmentsinTreasurysecuritiesfromdedicated
collections.
Allowancesarerecordedtoreflectestimatedlossesofprincipalasaresultofthesubordinatedposition
inhousingtrustcertificates. Theestimatedallowancecomputationsarebasedupondiscountedcash
flowanalysis. VAcontinuestousetheincomefromthesesubordinatedhousingtrustcertificatesto
fundtheHousingTrustReserveFund(ReserveFund),whichisusedinturntofunddeficienciesin
scheduledmonthlyprincipalandinterestontheloansaswellastocoveranyrealizedlossesincurredin
thepriormonth. AnyexcessfundsintheReserveFundarereimbursedtoVAuponrequest.
Notes to the Consolidated Financial Statements Part III - 15







AccountsReceivable
Accountsreceivablearereportedatnetrealizablevaluemeasuredasthecarryingamountlessan
allowanceforlossprovisionorcontractualadjustmentformedicalcareasconsiderednecessary.
ContractualadjustmentsareestimatedforMedicalCareCollectionFund(MCCF)receivablesduefrom
patientsandinsurancecompaniesusingtheallowancemethod. Theallowanceisdeterminedbasedon
theVAshistoricalexperienceandcollectioneffortsandthecontractualnatureofthebalancedue.
Uncollectibleamountsarewrittenoffagainsttheallowanceforlossprovisionorcontractualadjustment
formedicalcareonceVAdeterminesanamount,oraportionthereof,tobeuncollectible.
Accountsreceivableconsistsofintragovernmentalaccountsreceivableandpublicaccountsreceivable.
IntragovernmentalaccountsreceivableconsistsofamountsduefromotherFederalGovernment
agenciesprimarilyforreimbursementofcostsandleasepaymentsreceivable. Allamountsduefrom
FederalGovernmentagenciesareconsideredfullycollectible;therefore,noallowanceforlossprovision
isrecognized.
Publicaccountsreceivableconsistsprimarilyof(a)amountsdueforVeteranshealthcare,(b)amounts
dueforcompensation,pension,andreadjustmentbenefitoverpayments,(c)amountsdueforeducation
benefitsandreadjustmentoverpaymentsand(d)othermiscellaneousreceivablesdueprimarilyfor
generalfundadvances,insurance,LoanGuarantyreceivablesandmedicalresearch.
VAisrequiredbyPublicLaw(P.L.)96466tochargeinterestandadministrativecostsonbenefitdebts
similartochargesleviedonotherdebtsowedtheFederalGovernment. TheVAscurrentpolicyisnotto
chargeinterestoncompensation,pensiondebtsandcertaineducationbenefitsbasedonaJuly1992
decisionbythethenVADeputySecretary.
LoansReceivable
Loansreceivableconsistofdirectloansanddefaultedguaranteedloansreceivable. Includedindirect
loansarevendeeloans,acquiredloans,andNativeAmericandirectloans. Thesethreetypesofloans
receivablearepartoftheVALoanGuarantyProgram. DirectloansalsoincludeloansonVeterans
insurancepolicies. Theloansreceivablearesecuredbytheunderlyingrealestateandinsurance
policies. ThepresentvalueofthecostVAwillbearasguaranteedloansdefaultisanelementofthe
mortgageloanbenefitthatVAprovidestoVeterans. Thiscostisreflectedinthefinancialstatementsas
theliabilityforguaranteedloansandtheallowanceforsubsidyfordefaultedguaranteedloansincluded
inthebalanceofloansreceivable.
Vendeeloansaredirectloansissuedtoathirdpartyborrowerfortheacquisitionpriceofforeclosedreal
estatesoldbyVAafterthetransferofthepropertytoVAbyaprivatesectormortgagelenderupon
defaultofaloansubjecttotheVALoanGuarantyProgram. AcquiredloansareVAguaranteedloansin
defaultthatVApurchasesfromtheprivatesectormortgagelenderandservicestheloanwiththe
VeterandirectlyafterVAdeterminesthattheVeterancanservicethedebtservicepayments. Native
AmericandirectloansarespecialfinancingthatenablesNativeAmericanstopurchaseahomeon
federallyrecognizedtrustland.
Veteransthataregovernmentlifeinsurancepolicyholderswithpermanentplancoverageorpaidup
additionalinsurancecanborrowagainstthecashvalueoftheirpolicy,creatinganinsurancepolicydirect
Notes to the Consolidated Financial Statements Part III - 16















loan. Theloanamountmaynotexceed94percentofthecashsurrendervalueofthepolicyorthepaid
upadditionalinsurance. PriortoNovember2,1987,policyloanswereissuedatfixedratesdepending
onthefundandtimeperiod. Theremainingfixedrateloansareat4percentand5percent. Allpolicy
loansissuedsinceNovember2,1987,haveavariableinterestratewithaminimumof5percentanda
maximumof12percent. Ratechangesaretiedtothetenyearconstantmaturities,U.S.Treasury
SecuritiesIndexandmayonlychangeonOctober1. Thevariableratehasbeen5percentsinceOctober
1,2001.
Theinterestdueisequaltotheinterestratetimestheloanbalanceasoftheloananniversarydate. Any
interestfortheyearnotpaidwithin20daysoftheanniversarydateisaddedtotheloan
balance. Policyholdersmayrepayloansattheirdiscretionaslongastheloanamountplusaccumulated
interestdoesnotexceed94percentofthecashsurrendervalue. Ifthisoccurs,thepolicyholderis
notifiedthattheirpolicywillbesurrenderedunlessaminimumpaymentisreceivedwithin90days. At
thepolicyholder'sdeathorthematurityofthepolicy,anyloanindebtednessisdeductedfromthe
insuranceproceeds.
Loansreceivablefordirectloansarerecordedasfundsaredisbursed. Thecarryingamountofdirect
loansreceivableincludestheremainingbalanceoftheamountdisbursed,interestreceivable,an
allowanceforloanlossesusingtheallowancemethodforpre1992loans,thepresentvalueofan
allowanceforsubsidycostsforpost1991loansandthefairmarketvaluelesscosttodisposeof
foreclosedpropertybasedonthepresentvalueoffuturecashflowsfromtheproperty.
LoansreceivablefordefaultedguaranteedloansarerecordedwhenamountsaredisbursedbyVAto
funditsguarantywiththelenderfordefaultedloansandrepresentsthenetvalueoftheassetsrelated
tothepre1992andpost1991guaranteedloansthatdefaulted. Thecarryingamountoftheguaranteed
loansreceivableincludestheamountdispersedbyVAforitsguarantyunderthedefaultedloans,an
allowanceforloanlossesusingtheallowancemethodforpre1992loansandthefairmarketvalueless
costtodisposeofforeclosedpropertybasedonthepresentvalueoffuturecashflowsfromthe
property.
ForloansobligatedpriortoOctober1,1991,theloanlossallowanceisestimatedbasedonpast
experienceandananalysisofoutstandingbalances. ForloansobligatedafterSeptember30,1991,the
allowanceforsubsidycostsadjustmentisduetotheinterestratedifferentialbetweentheloansand
borrowingfromTreasury,theestimateddelinquenciesanddefaults,netofrecoveries,offsetsfromfees,
andotherestimatedcashflows.
Theprovisionforlossesonvendeeloansisbaseduponhistoricalloanforeclosureresultsappliedtothe
averagelossondefaultedloans. Thecalculationisalsobasedontheuseoftheaverageinterestrateof
U.S.interestbearingdebtasadiscountrateontheassumptionthattheVA'soutstandingvendeeor
directloanswilldefaultovera12yearperiod. For2013and2012,VAdeterminedthatthesevendee
loanshavesufficientequity,duetorealestateappreciationandbuydownofprincipal,tominimizeor
eliminateanypotentiallosstoVA.
Theamountrecordedforforeclosedpropertyisestimatedbaseduponthepresentvalueoffuturecash
flowstobereceiveduponthedispositionoftheproperty. Todeterminethefuturecashflowsfroma
foreclosedproperty,VAobtainsanindependentappraisalofthepropertytodeterminefairmarket
Notes to the Consolidated Financial Statements Part III - 17










valuewhichisreducedbyestimatedfuturecarryinganddisposalcostssuchasacquisition,
management,sellingandtransfercostsandestimatedgainsorlossesonpropertyresale.
VAaccruesinterestonperformingandnonperformingloansreceivableuntiltheoutstandingbalanceis
paidinfull. Performingloansreceivablearethoseloanswheretheamountdueontheoutstanding
balanceispaidinfullbytheestablishedduedate. Nonperformingloansreceivablearethoseloans
wheretheamountdueontheoutstandingbalanceisnotpaidinfullbytheestablishedduedatewhich
resultsinadelinquencyoftheindebtedness. Interestreceivableisaccruedonthenonperformingloan
balanceuntiltheamountdueispaidtoacurrentstatus,debtispaidinfullorotherwiseresolved
throughcompromise,waiverofthechargesorterminationofcollectionaction. VAchargesafixed
interestrateonloansissuedforthedurationoftheloanterm,includinganydelinquencyperiod. The
interestrateissetatloaninceptionbasedonthreebenchmarkinterestratestrackedbyVA. VAwill
applypaymentsreceivedfromthedebtorfirsttopenaltiesandadministrativecosts,secondtointerest
receivableandthirdtooutstandingdebtprincipal.
Therecordedvalueofloansreceivable,net,andthevalueofassetsrelatedtodirectloansreceivableare
notthesameastheproceedsthatVAwouldexpecttoreceivefromsellingitsloans. Itisatleast
reasonablypossiblethattheproceedsfromthesaleofitsloanswilldifferfromthereportedcarrying
valueoftheloansreceivableandtheunderlyingvalueoftheirrelatedassetsresultinginarealizedgain
orlossonsale.
Inventories
InventoriesconsistprimarilyofitemssuchasCanteenServiceretailstorestockheldforcurrentsaleand
arereportedatcostusingtheweightedaveragecostmethod. Inventorythatisexcess,obsoleteor
unserviceableisreportedatitsestimatednetrealizablevalue. Upondisposal,anydifferencebetween
theinventorysrecordedamountandthevaluereceivedfortheinventorywillberecognizedasagainor
loss.
VAfollowsthepurchasemethodofaccountingforoperatingsupplies,medicalsupplies,and
pharmaceuticalsuppliesinthehandsofendusers. Thepurchasemethodprovidesthattheseitemsbe
expensedwhenpurchased. VAdefinesanenduserasaVAmedicalcenter,regionaloffice,orcemetery.
Property,Plant,andEquipment
Themajorityofthegeneralproperty,plant,andequipmentareusedtoprovidemedicalcareto
Veterans. Property,plant,andequipment,includingtransfersfromotherfederalagencies,leasehold
improvements,otherstructuresnotclassifiedasbuildingsandcapitalleasesarevaluedatnetcarrying
cost. Multiuseheritageassetsarerecognizedandpresentedwithgeneralproperty,plantand
equipmentinthebasicfinancialstatementsandadditionalinformationforthemultiuseheritageassets
withonlyincidentalgovernmentuseareclassifiedasandincludedwiththeheritageassetsinformation
inNote10. Whenthecapitalizationcriteriaaremet,majoradditions,replacements,andalterationsare
capitalized,whereasroutinemaintenanceandrepairsareexpensedwhenincurred.
VAhasasignificantconstructionprogramformedicalfacilities,nationalcemeteries,andotherveteran
relatedprojects. VAsubmitsitsmajorconstructionprojectplansformedicalfacilitiesandnational
cemeteriestoCongressforapprovalpriortoreceivingappropriatedfunds. VAmaintainsseparate
Notes to the Consolidated Financial Statements Part III - 18














appropriatedfundaccountsforeachtypeofproject,asauthorized,formajorandminorconstruction
andnonrecurringmaintenanceprojects.
Constructionprojectcostsincurredduringthedesignanddevelopmentphasesarerecordedinthe
appropriateConstructionWorkinProcess(WIP)accountsincludingallmaterials,supplies,services,
capitalequipment,transportationcosts,incrementaloverheadorsupportcosts,andotherconstruction
relatedcostsdirectlyattributabletotheproject. Theassetsaretransferredtoeithercapitalizedornon
capitalizedproperty,plant,andequipment,asappropriate,whenplacedinservice. Construction
projectscompletedinmultiplephasesarerecordedasConstructionWIPuntiltheprojectphaseis
placedinservice. Personalpropertyandequipmentnotmeetingthecapitalizationcriteriaisexpensed
uponbeingplacedinservice.
Individualitemsarecapitalizediftheusefullifeistwoyearsormoreandtheunitpriceis$100thousand
orgreater. Buildingsaredepreciatedonastraightlinebasisoverestimatedusefullivesof25to40
years. Equipmentisalsodepreciatedonastraightlinebasisoveritsusefullife,usually5to20years.
Internalusesoftwareisalsosubjecttothe$100thousandthresholdforcapitalassets. Thecostssubject
tocapitalizationareincurredduringthesoftwaredevelopmentphase,andincludethedesignofthe
chosenpath,programmingdevelopment,installationofhardwareandtesting,andareaccumulatedin
SoftwareinDevelopmentuntilaprojectissuccessfullytestedandplacedinservice. Thecapitalized
costsareamortizedonastraightlinebasis,andtheamortizationtermisinaccordancewiththeplanned
lifecycleestablishedduringthesoftwaresplanningphasewhichgenerallyrangesfrom2to4years.
Preliminarydesignphasecostsandpostimplementationcostsareexpensedasincurred.
Property,plantandequipment,includingconstructionWIP,internalusesoftwareandcapitalizedlease
assets,arereviewedforimpairmentwhenevereventsorchangesincircumstancesindicatethatthe
carryingamountofanassetmaynotberecoverable. Ifthecarryingvalueofthelonglivedassetorasset
groupisnotrecoverable,animpairmentlossisrecognizedtotheextentthatthecarryingvalueexceeds
itsfairvalue. Fairvalueisdeterminedthroughvariousvaluationtechniques,includingquotedmarket
valuesandthirdpartyindependentappraisals,asconsiderednecessary.
VAfollowsTechnicalRelease14,ImplementationGuidanceontheAccountingfortheDisposalof
GeneralProperty,Plant,&Equipment,whichclarifiesexistingSFFAS6,AccountingforProperty,Plant,
andEquipment,requirementstoaccountforthedisposal,retirement,orremovalfromserviceof
generalproperty,plant,andequipment(GPP&E),aswellas,therecognitionandmeasurementof
disposalrelatedcleanupcosts.Theguidancedifferentiatesbetweenpermanentandotherthan
permanentremovalfromserviceofGPP&Eassetsanddelineateseventsthattriggerdiscontinuationof
depreciationandremovalofGPP&Efromaccountingrecords.
Theremovalfromserviceisconsideredotherthanpermanent,unlessthereisevidenceof
managementsdocumenteddecisiontopermanentlyremovetheassetfromserviceandtheassetsuse
isterminated.Permanentremovalfromserviceisevidentfrommanagementsdocumenteddecisionto
disposeofanassetbyselling,scrapping,recycling,donatingordemolishingtheasset.Ifonlythe
terminationofuseormanagementsdecisiontopermanentlyremoveanassetfromuseoccurs,butnot
bothbusinessevents,thenpermanentremovalfromservicehasnotoccurredandthereisnochangein
theGPP&Ereportedvalueanddepreciationcontinues.Likewise,inthecaseofGPP&Ecleanupcosts,if
Notes to the Consolidated Financial Statements Part III - 19















onlyoneofthetwobusinesseventshasoccurred,permanentremovalfromservicehasnotoccurred
andanycleanupcostsassociatedwithdisposal,closure,and/orshutdownshouldcontinuetobe
expensedandaccumulateasaliability.
WhenVAdocumentsitsdecisiontopermanentlyremoveanassetfromservicebyselling,scrapping,
recycling,donatingordemolishingtheassetandtheassetsuseisterminated,depreciationand
amortizationceasesinanticipationofdisposal,retirement,orpermanentremovalfromservice;theG
PP&Eaccountsalongwithassociatedaccumulateddepreciation/amortizationisremovedfromtheG
PP&Eaccountsandrecordedinanappropriateassetaccountatitsexpectednetrealizablevalue.Any
differenceinthebookvalueoftheGPP&Eanditsexpectednetrealizablevalueisrecognizedasagain
oralossintheperiodofadjustment.Theexpectednetrealizablevalueisadjustedattheendofeach
accountingperiodandanyfurtheradjustmentsinvaluerecognizedasagainoraloss.
TherearenorestrictionsontheuseorconvertibilityofGPP&E. FordisclosureregardingHeritage
AssetsseeNote10.
SFFASNo.40,DefinitionalChangestoDeferredMaintenance;AmendingStatementofFederalFinancial
AccountingStandards6,AccountingforProperty,Plant,andEquipment,wasadoptedbyVAfortheyear
endedSeptember30,2012. Thisstandardclarifiesthatrepairactivitiesshouldbeincludedtobetter
reflectassetmanagementpractices,andimprovereportingondeferredmaintenanceandrepairs
activitiesnotperformedwhentheyshouldhavebeenorwerescheduledtobe,therefore,areputoffor
delayedforafutureperiod.
FASABissuedSFFASNo.42,DeferredMaintenanceandRepairs:AmendingStatementsofFederal
FinancialAccountingStandard6,14,29and32,whichiseffectiveforperiodsbeginningafterSeptember
30,2014.Thisstandardrequiresexpandedqualitativeandquantitativedisclosureofthedeferred
maintenanceandrepairs,including(1)maintenanceandrepairspoliciesandhowtheyareapplied,(2)
rankingandprioritizingmaintenanceandrepairactivitiesamongotheractivities,(3)determining
acceptableconditionstandards,(4)whetherdeferredmaintenanceandrepairsarerelatedsolelyto
capitalizedGPP&Eandstewardshipproperty,plantandequipmentoralsotononcapitalizedorfully
depreciatedGPP&E,(5)GPP&Eexcludedfrommeasurementand/orreportingofdeferred
maintenanceandrepairsandtherationalefortheexclusionofotherthannoncapitalizedorfully
depreciatedGPP&E,(6)beginningandendingdeferredmaintenanceandrepairsbalancesbycategory
ofGPP&E,and(7)explanationofsignificantchangesfromtheprioryear. Managementiscurrently
evaluatingrequiredchangestoexistingdisclosurestobeincompliancewiththestandardbutdoesnot
believethatimplementationwillhaveamaterialeffectonfinancialposition,resultsofoperationsor
disclosures. ForadditionaldisclosureondeferredmaintenanceandrepairsofGPP&Eandheritage
assetsseeRequiredSupplementaryInformation(RSI).
SFFASNo.44,AccountingforImpairmentofGeneralProperty,PlantandEquipmentRemaininginUse,is
effectiveforperiodsafterSeptember30,2014.ThisStatementestablishesaccountingandfinancial
reportingstandardsforimpairmentofGPP&Eremaininginuse,exceptforinternalusesoftware.G
PP&Eisconsideredimpairedwhenthereisasignificantandpermanentdeclineintheserviceutilityof
GPP&Eorexpectedserviceutilityforconstructionworkinprogressandmanagementhasno
reasonableexpectationthatthelostserviceutilitywillbereplacedorrestored.Existingprocessesand
internalcontrolsareexpectedtoreasonablyassureidentificationandcommunicationofpotential
Notes to the Consolidated Financial Statements Part III - 20







materialimpairments,suchasthoserelatedtodeferredmaintenanceandrepairs,andVAwillnotbe
requiredtoconductannualorotherperiodicsurveyssolelyforthepurposeofapplyingimpairment
standards.
Thelossfromimpairmentisrecognizedandreportedinthestatementofnetcostinprogramcostsor
costsnotassignedtoprograms.Reversalsofimpairmentlossesarenotrecognized. Wherean
impairmentlossisnotrecognized,adjustmentstotheGPP&Esdepreciationmethods,usefullifeor
salvagevalueestimatesmaybeappropriate.Intheperiodtheimpairmentlossisrecognized,disclosure
oftheGPP&Eremaininginuseforwhichanimpairmentlossisrecognized,thenatureandamountof
theimpairment,andthefinancialstatementclassificationoftheimpairmentlosswillbeprovidedinthe
notestothefinancialstatements.VAiscurrentlyevaluatingthefinancialstatementimpactof
implementingthisstandardanddoesnotbelievethatimplementationwillhaveamaterialeffecton
financialpositionandresultsofoperations.
OtherAssets
IntragovernmentalOtherAssetsarereportedatcostandconsistprimarilyofIntragovernmental
Advances FederalandareprimarilyadvancestotheArmyCorpsofEngineers(Corps)andtheGeneral
ServicesAdministration(GSA). PublicOtherAssetsarereportedatcostandconsistofPublicAdvance
PaymentsmadebyVHAprimarilytohospitalsandmedicalschoolsunderhousestaffcontracts,grantees
andbeneficiaries,withthebalanceoftheadvancesbeingmadetoemployeesonofficialtravel.
AccountsPayable
AccountspayableareamountsowedbyVAforgoodsandservicesreceivedfrom,progressincontract
performancemadeby,andrentsduetootherentitiesandscheduledcompensation,pensionand
educationbenefitspayabletoVeterans. Accountspayabledonotincludeliabilitiesrelatedtoongoing
continuousexpensessuchasemployeessalaries,benefits,annuitiesforinsuranceprograms,interest
payableandloanguaranteelossesandVeteranscompensation,pensionandeducationbenefitspayable
whicharecoveredbyotherliabilities. WhenVAacceptstitletogoods,whetherthegoodsaredelivered
orintransit,orincurscostsforservicesreceived,VArecognizesaliabilityfortheunpaidamountofthe
goodsandservices. Ifinvoicesforthosegoodsandservicesarenotavailablewhenfinancialstatements
areprepared,theamountsowedareestimated.
IntragovernmentalaccountspayableconsistsofamountsowedtootherFederalGovernmentagencies
andaccountspayablefromcancelledappropriations. Theremainingaccountspayableconsistof
amountsduetothepublic. Intragovernmentalandpublicaccountspayablearecoveredbybudgetary
resources.
LoanGuarantees
VAprovidesloanguaranteesusingtwotypesofguarantyprograms. Underoneprogram,aloanmaybe
madetoaneligibleVeteranborrowerbyanapprovedprivatesectormortgagelender. VAguarantees
paymentofafixedpercentageoftheloanindebtednesstotheholderofsuchaloan,uptoamaximum
dollaramount,intheeventadefaultbytheVeteranborrowerresultsinalossbytheloanholder. Ifthe
loanholderacquiresthepropertywhichhadsecuredtheguaranteedloanattheliquidationsale,the
loanholdercanelecttoconveythepropertytoVA,whichthenattemptstoresellthepropertyatthe
bestpossiblepriceandterms.
Notes to the Consolidated Financial Statements Part III - 21

















VAreportstheliabilityontheguaranteeofloansinaccordancewiththerequirementsoftheCredit
ReformAct. Fortheseloans,theLiabilityforLoanGuaranteesrepresentsthepresentvalueofthe
estimatednetcashoutflowsconsideredmostlikelytobepaidbyVAasaresultofaclaimagainstthe
guaranteeonadefaultedloan. VAguaranteestheloanagainstlossatforeclosureforwhichVApaysnet
cashflowuptoalegallyspecifiedmaximumbasedonthevalueofindividualloans. VAwillpaythe
lendertheguaranteeandforeclosureexpenses.
Thesecondloanguarantyprograminvolvesthesaleofdirectloans. VAwillbundlevendeeandacquired
loansandsellthemtoathirdpartyinvestor(Trust)pursuanttoasaleagreement. Underthesale
agreement,theTrustownsthemortgageloansacquiredinthesaleandwillissuecertificatesbackedby
themortgageloansandinstallmentcontracts. Thecertificatesrepresentinterestsintheassetsofthe
TrustandinvestorsarepaidfromtheTrustsassets.Ontheclosingdateofthecertificates,VAtransfers
itsentireinterestintherelatedloansreceivableandcollateraltotheTrusteeforthebenefitofthe
relatedcertificateholderspursuanttothesaleagreement. Itisatleastreasonablypossiblethatthe
proceedsfromthesaleofVAsloanswilldifferfromthereportedcarryingvalueofthoseloansandthe
underlyingvalueoftheirrelatedassetsresultinginarealizedgainorlossonsale. VAguaranteesthat
theinvestorwillreceivefullandtimelydistributionsoftheprincipalandinterestonthecertificates
backedbythefullfaithandcreditoftheFederalGovernment.
VAreportstheliabilityontheguaranteeofloanssoldundertheVendeeMortgageTrustandAmerican
HousingTrustprogramsinaccordancewiththerequirementsoftheCreditReformAct. Fortheseloans,
theLiabilityforLoanGuaranteesrepresentsthepresentvalueoftheestimatednetcashoutflows
consideredmostlikelytobepaidbyVAarisingfromaclaimagainsttheguarantee. Theseloansales
containtwotypesofguaranteesforwhichVApaysnetcashflow. VAguaranteesthattheprincipaland
interestpaymentdueonaloanwillbepaidbythe15
th
ofeachmonth. Ifthepaymentisnotmadeby
theborrower,VAallowstheloanservicertotakefundsfromacashreserveaccountfortheamountof
thedeficiency. VAalsoguaranteestheloansagainstlossatforeclosure. AlthoughVAwillnotbuyback
theloan,VAwillpaytheloanlossandforeclosureexpenses.
InsuranceLiabilities
InsuranceLiabilitiesforVA'slifeinsuranceprogramsinclude:policyreserves;unearnedpremiums;
insurancedividendsleftondepositandrelatedinterestpayable;accruedinterestpayableoninsurance
policiesanddividendspayabletopolicyholders.
ActuarialreserveliabilitiesforVA'sinsuranceprogramsfor2013and2012arebasedonmortalityand
interestrateassumptionsthatvarybyfund,typeofpolicy,andtypeofbenefit. Theinterestrate
assumptionsrangefrom2.25to5.0percent. ThemortalityassumptionsincludetheAmerican
ExperienceTable,theX18Table,the1941CommissionersStandardOrdinary(CSO)Table,the1958CSO
BasicTable,the1980CSOBasicTable,andthe2001ValuationBasicMale(VBM)Table.
NationalServiceLifeInsurance(NSLI)basicpolicyreservesforpermanentplansarebasedonthe
AmericanExperienceTablewith3percentinterest,exceptfortheModifiedLifeplans,whicharebased
onthe1958CSOBasicTablewith3percentinterest,andpaidupadditionspurchasedbydividends,
whicharebasedonthe2001VBMTablewith4percentinterest. ThereserveforTermpoliciesisbased
onthe2001VBMTablewith4percentinterestandtheage70rate(thecappedpremium)of$6.18per
monthper$1,000faceamount.
Notes to the Consolidated Financial Statements Part III - 22













UnitedStatesGovernmentLifeInsurance(USGLI)permanentplanpolicyreservesarebasedonthe
AmericanExperienceTablewith3.5percentinterestandareheldonanetsinglepremiumbasis.
VeteransSpecialLifeInsurance(VSLI)permanentplanpolicyreservesarebasedontheX18Tableat2.5
percentinterest,exceptforpaidupadditions,whicharebasedonthe1980CSOBasicTablewith5
percentinterest. ThereserveforTermpoliciesisbasedonthe1980CSOBasicTablewith5percent
interestandtheage70rate(thecappedpremium)of$5.87permonthper$1,000faceamount.
ServiceDisabledVeteransInsurance(SDVI)permanentplanpolicyreservesarebasedonthe1941CSO
Tableat3.5percentinterestusingratebookpremiums. Thereservefor5YearTermpoliciesisbased
onvaryingratiosofthe1941CSOTableat3.5percentinterestusingratebookpremiumsandis
computedonacompletecontractbasis. Themortalityratiosstartat250percentforages50andbelow
andgradedownto100percentofthetableforages65andolder. ThereserveforTermpolicies
renewedatage70andoverisbasedonthe1941CSOTablewith3.5percentinterestandtheage70
Termcappedpremiumof$5.87permonthper$1,000faceamount.
VeteransReopenedInsurance(VRI)basicpolicyreservesarebasedonaninterestrateof3.5percent
andamortalitybasisthatvariesbysegment("J","JR"or"JS")andbyratingcodewithinthe"JR"
segment. For"J",thebasisis100percentofthe1958CSOBasicTable. For"JR",thebasisisthesameas
theratingcode(150,175,200,250,300,400or500percent)oftheBasicTable. For"JS",thebasisisthe
AmericanExperienceTable,andthereserveisasinglepremium. Reservesforpaidupadditionsare
basedonthe2001VBMTableand4percentinterestfor"J",the1958CSOBasicTableand4percent
interestfor"JR",and150percentofthe1958CSOBasicTableand4percentinterestfor"JS".
TheVeteransMortgageLifeInsurance(VMLI)programisoperatedthroughtheVeteransInsurance&
Indemnities(VI&I)fund. ThereserveforVMLIpoliciesisbasedon500percentofthe1958CSOBasic
Tableat2.5percentinterest.
Areserveforunearnedpremiumsisheldforpremiumspaidforcoveragepastthedateofthe
statement. Itiscomprisedofanestimateforpremiumspaidlessthanonemonthinadvancethatare
unearnedattheendofthereportingperiod,andareserveforpremiumspaidonemonthormorein
advancecomputedfrominforcemasterrecords.
InsurancedividendsthatareleftoncreditordepositwithVAaccrueinterestataratethatvariesbyfund
relativetothefund'sinvestmentportfolioearnings. For2013,theinterestratesrangedfrom3.5
percentto5.0percent,andfor2012,theyrangedfrom4.25percentto5.5percent.
TheSecretaryofVAdeterminesannuallytheexcessfundsavailablefordividendpayment. Policyholders
canelectto: (1)receiveacashpayment;(2)prepaypremiums;(3)repayloans;(4)purchasepaidup
insurance;or(5)deposittheamountinaninterestbearingaccount.Policiesinfour of
theadministeredprogramsareeligiblefordividends: NSLI,USGLI,VSLIandVRI. Thedividend
authorizationisbasedonanactuarialanalysisofeachprogramsclaimsandinvestmentexperience,
comparedtothemortalityandinterestassumptionsutilizedinthatprogram,attheendofthe
precedingcalendaryear. Dividendsaredeclaredonacalendaryearbasisandpaidonpolicyanniversary
dates. Aprovisionfordividendsischargedtooperationsandaninsurancedividendisestablishedwhen
Notes to the Consolidated Financial Statements Part III - 23






gainstooperationsarerealizedinexcessofthoseessentialtomaintainsolvencyoftheinsurance
programs.
ThereserveforDividendsPayableisanestimateofthepresentvalueofdividendsaccruedasofthe
valuationdate. InaccordancewithGAAPrequirements,VArecordsonlythatportionoftheestimated
policydividendthatappliestothecurrentreportingperiodasadividendliability. For2013and2012,a
discountrateof4percent(5percentVSLI),alongwiththeappropriateaccrualfactor,wasused. The
methodologyemployedbyVAtoestimatethedividendliabilityreflectsexpecteddividendstobepaidby
quarterusingpercentagesthatarebasedontheactualdistributionofdividendanniversariesattheend
oftheprioryear.
AnnualLeave
Federalemployeesannualleaveisaccruedasitisearned,andtheaccrualisreducedannuallyforactual
leavetaken. Eachyear,theaccruedannualleavebalanceisadjustedtoreflectthelatestpayratesfor
leavethathasbeenearnedbutnottaken. Sickandothertypesofnonvestedleaveareexpensedas
taken. Totheextentappropriationsarenotavailabletofundannualleaveearnedbutnotused,funding
willbeobtainedfromfuturefinancingsources,andtherefore,theseliabilitiesarenotcoveredby
budgetaryresources.
WorkersCompensationLiability
TheFederalEmployeesCompensationAct(FECA)providesincomeandmedicalcostprotectionto
coveredfederalcivilianemployeesinjuredonthejob,employeeswhohaveincurredaworkrelated
occupationaldisease,andbeneficiariesofemployeeswhosedeathsareattributabletojobrelated
injuriesoroccupationaldiseases. ClaimsincurredforbenefitsforVAemployeesunderFECAare
administeredbytheDepartmentofLabor(DOL)andareultimatelypaidbyVA.
Workerscompensationiscomprisedoftwocomponents: (1)theaccruedliabilitywhichrepresents
moneyowedbyVAtoDOLforclaimspaidbyDOLonbehalfofVAthroughthecurrentfiscalyear,and
(2)theactuarialliabilityforcompensationcasestobepaidbeyondthecurrentyear.
Futureworkerscompensationestimatesaregeneratedfromanapplicationofactuarialprocedures
developedbyDOLtoestimatetheliabilityforFECAbenefits. Theliabilityforfutureworkers'
compensationbenefitsincludestheexpectedliabilityfordeath,disability,medical,andmiscellaneous
costsforapprovedcompensationcasesandforpotentialcasesrelatedtoinjuriesincurredbutnot
reported. Theliabilityisdeterminedbyutilizinghistoricalbenefitpaymentpatternsrelatedtoa
particularperiodtoestimatetheultimatepaymentsrelatedtothatperiod. Consistentwithpast
practice,theseprojectedannualbenefitpaymentshavebeendiscountedtopresentvalueusingthe
OMBseconomicassumptionsfor10yearTreasurynotesandbonds.
Pension,OtherRetirementBenefits,andOtherPostEmploymentBenefits
Eachemployingfederalagencyisrequiredtorecognizeitsshareofthecostandimputedfinancingof
providingpensionandpostretirementhealthbenefitsandlifeinsurancetoitsemployees. Factorsused
inthecalculationofthesepensionsandpostretirementhealthandlifeinsurancebenefitexpensesare
providedbyOPMtoeachagency.
Notes to the Consolidated Financial Statements Part III - 24















VAsemployeesarecoveredundertheCivilServiceRetirementSystem(CSRS)ortheFederalEmployees
RetirementSystem(FERS);VAmakescontributionsaccordingtobothplansrequirements. CSRSand
FERSaremultiemployerplansadministeredbyOPM. VAdoesnotmaintainorreportinformationabout
theassetsoftheplans,nordoesitreportactuarialdatafortheaccumulatedplanbenefits. That
reportingistheresponsibilityofOPM.
VeteransBenefitsLiability
VAprovidescompensationbenefitstoVeteranswhoaredisabledbymilitaryservicerelatedcauses.
BenefitsarealsoprovidedtodeceasedVeteransbeneficiaries. Thesebenefitsareprovidedin
recognitionofaVeteransmilitaryservice. Theliabilityforfuturecompensationandburialpaymentsis
reportedonVAsbalancesheetatthepresentvalueofexpectedfuturepayments,andisdevelopedon
anactuarialbasis. Variousassumptionsintheactuarialmodel,suchasthetotalnumberofVeterans,
estimatedfuturemilitaryseparations, thenumberofVeteransanddependentsreceivingpayments,
discountrates,costoflivingadjustments,presumptiveserviceconditionsresultingindisabilitybenefits
coverageandlifeexpectancy,impacttheamountoftheliability.
Discountratesusedtomeasuretheactuarialliabilitiesarebasedonspotratesderivedfromthe10year
averagehistoricalinterestrateyieldcurveonTreasurysecuritiesatSeptember30ofeachyearforthe
10yearhistoricalperiodwithmaturitiesconsistentwiththeperiodofexpectedfuturepayments. Asa
result,eachyearforwhichexpectedfuturepaymentsareprojectedhasaseparatediscountrate
associatedwithit. However,asingleweightedaveragediscountrateisalsodisclosedthatmaybeused
forallprojectedfuturepaymentsthatresultsinapresentvaluethatisnotmateriallydifferentthanthe
resultingpresentvalueusingmultiplerates.
EstimatedliabilitiesforVeteranscompensationandburialobligationsinthefinancialstatementsare
measuredasoftheendofthefiscalyearbasedonJune30beneficiarydatathatisadjustedformaterial
knownchangesinthenumberofparticipantscovered(enrollment)duringthe4
th
quarter. Themethod
usedtomeasuretheliabilitiesprovidesforconsistencyintheunderlyingrelationshipbetweendiscount
rate,COLA,andtheothereconomicassumptions. For2013,valuationtechniquesortheirapplication
usedtomeasurethefairvalueoftheactuarialliabilitieswereconsistentlyappliedcomparedtothe
previousyear.
Fromtimetotime,VAmaydetermineitispreferabletomakerefinementstothevaluationtechniques
ortheirapplicationusedtomeasurethefairvalueoftheactuarialliabilitiesbecauseVAmanagement
concludesthattheresultingmeasurementsareequallyormorerepresentativeoffairvalueofthe
actuarialliabilitiesinthecircumstancesandwereduetoimprovedcomputersoftwaremodeling
capabilityand/orimprovedinformation. Theresultingchangesinfairvalueoftheactuarialliabilities
fromthechangesinvaluationtechniquesortheirapplicationaretreatedasachangeinestimateand
accountedforonaprospectivebasis.
Congressestablishedaprocesstoguidethecreationofnewpresumptivedisabilitybenefitpayments
throughtheAgentOrangeActof1991,P.L.No.1024. TheSecretaryofVArelyingonindependent
studiesbytheInstituteofMedicine(IOM)determineswhetherpresumptionsofserviceconnectionare
warrantedandpresumptivedisabilitybenefitpaymentsaredue. UpondeterminationbytheSecretary
ofVAthatpresumptivedisabilitybenefitpaymentsaredue,thereisawaitingperiodandafinal
Notes to the Consolidated Financial Statements Part III - 25








regulationisissued. InaccordancewiththeAgentOrangeAct,theadjudicationofcasesbasedonthe
newpresumptionhasbegunandaliabilityhasbeenrecognized.
SFFAS33,Pensions,OtherRetirementBenefits,andOtherPostemploymentBenefits:ReportingGains
andLossesfromChangesinAssumptions,andSelectingDiscountRatesandValuationDates(SFFAS33)
appliestotheactuarialliabilitiesrecognizedforVeteranscompensationandburialobligationsreported
inVAsfinancialreportspreparedpursuanttoFASABstandards.
SFFAS33requiresthedisplayofgainsandlossesfromchangesinlongtermassumptionsusedto
measureliabilitiesforVeteranscompensationandburialobligations,asseparatelineitemsonthe
StatementsofNetCost. TheStandardalsorequiresdisclosureinnotestothefinancialstatementsofa
reconciliationofbeginningandendingVeteranscompensationandburialobligationsbalances,including
allmaterialcomponentsofexpensefromexperienceandfromassumptionschangesbysignificant
programsandintotal. Inaddition,SFFAS33providesstandardsforselectingthediscountrate
assumptiontomeasuretheVeteranscompensationandburialobligationsasofthereportingdateand
selectingavaluationdateforestimatingtheobligationwhichwillestablishaconsistentmethodforsuch
measurements.
Contingencies
VAisapartyinvariousadministrativeproceedings,legalactions,andclaimsbroughtagainstit. Inthe
opinionofVAmanagementandlegalcounsel,theultimateresolutionsoftheseproceedings,actions,
andclaimswillnotmateriallyaffectthefinancialpositionorresultsofVAoperationsotherthanas
disclosedinNote18,Contingencies.
NonFederalTrusts
VAhasenteredintoenhanceduseleasestomaximizeuseofunderutilizedVAproperty. Certain
enhanceduseleaseswereenteredintowithnonfederaltrusts. VAleasedbacktheassetsdevelopedby
thenonfederaltrustsunderlongtermleases.Theassetsdevelopedbythenonfederaltrustsinclude
cogenerationplants,officebuildings,orparkinggaragesandwerefinancedwithpublicbonds.The
publicbondsarerepaidfromthecogenerationfeesandleasepaymentsmadebyVAundertheleasesas
longasVAutilizesthesefacilities. Undertheleasearrangements,VAistheprimarybeneficiaryofthe
trustassetswiththeobligationtoabsorbthemajorityofanyexpectedlossesandreceivethemajorityof
theresidualreturnsthatcouldbesignificant.Asaresult,VAhasacontrollingfinancialinterestinthe
nonfederaltrustassetsundertheenhanceduseleases.Accordingly,theassets,liabilities,andresultsof
operationsofthesesixtrustsundertheenhanceduseleasesareconsolidatedwithVAoperationsinthe
accompanyingconsolidatedfinancialstatements.
ApplicationofCriticalAccountingEstimates
Thefinancialstatementsarebasedontheselectionofaccountingpoliciesandtheapplicationof
significantaccountingestimates,someofwhichrequiremanagementtomakesignificantassumptions.
Further,theestimatesarebasedoncurrentconditionsthatmaychangeinthefuture. Actualresults
coulddiffermateriallyfromtheestimatedamounts. Thefinancialstatementsincludeinformationto
assistinunderstandingtheeffectofchangesinassumptionstotherelatedinformation.
Notes to the Consolidated Financial Statements Part III - 26












ComparativeData
Effectivefor2013,theSBRpresentationhaschangedtobetteralignwiththenewformatofthereport
onBudgetExecutionandBudgetaryResources(SF133)asrequiredbyOMB.Thenewformathas
additionalreconciliationrequirementswithbudgetexecutioninformationreportedintheBudgetofthe
UnitedStatestoensuretheintegrityofthenumberspresented.Asaresultoftheformatchanges,the
2012datahasbeenreclassifiedtoconformtothe2013presentation.Therearenoothereffects
reportedintheconsolidatedorcombinedfinancialstatements.
SubsequentEvents
Subsequenteventshavebeenevaluatedthroughtheauditorsreportdatewhichisthedatethe
financialstatementswereavailabletobeissued,andmanagementdeterminedthattherearenoother
itemstodisclose.
2. NonEntityAssets
EntityandNonEntityassetshavebeencombinedonthebalancesheet. NonEntityassetsrelate
primarilytostateandlocaltaxesandotheremployeepayrollwithholdingsandpersonalfundsof
patientsincludedinFundBalancewithTreasury;downwardreestimatesfortheVeteransHousing
ProgramincludedinIntragovernmentalAccountsReceivable;andamountsduetoTreasuryformedical
costsbilledtoVeteransincludedinPublicAccountsReceivable.
Thereareoffsettingliabilitiesintheconsolidatedbalancesheetforthenonentityassetsreported
below.OffsettingliabilitiesareincludedinIntragovernmentalOtherLiabilitiesandAccountsPayableand
PublicOtherLiabilities,InsuranceLiabilitiesandAccountsPayable.Thereisnobalanceinthe
consolidatednetpositionfromthenonentityassets.
NonEntityAssets
asofSeptember30,
FundBalancewithTreasury $ 116 $ 112
IntragovernmentalAccountsReceivable 1 1
PublicAccountsReceivable 71 68
TotalNonEntityAssets $ 188 $ 181
2013 2012
Notes to the Consolidated Financial Statements Part III - 27







3. FundBalancewithTreasury
FundBalancewithTreasury
asofSeptember30,
2013 2012
Entity Assets
Trust Funds $ 87 $ 94
RevolvingFunds 6,060 4,872
Appropriated Funds 32,386 35,143
Special Funds 349 293
OtherFundTypes 50 60
Total Entity Assets
38,932
40,462
NonEntityAssets


OtherFundTypes 116 112
TotalNonEntityAssets 116 112
Total Entity and NonEntity Assets $ 39,048 $ 40,574
ReconciliationofVAGeneralLedgerBalanceswithTreasury
BalanceperVAGeneralLedger $ 40,145 $ 40,386
ReconciledDifferences,PrincipallyTiming (1,167) 118
UnreconciledDifferences 70 70
FundBalancewithTreasury $ 39,048 $ 40,574
StatusofFundBalancewithTreasury
UnobligatedBalance
Available $ 6,898 $ 12,614
Unavailable 7,405 5,525
ObligatedBalanceNotYetDisbursed 24,333 22,046
Deposit/ClearingAccountBalances 412 389
FundBalancewithTreasury $ 39,048 $ 40,574
4. Cash
Cash
asofSeptember30,
2013 2012
CanteenService $ 2 $ 2
AgentCashierAdvance 6 14
TotalCash $ 8 $ 16
Notes to the Consolidated Financial Statements Part III - 28

5. Investments
InvestmentSecurities
asofSeptember30,2013
Cost
Amortization
Method
Amortized
(Premium)/
Discount
Interest
Receivable
Investments,
Net
Market
Value
Intragovernmental
Securities (Note 19)
NonMarketable:SpecialBonds $ 8,406 N/A $ 70 8,476 $ 8,476
TreasuryNotes 90 EffectiveInterest (3) 1 88 88
Total $ 8,496 $ (3) 71 8,564 $ 8,564
Public Securities
TrustCertificates(Loan Guaranty) $ 140 N/A $ 140 $ 140
Mutual Funds (NonFederalTrusts) 44 Straightline (6) 38 38
Total $ 184 $ (6) 178 $ 178
asofSeptember30,2012
Intragovernmental
Securities(Note19)
NonMarketable:SpecialBonds $ 9,132 N/A $ 112 9,244 $ 9,244
TreasuryNotes 65 EffectiveInterest (1) 1 65 65
Total $ 9,197 $ (1) 113 9,309 $ 9,309
PublicSecurities
TrustCertificates(LoanGuaranty) $ 140 N/A $ 140 $ 140
MutualFunds(NonFederalTrusts) 43 Straightline (5) 38 38
Total $ 183 $ (5) 178 $ 178
Notes to the Consolidated Financial Statements Part III - 29

6. AccountsReceivable,Net
AccountsReceivable,Net
asofSeptember30,
2013 2012
IntragovernmentalAccountsReceivable,Net $ 41 $ 40
PublicAccountsReceivable
Medical Care $ 2,343 $ 2,224
Contractual Adjustment and Allowance for LossProvision (1,023) (1,017)
Net Medical Care 1,320 1,207

Compensation and Pension 1,071 1,067


Allowance for LossProvision (727) (665)
NetCompensation and Pension

344 402

Education Benefits 380 365


Allowance for LossProvision (109) (269)
NetEducation Benefits 271 96

Other 127 102


Allowance for LossProvision (22) (18)
Net Other 105 84

TotalPublic Accounts Receivable 3,921 3,758


Total Contractual AdjustmentandAllowance for Loss Provision (1,881) (1,969)
PublicAccountsReceivable,Net $ 2,040 $ 1,789

TheTotalContractualAdjustmentandAllowanceforLossProvisionasapercentageofTotalPublic
AccountsReceivablewasapproximately48percentand52percentatSeptember30,2013and2012,
respectively.TheMedicalCareContractualAdjustmentandAllowanceforLossProvisionasapercentage
ofTotalMedicalCarerelatedaccountsreceivablewasapproximately44percentand46percentat
September30,2013and2012,respectively.
IncludedintheMedicalCareContractualAdjustmentandAllowanceforLossProvisionisanAllowance
forContractualAdjustmentof$611millionand$593millionorapproximately56percentand57
percent,respectivelyofMedicalCareCollectionFundthirdpartyreceivablesof$1.09billionand$1.04
billionatSeptember30,2013and2012,respectively.
TheCompensationandPensionAllowanceforLossProvisionasapercentageofTotalCompensation,
PensionandReadjustmentBenefitOverpaymentrelatedaccountsreceivablewasapproximately68
percentand62percentatSeptember30,2013and2012,respectively. TheEducationBenefits
AllowanceforLossProvisionasapercentageofTotalEducationBenefitsandReadjustmentBenefit
Overpaymentrelatedaccountsreceivablewasapproximately29percentand74percentatSeptember
30,2013and2012,respectively.
Notes to the Consolidated Financial Statements Part III - 30

7. DirectLoansandLoanGuarantees
AsmorefullydiscussedinNote1undertheLoansReceivableandLoanGuaranteessections,the
accountingfordirectloansreceivableandloanguaranteeliabilitiesmadeafter1991,isgovernedbythe
CreditReformAct. Disclosureofdirectloansreceivableandloanguaranteeliabilitiesisprovidedin
accordancewithSFFAS2,AccountingforDirectLoansandGuarantees,asamended.
VAoperatesthefollowingdirectloanandloanguarantyprograms:
HomeLoans
VocationalRehabilitationandEmployment
Insurance
TheVAHomeLoanprogramisthelargestoftheVAloanprograms. TheHomeLoanprogramprovides
loanguaranteesanddirectloanstoVeterans,Servicemembers,qualifyingdependents,andlimitednon
veteranstopurchasehomesandretainhomeownershipwithfavorablemarketterms.
VAoperatesinthebroadermortgagemarketplace;asaresult,theVAhousingprogramisaffectedby
overallhousingmarketconditions. Thecurrentmortgagemarkethasdemonstratedsteady
improvements;homeownerequityisrecovering. VAandloanservicerswillbebetterabletouse
foreclosureresolutionandavoidancetoolstoimprovetheoutcomesofservicingeffortsofferedto
borrowerswithdelinquentVAguaranteedhomeloans.
VAprojects,funds,andreportsthelongtermdirectcostsfortheseloans;thatis,estimatesofloan
lifetimecostsincurredbythegovernmentfrommakingVAloans. Theseestimatesoflongtermcosts
areupdatedannuallyandrepresentcapitalrequiredtocoverexpectedlifetimeloanlosses. Fortheyear
endedSeptember30,2013,VAreestimatedthecapitalsetasiderequiredforchangesinprojected
lifetimecashflowsmainlyforloanguaranteesforVeteransandServicemembers. Somedriversforthe
reestimatedcapitalrequiredareasfollows:
Unanticipatedhigherproportionofnewrefinanceloanguaranteesin2013duetolowermortgage
ratesandincreasesinhomepricesandsales. Thehigherlevelofrefinancingactivityincreasedthe
capitalcushionthroughadditionalfundingfeecollections. However,theaveragefundingfeeper
collectiondecreasedasaloanrefinancingincursalowerpercentagefeethananewloan.
Higherclaimpaymentsforsomeolderloanguaranteesbecauseofuncontrollableloanperformance
drivers(e.g.,continuingelevatedclaimlevelsfollowingthehousingcrisisdespiterisinghomeprices
andhistoricallylowmortgagerates).
VAperformseconomicmodelingandanalysisusingavailableloanportfoliodataandeconomic
assumptionscorrelatedwithsomekeyloandata(foreclosures,outlaysandcollections,homeprices,
interestrates,andloanprepaymentsandterms). Theseestimatesarebasedoncurrentconditionsthat
maychangeinthefuture.Actualresultsmaydiffermateriallyfromestimatedamounts.
TheVocationalRehabilitationandEmploymentdirectloansprovidetemporaryfinancialassistanceto
eligiblebeneficiaries. Loansprovidedunderthisprogramareinterestfreeandmustberepaidwithin10
months.
Notes to the Consolidated Financial Statements Part III - 31






Veteransthataregovernmentlifeinsurancepolicyholderswithpermanentplancoverageorpaidup
additionalinsurancecanborrowagainstthecashvalueoftheirpolicy,creatinganinsurancepolicydirect
loan. Theloanamountmaynotexceed94percentofthecashsurrendervalueofthepolicyorthepaid
upadditionalinsurance.
DirectLoans
Thefollowingtablessummarizethecarryingamountofloansreceivablerelatedtopre1992andpost
1991directloans. Thecarryingamountofdirectloansreceivableincludestheremainingbalanceofthe
amountdisbursed,interestreceivable,anallowanceforloanlossesusingtheallowancemethod
(estimateduncollectibleloans)forpre1992loans,thepresentvalueofanallowanceforsubsidycosts
forpost1991loansandthefairmarketvaluelesscosttodisposeofforeclosedpropertybasedonthe
presentvalueoffuturecashflowsfromtheproperty. Ananalysisofloansreceivableandthenatureand
amountsofthesubsidycostsassociatedwiththedirectloansareprovidedinthetablesthatfollow:
LoansReceivableandRelatedForeclosedPropertyandInsurancePolicyLoansFromDirectLoans
asofSeptember30,2013
Loans
Receivable,
Gross
Interest
Receivable
Allowancefor
LoanLosses
Foreclosed
Property
ValueofAssets
RelatedtoDirect
Loans,Net
DirectLoansObligated
Priorto1992
(AllowanceforLoss
Method)

$ 8 6 $ 14
InsurancePolicyLoans 384 9

393
TotalLoansReceivableandRelatedForeclosedPropertyandInsurancePolicyLoans,Excluding
DirectLoansObligatedAfter1991,Net $ 407

Loans
Receivable,
Gross
Interest
Receivable
Allowancefor
SubsidyCost
(PresentValue)
Foreclosed
Property

ValueofAssets
RelatedtoDirect
Loans,Net
DirectLoansObligated
After1991 $ 584 16 56 17 $ 673
TotalLoansReceivableandRelatedForeclosedPropertyandInsurancePolicyLoansfrom
DirectLoans,Net

$ 1,080

LoansReceivableandRelatedForeclosedPropertyandInsurancePolicyLoansFromDirectLoans
asofSeptember30,2012
Loans
Receivable,
Gross
Interest
Receivable

Allowancefor
LoanLosses
Foreclosed
Property

ValueofAssets
RelatedtoDirect
Loans,Net

DirectLoansObligated
Priorto1992
(AllowanceforLoss
Method) $ 11 10 (1) $ 20
InsurancePolicyLoans 423 10

433
TotalLoansReceivableandRelatedForeclosedPropertyandInsurancePolicyLoans,Excluding
DirectLoansObligatedAfter1991,Net $ 453

Notes to the Consolidated Financial Statements Part III - 32









LoansReceivableandRelatedForeclosedPropertyandInsurancePolicyLoansFromDirectLoans(continued)
asofSeptember30,2012
Loans
Receivable,
Gross
Interest
Receivable
Allowancefor
SubsidyCost
(PresentValue)
Foreclosed
Property
ValueofAssets
RelatedtoDirect
Loans,Net
DirectLoansObligated
After1991 $ 653 15 24 7 $ 699
TotalLoansReceivableandRelatedForeclosedPropertyandInsurancePolicyLoans
fromDirectLoans,Net $ 1,152
DirectLoansDisbursed
ThetotalamountofnewdirectloansdisbursedfortheyearsendedSeptember30,2013and2012was
$2.2millionand$159.7million,respectively.
SubsidyExpenseforPost1991DirectLoans
Subsidyexpensereflectednomaterialchangeovertheprioryearandthemethodologyusedtocompute
thesubsidyexpensewasconsistentwiththeprioryear.
Inputdataandassumptionswerechangedbasedonanalysisofloanperformanceandeconomic
conditionsin2013. Thechangesineconomicassumptionsweremarginaldriversinanalysisofchangein
subsidyestimatesforfuturepotentialbadloans. Actualhomepriceappreciation,mortgagerate,and
Treasurybondyieldwerebetterthantheirpredictedvalues.
Thesubsidyexpensefordirectloansisasshown:
DirectLoanSubsidyExpense
fortheyearsendedSeptember30,
2013 2012
InterestDifferential $ (1) $ (28)
Defaults 1
Fees* (1)
Other** 25
Subtotal (1) (3)
InterestRateReestimates (11) 4
TechnicalReestimates (33) (19)
TotalDirectLoanSubsidyExpense $ (45) $ (18)
*"Fees"expensefordirectloansincludesestimateddownpaymentsandotherfeescollectedwhenhomesare
soldwithvendeefinancing.
**"Other"expensefordirectloansincludestheestimatedlossofscheduledprincipalandinterestwhenvendee
loansaresold.
BudgetarySubsidyRatesforDirectLoansbyComponent
Thesubsidyratesdisclosedbelowpertainonlytothecurrentyearloans. Theseratescannotbeapplied
tothedirectloansdisbursedduringthecurrentreportingyeartoyieldthesubsidyexpense. Thesubsidy
expensefornewloansreportedinthecurrentyearcouldresultfromdisbursementsofbothcurrent
yearloansandprioryear(s)loans. Thesubsidyexpensereportedinthecurrentyearalsoincludes
reestimates.

Notes to the Consolidated Financial Statements Part III - 33








BudgetarySubsidyRatesforDirectLoansbyComponent
InterestDifferential
(32.62%)
Defaults
7.57%
Fees
(0.92%)
Other

21.14%

AllowanceforSubsidyforDirectLoans(Post1991)
Fortheseloans,theallowanceforsubsidyrepresentsthedifferencebetweenthebalanceofthedirect
loanandthepresentvalueoftheestimatednetcashflowstobepaidbyVA. Theallowanceforsubsidy
istheresultoftheinterestratedifferentialbetweentheloansandborrowingfromTreasury,the
estimateddelinquenciesanddefaults,netofrecoveries,offsetsfromfees,andotherestimatedcash
flows. For2013,thesubsidyrateis(2.54)percentforVeteransHousingDirectVendeeLoans,(2.29)
percentforVeteransHousingDirectAcquiredLoans,and(17.83)percentforNativeAmericanDirect.
For2012,thesubsidyrateis(2.12)percentforVeteransHousingDirectVendeeLoans,(4.09)percent
forVeteransHousingDirectAcquiredLoans,and(11.97)percentforNativeAmericanDirect. The
negativebalancesrelatedtotheallowanceforsubsidyshownbelowrepresentanincreaseinthepost
1991directloanbalancesreportedinthedirectloantable.
ScheduleforReconcilingSubsidyCostAllowanceBalances
BeginningBalance,ChangesandEndingBalance
2013 2012
Beginningbalanceoftheallowance $ (24) $ (2)
Subsidy expense for direct loans disbursed during the
reportingyearsbycomponent:
Interestsubsidycosts (1) (28)
Defaultcosts(netofrecoveries) 1
Feesandothercollections (1)
Othersubsidycosts 25
Totaloftheabovesubsidyexpensecomponents (1) (3)
Adjustments:
Feesreceived 4
Foreclosedpropertyacquired (7) 18
NewLoans 2 5
Loanswrittenoff (5) (4)
Subsidyallowanceamortization 16 (14)
ChangeinreestimateapprovedbyOMB 7 (13)
TotalAdjustments 13 (4)
Endingbalanceoftheallowancebeforereestimates (12) (9)
Subsidyreestimatesbycomponent
Interestratereestimate (11) 4
Technical/defaultreestimate (33) (19)
Totaloftheabovereestimatecomponents (44) (15)
Endingbalanceoftheallowance $ (56) $ (24)
Notes to the Consolidated Financial Statements Part III - 34












LoanGuarantees
Thefollowingtablessummarizethecarryingamountofloansreceivablerelatedtopre1992andpost
1991defaultedguaranteedloans. Thecarryingamountoftheguaranteedloansreceivableincludesthe
amountdispersedbyVAforitsguarantyunderthedefaultedloans,anallowanceforloanlossesusing
theallowancemethod(estimateduncollectibleloans)forpre1992loansandthefairmarketvalueless
costtodisposeofforeclosedpropertybasedonthepresentvalueoffuturecashflowsfromthe
property.
Ananalysisofloansreceivable,loanguarantees,theliabilityforloanguarantees,andthenatureand
amountsofthesubsidycostsassociatedwithloanguaranteesareprovidedinthetablesthatfollow:
LoansReceivableandRelatedForeclosedPropertyfromLoanGuarantees
asofSeptember30,2013
LoansReceivable,
Gross
Interest
Receivable
Allowancefor
LoanLosses
Foreclosed
Property
ValueofAssets
RelatedtoLoans
DefaultedGuaranteed
Loans Pre1992
Guarantees(Allowance
forLossMethod) $ 31 4 $ 35
DefaultedGuaranteed
Loans Post1991
Guarantees 5 1,027 1,032
TotalLoansReceivableandRelatedForeclosedPropertyfromLoanGuarantees $ 1,067
LoansReceivableandRelatedForeclosedPropertyfromLoanGuarantees
asofSeptember30,2012
LoansReceivable,
Gross
Interest
Receivable
Allowancefor
LoanLosses
Foreclosed
Property
ValueofAssets
RelatedtoLoans
DefaultedGuaranteed
Loans Pre1992
Guarantees(Allowance
forLossMethod) $ 32 (10) 4 $ 26
DefaultedGuaranteed
Loans Post1991
Guarantees 5 813 818
TotalLoansReceivableandRelatedForeclosedPropertyfromLoanGuarantees $ 844
Notes to the Consolidated Financial Statements Part III - 35






ForeclosedProperty
PriortotheforeclosureofpropertysecuredbyaVALoanGuarantee,VAobtainsanindependent
appraisaloftheproperty. ThisappraisalisreviewedbyVAstaffordelegatedStaffAppraisalReviewerto
substantiatethefairmarketvalue. Todeterminethenetvalueoftheproperty,VAcostssuchas
acquisition,management,anddispositionofthepropertyaswellasestimatedlossesonpropertyresale,
aresubtractedfromtheestimatedfairmarketvalue. Theamountrecordedforforeclosedpropertyis
estimatedbaseduponthepresentvalueoffuturecashflowstobereceiveduponthedispositionofthe
property. Futurecashflowsareestimatedbasedontheestimatedsellingpricelesstheamountspaidat
foreclosureplusestimatedcoststocarrytheproperty.
RecentvolatilityintheUnitedStateshousingmarketcouldchangetheestimatesandassumptionsused
forthesecalculationsinthefuture,whichcouldimpacttheamountsreportedanddisclosedherein.
Therehasbeennochangeinthemethodologyforcalculatingtheamountrecordedforforeclosed
propertyandtherearenorestrictionsontheuseordispositionofforeclosedpropertyfortheyears
endedSeptember30,2013,and2012.
AsofSeptember30,2013,and2012,thenumberofresidentialpropertiesinVAsinventorywas
approximately11,100and10,400,respectively. For2013and2012,theaverageholdingperiodfromthe
datepropertieswereconveyedtoVAuntilthedatepropertiesweresoldwasapproximately9months
and8months,respectively. Thenumberofpropertiesforwhichforeclosureproceedingsareinprocess
wasapproximately18,800and23,400asofSeptember30,2013,and2012,respectively.
GuaranteedLoans
asofSeptember30,
2013 2012
GuaranteedLoansOutstanding:
OutstandingPrincipalofGuaranteedLoans,FaceValue $ 339,245 $ 286,626
AmountofOutstandingPrincipalGuaranteed $ 89,227 $ 76,137
LoanPrincipalAmortizationPayments,FaceValue $ (1,452) $ (1,073)
TerminationofOutstandingPrincipalGuaranteed,FaceValue $ (74,123) $ (67,795)
NewGuaranteedLoansDisbursed:
OutstandingPrincipalofGuaranteedLoans,FaceValue $ 128,194 $ 106,763
AmountofOutstandingPrincipalGuaranteed $ 32,359 $ 27,402
NumberofNewLoansDisbursed 570,646 492,497
LiabilitiesforPre1992andPost1991LoanGuarantees,Excluding
LoanSaleGuarantees (PresentValueMethod) $ 7,559 $ 5,445

Notes to the Consolidated Financial Statements Part III - 36

























LoanGuaranteeModifications
OMBCircularNo.A11,section185,specifiesthatmodificationstoexistingloanguaranteesubsidycosts
resultfromthegovernmentsdecisiontoalterthepercentageoftheloanitwillguarantee. Thesubsidy
costofamodificationisthedifferencebetweenthenetpresentvalueoftheremainingestimatedcash
flowsbeforeandafterthemodification(i.e.,postmodificationliabilityminuspremodificationliability)
andthechangeincarryingamountisrecognizedasagainoraloss. Areductionintheloanguarantee
liabilityduetoamodificationreflectsassavingstoVAresultinginamodificationgainbeingrecognized.
AnincreaseintheloanguaranteeliabilityduetoamodificationreflectsincreasedcoststoVAresulting
inamodificationlossbeingrecognized.Thecarryamountoftheloanguaranteeliabilityreflectsthe
postmodificationliabilitybalance.
VAandloanservicersperformloanmodificationsundercurrentlawswithouttheneedtomodify
executedsubsidyestimatesforexistingloanguaranteesfrom1992to2013.
Multiplereestimatediscountratesareusedtocalculateloansubsidymodificationcostsforexistingloan
guaranteesfrom1992to2013. Thereestimatediscountrateiseitheraweightedaveragerate(priorto
2001)orasingleeffectiveratedependingontheloanissuanceyearofthecashflows. Thediscount
ratesrangebetween2.31percentto7.59percent.
VArecognizesgainsorlossesonmodificationasdescribedabove. VAperformedtwoloanmodifications
in2012andnonein2013. TheHonoringAmericasVeteransandCaringforCampLejeuneFamiliesAct
extendedtheperiodofprotectionsformembersofuniformedservicesrelatingtomortgages,mortgage
foreclosure,andeviction. Specifically,section710amendedsection303oftheServicemembersCivil
ReliefAct(SCRA)byextendingtheperiodinwhichaServicemembermayexerciseSCRAprotections
fromninemonthsaftertheperiodofserviceendstooneyear. Theamendmentsmadebysection710
willexpireonDecember31,2014,atwhichtimetheprotectionwouldreverttotheoriginal90day
periodnotedunderSection303ofSCRA.
TheVALoanGuarantyServiceamendeditsregulationsrelatedtomodificationofguaranteedhousing
loansindefaultviatheLoanGuarantyRevisedLoanModificationProcedures(RIN2900AN78).
Specifically,changesweremadetotherequirementsrelatedtomaximuminterestratesonmodified
loans,andtoitemsthatmaybecapitalizedinamodifiedloanamount. VAexpectsthatVeteran
borrowerswouldreceiveloanmodifications(asopposedtoalternativestoforeclosureandforeclosures)
asresultofthisregulationchange,theirmodifiedloanswouldremainingoodstandingandnotresultin
anetlosstolendersorVA.
SubsidyExpenseforPost1991LoanGuarantees
PursuanttotheCreditReformAct,subsidycostsfornewloanguarantees,netofupfrontfundingfees,
mustbeobligatedatthetimetheloanisdisbursed.Thecurrentandprioryearupwardreestimatewas
principallycausedbyincreasingclaimpaymentsfollowingthehousingcrisis,increasingdemandfornew
refinanceloanguaranteesresultingfromlowermortgagerates,higherhomesalepricesanda
recoveringhousingmarket. Specifically,theLoanGuaranteeFinancingAccount(4129)operatingincome
deterioratedonhigherforeclosureclaimpaymentsthatwereinconsistentwithrisinghomeprices. The
loanguaranteeaveragefundingfeeratedeterioratedonhigherdemandforrefinanceloanguarantees.
Notes to the Consolidated Financial Statements Part III - 37






















Deteriorationintheaveragefundingfeeraterelativetobudgetcontributedtoupwardreestimates.
ThesubsidyexpenseforloanguaranteesrelatedtotheLoanGuarantyProgramisasshown:
GuaranteedLoanSubsidyExpenses
fortheyearsendedSeptember30,
2013 2012
Defaults $ 1,897 $ 1,693
Fees (2,032) (1,856)
Subtotal (135) (163)
InterestRateReestimates 167 13
TechnicalReestimates 1,421 777
TotalGuaranteedLoanSubsidyExpenses $ 1,453 $ 627
BudgetarySubsidyRatesforLoanGuaranteesbyComponent
Thesubsidyratesdisclosedbelowpertainonlytotheloansguaranteedinthecurrentyear. Theserates
cannotbeappliedtotheguaranteesofloansdisbursedduringthecurrentreportingyeartoyieldthe
subsidyexpense. Thesubsidyexpensefornewloanguaranteesreportedinthecurrentyearcouldresult
fromdisbursementsofloansfrombothcurrentyearloanguaranteesissuedandprioryear(s)loan
guaranteesissued. Thesubsidyexpensereportedinthecurrentyearalsoincludesreestimates.
BudgetarySubsidyRatesforLoanGuarantees
Defaults
1.55%
Fees
(1.66)%
LiabilityforLoanGuarantees(Post1991)
VAguaranteestheloanagainstlossatforeclosureforwhichVApaysnetcashflowuptoalegally
specifiedmaximumbasedonthevalueofindividualloans. VAwillpaythelendertheguaranteeand
foreclosureexpenses. IfanagreementcanbemadewiththeVeteran,VAmayacquiretheloanby
refundingthelenderfortheloan. Thesubsidyratefor2013was(.11)percent. InNovember2011,
CongressenactedandthePresidentsignedPL11256whichincludedachangeinthefundingfees
chargedtoVeteranswhoreceiveaguaranteedloanafterNovember22,2011. Thischangeinfunding
feeaffectedthecashflowsoftheprogramandresultedinachangetothesubsidyratefor2012.
Therefore,in2012,therearetwosubsidyratesforguaranteedloans. Forloansguaranteedbetween
October1andNovember22,2011,thesubsidyrateis(0.20)percentandforloansguaranteedafter
November22,2011thesubsidyrateis0.28percent. Therewasnosimilarlegislationaffecting2013. In
thetablebelow,thecurrentyearandprioryearupwardreestimatewasprincipallycausedbyincreasing
claimpaymentsonsomeolderloanguaranteesfollowingthehousingcrisisandincreasingdemandfor
newloanguaranteesresultingfromarecoveringhousingmarket.
Notes to the Consolidated Financial Statements Part III - 38





ScheduleforReconcilingLoanGuaranteeLiabilityBalance
BeginningBalance,ChangesandEndingBalance
2013 2012
Beginningbalanceoftheliability $ 5,445 $ 4,973
Subsidyexpensefor guaranteedloans disbursedduringthe
reportingyearsbycomponent:
Defaultcosts(netofrecoveries) 1,897 1,693
Feesandothercollections (2,032) (1,856)
Totaloftheabovesubsidyexpensecomponents (135) (163)
Adjustments:
Feesreceived 1,494 1,203
Foreclosedproperty (243) (464)
Claimpaymentstolenders (1,123) (817)
Interestaccumulationontheliabilitybalance 149 166
ChangeinreestimateapprovedbyOMB 384 (222)
Modification (4)
Other (17)
TotalAdjustments 661 (155)
Endingbalanceoftheliabilitybeforereestimates 5,971 4,655
Subsidyreestimatesbycomponent
Interestratereestimate 167 13
Technical/defaultreestimate 1,421 777
Totaloftheabovereestimatecomponents 1,588 790
Endingbalanceoftheliability $ 7,559 $ 5,445
ScheduleforReconcilingPre1992LoanGuaranteeLiabilities
BeginningBalance,ChangesandEndingBalance
2013 2012
Beginningbalanceoftheliability* $ 189 $
Claims (11)
ForeclosedProperties (4)
VeteranLiabilityDebts 29
AmortizationofLiabilityBalance 5
Total $ 208 $
*ThisBeginningbalancewasacomponent(ResourcesPayabletoTreasury)ofOtherIntragovernmentalLiabilities
inthe2012BalanceSheet. ThereclassificationtoLoanGuaranteeLiabilitieswasdonein2013andtheprior
periodwasnotrestatedasthebalancewasnotmaterialtothefinancialstatements.

Notes to the Consolidated Financial Statements Part III - 39















LoanSales
VAownsmortgagesandrealestateoncertaindefaultedloansthatwereguaranteedbyVAandhave
gonethroughtheforeclosureprocesswiththelender. VAsellstherealestatetoathirdpartyowner
andmakesthedirectloanfortheunderlyingmortgageloanreceivable. Toreducetheadministrative
burdenofservicingtheseloans,VAwillbundletheseloansandsellthemtoathirdpartyinvestor(Trust)
pursuanttoasaleagreement. Itisatleastreasonablypossiblethattheproceedsfromthesaleofits
loanswilldifferfromthereportedcarryingvalueoftheloansandtheunderlyingvalueoftheirrelated
assetsresultinginarealizedgainorlossonsale.
Underthesaleagreement,theTrustownsthemortgageloansandotherpropertyacquiredinthesale
andmakeselectionstotreatcertainofitsassetsasoneormoreRealEstateMortgageInvestment
Conduits(REMIC)forU.S.Federalincometaxpurposes. Inaddition,theTrustwillissuecertificates
backedbymortgageloansandinstallmentcontracts. Thecertificatesrepresentinterestsintheassetsof
theTrustandarepaidfromtheTrustsassets. Ontheclosingdateofthecertificates,VAtransfersits
entireinterestintherelatedloansreceivableandcollateraltotheTrusteeforthebenefitoftherelated
certificateholderspursuanttothesaleagreement. VAguaranteesthattheinvestorwillreceivefulland
timelydistributionsoftheprincipalandinterestonthecertificatesbackedbythefullfaithandcreditof
theFederalGovernment.
Duringtheperiod1992through2013,thetotalloanssoldamountedto$14.2billion. VArecognizedno
loansaleproceedsorgainorlossonsaleofloansduring2013. VArecognizedloansaleproceedsof
$198millionduring2012resultinginagainof$8million. Asaresultofthesaleofloansreceivablewith
acarryingamountof$0millionand$190millionin2013and2012,respectively,theamountof
guaranteedloanssoldincreasedbythecarryingamountoftheloansreceivableatthedateofsale. The
componentsoftheloansaleandtheoutstandingbalanceforguaranteedloanssoldaresummarizedin
thetablesbelow:
LoanSales
YearsEndedSeptember30,
2013 2012
LoansReceivableSold $ $ 190
NetProceedsfromSale (198)
GainonReceivablesSold $ $

(8)
OutstandingBalanceofLoanSaleGuarantees GuaranteedLoansSold
asofSeptember30,
2013 2012
OutstandingBalanceGuaranteedLoansSold,StartofYear $ 1,808 $ 1,789
SoldtothePublic 190
Payments,Repayments,andTerminations (211) (171)
OutstandingBalanceGuaranteedLoansSold,EndofYear $ 1,597 $ 1,808
SubsidyExpenseforLoanSaleGuarantees
PursuanttotheCreditReformAct,subsidycostsfornewloansaleguaranteesmustbeobligatedatthe
timetheloansaleisclosed. Thesubsidyexpenseforloansaleguaranteesisbelow:
Notes to the Consolidated Financial Statements Part III - 40

LoanSaleGuaranteedLoanSubsidyExpense
fortheyearsendedSeptember30,
2013 2012
Defaults $ $ 6
Fees 14
Other
Subtotal 20
InterestRateReestimates 30 (2)
TechnicalReestimates 23 (11)
TotalLoanSaleGuaranteedSubsidyExpense $ 53 $ 7
LiabilityforLoanSaleGuarantees(Post1991)
Fortheseprograms,theguaranteedloansaleliabilityrepresentsthepresentvalueoftheestimatednet
cashflowstobepaidbyVAasaresultoftheguarantee. Thesesalescontaintwotypesofguarantees.
VAguaranteesthattheprincipalandinterestpaymentdueonaloansoldwillbepaidbythe15thof
eachmonth. Ifnotpaidbytheborrower,VAallowstheloanservicertotakefundsfromcash
reserveaccountsforthedeficientamount. VAalsoguaranteestheloanagainstlossatforeclosure. VA
willnotbuybacktheloansbutwillpayofftheloanlossandforeclosureexpenses. Therewereno
guaranteedloanssoldin2013,thereforethesubsidyrateisnotapplicableto2013. Thesubsidyratefor
2012is10.75percent.
ScheduleforReconcilingLoanSaleGuaranteeLiabilityBalances
BeginningBalance,ChangesandEndingBalance 2013 2012
Beginningbalanceoftheliability $ 116 $ 89
Subsidyexpenseforguaranteedloansdisbursedduringthereporting
yearsbycomponent:
Defaultcosts(netofrecoveries) 6
Fees 14
Totaloftheabovesubsidyexpensecomponents 20
Adjustments:
Claimpaymentstolenders (29) (29)
Interestaccumulationontheliabilitybalance 46 24
ChangeinreestimateapprovedbyOMB (20) 17
GainonLoanSales 8
TotalAdjustments (3) 20
Endingbalanceoftheliabilitybeforereestimates 113 129
Subsidyreestimatesbycomponent
Interestratereestimate 30 (2)
Technical/defaultreestimate 23 (11)
Totaloftheabovereestimatecomponents 53 (13)
Endingbalanceoftheliability $ 166 $ 116
Notes to the Consolidated Financial Statements Part III - 41







ProgramTotals
TotalLoansReceivableandRelatedForeclosedProperty,Net
asofSeptember30,


2013 2012
TotalDirectLoans $ 1,080 $ 1,152
TotalGuaranteedLoans 1,067 844
TotalLoansReceivableandRelatedForeclosedProperty,Net $ 2,147 $ 1,996
TotalSubsidyExpense
fortheyearsendedSeptember30,
2013 2012
TotalDirectLoans $ (45) $ (18)
TotalGuaranteedLoans 1,453 627
TotalLoanSales 53 7
TotalSubsidyExpense $ 1,461 $616
TotalLiabilitiesforLoanGuarantees
asofSeptember30,
2013 2012
TotalLoanGuaranteeLiability $ 7,559 $ 5,445
TotalPre1992LoanGuaranteeLiability 208
TotalLoanSaleGuaranteeLiability 166 116
TotalLiabilitiesforLoanGuarantees $ 7,933 $ 5,561
AdministrativeExpense
AdministrativeexpensefordirectandguaranteedloansforthefiscalyearsendedSeptember30,2013,
and2012was$151millionand$143million,respectively.
8. InventoriesandRelatedProperty,Net
Inventories
asofSeptember30,
2013 2012
HeldforCurrentSale $ 71 $ 54
Other 2
TotalInventories $ 71 $ 56
Notes to the Consolidated Financial Statements Part III - 42






9. GeneralProperty,PlantandEquipment
GeneralProperty,PlantandEquipment
asofSeptember30,2013
Cost
AccumulatedDepreciation
/Amortization NetBookValue
Landand Improvements $ 1,158 $ (241) $ 917
Buildings 25,834 (14,138) 11,696
Equipment 4,429 (2,393) 2,036
Other Structures and Capital Leases 3,612 (2,021) 1,591
Internal Use Software 912 (587) 325
Construction Work in Progress 5,102 5,102
Internal Use Software in Development 309 309
TotalProperty,Plant,andEquipment $ 41,356 $ (19,380) $ 21,976

GeneralProperty,PlantandEquipment
asofSeptember30,2012
Cost
AccumulatedDepreciation
/Amortization NetBookValue
LandandImprovements $ 1,006 $ (186) $ 820
Buildings 24,129 (12,872) 11,257
Equipment 4,110 (2,181) 1,929
OtherStructuresandCapitalLeases 3,314 (1,859) 1,455
InternalUseSoftware 707 (366) 341
ConstructionWorkinProgress 4,505 4,505
InternalUseSoftwareinDevelopment 324 324
TotalProperty,Plant,andEquipment $ 38,095 $ (17,464) $ 20,631
Depreciationandamortizationexpensetotaled$2.1billionand$1.9billionin2013and2012,
respectively. Lossondispositionofassetstotaled$100.2millionand$101.3millionin2013and2012,
respectively.
Notes to the Consolidated Financial Statements Part III - 43







10. HeritageAssets
Heritageassetsarepropertiesthatpossessoneormoreofthefollowingcharacteristics: historicalor
naturalsignificance;cultural;educationaloraestheticvalue;orsignificantarchitecturalcharacteristics.
VAhaspropertiesatmedicalcenters,RegionalOfficesandNationalCemeteriesthatmeetthecriteria
forheritageassets. HistoricheritageassetsallowVAtomeetitsresponsibilitiesundertheNational
HistoricPreservationActtoadministerfederallyowned,administered,orcontrolledprehistoricor
historicresourcesinaspiritofstewardshipfortheinspirationandbenefitofpresentandfuture
generations.
Generally,additionstoandwithdrawalsofVA'sheritageassetsinventoryresultfromfieldstation
conditionassessmentsurveys,whichidentifyitemssuchasnewcollectionsornewlydesignatedassets.
TherewerenoheritageassetstransferredbetweenFederalentitiesoracquiredthroughdonationor
devisethatwereconsideredmaterialtotheconsolidatedfinancialstatementsfor2013and2012,
therefore,fairvaluedisclosureisnotrequiredforheritageassetsacquiredbydonationordevise. VA
classifiesitsheritageassetsas: ArtCollections(includingartwork,archives,historicmedicalequipment,
medalsandawards,furniture,archaeologicalmaterials,andphotographs);BuildingsandStructures
(includinghistorichospitals,quarters,lodges,andchapels,butexcludingmultiusebuildings);
Monuments/HistoricFlagPoles,OtherNonStructureItems(includingrostrums,gatesandhistoric
walls);ArchaeologicalSites;andCemeteries. AccordingtoVAspolicyforheritageassets,only
developedsectionsofNationalCemeteriesareclassifiedasheritageassets.
VAexpensed$7.1millionand$7.0millionofheritageassetscostsassociatedwithacquisition,
construction,renovationand/ormodificationofVAownedpersonalpropertyandbuildingsand
structureswhenthebuildingsorstructuresaredeclaredheritageassetsfortheyearsendedSeptember
30,2013and2012,respectively.
Thesignificantwithdrawalsin2013resultedprimarilyfromthereclassificationofmultiuseheritage
assetsoutofheritageassetsbasedonareviewoftheheritageassetinventory.
HeritageAssetsinUnits
asofSeptember30,
2012
Balance
2013
Additions
2013
Withdrawals
2013
Balance
(Unaudited)
Condition
ArtCollections 32 (8) 24 A
BuildingsandStructures 2,081 (1,477) 604 A/U
Monuments/HistoricFlagPoles 1,593 (391) 1,202 A
OtherNonStructureItems 291 99 390 A
ArchaeologicalSites 10 (1) 9 A
Cemeteries *164

*164 A
TotalHeritageAssetsinUnits 4,171 99 (1,877) 2,393
ExplanationofCondition: A=Acceptable(Notoslightdeterioration);U=Unacceptable(Moderatetosignificant
deterioration).
*Thistotalaccountsonlyforopen,operationalcemeteries,notthoseunderdevelopment.
Notes to the Consolidated Financial Statements Part III - 44









11. Debt
IntragovernmentalDebt
asofSeptember30,
2012
Beginning
Balance
2012
Net
Borrowing
2012
Ending
Balance
2013
Net
Borrowing
2013
Ending
Balance
Loan Guaranty Debt

Debt to the Treasury $ 1,674 $ (837) $ 837 $ (88) $ 749


Debt tothe Federal Financing Bank

5 5 5
TotalLoanGuarantyDebt 1,679 (837) 842 (88) 754
Direct LoansDebt Vocational RehabilitationProgram
Debt tothe Treasury 1 1 1 2
Debt tothe Federal Financing Bank
TotalDirectLoansDebt 1 1 1 2
Total Debt
Debt tothe Treasury
1,675 (837) 838 (87) 751
Debt tothe Federal Financing Bank
5 5 5
Total Debt $ 1,680
$
(837) $ 843 $(87) $756



AtSeptember30,2013,and2012,alldebtisclassifiedasintragovernmentaldebt. Exceptasnoted
above,VAhadnodebtduetoanyotherFederalagencyandalldebtiscoveredbybudgetaryresources.
LoanGuarantyProgramdebthasa30yeartermfromthedateofissuanceandbearsinterestatthe
Treasurysecuritiesrateatthetimeofborrowing. Theinterestratesondebtissuedin2013rangedfrom
2.74to3.49percentand2.64to3.49percentfordebtissuedin2012. Theinterestratesonall
outstandingdebtissuedrangedfrom2.00to7.58percentin2013and1.00to7.58percentin2012.
Interestexpensewas$40millionfor2013and$116.2millionfor2012.
VocationalRehabilitationProgramDirectLoandebthasa2yeartermfromthedateofissuanceand
bearsinterestattheTreasurysecuritiesrateatthetimeofborrowing. Theinterestratesondebtissued
was1.00percentin2013and2012. Theinterestrateonalloutstandingdebtissuedis 1.00percentin
2013andrangedfrom1.00to1.49percentin2012. Interestexpensewas$41thousandeachyearfor
2013and2012.
NetborrowingsrelatedtotheLoanGuarantyProgramdebtandDirectLoansProgramdebtdonot
includeanyamountsthatresultfromrefinancingdebt.
Nodebtwasheldbythepublicduring2013or2012. Therewerenoredemptionsorcallsofdebts
beforematurityorwriteoffsofdebtowedtotheTreasury.
Notes to the Consolidated Financial Statements Part III - 45

















12. LiabilitiesNotCoveredByBudgetaryResources
LiabilitiesNotCoveredByBudgetaryResources
asofSeptember30,
2013 2012
Workers'Compensation(FECA)* $ 2,680 $ 2,463
AnnualLeave 1,908 1,848
JudgmentFund 1,397 1,178
EnvironmentalandDisposalLiabilities 823 851
VeteransCompensationandBurial 1,974,800 1,761,600
Insurance 1,352 1,293
AmountsduetoNonFederalTrust 141 148
Total $ 1,983,101 $ 1,769,381
*Theactuarialestimateforworkers'compensationprovidedbyDOLwascomputedusinganinterestrateof
3.13percentforwagebenefitsand2.86percentformedicalbenefitstodiscounttheprojectedannualbenefit
paymentsasofSeptember30,2013and3.14percentforwageandmedicalbenefitstodiscounttheprojected
annualbenefitpaymentsasofSeptember30,2012.
LiabilitiesnotcoveredbybudgetaryresourcesareliabilitiesforwhichCongressionalactionis
neededbeforebudgetaryresourcescanbeprovided.
TotalUnfundedLiabilitiesincludeWorkersCompensation(FECA)whichiscomprisedofthe
actuarialWorkersCompensation(FECA)Liability,AccruedFECALiabilityforDOLfundedcosts
notyetappropriatedandUnfundedEmployeeLiability. TheAccruedFECALiabilityand
UnfundedEmployeeLiabilityareIntragovernmentalLiabilitiestotaling$460millionand$449
millionatSeptember30,2013,and2012,respectively.
13. FederalEmployeeandVeteransBenefitsLiabilities
FederalEmployeeBenefits
VAistheemployerentitythatgeneratesemployeecoststobefunded,nottheadministrative
entityresponsibleformanagingandaccountingforVAemployeesretirement,health
insuranceandlifeinsurancebenefitplans. Asaresult,VArecognizesthebenefitcostsforthe
reportingperiodinitsfinancialstatementsinanamountequaltotheservicecostforits
employeesbasedonthebenefitplansactuarialcostmethodandassumptionsappliedtoVA
andprovidedbytheadministrativeentity,OPM. Theoffsettotheexpenseisanincreasetoan
intragovernmentalimputedfinancingsourceentitled,ImputedFinancingunderOther
FinancingSources(Nonexchange)intheConsolidatedStatementofChangesinNetPosition,
representingtheamountbeingfinanceddirectlythroughthebenefitplansadministrative
entity. ThetablebelowsummarizestheimputedexpensesreportedbyVAforitsemployees
benefitplans.
Notes to the Consolidated Financial Statements Part III - 46





Federal EmployeeBenefits: ImputedExpensesEmployeeBenefits


YearsendedSeptember30,
2013 2012
CivilServiceRetirementSystem $ 527 $ 312
FederalEmployeesHealthBenefits 1,267 1,385
FederalEmployeesGroupLifeInsurance 4 3
TotalImputedExpensesEmployeeBenefits* $ 1,798 $ 1,700


*Thetotalimputedexpensesinthetableabove,whencombinedwiththeImputedFinancingPaidby
OtherEntitiesreportedinthetablereconciliationofjudgmentfundoperatingexpenseinNote18
reconcilestoImputedFinancingCostsreportedintheConsolidatedStatementofChangesinNet
Position.
VeteransBenefits
CertainVeterans,whodieoraredisabledfrommilitaryservicerelatedcausesaswellastheir
dependents,receivecompensationbenefits. Also,Veteransareprovidedwithburialflags,
headstones/markers,andgravelinersforburialinaVAnationalcemeteryorareprovidedaburialflag,
headstone/markerandaplotallowanceforburialinaprivatecemetery. Thesebenefitsareprovided
underTitle38,Part2,Chapter23inrecognitionofaVeteransmilitaryserviceandarerecordedasa
liabilityonthebalancesheetintheperiodtherequirementsaremet.
FederalEmployeeandVeteransBenefitsLiabilities
asofSeptember30,
2013 2012
Workers Compensation(FECA) $ 2,220 $ 2,014
Compensation 1,970,200 1,757,100
Burial 4,600 4,500
Total Federal Employee and Veterans Benefits Liabilities $ 1,977,020 $ 1,763,614









VAprovidescertainVeteransand/ortheirdependentswithpensionbenefitsiftheVeterandiedorwas
disabledfromnonservicerelatedcauses,basedonannualeligibilityreviews. Theactuarialpresentvalue
ofthefutureliabilityforpensionbenefitsisanonexchangetransactionandisnotrequiredtobe
recordedonthebalancesheet. Theprojectedamountoffuturepaymentsforpensionbenefits
(presentedforinformationalpurposesonly)asofSeptember30,2013and2012was$97.5billionand
$92.8billion,respectively.
AssumptionsUsedtoCalculatetheVeteransBenefitsLiability
Severalsignificantactuarialassumptionswereusedinthevaluationofcompensationandburialbenefits
tocalculatethepresentvalueoftheliability. Aliabilitywasrecognizedfortheprojectedbenefit
paymentsto: (1)thosebeneficiaries,includingVeteransandsurvivors,currentlyreceivingbenefit
payments;(2)currentVeteranswhowillinthefuturebecomebeneficiariesofthecompensation
program;and(3)aproportionalshareofthoseinactivemilitaryserviceasofthevaluationdatewhowill
becomeVeteransinthefuture. FuturebenefitspaymentstosurvivorsofthoseVeteransinclasses(1),
(2),and(3)abovearealsoincorporatedintotheprojection. Theprojectedliabilitydoesnotincludeany
Notes to the Consolidated Financial Statements Part III - 47










administrativecosts. ActualadministrativecostsincurredannuallyareincludedintheVeteransBenefits
AdministrationsNetProgramCostsshownintheaccompanyingStatementsofNetCost.
TheliabilityforfuturecompensationandburialpaymentsisreportedonVAsbalancesheetatthe
presentvalueofexpectedfuturepayments,andisdevelopedonanactuarialbasis. Discountratesat
September30,2013and2012werebasedonspotratesderivedfromthe10yearaveragehistorical
interestrateyieldcurveonTreasurysecuritiesatSeptember30ofeachyearfortheperiod2004to2013
and2003to2012forSeptember30,2013and2012,respectively. Thespotratesderivedfromthe10
yearaveragehistoricalinterestrateyieldcurveonTreasurysecuritiesforeachyearofexpectedfuture
paymentsrangefrom1.81percentto4.35percentandfrom1.92percentto4.48percentasof
September30,2013and2012,respectively. Thesespotratesproducedasingleweightedaverage
discountrateof4.20percentand4.31percentasofSeptember30,2013and2012,respectivelythat
couldbeappliedtotheexpectedfuturecashflowstoproduceapresentvaluethatisnotmaterially
differentthanthepresentvalueusingmultiplerates.
AllcalculationswereperformedseparatelybyagefortheCompensationandBurialprograms.
TheVeteransbenefitliabilityisimpactedbyinterestontheliabilitybalance,changesinexperience,
changesinactuarialassumptions,priorservicecostsandamountspaidforcostsincludedintheliability
balance. Interestontheliabilitybalanceisbasedontheprioryearliabilitybalancemultipliedbythe
singleweightedaveragediscountrateusedtocomputetheVeteransbenefitliabilitybalanceforthe
prioryear. ChangesinexperienceincludethenumberofVeteransanddependentsreceivingpayments,
changesindegreeofdisabilityconnectedwithmilitaryservice,changesinthenumberofpresumptive
conditions,theongoingincidencerateandtheprevalenceofthepresumptiveconditionsintheVeteran
populationandtheimpactofthosechangesonfutureyears. Changesinactuarialassumptionsinclude
changesinthespotratesderivedfromthe10yearaveragehistoricalinterestrateyieldcurveon
Treasurysecurities,costoflivingadjustments,presumptiveserviceconditionsresultinginbenefits
coverage,mortalityanddisabilityclaimsratesandbacklogofVeteransclaimstobeprocessed. Prior
servicecostsrelatetonewbenefitsduetoadministrative,judicialorlegislativechanges.
ThetotalnumberofVeterans,estimatedfuturemilitaryseparationsandtotalnumberofbeneficiary
participantsaredeterminedthroughactualrecordleveldataandprojectedAmericanCommunity
Surveydata. Theamountofbenefitsbybeneficiarycategoryandagewerebasedoncurrentamounts
beingpaid,futurecostoflivingadjustments(COLA),changeindegreeofdisabilityconnectedwith
militaryserviceandrevisedfactorsbasedoncurrentyearactualdatarelatedtotheincidenceand
prevalenceofpresumptiveserviceconditionsinexistenceintheVeteranpopulationatSeptember30,
2013,and2012,respectively,resultinginbenefitscoveragetodeterminetheaveragebenefitsper
Veteranforeachfuturetimeperiod,andchangesinotherfactorsthataffectbenefits. Theaverage
COLArateusedforallfutureyearsatSeptember30,2013and2012was2.57percentand2.61percent,
respectively. COLAratesforfutureyearsaremodeledtobeconsistentwiththediscountrate
assumptiondescribedabove.
LifeexpectanciesofbeneficiariescollectingbenefitsfromtheCompensationprogramwerebasedupon
studiesofmortalityexperienceofthosebeneficiariesbetween2002and2008. Lifeexpectanciesof
Veteransnotyetcollectingthesebenefitsusedinthecalculationoftheliabilityforfuturebeneficiaries
Notes to the Consolidated Financial Statements Part III - 48










arebasedonmortalityderivedfromthe2006U.S.LifeTable. Applyingmortalityimprovementsatarate
thatvariesbyageofbetween0.85and1.00percentperannumbroughtbothsetsofmortalityrates
forward. Inaddition,ratesofbenefitterminationofbeneficiariesduetoreasonsotherthanmortality
arealsoreflected. Expectedbenefitpaymentshavebeenexplicitlymodeledforthenext100years. The
CompensationprojectiononlyreflectsbenefitsassociatedwithmilitaryservicethroughSeptember30,
2013.
ThecalculationandpresentationofthecomponentsoftheReconciliationofVeteransCompensation
andBurialActuarialLiabilitiesshowninthetablebelowweremodifiedin2012tomorecloselyalignVAs
presentationofVeteransBenefitsLiabilitieswithotheragenciesoftheFederalGovernmentfor
improvedconsistencyingovernmentwidereportingofotherpostemploymentbenefits(OPEB). VAhas
auniqueprogramthatisnotadefinedbenefitplanandhasnoplanassetssetasidetofundfuturecosts.
VAfundsthecurrentyearcostsofVeteransservicerelateddisabilitycompensationandburialcosts
throughitsannualappropriationsthatarerecognizedinProgramCostsunderVeteransBenefits
AdministrationintheStatementsofNetCostandinAmountsPaidintheReconciliationofVeterans
CompensationandBurialActuarialLiabilitiestablethatfollowsbelow. TheStatementsofNetCostwere
modifiedtoreflecttherevisedcomponents,VeteransBenefitsActuarialCost,ExcludingChangesin
ActuarialAssumptionsandChangesinActuarialLiabilityAssumptions;however,theNetCostof
Operationsdidnotchangeandthechangeinpresentationhadnootherimpactonnetposition,or
budgetaryresourcesintheconsolidatedorcombinedfinancialstatements.
Thereconciliationtablethatfollowsthenarrativebelowshowsthattotalcostfor2013of$277.9billion
decreased$2.9billionover2012expenseof$280.8billion. Thedecreasewasprimarilyattributableto:
significantlylowerincreasesindisabilityclaimrateassumptionswhichincludeexpandedpresumptive
conditionsrelatedtoAgentOrangeforischemicheartdisease,leukemiaandParkinsonsdiseasein2013
comparedtothe2012forecastmodel; andadecreaseinthesingleweightedaveragediscountrateto
4.20percentin2013from4.31percentin2012resultedinalowerincreaseincostsassociatedwiththe
reportedliabilitycomparedtoadecreaseinthesingleweightedaveragediscountrateto4.31percentin
2012from4.53percentin2011whichresultedinalargerincreaseinthe2012liability.
Thedecreaseincostsabovewerepartiallyoffsetbycostincreasesprimarilyattributableto:increased
changeinexperiencecostsrelatedtoincreasedVeteranscountsandclaimscostscomparedtothe2012
forecastmodelprojectedamounts;andtheCOLAratedeclinedto2.57percentin2013from2.61
percentin2012and2.78in2011,whichwasconsistentwiththedeclineinthediscountrate,and
resultedinasmallerdeclineintheliabilityin2013comparedto2012.
Inaddition,therewere:increasesinotherassumedcostsassociatedwithnewandupdatedsourcesof
dataforpensionclaimsrates,agedistributionofVeteransandbeneficiariesandVeteranspecific
identificationdataforthosethatare62yearsoldoryoungertoprojectthefutureliability;andincreased
priorservicecostsrelatedtotheimpactoftheSupremeCourtoftheUnitedStatesdecisiononthe
DefenseofMarriageAct(DOMA)in2013andPublicLaw112154,Section506,whichprovidedauthority
forretroactiveeffectivedatesforawardsofdisabilitycompensationinconnectionwithapplicationsthat
werefullydevelopedatsubmittaldatein2012.
Notes to the Consolidated Financial Statements Part III - 49









TheresultingincreaseintheVeteransCompensationandBurialActuarialLiabilitiesshowninthetable
whichfollowswasreducedbyincreasedbenefitpaymentsmadebyVAtotheVeteransduring2013
comparedto2012.
Thelowerincreaseindisabilityclaimsratesfor2013comparedto2012isbasedonactualclaims
experiencein2013usedtoupdateassumptionsforprocessingthecurrentclaimsbacklogonan
acceleratedbasisthrough2015. Basedon2013actualexperience,thebackloginformationincludedin
the2012forecastmodelforexpectedfuturecashpaymentsrelatedtoprocessingclaimsthrough2015
wasrevisedupwardtomeetthe2015targetcompletiondate. Backlogprocessingofclaimsincludesthe
expandedpresumptiveconditionsrelatedtoAgentOrangeforischemicheartdisease,leukemiaand
Parkinsonsdisease.
Notes to the Consolidated Financial Statements Part III - 50










ReconciliationofVeteransCompensationandBurialActuarialLiabilities
FortheYearEndedSeptember30,
Compensation Burial TOTAL
LiabilityatOctober1,2011 $ 1,529,200 $ 4,500 $ $1,533,700
Expense:
InterestontheLiabilityBalance* 69,300 200 69,500
Actuarial(Gain)/LossfromCurrentYearActivity
ChangesinExperience(VeteransCounts,Status)* 61,700 (100) 61,600
ChangesinAssumptions:
ChangesinDiscountRateAssumption 66,100 200 66,300
ChangesinCOLARateAssumption (40,300) (100) (40,400)
ChangesinDisabilityClaimsRates 123,400 123,400
Net(Gain)/LossfromChangesinAssumptions 149,200 100 149,300
PriorServiceCosts(AdjustmenttoBenefits)* 400 400
TotalExpense 280,600 200 280,800
LessAmountsPaid* (52,700) (200) (52,900)
NetChangeinActuarialLiability 227,900 227,900
LiabilityatSeptember30,2012 1,757,100 4,500 1,761,600
Expense:
InterestontheLiabilityBalance** 75,700 200 75,900
Actuarial(Gain)/LossfromCurrentYearActivity
ChangesinExperience(VeteransCounts,Status)**
86,800 (100) 86,700
)
ChangesinAssumptions:
ChangesinDiscountRateAssumption 39,600 100 39,700
ChangesinCOLARateAssumption (11,800) (11,800)
ChangesinDisabilityClaimsRates 70,400 70,400
ChangesinOtherAssumptions 15,700 100 15,800
Net(Gain)/LossfromChangesinAssumptions 113,900 200 114,100
PriorServiceCosts(AdjustmenttoBenefits)** 1,200 1,200
TotalExpense 277,600 300 277,900
LessAmountsPaid** (64,500)
(200)
(64,700)
NetChangeinActuarialLiability 213,100 100 213,200
LiabilityatSeptember30,2013 $ 1,970,200 $ 4,600 $ 1,974,800
* The sum ofthese changes represents Veterans Benefits Actuarial Cost, Excluding Changes inActuarial Assumptions on
the Statement of Net Cost for 2012.
** The sum of these changes represents Veterans Benefits Actuarial Cost, Excluding Changesin Actuarial Assumptions on
the Statement of Net Cost for 2013.
Notes to the Consolidated Financial Statements Part III - 51






14. EnvironmentalandDisposalLiabilities
VAhadunfundedenvironmentalanddisposalliabilitiesintheamountof$823millionand$851million
asofSeptember30,2013and2012,respectively. Themajorityoftheunfundedliabilitiesinvolve
asbestosremoval,leadabatement,replacementofundergroundoilandgasolinetanks,
decommissioningofwasteincinerators,anddecontaminationofequipmentpriortodisposal.
WhilesomefacilitieshaveappliedprevailingstateregulationsthataremorestringentthanFederal
guidelines,theOccupationalSafetyandHealthAdministrationandEnvironmentalProtectionAgency
regulationsarethelegalbasebehindthemajorityofVAsenvironmentalanddisposalliabilities.
Estimatedliabilitiesfortheseprojectsarebasedonknowncontaminationthatexiststodayandhave
beencomputedbythefacilityengineeringstaffbasedonsimilarprojectsalreadycompleted,orby
independentcontractorsprovidingworkestimates.
Itisatleastreasonablypossiblethattheestimatedliabilitieswillchange,possiblymaterially,asaresult
ofchangesinapplicablelawsandregulations,technology;futurelocationrequirementsorplans;
budgetaryresources;andchangesinfutureeconomicconditions,includinginflationanddeflation.
TechnicalBulletin(TB)20061,RecognitionandMeasurementofAsbestosRelatedCleanupCosts,as
amendedbyTB20112,wasissuedonSeptember28,2006,andwasadoptedfortheyearended
September30,2013. TB20061requiresallFederalentitiesthatowntangibleproperty,plant,and
equipmentthatcontainasbestostodiscloseliabilitiesrelatedtofriableandnonfriableasbestoscleanup
costsdeemedprobable,butnotreasonablyestimableconsistentwithSFFAS5,SFFAS6,andTechnical
ReleasesNo.2,No.10andNo.11. AdoptionofthestandardhadnomaterialimpactonVAs
consolidatedandcombinedfinancialstatements.
15. OtherLiabilities
OtherliabilitiesareliabilitiesnotreportedelsewhereintheConsolidatedBalanceSheets. Theyconsist
ofFundedandUnfundedLiabilities. Fundedliabilitiesaregenerallyconsideredtobecurrentliabilities.
Unfundedliabilitiesaregenerallyconsideredtobenoncurrentliabilities.
OtherIntragovernmentalFundedLiabilities
asofSeptember30,
2013 2012
Deposit andClearing Account Liabilities $ 681 $ 315
Accrued Expenses Federal 16 6
Deferred Revenue 17 15
Resources Payable toTreasury 189
Custodial Liabilities 71 69
Credit Reform Act Subsidy Reestimates* 21 192
Accrued VA Contributions for Employee Benefits

148 117
TotalOtherIntragovernmentalFundedLiabilities $ 954 $ 903






*Thesubsidyamountforeachguaranteedloanisreestimatedannuallytoensureamountsreflecttheactuallosseson
guaranteedloans. Basedonthereestimatedamounts,additionalsubsidyfundsareprovidedfororexcessfundsare
returnedtoTreasury.

Notes to the Consolidated Financial Statements Part III - 52







OtherIntragovernmentalUnfundedLiabilities
asofSeptember30,
2013 2012
AccruedFECA Liability $ 453 $ 441

Unfunded Employee Liability 7 8


TotalOtherIntragovernmentalUnfundedLiabilities $ 460 $ 449
Total Other Intragovernmental Liabilities $ 1,414 $ 1,352

OtherPublicFundedLiabilities
asofSeptember30,
2013 2012
AccruedFunded Annual Leave $ 20 $ 19
Accrued Expenses 68 153
Accrued Salaries and Benefits 609 490
Capital LeaseLiability 8 10
Other 109 90
Total Other Public Funded Liabilities $ 814 $ 762

OtherPublicUnfundedLiabilities
asofSeptember30,
2013 2012
AccruedUnfunded Annual Leave* $ 1,908 $ 1,848
Amounts dueto nonFederal trust 141 148
JudgmentFundUnfunded** 1,397 1,178
Total Other Public Unfunded Liabilities $ 3,446 $ 3,174
Total Other Public Liabilities $ 4,260 $ 3,936

*Annualleaveisaccruedwhenearnedandisadjustedattheendofeachreportingperiodtoreflectcurrentpay
ratesofcumulativeleaveearnedbutnottaken. Sickandothertypesofleaveareexpensedastaken.
**TheJudgmentFundliabilityamountrepresentstheestimateforfuturepaymentsonlegalcasesthatwillbepaid
bytheTreasuryJudgmentFundonbehalfofVA(seeNote18,Contingencies).
Notes to the Consolidated Financial Statements Part III - 53

16. Leases
VAhasbothcapitalandoperatingleases. Thenetcapitalleaseliabilitywas$8millionand$10millionas
ofSeptember30,2013,and2012,respectively. Capitalleasesconsistprimarilyofinformationand
computertechnology,medicalequipment,officeequipmentandrealproperty.Thecapitallease
liabilitiesareclassifiedinOtherPublicFundedLiabilitiesinNote15sincecapitalleasesenteredintoafter
1991arerequiredtobefullyfundedbybudgetaryresourcesinthefirstyearofthelease.
Thefollowingisananalysisoftheleasedpropertyundercapitalleasesbymajorclassesthatisincluded
inGPP&EasdisclosedinNote9(inmillionsofdollars):
CapitalLeaseAssets
asofSeptember30,2013
Cost Accumulated Amortization Net Book Value
Real Property $ 17.7 $ (15.4) $ 2.3
Equipment 40.2 (29.0) 11.2
LeasedPropertyUnderCapitalLease $ 57.9 $ (44.4) $ 13.5
Amortization Expense $ 3.8

CapitalLeaseAssets
asofSeptember30,2012
Cost Accumulated Amortization Net Book Value

Real Property $ 17.7 $ (14.8) $ 2.9


Equipment 44.3 (30.0) 14.3
LeasedPropertyUnderCapitalLease $ 62.0 $ (44.8) $ 17.2
Amortization Expense $ 4.4
Operatingleasesconsistofequipmentandrealpropertyleasesthatarefundedannuallyandexpensed
asincurred. Operatingequipmentleasesgenerallyconsistofmedicalandofficeequipmentwithterms
offiveyearsorlessandlevelpaymentsovertheleaseterm. Operatingrealpropertyleasesgenerally
consistofVeteransmedicalfacilitiesandclinics,regionalanddistrictbenefitsofficesandadministrative
facilitiesthatenableVAtofulfillitsmissiontocareforandprovidebenefitstoVeterans.
FortheyearendedSeptember30,2013,VAhad1,876leasesineffectconsistingofapproximately21.7
millionsquarefeetandbaseannualminimumrentalobligationsofapproximately$574million. Ofthe
operatingrealpropertyleases,VHAaccountsfor85.6percent,VBAaccountsfor11.0percent,Indirect
AdministrativeProgramofficesaccountfor3.3percentandNCAaccountsforthebalance. Thesereal
propertyleasesgenerallyhaveleasetermsrangingfromoneyeartotwentyyearsandalloperating
leasesarefundedannuallybyappropriationoffundsbyCongress. Approximately73percentofthereal
propertyleaseshaveaninitialleasetermoffiveyearsorless;approximately21percenthaveinitial
leasetermsofsixtotenyears;approximately3percenthaveinitialleasetermsofeleventofifteen
years;andapproximately3percenthaveinitialleasetermsofsixteentotwentyyears. Certainleases
containrenewal,terminationandcancelationoptions.
Notes to the Consolidated Financial Statements Part III - 54



















Approximately86percentofVAleasesareexecuteddirectlywiththirdpartycommercialproperty
owners(thirdpartydirectleases)withthebalanceoftheleasesexecutedbyGeneralServices
Administration(GSA)onbehalfofVA. GSAchargesrentalratesforspacethatapproximatescommercial
rentalratesforsimilarproperties. Thetermsofoccupancyagreements(OAs)withGSAwillvary
accordingtowhethertheunderlyingassetsareowneddirectlybytheFederalGovernmentorrentedby
GSAfromthirdpartycommercialpropertyowners. VAexecutescancelableandnoncancelableOAs
withGSA. GSAOAscanbecancelablewithvaryingperiodsofnoticerequired(generallyfourtosix
months)andforOAsexecutedafterOctober2011,varyingperiodsofoccupancyarealsorequired
(generallyoneyear). GSAOAsthatarecancelledrequireapaymentofallunamortizedtenant
improvementsandrentconcessionsnotyetearned. GSAOAsmayalsobenoncancelable,whereVA
wouldbefinanciallyresponsibleforrentpaymentsonvacatedspaceuntiltheexpirationoftheOA,the
terminationoftheOApermittedundertheleaseterms,ortheoccupancybyareplacementtenant
coversthetotalrentobligationofVA. However,VAnormallyoccupiestheleasedpropertiesforan
extendedperiodoftimewithoutexercisingcancelationorterminationclausesintheleases.
Annualbaserentforoperatingrealpropertyleasesisgenerallyflatovertheleaseterm;however,
certainGSAOAsandthirdpartydirectleasescontainrentabatementandrentescalationclauses. For
certainGSAOAs,thebaserentissetforperiodsuptobutnotbeyond5years. ForcertainGSAOAswith
occupancytermsinexcessof5yearsorthatincurcapitalizedbuildingimprovementorreplacement
costs,thebaserentalratewillbereassessedevery5yearstoreflectcurrentmarketrentalratesand
additionalrealpropertyinvestments. TheGSAOAsandthirdpartydirectleasesalsorequireVAto
reimburseincreasesincommonareamaintenancecostsandoperatingcostsoverbaseyearamounts
annuallybasedonincreasesintheConsumerPriceIndex(CPI),reimburseincreasesinrealestatetaxes
overabaseyearamountatleastannuallyand,incertaincases,VAmaypaythecommonarea
maintenancecosts,operatingcostsandrealestatetaxesdirectly.
Futurecommitmentsforrealpropertyandequipmentoperatingleasesarebasedonleasesineffectas
ofSeptember30,2013. VAnormallyoccupiesleasedrealpropertyfortheentireinitialleaseterm
withoutexercisingcancelationandterminationoptions. Asaresult,theoperatingleasecommitment
tablethatfollowsincludesrealpropertyleasesoverthenoncancelableinitialleaseterm. Realproperty
leasedataismaintainedinacentralizeddatabaseanddoesnotcapturefuturefixedrentincreases
whichareconsideredimmaterialtothefinancialstatementstakenasawholeandaretherefore
excludedfromtheoperatingleasecommitmenttablethatfollows.
Duetothenumberofequipmentoperatingleasesandthedecentralizationofequipmentleaserecords,
thefuturecommitmentsforequipmentleaseshavebeenestimatedusingtheexpensefrom2013inlieu
ofactualleasetermsbeingreflectedforthe5yearperiodinthedisclosuretablebelow. VAdoesnot
believethisdisclosuremethodproducesinformationthatismateriallydifferentthanusingactual
equipmentleaseterms.
VA's2013operatingleaserentalcostswere$634millionforrealpropertyrentalsand$167millionfor
equipmentrentals. The2012operatingleasecostswere$608millionforrealpropertyrentalsand$146
millionforequipmentrentals.
Notes to the Consolidated Financial Statements Part III - 55






















ExcludedfromthefollowingtableareleasesofpropertiesthathaveexpiredasofSeptember30,2013
andprior,butarestilloccupiedbyVA.Onoccasion,VAwillretainoccupancyofpropertiesoncethefull
termoftheleasehasexpiredandcontinuetoremitrentonamonthlybasisinaccordancewiththe
holdoverprovisionsoftheexpiredleaseagreement. Thesecommitmentsareexcludedfromthe5year
leasecommitmenttablependingalongtermleaserenewalcontractorthevacancyofthespacebyVA.
Therentexpenseassociatedwithholdoverleasesisreflectedinthe2013expenseinthestatementsof
netcosts. ThefollowingtablerepresentsVA'sprojectedfutureoperatingleasecommitments(in
millionsofdollars):
ProjectedFutureOperatingLeaseCommitments
YearsEndingSeptember30,
GSA
OAs
ThirdParty
Direct
Leases
Total
Real
Property Equipment
2014 $ 148 $ 335 $ 483 $ 167
2015 129 268 397 167
2016 115 233 348 167
2017 107 203 310 167
2018 93 178 271 167
2019andThereafter(intotal) 329 1,114 1,443
TotalFutureLeasePayments $ 921 $ 2,331 $ 3,252 $ 835
VAisalessorofcertainunderutilizedrealestatepropertieswithintheDepartmentunderitsenhanced
uselease(EUL)programauthorizedbyCongress. Title38,U.S.C.81618169,EnhancedUseLeasesof
RealProperty,authorizesVAtoleaserealpropertyunderVAscontrolorjurisdictiontootherpublicand
privateentitiesonalongtermbasis(upto75years)onlyfortheprovisionofsupportivehousing,in
returnforcashconsiderationornoconsideration. VAspreviousEULauthorityexpiredonDec.31,2011
andwasreauthorizedunderPublicLaw112154Section211,limitedtosupportivehousing. The
previousauthorityunderwhichallofthecurrentlyoperationalleaseswereexecutedallowedVAto
enterintoEULsforreceiptofrentalincomeorinkindconsideration(suchascostavoidance,cost
savings,andenhancedservicesbenefittingVeterans)asallorpartoftheconsiderationfortheleaseto
furtheritsmissiontoeffectivelyserveVeteransandwasnotlimitedtosupportivehousing.
TheleasesrelatedtotheEULandNCAsleasingofexcesslandandbuildingsatcemeteriesaremorefully
describedinNote20underthecaption,PublicExchangeTransactions. TheEULprogramconsistsof53
operationalleasesoflandand/orbuildingstothepublicandprivatesector,includingtheNonFederal
TrustsdiscussedinNote1. TherentalincomerecognizedfromtheEULprogramandtheNCAleasing
programfortheyearsendedSeptember30,2013and2012,respectively,areimmaterialtothefinancial
statements. VAbelievesthatthefuturerentalincometoberecognizedoverthenext5yearsfromthe
EULprogramandNCAleasingprogramdescribedabovewillcontinuetobeimmaterial;therefore,the
tableoffutureminimumrentalincomecommitmentsisnotpresented.
Notes to the Consolidated Financial Statements Part III - 56









17. InsurancePrograms
ThroughVA,theGovernmentadministerssixlifeinsuranceprograms:theUnitedStatesGovernment
LifeInsurance(USGLI)program,theNationalServiceLifeInsurance(NSLI)program,theVeteransSpecial
LifeInsurance(VSLI)program,andtheVeteransReopenedInsurance(VRI)program,whichcover
VeteranswhoservedduringWorldWarI,WorldWarII,andtheKoreanConflicteras,andalsothe
ServiceDisabledVeteransInsurance(SDVI) programandtheVeteransMortgageLifeInsurance(VMLI)
program,whichcoverseverelydisabledVeteransandareopentonewissues. VMLIispartofthe
VeteransInsurance&Indemnities(VI&I)fund.
Inaddition,VAsupervisestheServicemembersGroupLifeInsurance(SGLI)andtheVeteransGroupLife
Insurance(VGLI)programs,whichprovidecoveragetomembersoftheuniformedarmedservices,
reservists,andpostVietnamVeteransandtheirfamilies. AllSGLIinsuredsareautomaticallycovered
undertheTraumaticInjuryProtection(TSGLI)program,whichprovidesforinsurancepaymentsto
memberswhosufferaserioustraumaticinjuryinservice. VAhasenteredintoagrouppolicywiththe
PrudentialInsuranceCompanyofAmericatoadministertheseprograms.
PremiumsfortheSGLIandVGLIprogramsaresetbymutualagreementbetweenVAandPrudential.
SGLIpremiumsforactivedutypersonnelandtheirspousesaredeductedfromtheServicememberspay
bytheArmedServicescomponentsthroughtheDoD. DoD,throughtheDefenseFinanceand
AccountingService(DFAS),remitscollectedpremiumstoVA,whicharethentransmittedtoPrudential.
Prudentialrecordsthepremiumsandmaintainsinvestmentsintheiraccountingrecordsseparateand
independentfromtheVAreportingentity. VAmonitorsPrudentialsinsurancereservebalancesto
determinetheiradequacyandmayincreaseordecreasetheamountsretainedbyPrudentialfor
contingencypurposes. ThereservesforthecontingentliabilitiesarerecordedinPrudentialsaccounting
recordsandarenotreflectedintheVAreportingentitybecausetheriskoflossontheseprogramsis
assumedbyPrudentialanditsreinsurersthroughthetermsandconditionsofthegrouppolicy.
PrudentialadministerstheTSGLIprogramunderanAdministrativeServicesOnlyagreementwithVA.
Underthelaw,DoDpaysforanyclaimcostsforthisprograminexcessofpremiumscollected.
TheSecretaryofVAdeterminestheclaimcoststhataretraceabletotheextrahazardsofdutyinthe
uniformedservices,onthebasisoftheexcessmortalityincurredbymembersandformermembersof
theuniformedarmedservicesinsuredunderSGLI,abovewhattheirmortalitywouldhavebeenunder
peacetimeconditions. ThecostssoidentifiedbytheSecretaryarepaidbytheuniformedservices,not
fromtheServicememberspremiums,asareallotherprogramscosts.
Theinsurancereservesfortheadministeredprogramsarereportedasliabilitiescoveredbybudgetary
resources,whilepartoftheSDVIandVI&Ireservesarereportedasliabilitiesnotcoveredbybudgetary
resources. ReservesforSGLIandVGLIaremaintainedinPrudential'sfinancialrecordssincetheriskof
lossisassumedbyPrudentialanditsreinsurers.UnitedStatesCode,Title38,requiresthattheLife
InsuranceprogramsinvestinTreasurysecurities.
Actuarialreserveliabilitiesfortheadministeredlifeinsuranceprogramsarebasedonthemortalityand
interestassumptionsthatvarybyfund,typeofpolicy,andtypeofbenefit. Theinterestassumptions
rangefrom2.25to5percent. ThemortalityassumptionsincludetheAmericanExperienceTable,the
Notes to the Consolidated Financial Statements Part III - 57









1941CommissionersStandardOrdinary(CSO)Table,the1958CSOBasicTable,the1980CSOBasic
Table,the2001CSOTableandthe2001ValuationBasicMale(VBM)Table.
InsuranceLiability(Reserve)Balances
asofSeptember30,2013
Program
InsuranceDeath
Benefits
DeathBenefit
Annuities
DisabilityIncome
&Waiver
Reserve
Totals
NSLI $ 5,050 $ 65 $ 34 $ 5,149
USGLI 3 2 5
VSLI 1,452 6 11 1,469
SDVI 541 6 741 1,288
VRI 179 1 2 182
VI&I 200 200
Subtotal

$ 7,425 $ 80 $ 788 $ 8,293


UnearnedPremiums 54
Insurance Dividends LeftonDepositandRelated Interest Payable 1,438
Dividends Payable to Policyholders 68
UnpaidPolicyClaims 1
Insurance Liabilities reported on the Consolidated BalanceSheet



9,854
LessLiability not Covered by BudgetaryResources (1,352)
LiabilityCoveredbyBudgetaryResources $ 8,502

asofSeptember30,2012
Program
InsuranceDeath
Benefits
DeathBenefit
Annuities
DisabilityIncome
&Waiver
Reserve
Totals
NSLI $ 5,661 $ 75 $ 41 $ 5,777
USGLI

5 2 7
VSLI 1,497 6 13 1,516
SDVI 510 6 693 1,209
VRI 203 1 2 206
VI&I 201 201
Subtotal $ 8,077 $ 90 $ 749 $ 8,916
UnearnedPremiums 59
Insurance Dividends LeftonDepositandRelated InterestPayable 1,521
Dividends Payable to Policyholders 84
Unpaid PolicyClaims 1
Insurance Liabilities reportedonthe Consolidated BalanceSheet 10,581
LessLiability not Covered by BudgetaryResources (1,293)
LiabilityCoveredbyBudgetaryResources

$ 9,288


Notes to the Consolidated Financial Statements Part III - 58




InsuranceInForce
Theamountofinsuranceinforceisthetotalfaceamountoflifeinsurancecoverageprovidedbyeach
administeredandsupervisedprogramasoftheendofthefiscalyear. Itincludesanypaidupadditional
coverageprovidedunderthesepolicies. Thesupervisedprogramspoliciesandfacevaluearenot
reflectedintheVAreportingentitybecausetheriskoflossontheseprogramsisassumedbyPrudential
anditsreinsurersthroughthetermsandconditionsofthegrouppolicy. Asaresult,theinformation
providedbelowundertheSupervisedProgramsisforinformationalpurposesonlyandisunaudited.
Prudentialanditsreinsurersprovidedcoverageto5,894,490 and6,009,819policyholderswithaface
valueof$1.3trillionand$1.3trillionfortheyearsendedSeptember30,2013,and2012,respectively.
ThefacevalueoftheinsuranceprovidedbyPrudentialanditsreinsurersrepresents99percentand99
percentofthetotalinsuranceinforceasofSeptember30,2013,and2012,respectively. Thenumberof
policiesrepresentsthenumberofactivepoliciesremainingintheprogramasoftheendofeachfiscal
year.
2013Policies 2012Policies
2013
FaceValue
2012
FaceValue
SupervisedPrograms
(UNAUDITED)
SGLIActiveDuty 1,504,000 1,525,000 $ 582,115 $ 588,489
SGLI ReadyReservists 761,500 771,500 261,262 268,153
SGLI PostSeparation 100,000 93,000 37,431 34,812
SGLI Family Spouse 1,055,000 1,095,000 104,071 108,012
SGLI Family Children 2,048,000 2,098,000 20,480 20,980
TSGLI* 226,550 229,650
VGLI 425,990 427,319 64,418 62,700
Total Supervised 5,894,490 6,009,819 $ 1,296,327 $ 1,312,796


NSLI 509,337 586,450 $ 6,297 $ 7,174
VSLI 140,336 149,947 1,955 2,055
SDVI 251,497 241,224 2,620 2,499
VRI 20,568 23,983 216 249
USGLI 1,572 2,165 4 6

VMLI 2,419 2,466 295 299


Total Administered 925,729 1,006,235 $ 11,387 $ 12,282

Total Supervisedand
Administered Programs

6,820,219 7,016,054 $ 1,307,714 $ 1,325,078


AdministeredPrograms
*TSGLIcoverageisariderattachedtoSGLIcoverage,sopoliciesunderSGLIalsohaveTSGLI.
PolicyDividends
TheSecretaryofVAdeterminesannuallytheexcessfundsavailablefordividendpayment. Policy
dividendsfor2013and2012were$152millionand$189million,respectively.
Notes to the Consolidated Financial Statements Part III - 59






18. CommitmentsandContingencies
VAisapartyinvariousadministrativeproceedings,legalactions,andtortclaimsarisingfromvarious
sourcesincluding: disputeswithcontractors,challengestocompensationandeducationaward
decisions,loanguarantyindemnitydebtcases,andallegationsofmedicalmalpractice. Certainlegal
matterstowhichVAmaybeanamedpartyareadministeredbyand,insomeinstances,litigatedby,the
DepartmentofJustice. Generally,amounts(morethan$2.5thousandforFederalTortClaimsActcases)
tobepaidunderanydecision,settlement,orawardarefundedfromtheJudgmentFund,whichis
maintainedbyTreasury. Medicalmalpracticecasescomprised48percentand90percentofthe
amountsfundedonbehalfofVAbytheJudgmentFundin2013and2012,respectively. Contract
disputepaymentsfor2013and2012were$0.5millionand$4.3million,respectively. The
discriminationcasepaymentsfor2013and2012were$1.4millionand$0.9million,respectively. VA
usesvariousacceptedactuarialmethodstoestimatetheliabilityresultingfrommedicalmalpracticeand
othertortclaimexposure. VAdiscountedfutureestimatedpayments,usingU.S.Treasuryspotrates,as
ofSeptember30,2013,and2012.
VAhasrecordedaliabilityforpendinglegalclaimsthatareestimatedtobepaidbytheJudgmentFund.
Thisliabilityisestablishedforallpendingclaimsandtheactuarialprojectionofpotentiallegalclaims
determinedtobeprobable,whetherreimbursementisrequiredornot. Thisliabilitywas$1.40billion
for2013and$1.18billionfor2012.
Therewere28contractandpersonnellawcases,wheretherewasatleastareasonablepossibilitythata
lossmayoccur,withfinancialexposurerangingfrom$279millionto$2.8billioninaggregatefor2013.
Withinthatrange,$78millionisconsideredprobableandisrecordedasaliability. In2012,thetotal
quantifiableexposurewas$203million,from13cases,ofwhich$28millionwasprobableandrecorded
asaliability.
Theprincipalreasonfortheincreaseintheestimateoffinancialexposureduring2013relatestotwo
claims,forwhichrangesofliabilitylastyearwerenotsubjecttodisclosureinthefirstcase,andwerenot
abletobeestimatedatthattimeinthesecondcase.
Thefirstclaimwaspreviouslyconsideredremoteand,accordingly,nodisclosureoffinancial
exposurewasrequired. Thelikelihoodofanunfavorableoutcomeisnowconsideredreasonably
possible,buttherangeofpotentialliabilityatthisstageofthelitigationisstillbroad,asaresult,
theestimatesofanyunfavorableoutcomecannotruleouttheupperrangeofliability. The
litigationinthiscaseiscurrentlybeinghandledbytheUSDepartmentofJustice.
Thesecondclaimlikewisehasawiderangeofpotentialliability,theprofessionalestimateof
whichcannotbenarrowedwithanydegreeofconfidenceatthisstage. Thelitigationinthis
caseisbeinghandledbytheDepartmentofJustice.
VAisalsorequiredtorecordanoperatingexpenseandimputedfinancingsourcefortheJudgment
Fund'spendingclaimsandsettlements. TheJudgmentFundaccountingisshownbelow:
Notes to the Consolidated Financial Statements Part III - 60

















JudgmentFund
FortheYearsEndedSeptember30,

2013 2012
FiscalYearSettlementPayments
$
175 $ 100
LessContractDisputeandNoFearPayments (2) (5)
ImputedFinancingPaidbyOtherEntities* 173 95
Increase(Decrease)inLiabilityforClaims
217 207
OperatingExpense $ 390 $ 302
*TheImputedFinancingPaidbyOtherEntitiesinthetableabove,whencombinedwiththeTotalImputed
ExpensesEmployeeBenefitsreportedinNote13reconcilestototalImputedFinancingcostsreportedinthe
ConsolidatedStatementofChangesinNetPosition.
ItistheopinionofVA'smanagementthatresolutionofpendinglegalactionsasofSeptember30,2013,
willnotmateriallyaffectVA'soperationsorfinancialpositionwhenconsiderationisgiventothe
availabilityoftheJudgmentFundappropriationtopaysomecourtsettledlegalcases. The2013tort
paymentswere$173millionand2012tortpaymentswere$95million.
Anypaymentsduethatmayariserelatingtocancelledappropriationswillbepaidoutofthecurrent
yearsappropriationsinaccordancewiththeprovisionsoftheExpiredFundsControlActof1990. The
amountofunobligatedandobligatedauthorityrelatingtoappropriationscancelledonSeptember30,
2013and2012was$298.3millionand$329.4million,respectively.
VAprovidesmedicalcaretoVeteransonanasavailablebasis,subjecttothelimitsoftheannual
appropriations. Inaccordancewith38CFR17.36(c),VAsSecretarymakesanannualenrollment
decisionthatidentifieswhichVeterans,bypriority,willbetreatedforthatfiscalyearsubjecttochange
basedonfundsappropriated,estimatedcollections,usage,theseverityindexofenrolledVeterans,and
changesincost. WhileVAexpectstocontinuetoprovidemedicalcaretoVeteransinfutureyears,an
estimateofthisamountcannotbereasonablymade. Accordingly,VArecognizesthemedicalcare
expensesintheperiodthemedicalcareservicesareprovided. For20092013,theaveragemedicalcare
costperyearwas$39billion.
19. FundsfromDedicatedCollections
SFFAS43,FundsfromDedicatedCollections:AmendingSFFAS27,IdentifyingandReportingEarmarked
Funds,definesfundsfromdedicatedcollectionsasanindividualfundwithexplicitauthoritytoretain
revenuesand/orotherfinancingsourcesnotusedinthecurrentperiodforfutureusetofinancethe
designatedactivities,benefits,orpurposes;andtoaccountforandreportonthereceipt,use,and
retentionoftherevenuesand/orotherfinancingsourcesthatdistinguishesthefundfromthefederal
governmentsgeneralrevenues.Thefundssourcesofrevenueandotherfinancingsourcesarenon
federalsourcesthatarematerialtotheVAandrequiredisclosureofallfundsfromdedicatedcollections
forwhichVAhasprogrammanagementresponsibility. TheU.S.Treasurydoesnotsetasideassetsto
payfutureexpendituresassociatedwithfundsfromdedicatedcollections.VAsfundsfromdedicated
collectionsconsistoftrusts,specialandrevolvingfundsandremainavailableovertime. Thetrust
Notes to the Consolidated Financial Statements Part III - 61








fundsdonotinvolveafiduciaryrelationshipwithanindividualorgroupbutaredesignatedexclusively
foraspecificactivity,benefit,orpurpose.
Theinvestments(TreasurySecuritiesdiscussedinNote1andpresentedinNote5)areassetsoffunds
fromdedicatedcollectionsthatareissuedasevidenceofspecificdedicatedreceiptsfromfundactivities
bythefundandprovidethefundtheauthoritytodrawupontheTreasuryforfutureauthorized
expendituresrelatedtothefundsspecificpurpose. Theinvestments(TreasurySecurities)arenot
generalfundassetsoftheFederalGovernment,sincetheiruseisrestrictedtothefundspurpose,and
arenotnonentityassets. WhenthefundredeemsitsTreasurySecuritiestomakeexpenditures,the
Treasurywillfinancethoseexpendituresinthesamemannerthatitfinancesallotherexpenditures.
Notes to the Consolidated Financial Statements Part III - 62








VAsFundsfromDedicatedCollectionsareasfollowsandtheclassificationofeachfundintothe
groupingofInsurance,MedicalCare,BenefitsandBurialasshowninthecondensedfinancialstatements
thatfollowisdesignatedinthePurposeofFundcolumnbelow:
DedicatedCollections
FundName
Treasury
Symbol Authority PurposeofFund FinancingSources
ServicemensGroup
LifeInsurance
36x4009 38U.S.C1965 InsuranceProvided
insurancetoactiveduty,
readyreservists,retired
reservistsandcadets
attendingservice
acediesandROTC
Public,Veterans
VeteransReopened
InsuranceFund
36x4010 38U.S.C.
1925
Insurance Provides
insurancetoWorldWar
IIandKoreaVeterans.
Public,Veterans.
ServiceDisabled
VeteransInsurance
Fund
36x4012 38U.S.C.
1922
Insurance Provides
insurancetoVeterans
withserviceconnected
disabilities.
Public,Veterans.
NationalServiceLife
InsuranceFund
36x8132 38U.S.C. 720 Insurance Premiums
insureWWIIVeterans.
Public,Veterans.
U.S. GovernmentLife
Insurance
36x8150 38U.S.C. 755 Insurance Premiums
insureWWIVeterans.
Public,Veterans.
VeteransSpecialLife
InsuranceFund
36x8455 38U.S.C. 723
101228
Insurance Premiums
insureKoreanconflict
Veterans.
Public,Veterans.
CanteenService
RevolvingFund
36x4014 38U.S.C.78 MedicalCareOperates
thecanteenservicesat
hospitals.
Revenuefrom
sales.
MedicalCare
CollectionsFund
36x5287 P.L. 10533
111Stat665
MedicalCare Third
partyandpatientco
paymentsformedical
services.
Public,primarily
insurance
carriers.
EnhancedUseLease
Trusts
N/A 38U.S.C8162 MedicalCare Lease
underutilizedVA
property.
Public.
GeneralPostFund,
NationalHomes
36x8180 38U.S.C.
101228
MedicalCare
Donationsforpatient
benefits.
Public,mostly
Veterans.
PostVietnamEra
EducationAssistance
Program
36x8133 38U.S.C. 1622 Benefits Subsidizesthe
costofeducationto
Veterans.
Veterans,DoD.
CemeteryGiftFund 36x8129 38U.S.C. 1007 Burial Donationsfor
Veteranscemeteries.
Publicdonors.
NationalCemetery
Administration
FacilitiesOperation
Fund
36x5392 P.L.108454 Burial Proceedsbenefit
landandbuildings.
Proceedsfrom
leases.
Notes to the Consolidated Financial Statements Part III - 63








Thefollowingtablesprovideconsolidatedcondensedinformationonassets,liabilities,fundbalances,
netcosts,andchangesinfundbalancesrelatedtoCumulativeResultsofOperationsFundsfrom
DedicatedCollectionsintheConsolidatedStatementsofChangesinNetPosition:
BalanceSheetFundsfromDedicatedCollections
asofSeptember30,2013
Insurance
Medical
Care

Benefits Burial
Fundsfrom
Dedicated
Collections
Assets:
FundBalancewithTreasury $ 85 $ 298 $ 64 $ 1 $ 448

Investmentswith Treasury (Note5) 8,476 88 8,564
Other Assets 425 1,486 4 1,915
Total Assets $ 8,986 $ 1,872 $ 64 $ 5 $ 10,927
Liabilities and NetPosition:
Payables to Beneficiaries $ 211 $ 63 $ 1$ $ 275
Other Liabilities 9,652 157 9,809
Total Liabilities 9,863 220 1

10,084
UnexpendedAppropriations
CumulativeResultsofOperations (877) 1,652 63 5 843
Total Liabilitiesand Net Position $ 8,986$ 1,872 $ 64 $ 5 $ 10,927

Statement ofNet Cost Funds from Dedicated Collections


for the YearEnded September30, 2013
Gross Program Costs $ 862 $ 479 $ 1 $ $ 1,342
Less Earned Revenues 732 3,487 4,219
Net Program Costs 130 (3,008) 1 (2,877)
Costs Not Attributable to Program
Costs
Net Cost/(Benefit)of Operations $ 130 $ (3,008) $ 1 $ $ (2,877)

Statement of ChangesinNet PositionFunds from Dedicated Collections


for the YearEnded September30, 2013
Net Position Beginning of Period $ (826) $ 1,502 $ 64 $ 5 $ 745
Budgetaryand OtherFinancing
Sources 79 (2,858) (2,779)
NetCost/(Benefit) of Operations 130 (3,008) 1 (2,877)
ChangeinNetPosition (51) 150 (1) 98
Net Position End of Period $ (877) $ 1,652 $ 63 $ 5 $ 843

Notes to the Consolidated Financial Statements Part III - 64

BalanceSheetFundsfromDedicatedCollections
asofSeptember30,2012

Insurance
Medical
Care Benefits Burial
Fundsfrom
Dedicated
Collections
Assets:
FundBalancewithTreasury $ 62 $ 265 $ 65 $ 1 $ 393
InvestmentswithTreasury(Note5) 9,244 65 9,309
OtherAssets 437 1,368 4 1,809
TotalAssets $ 9,743 $ 1,698 $ 65 $ 5 $ 11,511
LiabilitiesandNetPosition:
PayablestoBeneficiaries $ 187 $ 27 $ 1 $ $ 215
OtherLiabilities 10,382 169 10,551
Total Liabilities 10,569 196 1
10,766
UnexpendedAppropriations
CumulativeResultsofOperations (826) 1,502 64 5 745
Total Liabilitiesand Net Position $ 9,743 $ 1,698 $ 65 $ 5 $ 11,511

StatementofNetCostFundsfromDedicatedCollections
fortheYearEndedSeptember30,2012
Gross Program Costs $ 1,057 $ 449 $ 1 $ $ 1,507
Less Earned Revenues 951 3,186 1 4,138
Net Program Costs 106 (2,737) (2,631)
Costs Not Attributable to Program
Costs
Net Cost/(Benefit)of Operations $ 106 $ (2,737) $ $ $ (2,631)
StatementofChangesinNetPositionFundsfromDedicatedCollections
fortheYearEndedSeptember30,2012
Net Position Beginning of Period $ (720) $ 1,552 $ 64 $ 3 $ 899
Budgetaryand OtherFinancing
Sources (2,787) 2 (2,785)
NetCost/(Benefit) of Operations 106 (2,737) (2,631)
Change in Net Position (106) (50) 2 (154)
Net Position End of Period $ (826) $ 1,502 $ 64 $ 5 $ 745

Notes to the Consolidated Financial Statements Part III - 65

20. ExchangeTransactions
ExchangeRevenues
ExchangerevenueisaninflowofresourcestoVAthatisrecognizedwhenearnedfromexchange
transactionswithotherfederalagenciesorthepublicwhereeachpartytothetransactionsacrifices
valueandreceivesvalueinreturn. Exchangerevenueconsistsprimarilyof:medicalrevenuerecognized
whenearnedfromotherfederalagenciesorthepublicasaresultofcostsincurredorservices
performedontheirbehalf;benefitsrevenuefromreimbursementofeducationbenefitprogramsfrom
servicemembercontributionsthataretransferredtothegeneralfundaccountwiththeDepartmentof
theTreasury(Treasury);insurancerevenuefrominsurancepolicypremiumspaidbypolicyholders;and
housingrevenuefrominterestearnedondirectloans. ExchangerevenuesarediscussedfurtherinNote
1underRevenuesandOtherFinancingSources.
Exchangerevenueistobebasedonthefullcostassociatedwiththegoodsexchangedorservices
performed. AlthoughVArecognizesfullcostperSFFAS4,ManagerialCostAccountingStandardsand
Concepts,VHAhaslegislatedexceptionstotherequirementtorecoverthefullcosttotheFederal
Governmentofprovidingservices,resources,orgoodsforsale. Underenhancedsharingauthority,
VHAfacilitiesmayenterintoarrangementsthatareinthebestinterestoftheFederalGovernment.
TheOfficeofFinancialPolicywithinVAsOfficeofFinanceestablishedpolicyrequiringafourpart
biennialselfcertificationprogramtobeimplementedbyVHA. Thefirstpartofthecertificationprogram
requireseachmedicalfacilitytocertifywhetherchargesestablishedbyVHAaresufficienttorecoverthe
fullcostofprovidingservices. Thesecondpartrequireseachmedicalfacilitytocertifythatitscost
accountingprocedurescomplywithSFFAS4. AnymedicalfacilitywithafullyfunctionalDecision
SupportSystem(DSS)thatproducestimely(i.e.currentyear)datawillbeabletocertifycompliancewith
thisrequirement. ThethirdpartrequireseachmedicalfacilitytocertifyitscompliancewithFederal
pricingpoliciesandthatithasfullydisclosedsituationswhereitdoesnotcomplywiththosepoliciesas
requiredbySFFAS7,AccountingforRevenueandOtherFinancingSourcesandConceptsforReconciling
BudgetaryandFinancialAccounting. Thefourthpartrequireseachmedicalfacilitytocertifywhetherits
enhancedhealthcaresharingcontractsrecoverfullcostormarketpriceasdefinedinOMBCircularNo.
A25,UserCharges.
TheManagementQualityAssuranceService(MQAS)withinVAsOfficeofBusinessOversight(OBO)is
responsibleforreviewingtheimplementationandexecutionoftheselfcertificationprogram. Eachyear
MQASreviewshalfoftheVeteransIntegratedServiceNetworks(VISNs);evenVISNsoneyearandodd
VISNsthesecondyear. Generally,onestationisselectedforreviewperVISN. MQASreviewefforts
culminateinasummaryreportissuedtotheVHAChiefFinancialOfficer(CFO)andisdistributedtoVA
seniormanagementincludingtheVAChiefFinancialOfficer.
PublicExchangeTransactions
VAsLoanGuarantyProgramcollectscertainfeesthataresetbylaw. Theloanguaranteefundingfees
collectedfor2013and2012were$1.43billionand$1.18billion,respectively. Theloanguarantee
lenderparticipationfeescollectedfor2013and2012were$2.1millionand$1.8million,respectively.
Notes to the Consolidated Financial Statements Part III - 66



















VAsLoanGuarantyProgramcollectsrentalfeesonasmallnumberofpropertiesduringtheperiod
whenthepropertyistitledtoVA.
NCAleaseslodgesateightcemeteriestonotforprofitgroupsatnocost. Thesenotforprofitgroups
arerequiredtoprovidetheupkeeponthelodgesandpaythecostsforutilities,insurance,minor
repairs,maintenanceandanyothercostsassociatedwiththelodges. NCAhasagriculturallicensesat
elevencemeterieswithprivatesectorentities,forwhichitreceivesrentalpayments;oneagricultural
licensetothestateofColoradoatnocost,andonepermittotheFederalAviationAdministration(FAA)
atnocost. NCAalsoleasesbuildingsattwocemeteries,onetoaprivatesectorentityforwhichit
receivesrentalpayments,andonetoanotforprofitgroupthatisresponsibleforthehistoric
preservationofthebuildingatnocosttoNCA. Totalrentalrevenuesearnedunderthecontractsabove
were$93thousandand$109thousandfortheyearsendedSeptember30,2013and2012,respectively.
VAsMedicalCareCollectionsFund,ConformingAmendments,changedthelanguageofspecific
sectionsof38USCChapter17tosubstitutereasonablechargesforreasonablecost. TheVHAChief
BusinessOffice(CBO)isresponsibleforimplementingandmaintainingthesereasonablechargesfor
billingthirdpartypayersforservicesprovidedtoinsuredVeteransfortreatmentofnonservice
connectedconditions.
Reasonablechargesareusedtobillforreimbursablehealthcareservices,nonfederalworkers
compensation,tortfeasorandnofaultoruninsuredmotoristsinsurancecases.
ReasonablechargesarebasedonproviderchargesinthemarketareaofeachVAfacility. Under
regulationsissuedpursuanttosection1729andpublishedatsection17.101,title38,CodeofFederal
Regulations,thirdpartypayersmayelecttopayVAsbilledcharges(lessapplicabledeductibleorco
paymentamounts)forthecareandservicesprovidedtoVeterans. Alternatively,thirdpartypayersmay
electtopayVAanamount,generallyknownasusualandcustomary,thatitwouldpaytoother
providersforcareandservicesinthesamegeographicarea.
Costbasedperdiemsarecalculatedannuallytoproduceratesusedtobillformedicalcareorservices
providedbyVA:
(a) inerrororontentativeeligibility;
(b) inamedicalworkerscompensation(otherthanfederal),humanitarianemergency;
(c) topensionersofalliednations;
(d) forresearchpurposesincircumstancesunderwhichVAmedicalcareappropriationistobe
reimbursedbyVAresearchappropriation;and
(e) tobeneficiariesoftheDepartmentofDefenseorotherfederalagencies,whenthecareor
serviceprovidedisnotcoveredbyanapplicablesharingagreement.
Theseperdiemcostsarederivedprimarilyfromcostandworkloaddatafromanationalcostallocation
report.
IntragovernmentalExchangeTransactions
IntragovernmentalcostsrelatetothesourceofgoodsandservicespurchasedbyVAandnottothe
classificationofrelatedintragovernmentalrevenue. Classificationofrevenueand/orcostsas
Notes to the Consolidated Financial Statements Part III - 67











IntragovernmentalorWiththePublicisdeterminedonatransactionbytransactionbasisfor
disclosurepurposes. Classificationofprecedingtransactionsinaproductslifecyclewillnothavean
impactonclassificationofsubsequenttransactions. Thepurposeofthisclassificationistoenablethe
FederalGovernmenttoprovideconsolidatedfinancialstatements,andnottomatchpublicand
intragovernmentalrevenuewithcoststhatareincurredtoproducepublicandintragovernmental
revenue.
VAandDoDhaveauthoritytoenterintoagreementsandcontractsforthemutualuseorexchangeof
useofhospitalanddomiciliaryfacilitiesandotherresources. Theprovidingagencyshallbereimbursed
forthecostofthehealthcareresourcesbasedonthemethodologyagreedtobyVAandDoD. Facility
directorshavetheflexibilitytoconsiderlocalconditionsandneedsandtheactualcostsofprovidingthe
services. VAsGeneralCounselhasdeterminedthatfullcostrecoveryisnotmandated. VHAcaptures
thetotalamountofreimbursementsreceivedunderDoDsharingagreements,butthetotalamount
billedbelowfullcostisnotreadilyavailable. VHAisintheprocessofdevelopingmechanismstoreport
thisinformationinthefuture. VBAcollectsfundingfromDoDinordertoadministercertaineducation
programs. DoDtransferred$369millionand$364.4millionduring2013and2012,respectively,forthe
PostVietnamEraEducationAssistanceProgram,ReinstatedEntitlementsProgramforSurvivorsandthe
NewGIBillforVeterans.
WhenVAfurnishesmedicalcareorservicesforbeneficiariesofotherfederalagencies,andthatcareor
serviceisnotcoveredbyanapplicablelocalsharingagreement,thebillingratesusedaredetermined
andpublishedannuallybytheVHACFO. Similartothetortrates,interagencybillingratesare
determinedfromcostandworkloaddataintheCostDistributionReport.
Notes to the Consolidated Financial Statements Part III - 68







21. NetProgramCostsbyAdministration
ScheduleofNetProgramCostsbyAdministration
ForthePeriodEnding
September30,2013
(DollarsinMillions)
Veterans
Health
Administration
Veterans
Benefits
Administration
National
Cemetery
Administration
Indirect
Administrative
ProgramCosts
Total
ProgramCosts
Intragovernmental
Costs $ 8,589 $ 645 $ 40 $ 444 $ 9,718
LessEarnedRevenues (134) (947) (246) (1,327)
NetIntragovernmental
ProgramCosts 8,455 (302) 40 198 8,391
PublicCosts
VeteransBenefits
ActuarialCosts,
ExcludingChangesin
ActuarialAssumptions
(Note13)
51,728 83,274 265 1,643 136,910
99,200 (100) 99,100
LessEarnedRevenues

(3,633) (602) (261) (4,496)


NetPublicProgram
Costs 48,095 181,872 165 1,382 231,514
NetProgramCostby
Administration
BeforeChangesin
VeteransBenefits
ActuarialLiability
Assumptions 56,550 181,570 205 1,580 239,905
Net(Gain)/Lossfrom
ActuarialLiability
Assumptions(Note13) 113,900 200 114,100
NetCostofOperations $ 56,550 $ 295,470 $ 405 $ 1,580 $ 354,005
Notes to the Consolidated Financial Statements Part III - 69






ScheduleofNetProgramCostsbyAdministration
ForthePeriodEnding
September30,2012
(DollarsinMillions)
Veterans
Health
Administration
Veterans
Benefits
Administration
National
Cemetery
Administration
Indirect
Administrative
ProgramCosts
Total
ProgramCosts
Intragovernmental
Costs
LessEarnedRevenues
$ 8,329
(106)
$ 318
(1,141)
$ 49

$ 547
(402)
$ 9,243
(1,649)
NetIntragovernmental
ProgramCosts 8,223 (823) 49 145 7,594
PublicCosts
VeteransBenefits
ActuarialCost,
ExcludingChangesin
ActuarialAssumptions
48,559 74,206 245 1,425 124,435
(Note13) 78,700 (100) 78,600
LessEarnedRevenues (3,354) (525) (193) (4,072)
NetPublicProgram
Costs 45,205 152,381 145 1,232 198,963
NetProgramCostby
AdministrationBefore
ChangesinVeterans
BenefitsActuarial
LiabilityAssumptions 53,428 151,558 194 1,377 206,557
Net(Gain)/Lossfrom
ActuarialLiability
Assumptions(Note13) 149,200 100 149,300
NetCostofOperations $ 53,428 $300,758 $ 294 $ 1,377 $ 355,857
Notes to the Consolidated Financial Statements Part III - 70










22. DisclosuresRelatedtotheStatementsofBudgetaryResources
OMBRequiredChangestotheStatementofBudgetaryResources
Effectivefor2013,theSBRpresentationhaschangedtobetteralignwiththenewformatofthereport
onBudgetExecutionandBudgetaryResources(SF133)asrequiredbyOMB.InthenewSBRformat,
significantbalancesandunderlyingdetaillinesfromtheSF133areaggregatedtothemajorcategories
deemedmostsignificantforbroadgovernmentwidedisplaypurposes. Thenewformatalsohas
additionalreconciliationrequirementswithbudgetexecutioninformationreportedintheBudgetofthe
UnitedStatestoensuretheintegrityofthenumberspresented.Asaresultoftheformatchanges,the
2012datahasbeenreclassifiedtoconformtothe2013presentation.Therearenoothereffectsonthe
consolidatedorcombinedfinancialstatements.
BudgetaryAccounting
Budgetaryresources,whichincludenewbudgetauthority,unobligatedbalances,directspending
authority,andobligationlimitations,areformsofauthoritygiventoVAallowingittoincurobligations.
BudgetauthorityisprovidedbyFederallawtoenterintofinancialobligationsthatwillresultin
immediateorfutureoutlaysinvolvingFederalGovernmentfunds. Budgetauthoritymaybeclassifiedby
theperiodofavailability(1year,multipleyear,noyearoravailableuntilexpended),bythetimingof
congressionalaction(currentorpermanent),orbythemannerofdeterminingtheamountavailable
(definiteorindefinite).
Budgetauthorityfromappropriationsisthemostcommonformofprovidingforthespecificamountof
moneyauthorizedbyCongressforapprovedwork,programs,orindividualprojects. Appropriationsdo
notrepresentcashactuallysetasideintheTreasuryforpurposesspecifiedintheappropriationact;they
representamountsthatVAmayobligateduringtheperiodoftimespecifiedintherespective
appropriationacts. Anappropriationmaymakefundsavailablefromthegeneralfund,specialfunds,or
trustfunds.
BorrowingauthorityisbudgetauthorityenactedtopermitVAtoborrowmoneyandthentoobligate
againstamountsborrowed. Itmaybedefiniteorindefiniteinnature. Thefundsareborrowedfromthe
TreasuryandFederalFinancingBank.
SpendingauthorityfromoffsettingreceiptsandcollectionsisbudgetauthoritythatpermitsVAto
obligateandexpendfundsfromsourcesthatarenotappropriated. Offsettingcollectionsareauthorized
bylawtobecreditedtoappropriationorfundexpenditureaccounts. Theyresultfrom(1)businesslike
transactionsormarketorientedactivitieswiththepublic,(2)intragovernmentaltransfers,and(3)
collectionsfromthepublicthataregovernmentalinnaturebutrequiredbylawtobeclassifiedas
offsetting. Collectionsresultingfrombusinessliketransactionswiththepublicandothergovernment
accountsarealsoknownasreimbursements. Lawsauthorizingoffsettingcollectionsmakethem
availableforobligationtomeettheaccountspurposewithoutfurtherlegislativeaction.
Offsettingcollectionsincludereimbursements,transfersbetweenfederalandtrustfundaccounts,
offsettinggovernmentalcollections,andrefunds. Foraccountingpurposes,earnedreimbursementsare
alsoknownasrevenues.Theseoffsettingcollectionsarenettedagainstgrossoutlaysindeterminingnet
outlaysfromsuchappropriations.
Notes to the Consolidated Financial Statements Part III - 71










Offsettingreceiptsarecollectionsthatareoffsetagainstgrossoutlaysbutarenotauthorizedtobe
creditedtoexpenditureaccounts. Offsettingreceiptsaredepositedinreceiptaccounts. Likeoffsetting
collections,theyresultfrom(1)businessliketransactionsormarketorientedactivitieswiththepublic,
(2)intragovernmentaltransfers,and(3)collectionsfromthepublicthataregovernmentalinnaturebut
requiredbylawtobeclassifiedasoffsettingreceipts.
TheStatusofBudgetaryResourcesreflectstheobligationsincurred,theunobligatedbalancesattheend
oftheperiodthatremainavailable,andunobligatedbalancesattheendoftheperiodthatare
unavailableexcepttoadjustorliquidateprioryearobligations. Unobligatedbalancescurrently
unavailablemaybecomeavailablesubjecttoapportionmentbyOMBandallotmentbyVA.
ApportionmentsaredistributionsmadebyOMBofamountsavailableforobligationinanappropriation
orfundaccount. Apportionmentsdivideamountsavailableforobligationbyspecifictimeperiods
(usuallyquarters),activities,projects,objects,oracombinationthereof. Theamountssoapportioned
limittheamountofobligationsthatmaybeincurred.
Uponapportionmentandallotment,obligationscanbeincurred. Obligationsrepresentacommitment
thatcreatesalegalliabilityforVAtopayforgoodsandservicesorderedorreceived,oralegaldutyon
thepartofVAthatcouldmatureintoalegalliabilitybyvirtueofactionsonthepartoftheotherparty
beyondthecontrolofVA. Anobligationistheamountofordersplaced,contractsawarded,services
received,andothertransactionsoccurringduringagivenperiodthatwouldrequirepaymentsduring
thesameorfutureperiod.
Obligationalauthorityisanamountcarriedoverfromoneyeartothenextifthebudgetauthorityis
availableforobligationinthenextfiscalyear. Notallobligationalauthoritythatbecomesavailableina
fiscalyearisobligatedandpaidoutinthatsameyear. Balancesaredescribedas(1)obligated,(2)
unobligated,or(3)unexpended.
Anobligatedbalanceistheamountofobligationsalreadyincurredforwhichpaymenthasnotyetbeen
made,includingundeliveredordersandotherunliquidatedobligations. Budgetauthoritythatis
availableforafixedperiodexpiresattheendofitsperiodofavailability,buttheobligatedbalanceof
thebudgetauthorityremainsavailabletoliquidateobligationsfor5additionalfiscalyears. Attheendof
thefifthfiscalyear,theaccountisclosedandanyremainingbalanceiscanceled.
Anunobligatedbalanceistheportionofobligationalauthoritythathasnotyetbeenobligated. Foran
appropriationaccountthatisavailableforafixedperiod,thebudgetauthorityexpiresaftertheperiod
ofavailabilityendsbutitsunobligatedbalanceremainsavailablefor5additionalfiscalyearsfor
recordingandadjustingobligationsproperlychargeabletotheappropriationsperiodofavailabilitysuch
astorecordpreviouslyunrecordedobligationsortomakeupwardordownwardadjustmentsin
previouslyrecordedobligations,suchascontractmodificationsproperlywithinscopeoftheoriginal
contract. Attheendofthefifthfiscalyear,theaccountisclosedandanyremainingbalanceiscanceled.
Unexpendedbalancerepresentsthesumoftheobligatedandunobligatedbalances.
Notes to the Consolidated Financial Statements Part III - 72



















Outlayistheamountofchecks,disbursementofcash,orelectronictransferoffundstoliquidatea
Federalobligation. UndertheCreditReformAct,thecreditsubsidycostisrecordedasanoutlaywhena
directorguaranteedloanisdisbursed. Outlaysduringafiscalyearmaybeforpaymentofobligations
incurredinprioryears(prioryearobligations)orinthesameyear.
Thecaption,AppropriationsunderBudgetaryResources,intheCombinedStatementsofBudgetary
Resources,doesnotagreetothecaptionBudgetaryFinancingSourcesAppropriationsReceivedinthe
ConsolidatedStatementsofChangesinNetPosition. TheamountintheCombinedStatementof
BudgetaryResourcesincludesappropriationsfromtheGeneralFundandSpecialReceiptFunds,while
theConsolidatedStatementsofChangesinNetPositionincludesappropriationsfromtheGeneralFund
only.
Thecaption,SpendingAuthorityfromOffsettingCollectionsunderBudgetaryResourcesinthe
CombinedStatementofBudgetaryResources,doesnotagreetothecaptionEarnedRevenueinthe
ConsolidatedStatementsofNetCost. TheamountintheCombinedStatementofBudgetaryResources
includesCreditReformsubsidiesforinterest,feesandprincipalasrequiredbyTreasuryreporting
requirements,whiletheConsolidatedStatementsofNetCostincludesinterestonly.
ApportionmentCategoriesofObligationsIncurred:Directvs.ReimbursableObligations
YearsEndedSeptember30,
CategoryA,Direct,consistsofamountsrequestedtobeapportionedbyeachcalendarquarterinthe
fiscalyear.CategoryB,Direct,consistsofamountsrequestedtobeapportionedonabasisotherthan
calendarquarters,suchasactivities,projects,objects,oracombinationofthesecategories. The
amountsbyyearandcategoryreconciletotheSF132,ApportionmentandReapportionment
Schedule,SF133,ReportonBudgetExecutionandBudgetaryResources,andFACTSIIasrequiredby
OMBCircularNo.A11,Section120. TheincreaseinCategoryAanddecreaseinCategoryBis
primarilyduetoachangeintheclassificationoftheCompensationandPensionsfundtoconformto
thecategorydefinitionsinA11,Section120.
2013 2012
CategoryA,Direct $ 142,590 $ 70,821
CategoryB,Direct 7,456 66,829
Reimbursable 5,544 5,014
TotalObligations $ 155,590 $ 142,664
AdjustmentstoBudgetaryResourcesandPriorYearRecoveries
Recoveriesofprioryearunpaidobligationsconsistofcancellationsordownwardadjustmentsof
obligationsincurredinpriorfiscalyearsandrecoveriesofprioryearpaidobligations(i.e.,cashrefunds).
Anticipatedresources,requiredforallopenphasefunds,arerequiredtobeapportionedbyOMBbefore
theycanbeused. OnceapportionedbyOMB,theseapportionedanticipatedresourcescannotbeused
untilfundsaredeobligatedorrefundedandtherecoveredbudgetauthorityisrealized. Atthatpoint,
thebudgetauthorityisallottedbackdowntotheappropriatefacilitiesorspecificprogramoffices.
Theseadjustmentsrelatetotheopenphaseonlyofmultiyearandnoyearappropriationsbeyondthe
firstyearofavailabilityofbudgetaryauthorityandtheexpiredphaseofannualandmultiyear
Notes to the Consolidated Financial Statements Part III - 73






appropriations. Noyearappropriationshavenoexpirationofbudgetaryauthorityunlesscancelledby
Congress.
VAssystemsrequiremodificationtoproperlyaccountfortheprioryearrecoveriesasprovidedby
TreasuryandtheguidanceintheTreasuryFinancialManual. VAhascompletedthetechnical
assessmentprocessanddetaileddesignrequirementstomodifyitscoreaccountingsystemandhas
beguntheprogrammingphaseofdevelopment. Whenanautomatedsystemssolutionisimplemented,
VAwillbeenabledtoproperlyidentifyprioryearrecoveries,systematicallymonitorreapportioned
budgetauthorityandtrackbothforinternalandexternalfinancialreporting.
Intheinterim,VAhasimplementedamanualreviewprocesstoidentifyprioryearrecoveriesand
quantifyanestimatedrangeoftransactionsthatwouldbeaccountedforasandmeetthedefinitionofa
prioryearrecovery. Basedonthereviewprocess,estimatedrecoveriesofprioryearunpaidobligations
rangefrom$1.6billion$2.7billion(recorded)for2013andrangefrom$1.2billion$2.3billion(not
recorded)for2012. Theeffectofrecordingthe$2.7billionestimate ofrecoveriesofprioryearunpaid
obligationsin2013wastoincreaseRecoveriesofPriorYearUnpaidObligationsandincrease
ObligationsIncurredintheCombinedStatementofBudgetaryResources. Theestimatedrangeof
recoveriesofprioryearunpaidobligationswasdisclosedbutnotrecordedin2012. Itwasthefirstyear
VAimplementedamanualreviewprocess,underagreementwithandguidancefromOMB,toidentify
andquantifytransactionsthatwouldbeaccountedforasandmeetthedefinitionofaprioryear
recovery. Testingandverificationoftheidentifiedtransactionsasprioryearunpaidobligationswasstill
beingformulated. Asaresult,noprobableamountcouldbequantified;however,therangeofprior
yearunpaidobligationscouldbereasonablyestimatedanddisclosed. Asaresult,therewasnoeffecton
RecoveriesofPriorYearUnpaidObligationsandObligationsIncurredintheCombinedStatementof
BudgetaryResourcesin2012.
For2013and2012,VAappropriationsweresubjectedtoarescissionof$2.0billionand$1.8billion,
respectively,undertheprovisionsofP.L.1136,ConsolidatedandFurtherContinuingAppropriationsAct,
2013andP.L.11210,TheDepartmentofDefenseandFullYearContinuingAppropriationsAct,2012,
respectively.
BorrowingAuthority
TheLoanGuarantyProgramhadborrowingauthorityof$249millionand$1.32billionasofSeptember
30,2013and2012,respectively. Theinterestratesontheborrowingauthorityrangefrom2.64to3.49
percentfor2013and2012. Principalrepaymentisexpectedovera30yearperiodfromthedateof
issuanceofdebt. DirectLoansundertheVocationalRehabilitationProgramhadborrowingauthorityof
$2.8millionand$3.13millionasofSeptember30,2013and2012,respectively. Theinterestrateonthe
borrowingauthoritywas1.00percentfor2013and2012. Principalrepaymentisexpectedovera2year
periodfromthedateofissuanceofdebt. TheLoanGuarantyProgramborrowingisrepaidtoTreasury
throughtheproceedsofportfolioloancollections,fundingfees,andthesaleofloanstohousing
trusts. TheVocationalRehabilitationProgramloansgenerallyhadadurationofoneyear,and
repaymentwasmadefromoffsettingcollections.
Notes to the Consolidated Financial Statements Part III - 74














PermanentIndefiniteAppropriations
VAhasfourhousingbenefitprogramsthathavepermanentandindefiniteappropriationstocover
unexpectedlosses.
UseofUnobligatedBalancesofBudgetAuthority
AvailableunobligatedbalancesontheStatementofBudgetaryResources(SBR)arecomprisedofcurrent
fiscalyearapportionedfundsforannual,multiyear,andnoyearappropriationsfromCongressaswell
asrevolvingandtrustfunds. Otherbalancesnotavailablearecomprisedofunobligatedfundsthatwere
notapportionedbyOMBfor2013useandappropriatedunobligatedamountsthathaveexpired,which
generallyarenotavailablefornewobligations,butcanbeusedtoincreaseexistingobligationsunder
certaincircumstances.
UnobligatedVAfundsareavailableforusesdefinedinVA's2013AppropriationLaw(P.L.1136). These
purposesinclude: Veteransmedicalcare,research,education,constructionandmaintenanceofVA
buildings,Veteransanddependentsbenefits,Veteranslifeinsurance,loanguarantyprograms,Veterans
burialbenefits,andadministrativefunctions. Variousobligationlimitationsareimposedonindividual
VAappropriations.
ExplanationofDifferencesbetweentheStatementofBudgetaryResourcesandtheBudgetoftheUS
Government
Estimatedrecoveriesofprioryearunpaidobligationstotaling$2.7billionwererecordedasanincrease
inRecoveriesofPriorYearUnpaidObligationsandanincreaseinObligationsIncurredinthe
CombinedStatementofBudgetaryResourcesfortheyearendedSeptember30,2013. VAssystems
requireextensivemodificationtoproperlyaccountfortheprioryearrecoveriesinthebaseleveloffund
accountandUSSGLdetailtoconformwithOMBandTreasuryguidelines. VAhascompletedthe
technicalassessmentanddetaileddesignrequirementstomodifyitscoreaccountingsystemandhas
beguntheprogrammingphaseofthedevelopment. Whenanautomatedsystemssolutionis
implemented,VAwillbeenabledtoproperlyidentifyprioryearrecoveries,systematicallymonitor
reapportionedbudgetauthorityandtrackbothforinternalandexternalfinancialreporting. Untilthat
time,VAhasimplementedamanualreviewprocesstoidentifyprioryearrecoveriesandquantifyan
estimatetoberecordedattheVAcombinedlevel,notatthedetailedfundaccountlevel. Therefore,the
adjustmentshavenotbeenreflectedintheFACTSIIdatausedtopreparethePresidentsBudget.
UndeliveredOrdersattheEndofaPeriod
Theamountofbudgetaryresourcesobligatedforundeliveredordersattheendof2013and2012was
$16.8billionand$12.7billion,respectively.
ContributedCapital
Theamountofcontributedcapitalreceivedduring2013consistedofdonationsintheamountof$50.4
milliontotheGeneralPostFund,$0.2milliontotheNationalCemeteryGiftFundand$1.1milliontothe
SupplyFund. Theamountofcontributedcapitalreceivedduring2012consistedofdonationsinthe
amountof$43.7milliontotheGeneralPostFund,$1.4milliontotheNationalCemeteryGiftFundand
$1.3milliontotheSupplyFund.
Notes to the Consolidated Financial Statements Part III - 75











































23. ReconciliationofNetCostofOperationstoBudget
Theobjectiveoftheinformationshownbelowistoprovideanexplanationofthedifferencesbetween
budgetaryandfinancial(proprietary)accounting. Thisisaccomplishedbymeansofareconciliationof
budgetaryobligationsandnonbudgetaryresourcesavailabletoVAwithitsnetcostofoperations.
DEPARTMENTOFVETERANSAFFAIRS
RECONCILIATIONOFNETCOSTSOFOPERATIONSTOBUDGET
FortheYearsEndedSeptember30, 2013 2012
ResourcesUsedtoFinanceActivities
ObligationsIncurred $ 155,590 $ 142,664
LessSpendingAuthorityfromOffsettingCollectionsandAdjustments (12,710) (9,697)
ObligationsNetofOffsettingCollectionsandAdjustments 142,880 132,967
LessOffsettingReceipts (3,431) (3,465)
NetObligations 139,449 129,502
DonationsofProperty 22 23
ImputedFinancing 1,971 1,795
OtherFinancingSources (125) (367)
TotalResourcesUsedtoFinanceActivities 141,317 130,953
ResourcesThatDoNotFundNetCostofOperations
ChangeinAmountofGoods,ServicesandBenefitsOrderedBut
NotYetProvided (725) (1,942)
ResourcesthatFinancetheAcquisitionofAssets (6,684) (6,921)
ResourcesthatFundExpensesRecognizedinPriorPeriods (1,598) (2,332)
BudgetaryOffsettingCollectionsandReceiptsthatDoNot
AffectNetCostofOperations 4,665 4,892
TotalResourcesthatDoNotFundNetCostofOperations (4,342) (6,303)
TotalResourcesUsedtoFinancetheNetCostofOperations 136,975 124,650
CostsThatDoNotRequireResourcesintheCurrentPeriod
IncreaseinAnnualLeaveLiability 60 51
Increase(Decrease)inEnvironmentalandDisposalLiability (28) (33)
ReestimatesofCreditSubsidyExpense 1,406 563
IncreaseinExchangeRevenueReceivablefromthePublic (318) 39
Increase(Decrease)inVeteransBenefitsandOtherNoncurrentLiabilities 213,666 228,418
DepreciationandAmortization 2,103 1,895
BadDebtsRelatedtoUncollectibleNonCreditReformReceivables 188 284
LossonDispositionofAssets 100 101
Other (147) (111)
TotalCostsThatDoNotRequireResourcesintheCurrentPeriod 217,030 231,207
NetCost(Benefit)ofOperations $ 354,005 $ 355,857
Notes to the Consolidated Financial Statements Part III - 76







Statements.
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Department of
Veterans Affairs
Audit of VAs
Consolidated Financial
Statements for Fiscal
Years 2013 and 2012
November 27, 2013
13-01316-22
Part III - 77
Part III - 78







































CliftonLarsonAllen LLP
www.cliftonlarsonallen.com
INDEPENDENT AUDITORS REPORT
To the Secretary
and Inspector General
Department of Veterans Affairs
In our audits of the fiscal years (FY) 2013 and 2012 financial statements of the Department of
Veterans Affairs (VA), we found:
The financial statements are presented fairly, in all material respects, in accordance with
accounting principles generally accepted in the United States of America (U.S.);
One material weakness in internal control over financial reporting as of September 30,
2013; and
Two instances of reportable noncompliance with certain provisions of laws and
regulations tested, including the requirements of the Federal Financial Management
Improvement Act of 1996 (FFMIA), as of September 30, 2013.
The following sections and exhibits discuss in more detail: (1) these conclusions,
(2) Managements Discussion and Analysis (MD&A), other required supplementary information
(RSI), and other information included with the financial statements, (3) managements
responsibilities, (4) our responsibilities, (5) the current status of prior year findings, and
(6) managements response to FY 2013 findings.
Report on the Financial Statements
We have audited the accompanying consolidated financial statements of VA, which comprise
the consolidated balance sheets as of September 30, 2013 and 2012, and the related
consolidated statements of net cost and changes in net position, and the combined statements
of budgetary resources, for the years then ended, and the related notes to the financial
statements. The objective of our audits was to express an opinion on the fairness of these
financial statements.
Managements Responsibility for the Financial Statements
VA management is responsible for the (1) preparation and fair presentation of these financial
statements in accordance with accounting principles generally accepted in the U.S.,
(2) preparation, measurement, and presentation of the RSI in accordance with the prescribed
accounting principles generally accepted in the U.S., (3) preparation and presentation of other
information in documents containing the audited financial statements and auditors report, and
consistency of that information with the audited financial statements and the RSI; (4) design,
implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to
fraud or error.
Independent Auditor's Report Part III - 79







































INDEPENDENT AUDITORS REPORT (Continued)
Auditors Responsibility
Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the U.S.
and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States. Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the financial statements
are free from material misstatement. We also conducted our audits in accordance with Office of
Management and Budget (OMB) Bulletin No. 14-02, Audit Requirements for Federal Financial
Statements, (OMB Bulletin 14-02).
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditors
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entitys preparation and fair presentation of the
financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
entitys internal control. Accordingly, we express no such opinion. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
Opinion on the Financial Statements
In our opinion, the financial statements referred to above present fairly, in all material respects,
the financial position of the Department of Veterans Affairs as of September 30, 2013 and 2012,
and its net costs, changes in net position, and budgetary resources for the years then ended, in
accordance with accounting principles generally accepted in the U.S.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the U.S. require that VAs MD&A and other RSI
(including stewardship information) be presented to supplement the financial statements. Such
information, although not a part of the financial statements, is required by the Federal
Accounting Standards Advisory Board (FASAB), who considers it to be an essential part of
financial reporting for placing the financial statements in an appropriate operational, economic,
or historical context. We have applied certain limited procedures to the MD&A and other RSI in
accordance with auditing standards generally accepted in the U.S., which consisted of inquiries
of management about the methods of preparing the information and comparing the information
for consistency with management's responses to our inquiries, the financial statements, and
other knowledge we obtained during our audits of the financial statements. We do not express
an opinion or provide any assurance on the information because the limited procedures do not
provide us with sufficient evidence to express an opinion or provide any assurance.
Independent Auditor's Report Part III - 80










































INDEPENDENT AUDITORS REPORT (Continued)
Other Information
All other sections exclusive of the consolidated financial statements, MD&A and other RSI as
listed in the table of contents contain a wide range of information, some of which is not directly
related to the financial statements. This information is presented for purposes of additional
analysis and is not a required part of the financial statements or RSI. The information has not
been subjected to the auditing procedures applied in the audits of the financial statements, and
accordingly, we do not express an opinion or provide any assurance on it.
Report on Internal Control over Financial Reporting and on Compliance and Other
Matters Based on an Audit of Financial Statements Performed in Accordance with
Government Auditing Standards
Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered VAs internal
control over financial reporting (internal control) to determine the audit procedures that are
appropriate in the circumstances for the purpose of expressing our opinion on the financial
statements, but not for the purpose of expressing an opinion on the effectiveness of VAs
internal control or on managements assertion on internal control included in the MD&A.
Accordingly, we do not express an opinion on the effectiveness of VAs internal control or on
managements assertion on internal control included in the MD&A.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to
prevent, or detect and correct, misstatements on a timely basis. A material weakness is a
deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable
possibility that a material misstatement of the VAs financial statements will not be prevented, or
detected and corrected on a timely basis. A significant deficiency is a deficiency, or combination
of deficiencies, in internal control that is less severe than a material weakness, yet important
enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the preceding
paragraph and was not designed to identify all deficiencies in internal control that might be
material weaknesses or significant deficiencies and therefore, material weaknesses or
significant deficiencies may exist that were not identified. However, we identified certain
deficiencies in internal control described below and in Exhibit A that we consider to be a
material weakness.
Information Technology Security Controls (Repeat Condition)
VA continues to have control weaknesses in Configuration Management, Access
Controls, Security Management, and Contingency Planning.
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether VAs financial statements are free
from material misstatement, we performed tests of its compliance with certain provisions of laws
and regulations, noncompliance with which could have a direct and material effect on the
determination of financial statement amounts. However, providing an opinion on compliance
with those provisions was not an objective of our audit, and accordingly, we do not express such
Independent Auditor's Report Part III - 81










































INDEPENDENT AUDITORS REPORT (Continued)
an opinion. The results of our tests, exclusive of those required by FFMIA as discussed below,
disclosed instances of noncompliance and other matters, described below and in Exhibit B, that
are required to be reported in accordance with Government Auditing Standards, issued by the
Comptroller General of the United States.
Noncompliance with the Debt Collection Act of 1996
VBA did not charge interest or administrative costs on delinquent payments from
veterans related to certain receivables for Compensation, Pension, and
Education.
Systems Compliance with FFMIA Requirements
Under FFMIA, we are required to report whether the financial management systems used by VA
substantially comply with the (1) Federal financial management systems requirements, (2)
applicable Federal accounting standards, and (3) the United States Standard General Ledger
(USSGL) at the transaction level. To meet this requirement, we performed tests of compliance
with FFMIA Section 803(a) requirements. However, providing an opinion on compliance with
FFMIA was not an objective of our audit, and accordingly, we do not express such an opinion.
Except for matters described in Exhibit B, where VA did not substantially comply with applicable
Federal financial management systems requirements, the results of our tests of FFMIA
disclosed no instances in which VAs financial management systems did not substantially
comply with applicable Federal accounting standards, or the USSGL at the transaction level.
Managements Responsibility for Internal Control and Compliance
VA management is responsible for (1) evaluating the effectiveness of internal control over
financial reporting based on criteria established under the Federal Managers Financial Integrity
Act (FMFIA), (2) providing a statement of assurance on the overall effectiveness of internal
control over financial reporting, (3) ensuring VAs financial management systems are in
substantial compliance with FFMIA requirements, and (4) ensuring compliance with other
applicable laws and regulations.
Auditors Responsibilities
We are responsible for: (1) obtaining a sufficient understanding of internal control over financial
reporting to plan the audit, (2) testing whether VAs financial management systems substantially
comply with the FFMIA requirements referred to above, (3) testing compliance with certain
provisions of laws and regulations that have a direct and material effect on the financial
statements and applicable laws for which OMB Bulletin 14-02 requires testing, and (4) applying
certain limited procedures with respect to the MD&A and other RSI.
We did not evaluate all internal controls relevant to operating objectives as broadly established
by the FMFIA, such as those controls relevant to preparing statistical reports and ensuring
efficient operations. We limited our internal control testing to testing controls over financial
reporting. Because of inherent limitations in internal control, misstatements due to error or fraud,
losses, or noncompliance may nevertheless occur and not be detected. We also caution that
projecting our audit results to future periods is subject to risk that controls may become
inadequate because of changes in conditions or that the degree of compliance with controls
may deteriorate. In addition, we caution that our internal control testing may not be sufficient for
other purposes.
Independent Auditor's Report Part III - 82
























INDEPENDENT AUDITORS REPORT (Continued)
We did not test compliance with all laws and regulations applicable to VA. We limited our tests
of compliance to certain provisions of laws and regulations that have a direct and material effect
on the financial statements and those required by OMB Bulletin 14-02 that we deemed
applicable to VAs financial statements for the fiscal year ended September 30, 2013. We
caution that noncompliance with laws and regulations may occur and not be detected by these
tests and that such testing may not be sufficient for other purposes. Also, our work on FFMIA
would not necessarily disclose all instances of noncompliance with FFMIA requirements.
Managements Response to Findings
Management has presented a response to the findings identified in our report. We did not audit
VAs response and, accordingly, we express no opinion on it.
Status of Prior Years Control Deficiencies and Noncompliance Issues
We have reviewed the status of VAs corrective actions with respect to the findings included in
the prior years Independent Auditors Report, dated November 8, 2012. The status of prior year
findings is presented in Exhibit C.
Purpose of the Report on Internal Control over Financial Reporting and the Report on
Compliance and Other Matters
The purpose of the Report on Internal Control over Financial Reporting and the Report on
Compliance and Other Matters sections of this report is solely to describe the scope of our
testing of internal control and compliance and the result of that testing, and not to provide an
opinion on the effectiveness of VAs internal control or on compliance. These reports are an
integral part of an audit performed in accordance with Government Auditing Standards in
considering VAs internal control and compliance. Accordingly, these reports are not suitable for
any other purpose.
Calverton, Maryland
November 26, 2013
Independent Auditor's Report Part III - 83








































EXHIBIT A
Material Weakness
Information Technology Security Controls (Repeat Condition)
The VA relies extensively on Information Technology (IT) system controls to initiate, authorize,
record, process, summarize, and report financial transactions in the preparation of its financial
statements. Internal controls over these operations are essential to ensure the integrity,
confidentiality, and reliability of critical data while reducing the risk of errors, fraud, and other
illegal acts. Our review of IT controls covered general and selected business process
application controls across 22 selected VA medical centers, regional offices and data centers.
As noted in prior years audits, VA continues to have control weaknesses in Security
Management, Access Controls, Configuration Management, and Contingency Planning. These
controls are designed to protect mission-critical systems from unauthorized access, alteration,
or destruction.
Our current year audit identified security weaknesses that were corrected in some locations and
for certain control activities. Examples of VAs improvements in its IT control environment
include continued implementation of a Continuous Readiness in Information Security Program
(CRISP), designed to ensure continuous monitoring year-round. As part of the CRISP initiative,
we noted continued improvements related to role-based and security awareness training,
contingency plan testing, reducing the number of individuals with outdated background
investigations, and improving data center web application security. In addition, VA implemented
predictive scanning in February 2013 allowing for the identification of vulnerabilities across field
offices. In August 2013, VA also implemented an IT Governance, Risk and Compliance (GRC)
Tool to improve the process for assessing, authorizing, and monitoring the security posture of
the agency. However, these controls require time to mature and show evidence of their
effectiveness. Accordingly, we continue to see information system security deficiencies similar
in type and risk level to our findings in prior years and an overall inconsistent implementation of
the security program. Moving forward, VA needs to ensure a proven process is in place across
the agency. VA also needs to continue to address control deficiencies that exist in other areas
across all VA locations.
We continue to find control deficiencies in Security Management, Access Controls,
Configuration Management, and Contingency Planning. Most importantly, we continue to
identify significant technical weaknesses in databases, servers, and network devices that
support transmitting financial and sensitive information between VAs medical centers, regional
offices and data centers. This is the result of an inconsistent application of vendor patches that
could jeopardize the data integrity and confidentiality of VAs financial and sensitive information.
VA has made progress in deploying current patches; however, older patches and previously
identified vulnerabilities continue to persist on networks. Even though VA has made some
progress in these areas, more progress must be made to improve deployment of patches that
will mitigate security vulnerabilities and to implement a centralized process that is consistent
across all field offices.
Many of these weaknesses can be attributed to an inconsistent enforcement of an agency-wide
information security program across the enterprise and ineffective communication between VA
management and the individual field offices. Therefore, VA needs to improve its performance
monitoring to ensure controls are operating as intended at all facilities and communicate
security deficiencies to the appropriate personnel, who will implement corrective actions.
Our assessment of the general and application controls of VAs key IT infrastructure and
financial systems identified the following conditions:
Independent Auditor's Report Part III - 84






























EXHIBIT A
Material Weakness
Conditions:
Configuration Management
Systems including key databases supporting financial applications were not timely
patched or securely configured to mitigate known and unknown information security
vulnerabilities. The deployment of vendor patches to mitigate the vulnerabilities was
decentralized, inconsistent, and not effective across all VA facilities. For example, we
noted large variances in the number of critical and high level vulnerabilities across all
sites.
Baseline configurations, including implementation of the U.S. Government Configuration
Baseline standards, were not consistently implemented to mitigate significant system
security risks and vulnerabilities across all facilities.
Several VA organizations shared the same local network at some medical centers and
data centers; however, systems were not under the common control of the local site.
These organizations, or guest networks, had significant critical or high level
vulnerabilities that weaken the overall security posture of the local sites.
Change management policies and procedures for authorizing, testing, and approving
system changes were not consistently implemented for networks and mission critical
systems.
No formal processes for monitoring, preventing installation of, and removing
unauthorized application software on agency systems.
Access Controls
Password standards were not consistently implemented and enforced across multiple
VA systems, including the network domain, databases, and key financial applications. In
addition, multi-factor authentication for remote access had not been implemented across
the agency.
Inconsistent reviews of networks and financial application user access resulted in
numerous generic, system, terminated, and inactive user accounts that were not
removed from the system.
Proper completion of user access requests was not consistently performed to eliminate
conflicting roles and enforce principles of least system privilege.
We noted a lack of monitoring of access for individuals with elevated application
privileges within a major applications production environment. In addition, some users
had access to development environments that did not require this access to perform
their respective job duties.
There are no policy and procedures restricting privileged remote access from foreign
countries that pose a significant risk to VA systems and networks.
The identification, notification, and remediation of security incidents was not consistently
implemented to ensure incidents were resolved timely. In addition, network security
event logs were not consistently maintained or reviewed across all facilities.
Independent Auditor's Report Part III - 85





































EXHIBIT A
Material Weakness
Security Management
Security management documentation, including the risk assessments and system
security plans, were not completed properly and did not accurately reflect the current
system environment.
A contractor application and general support system did not have a completed
assessment and authorization package consisting of a system security plan, risk
assessment, or authorization letter to operate. In addition, VA did not manage and
monitor its systems hosted at a cloud service provider.
Background reinvestigations were not performed timely and tracked effectively. In
addition, personnel were not receiving the proper level of investigation for their position
sensitivity level.
Plan of Action and Milestones (POA&Ms) were not completed by their milestone dates
and not updated to reflect changes to milestones. POA&M closures were not supported
with adequate documentation. Additionally, prior year audit findings and risk assessment
results were not included within the POA&M tracking system.
Contingency Planning
Backup tapes were not encrypted prior to being sent to offsite storage at selected
facilities and data centers.
A significant loss of records occurred due to inadequate backup and change
management procedures.
Criteria:
OMB Circular A-130, Appendix III, Security of Federal Automated Information Resources, states
that Agencies shall implement and maintain a program to assure that adequate security is
provided for all agency information collected, processed, transmitted, stored, or disseminated in
general support systems and major applications.
The Federal Information Security Management Act of 2002 (FISMA) requires that each agency
develop an agency-wide information security program that includes:
Periodic assessments of risk, including the magnitude of harm that could result from the
unauthorized access, use, disclosure, disruption, modification, or destruction of
information and information systems that support the operations and assets of the
organization;
Policies and procedures that are based on risk assessments, cost-effectively reduce
information security risks to an acceptable level and address information security
throughout the life cycle of each organizational information system;
Plans for providing adequate information security for networks, facilities, information
systems, or groups of information systems, as appropriate;
Security awareness training to inform personnel of the information security risks
associated with their activities and their responsibilities in complying with organizational
policies and procedures designed to reduce these risks;
Periodic testing and evaluation of the effectiveness of information security policies,
procedures, practices, and security controls to be performed with a frequency depending
on risk, but no less than annually;
Independent Auditor's Report Part III - 86







































EXHIBIT A
Material Weakness
A process of planning, implementing, evaluating, and documenting remedial actions to
address any deficiencies in the information security policies, procedures, and practices
of the organization;
Procedures for detecting, reporting, and responding to security incidents; and
Plans and procedures for continuity of operations for information systems that support
the operations and assets of the organization.
Cause:
Dispersed locations, continued reorganization, and diversity of applications have impacted
facilities and managements ability to consistently remediate IT security deficiencies across the
enterprise. For example, VAs complex and disjointed financial system architecture has resulted
in a lack of common system security controls and inconsistent maintenance of IT mission critical
systems. Consequently, VA continues to be challenged with consistent and proactive
enforcement of established policies and procedures throughout its geographically dispersed
portfolio of legacy applications and newly implemented systems. The continued reorganization
of components within VA, such as centralization of the data centers and shift of control from the
medical centers to regional levels, has caused delays in communicating established policies
with personnel throughout VA. In addition, VA lacks an effective and consistent corrective action
process for addressing known internal security vulnerabilities on databases and networks
infrastructures.
Effect:
By not effectively implementing and enforcing IT policies and procedures, there is an increased
risk that financial and personally identifiable information may be inadvertently or deliberately
misused and may result in improper disclosure or theft. Additionally, inappropriate or
unnecessary changes may be made to key financial information systems, which could result in
materially misstated financial information.
Recommendations:
The Assistant Secretary for Information and Technology should continue to analyze and
prioritize remediation efforts to accomplish security and control objectives. Key tasks should
include, but are not limited to:
Implement a process to ensure all VA organizations are included in the vulnerability
management program and implement improved mechanisms to continuously identify
and remediate security deficiencies on VAs network infrastructure, database platforms,
and Web application servers.
Implement an improved patch and vulnerability management program to address
security deficiencies identified during our assessments of VAs database platforms and
network infrastructure.
Implement improved processes to ensure that workstations are consistently patched,
updated and configured to minimize security risks and are in compliance with U.S.
Government Configuration Baseline standards.
Consolidate the security responsibilities for guest networks under a common control for
each site.
Independent Auditor's Report Part III - 87


































EXHIBIT A
Material Weakness
Implement improved change control procedures to ensure the consistent approval and
testing during development of system changes for VA financial applications and
networks.
Develop a comprehensive list of approved and unapproved software and implement a
process for monitoring, preventing installation, and removing unauthorized application
software on agency devices.
Implement improved processes to ensure compliance with VA policy for password and
security configuration baselines on domain controls, operating systems, databases,
applications, and network devices.
Implement two-factor authentication for remote access throughout the agency.
Implement improved processes for the periodic review of network and financial
applications to identify and remove generic and inactive accounts on systems and
networks. Recertify that access remains appropriate and is restricted to necessary
personnel.
Implement improved processes to ensure the proper completion and retention of the
user access request forms that enforce principles of least system privilege, prior to
system access being granted.
Implement access monitoring within production environments for individuals with
elevated system privileges.
Implement policies and procedures to restrict privileged remote access from foreign
countries that pose a significant risk to VA systems and networks.
Implement more effective agency-wide incident response procedures to ensure timely
notification and resolution of computer security incidents in accordance with VA set
standards. In addition, develop a system of metrics that can objectively measure
organizational incident response capabilities; such as timeframes for remediation and
closure of security events, with an emphasis on higher risk security related incidents.
Implement a process for monitoring network logs and ensuring audit logs are maintained
in accordance with VA policy.
Implement improved processes for reviewing and updating key security documentation,
including risk assessments and system security plans on an annual basis. Such updates
will ensure all required information is included and accurately reflects the current
environment, new security risks, and applicable federal standards.
Implement processes to ensure contractors develop and complete Security Authorization
Packages for VA systems including a System Security Plan, Risk Assessment, Security
Assessment Report, POA&Ms, and Authorization Decision Document.
Implement improved processes for monitoring systems hosted at contractor sites,
including cloud service providers.
Implement improved processes to ensure appropriate levels of background
investigations are completed for all applicable VA employees and contractors in a timely
manner.
Implement improved processes to ensure local facilities track reinvestigations for
employees and contractors in high risk positions and the Security Investigation Center
initiates all reinvestigations in a timely manner. Additionally, implement processes for
local facilities to accurately and timely report any changes in position sensitivity levels.
Furthermore, local facilities should ensure position descriptions are appropriately marked
for position risk and sensitivity levels in accordance with the Office of Personnel
Management Position Designation Automation Tool.
Implement improved processes to ensure closed POA&Ms are adequately supported
with appropriate documentation. In addition, implement improved processes to ensure
Independent Auditor's Report Part III - 88








EXHIBIT A
Material Weakness
security weaknesses and corrective action plans identified during system reviews are
included in POA&M reports.
Implement processes to ensure the encryption of backup data prior to transferring
storage media offsite. Additionally, implement improved change control processes to
ensure changes to backup policies are appropriately tested, documented, and approved.
These processes should ensure that backup reports include all critical data and that data
are effectively captured during system backups.
Independent Auditor's Report Part III - 89








































EXHIBIT B
Compliance Findings
1. Noncompliance with FFMIA
Financial Management Systems
We have concluded that VAs financial management systems do not substantially comply with
the Federal financial management systems requirements as required by FFMIA Section 803(a)
for the following reasons:
As reported in our report on internal control over financial reporting, VA has a material
weakness over Information Technology Security Controls. This is a repeat finding.
VAs complex and disjointed financial system architecture has resulted in a lack of
common system security controls and inconsistent maintenance of IT mission critical
systems. Consequently, VA continues to be challenged with consistent and proactive
enforcement of established policies and procedures throughout its geographically
dispersed portfolio of legacy applications and newly implemented systems. As a result,
certain financial statement line items may not be readily re-created and supported by
audit trails of detailed financial transactions. Not all current systems can be readily
accessed and used without extensive manipulation, and manual processing and
reconciliation. Some examples of issues we found include:
o The Financial Management System (FMS) is not properly recording recoveries or
downward adjustments in the proper SGL accounts. In addition, it is not recording the
apportionment, allotment, suballotment and distribution of recovered funds as
required by OMB Circular A-11.
o The Benefits Delivery Network (BDN) system is not designed to keep a complete
history of education benefit related transactions. Detailed transaction data on Chapter
34 and 35 education benefit expense could not be retrieved.
o The Fixed Asset System (FAS) cannot readily provide reports on additions, deletions
or current depreciation to support effective and efficient reconciliation of account
balances and the investigation of discrepancies.
o The Veterans Health Information Systems and Technology Architecture (VistA) does
not provide VA management with the ability to effectively and efficiently monitor
Medical Care Collection Fund (MCCF) activities at the transaction level. Although
billing and collection functions have been centralized at the Consolidated Patient
Accounting Centers (CPACs) to achieve better revenue cycle management and
improve VAs internal controls and quality assurance over its revenue processes,
CPAC personnel cannot generate combined reports for all the facilities under their
purview. Reports must be separately generated for individual medical facilities, which
lead to inefficiencies in operations and financial management. Further, a nationwide
report at a sufficient level of detail cannot be generated to aggregate the MCCF
transactions residing in the multiple instances of VistA used throughout VA.
Independent Auditor's Report Part III - 90

















EXHIBIT B
Compliance Findings
2. Noncompliance with the Debt Collection Improvement Act
Condition:
We tested various sample transactions for compliance with the Debt Collection Improvement
Act of 1996 (DCIA), and noted the following exceptions:
Interest and administrative costs are required to be charged to VAs delinquent debtors.
The rates are determined by the Treasury on a yearly basis. However, for 88 sample
items out of a total of 90 sample selections tested, VBA did not charge interest or
administrative costs on delinquent payments from veterans related to certain receivables
for Compensation, Pension, and Education.
Criteria:
Public Law 96-466 and Title 38 U.S.C 501(a) and 5315, and 38 CFR 1.919 require VA to
charge interest and administrative costs on any amount owed to the United States.
Cause:
This has been a long standing issue and is based on a former VA Deputy Secretarys instruction
in July 1992 that VA not charge interest or administrative costs on veteran debts.
Effect:
VA is noncompliant with the Debt Collection Improvement Act of 1996.
Recommendation:
We recommend that VA:
Implement policies and procedures to assess applicable interest and administrative
costs or propose a legislative remedy to request a waiver of these requirements.
Other Matters
VA is engaged in one active investigation of a possible violation of the Antideficiency
Act, 31 U.S.C. 1341(a), involving the obligation of funds from the Joint Department of
Defense/VA Medical Facility Demonstration Fund in excess of an apportionment in
FY 2012.
The VA Office of Inspector General, in a report dated March 15, 2013, reported that VA
did not fully comply in FY 2012 with the Improper Payments Elimination and Recovery
Act, (IPERA), 31 U.S.C. 3321.
Independent Auditor's Report Part III - 91










EXHIBIT C
Status of Prior Year Findings
Our assessment of the current status of the recommendations related to findings identified in
the prior year audit is presented below:
Type of Finding FY 2012 Finding
Fiscal Year
2013 Status
Material Weakness Information Technology Security Controls Repeat; see FY
2013 Material
Weakness
Significant Deficiency Undelivered Orders Resolved in FY
2013
Compliance Finding Noncompliance with FFMIA Repeat See
Compliance
Finding #1
Compliance Finding Noncompliance with Debt Collection
Improvement Act
Repeat See
Compliance
Finding #2
Independent Auditor's Report Part III - 92
CFO's Response to the Independent Auditor's Report Part III - 93






RequiredSupplementaryStewardshipInformation
(Unaudited)
(dollarsinmillions,unlessotherwisenoted)
1. NonFederalPhysicalProperty
Annually,VAprovidesfundingtostategovernmentsforthepurchase,construction,ormajorrenovation
ofphysicalpropertyownedbythestate. Inmostcasesthesegrantprogramsinvolvematchingfunds
fromthestates.
GrantProgramCosts
YearsEndedSeptember30, 2013 2012 2011 2010 2009
State Extended Care Facilities $ 180 $ 66 $ 54 $ 242 $ 163
Veterans Cemeteries (NCA) 36 47 44 49 40
TotalGrantProgramCosts $ 216

$ 113 $ 98 $ 291 $ 203





TheExtendedCareFacilitiesGrantProgramassistsstatesinacquiringfacilitiestoprovidedomiciliary,
nursinghome,andotherdayhealthcareforVeterans,andtoexpand,remodel,oralterexisting
buildingstoprovidedomiciliary,nursinghome,hospital,anddayhealthcareforVeteransinstate
homes. VAparticipatesintwograntinaidprogramsforstates. VAmayparticipateinupto65percent
ofthecostofconstructionoracquisitionofstatenursinghomesordomiciliariesorinrenovationsof
existingstatehomes. Overthelastfivefiscalyears,theStateHomeConstructionGrantProgramhas
awardedgrantsinexcessof$569million. VAalsoprovidesperdiempaymentforthecareofeligible
Veteransinstatehomes.
Since,thecemeteryprogramwasestablishedin1980,theVAprogramhashelpedestablish,expand,
improve,operateandmaintain89Veteranscemeteriesin44statesandterritoriesincludingtribaltrust
lands,NorthernMarianaIslands,andGuam,whichprovidedmorethan32,000burialsin2013.VAhas
awardedgrantstotalingmorethan$566million. Stateortribalorganizationsprovidethelandand
agreetooperatethecemeteries.
2. HumanCapital
Investmentinhumancapitaliscomprisedofexpensesforeducationandtrainingprogramsforthe
generalpublicthatareintendedtoincreaseormaintainnationaleconomicproductivecapacity. Itdoes
notincludeexpensesforinternalFederaleducationandtrainingofcivilianemployees.
Required Supplementary Stewardship Information Part III - 94



VeteransandDependentsEducation
YearsEndedSeptember30,
2013 2012
Program Expenses
Educationand TrainingDependentsof Veterans $ 487 $ 444
VocationalRehabilitationand Education Assistance 12,693 11,727
Administrative Program Costs 372 389
TotalProgramExpenses $ 13,552 $ 12,560
Program Outputs (Participants)
Dependent Education 89,618 94,618
VeteransRehabilitation 89,708 85,436
Veterans Education 971,597 871,188

Program Expenses

Educationand TrainingDependentsof Veterans $ 567 $ 477


VocationalRehabilitationand Education Assistance 11,259 9,031
Administrative Program Costs
TotalProgramExpenses
ProgramOutputs(Participants)
370 348
$ 12,196 $ 9,856
Dependent Education 96,078 81,974
VeteransRehabilitation 81,097 77,176
Veterans Education 822,808 634,038


VeteransandDependentsEducation
YearsEndedSeptember30,

2011 2010
Required Supplementary Stewardship Information Part III - 95

VeteransandDependentsEducation
YearsEndedSeptember30,
2009
ProgramExpenses
EducationandTrainingDependentsofVeterans $ 464
VocationalRehabilitationandEducationAssistance 4,393
AdministrativeProgramCosts 304
TotalProgramExpenses $ 5,161
ProgramOutputs(Participants)
DependentEducation 82,345
VeteransRehabilitation 72,803
VeteransEducation* 822,738
*DuetotheimplementationofthenewPost9/11GIBillduring2009,totalparticipantsintheVeteransEducation
Programfor2009mayincludetworecordsforasingleparticipantwhoswitchesfromtheMontgomeryGIBill
(MGIB)tothePost9/11GIBillmidyear.
ProgramOutcomes
VAseducationandtrainingprogramsareintendedtoprovidehighereducationtodependentsthat
mightnotbeabletoparticipateotherwise. Veteransrehabilitationandemploymentprogramsare
providedtoservicedisabledVeterans;theyaredesignedtoimproveemployabilityandpromote
independenceforthedisabled. Educationalprogramsforactivedutypersonnel,reservists,and
VeteransprovidehighereducationassistancetothosewhoareeligibleunderthenewPost9/11GIBill,
MGIBandtheVeteransEducationalAssistanceProgram. Educationandtrainingassistanceisprovided
todependentsofVeteranswhodiedofserviceconnecteddisabilityorwhoseserviceconnected
disabilitywasratedpermanentandtotal. TheVocationalRehabilitationandEmploymentprogram
providesevaluationservices,counseling,andtrainingnecessarytoassistVeteransinbecoming
employableandmaintainingemploymenttotheextentpossible. TheprogramisopentoVeteranswho
havea10percentorgreaterserviceconnecteddisabilityratingandarefoundtohaveaserious
employmenthandicap. TheVeteransEducationprogramprovideseducationalassistancetoeligible
ServicemembersandVeterans,andeligiblefamilymembers.
Required Supplementary Stewardship Information Part III - 96






3. HealthProfessionsEducation
HealthProfessionsEducation
YearsEndedSeptember30,
2013 2012 2011 2010 2009
ProgramExpenses
PhysicianResidentsandFellows $ 692 $ 663 $ 637 $ 584 $ 547
AssociatedHealthResidentsandStudents 164 153 114 113 99
InstructionalandAdministrativeSupport 856 851 819 794 707
TotalProgramExpenses $ 1,712 $ 1,667 $ 1,570 $ 1,491 $ 1,353
ProgramOutputs
HealthProfessionsRotatingThroughVA:
PhysicianResidentsandFellows
38,106 37,104 36,984 36,600 35,099
MedicalStudents
20,128 21,502 20,516 21,267 20,567
NursingStudents
25,948 32,349 25,931 33,580 31,380
AssociatedHealthResidentsandStudents
33,228 25,839 31,869 23,416 22,916
TotalProgramOutcomes 117,500 116,794 115,300 114,863 109,962
ProgramOutcomes
Title38U.S.C.mandatesthatVAassistinthetrainingofhealthprofessionalsforitsownneedsandthose
oftheNation. TheVHAconductseducationandtrainingprogramstoenhancethequalityofcare
providedtoVeteranswithintheVAhealthcaresystem. Buildingonthelongstandingpartnerships
betweenVAandtheNationsacademicinstitutions,VAplaysaleadershiproleindefiningtheeducation
offuturehealthcareprofessionalstomeetthechangingneedsoftheNationshealthcaredelivery
system.
VAseducationmissioncontributestohighqualityhealthcareofVeteransbyprovidingaclimateof
scientificinquiryandevidencebasedpractice;rapidapplicationofmedicaladvances;supervised
traineeswhoprovideclinicalcare;andtherecruitmentofhighlyqualifiedhealthcareprofessionals.
Required Supplementary Stewardship Information Part III - 97


4. ResearchandDevelopment(R&D)
Investmentsinresearchanddevelopmentcomprisethoseexpensesforbasicresearch,appliedresearch,
anddevelopmentthatareintendedtoincreaseormaintainnationaleconomicproductivecapacityor
yieldotherbenefits.
ProgramExpense
YearEndedSeptember30,2013
Basic Applied Development Total
Medical Research Service $ 192.0 $ 90.0 $ $ 282.0
RehabilitativeResearch and
Development 7.0 52.0 36.3 95.3
Health Services Research and
Development 90.0 90.0
Cooperative Studies Research
Service 40.6 75.0 115.6
Medical ResearchSupport 581.9 581.9
TotalProgramExpenses $ 239.6 $ 888.9 $ 36.3 $ 1,164.8

ProgramExpense
YearEndedSeptember30,2012
Basic Applied Development Total
Medical Research Service $ 191.0 $ 92.0 $ $ 283.0
Rehabilitative Researchand
Development 6.7 52.0 36.6 95.3
Health Services Research and
Development 88.6 88.6
Cooperative Studies Research
Service 40.4 75.2 115.6
Medical ResearchSupport 581.0 581.0
TotalProgramExpenses $ 238.1 $ 888.8 $ 36.6 $ 1,163.5

ProgramExpense
YearEndedSeptember30,2011
Basic Applied Development Total
Medical Research Service $ 166.1 $ 80.0 $ $ 246.1
Rehabilitative Researchand
Development 8.7 68.6 47.4 124.7
Health Services Research and
Development 85.3 85.3
Cooperative Studies Research
Service 43.2 80.3 123.5
Medical ResearchSupport 579.8 579.8
TotalProgramExpenses $ 218.0 $ 894.0 $ 47.4 $ 1,159.4

Required Supplementary Stewardship Information Part I II - 98



ProgramExpense
YearEndedSeptember30,2010
Basic Applied Development Total
Medical Research Service $ 202.9 $ 97.5 $ $ 300.4
Rehabilitative Researchand
Development 6.4 50.6 35.0 92.0
Health Services Research and
Development 91.0 91.0
Cooperative Studies Research
Service 34.0 63.6 97.6
Medical ResearchSupport 581.0 581.0
TotalProgramExpenses $ 243.3 $ 883.7 $ 35.0 $ 1,162.0

ProgramExpense
YearEndedSeptember30,2009
Basic Applied Development Total
Medical Research Service $ 164.4 $ 89.6 $ $ 254.0
Rehabilitative Researchand
Development 5.6 42.7 32.7 81.0
Health Services Research and
Development 80.0 80.0
Cooperative Studies Research
Service 33.3 61.7 95.0
Medical ResearchSupport 510.0 510.0
TotalProgramExpenses $ 203.3 $ 784.0 $ 32.7 $ 1020.0






Inaddition,VHAresearchersreceivedgrantsfromtheNationalInstitutesofHealthintheamountof
$414millionand$251millioninothergrantsduring2013. Thesegrantswentdirectlytoresearchers
andarenotconsideredpartoftheVAentity. Theyarebeingdisclosedherebutarenotaccountedforin
thefinancialstatements.
Required Supplementary Stewardship Information Part III - 99









ProgramOutputs/Outcomes
For2013,VAsR&DgeneralgoalrelatedtostewardshipwastoensurethatVAsPreclinicalResearch
andClinicalResearchProgram(excludingCSP)mettheneedsoftheVeteranpopulationandcontributed
totheNationsknowledgeaboutdiseaseanddisability. Targetlevelswereestablishedforthe: (1)
percentoffundedresearchprojectsrelevanttoVAshealthcaremissionindesignatedresearchareas
and(2)numberofresearchanddevelopmentprojects. Strategiesweredevelopedinordertoensure
thatperformancetargetswouldbeachieved.
ResearchandDevelopmentMeasuresActual
YearsEndedSeptember30,



2013 2012 2011 2010 2009
PercentofFundedResearchProjectsRelevanttoVA's
HealthCareMission 100.0% 100.0% 100.0% 100.0% 100.0%
NumberofResearchandDevelopmentProjects 2,241 2,249 2,200 2,350 2,193
VAsPreclinicalResearchandClinicalResearchPrograms(excludingCSP)goalistobethepremier
researchorganization,leadingourNationseffortstodiscoverknowledgeandcreateinnovationsthat
promoteandadvancethehealthandcareofVeteransandtheNation. Toachievethisgoal,VAtargets
researchprojectsthataddressspecialneedsofVeteranpatientsandbalanceresearchresourcesamong
basicandappliedresearchtoensureacomplementaryrolebetweenthediscoveryofnewknowledge
andtheapplicationofthesediscoveriestomedicalpractice.
Required Supplementary Stewardship Information Part III - 100









RequiredSupplementaryInformation(Unaudited)
(dollarsinmillions,unlessotherwisenoted)
1.DeferredMaintenanceandRepairs
FASABissuedSFFASNo.40,DefinitionalChangestoDeferredMaintenance;AmendingStatementof
FederalFinancialAccountingStandards6,AccountingforProperty,Plant,andEquipment,whichwas
adoptedbyVAin2012. Thisstandardclarifiesthatrepairactivitiesshouldbeincludedtobetterreflect
assetmanagementpractices,andimprovereportingondeferredmaintenanceandrepairs. Deferred
maintenanceandrepairsaremaintenanceandrepairactivitiesnotperformedwhentheyshouldhave
beenorwerescheduledtobe,therefore,areputoffordelayedforafutureperiod. Activitiesinclude
preventivemaintenance;replacementofparts,systemsorcomponents;andotheractivitiesneededto
preserveormaintainanasset. Maintenanceandrepairs,asdistinguishedfromcapitalimprovements,
excludeactivitiesthatexpandthecapacityofanassetorotherwiseupgradeittoserveneedsdifferent
from,orsignificantlygreaterthan,itscurrentuse.
FASABissuedSFFASNo.42,DeferredMaintenanceandRepairs:AmendingStatementsofFederal
FinancialAccountingStandard6,14,29and32,whichiseffectiveforperiodsbeginningafterSeptember
30,2014. Thisstandardrequiresexpandedqualitativeandquantitativedisclosureofdeferred
maintenanceandrepairs. Managementdoesnotbelievethatimplementationwillhaveamaterial
effectonfinancialstatementdisclosures.
ManagementdeterminesthelevelofserviceandconditionthatisacceptabletocarryoutVAsmission,
whichmayvarybyVAcomponentswhichincludeVHA,VBA,NCA,andIndirectAdministrativeProgram
Costs. ItisVApolicytoensurethatmedicalequipmentandcriticalfacilityequipmentsystemsare
maintained,repairedandmanagedinasafeandeffectivemanner;therefore,deferredmaintenanceand
repairsarenotapplicabletothem.
VAfacilitiesreportedtheircostestimatesfordeferredmaintenanceandrepairsbyperformingperiodic
FacilityConditionAssessmentSurveys,whichareinspectionsofproperty,plantandequipmentbasedon
generallyacceptedmethodsandstandardsconsistentlyapplied,toassignconditionratingsandestimate
costsforeachfixedassettocorrectdeficiencies. ThecostsassignedD(poor)andF(critical)ratings,
qualifyforreportingasdeferredmaintenanceandrepairs,exceptwheredeficienciesaretobereplaced
bycapitalexpenditures. SeeNotes1,9and10totheconsolidatedfinancialstatementsforadditional
informationongeneralPP&Eandheritageassets.
DeferredMaintenanceandRepairs
asofSeptember30, 2013 2012 2011
GeneralPP&E $ 6,709 $ 5,911 $ 5,719
HeritageAssets 622 740 698
TotalDeferredMaintenanceandRepairs $ 7,331 $ 6,651 $ 6,417
Required Supplementary Stewardship Information Part III - 101





2.ScheduleofBudgetaryActivityYearEndedSeptember30,2013
Total
Budgetary
Resources
Obligations
Incurred
SpendingAuthority
fromOffsetting
Collectionsand
Adjustments
Obligated
BalanceNet,
Oct.1
Obligated
BalanceNet,
Sept.30
Total
Outlays
VeteransHealth
Administration
MedicalAdmin0152 $ 5,980 $ 5,604 $ 20 $ 894 $ 1,046 $ 5,432
MedicalCare0160 45,157 43,727 189 7,477 8,633 42,382
MedicalFacilities0162 5,533 5,429 19 3,185 3,120 5,475
InformationTechnology0167 3,700 3,375 78 1,634 1,713 3,218
AllOther 6,353 3,069 496 3,029 3,411 2,191
Total $ 66,723 $ 61,204 $ 802 $ 16,219 $ 17,923 $ 58,698
VeteransBenefits
Administration
Compensation,Pension,&
BurialBenefits0102 $ 66,426 $ 65,204 $ $ 4,691 $ 5,136 $ 64,759
ReadjustmentBenefits0137 14,123 13,277 369 545 646 12,807
DirectLoanFinancing4127 146 56 147 (91)
GuaranteedLoan
Financing4129 7,981 3,028 4,196 306 345 (1,207)
NationalServiceLife
InsuranceFund8132 1,043 1,043 (1) 1,089 1,107 1,026
AllOther 7,929 5,465 1,717 907 836 3,819
Total $ 97,648 $ 88,073 $ 6,428 $ 7,538 $ 8,070 $ 81,113
NationalCemetery
Administration
Total $ 321 $ 287 $ $ 194 $ 167 $ 314
IndirectAdministrative
ProgramCosts
GeneralOperating
Expenses0151 $ 2,605 $ 2,448 $ 378 $ 403 $ 343 $ 2,130
SupplyFund4537 2,771 1,984 1,949 (513) (562) 84
AllOther (1,110) (1,106) 453 (216) (45) (1,730)
Total $ 4,266 $ 3,326 $ 2,780 $ (326) $ (264) $ 484
Reconciling Adjustments
forPriorYearRecoveries $ 2,700 $ 2,700 $ 2,700 $ $ $
Totalofall
Administrations $ 171,658 $ 155,590 $ 12,710 $ 23,625 $ 25,896 $ 140,609
Required Supplementary Stewardship Information Part III - 102















ScheduleofSpending(Unaudited)
TheScheduleofSpending(SOS)presentsanoverviewofhowandwhereVAisobligatingandspending
money. ThedatausedtopopulatethisscheduleisthesameunderlyingdatausedtopopulatetheSBR.
TheSOSpresentstotalbudgetaryresourcesandfiscalyeartodatetotalobligationsincurredforthe
reportingentity.
Thebudgetaryinformationinthisscheduleispresentedonacombinedbasisconsistentwiththe
accountlevelinformationpresentedontheReportonBudgetExecutionandBudgetaryResources(SF
133)andtheSBR. Consolidation,whichinvolveslinebylineeliminationofinterentitybalancesisnot
permittedforthisschedule.
CreditreformfinancingaccountsarematerialtoVAsfinancialstatements;therefore,thebudgetary
accountsandnonbudgetarycreditreformaccountsarepresentedseparatelysimilartothe
presentationintheSBR.
AssomeoftheimplementationandreportingdetailsoftheSOSarestillbeingdeveloped,OMBhas
directedtheschedulebeincludedinOtherInformationtopermitVAtoexploretheoptimalmeansof
implementationandreporting. VAisinterestedinpublicfeedbackfromtheusersofthefinancial
statementsregardingthepresentationandclassificationofthedatainthescheduleofspendingto
evaluatetheusefulnessoftheinformationaspresentedandpossiblealternativestothecurrent
presentation,ifnecessary,tomeetVAusers'needs. Comparativeschedulesarenotrequireduntil2014.
TheSOSispresentedinthreesectionsasrequiredforCFOActagenciesin2013. Thefirstsectionis
entitledWhatMoneyisAvailabletoSpend?. ThissectionoftheSOSpresentstotalbudgetary
resourcesthatwereavailabletospendreconciledtoobligationsincurredasshownintheStatusof
BudgetaryResourcessectionoftheSBR.
ThesecondsectionisentitledHowwastheMoneySpent/Issued?. ThissectionoftheSOSpresents
servicesoritemsthatwerepurchasedandhowobligationsareincurredorthepaymenttypewithin
eachVAadministrationconsistentwiththeSBRandclassifiedbytheOMBBudgetObjectClass(BOC)as
definedinCircularNo.A11. ThemostsignificantBOCsandpaymenttypesarepresentedseparately
withineachVAadministrationwiththeremainingBOCspresentedinaggregateasOtherwithineach
administration. ThelineitemsinthesecondsectionoftheSOSwillreconciletoobligationsincurredin
theSBR.
ThethirdsectionisentitledWhodidtheMoneygoto?andreconcilestoobligationsincurredinthe
SBR. ThissectionoftheSOSpresentsobligationsincurredaseitherFederalorNonFederalobligations
withineachVAAdministration. VAdoesnothaveanyspeciallinesofbusinessorspecialtrading
partnersbeyondtheexistingpresentationthatrequiresseparatedisclosuretoaccuratelyreflectits
businessactivities.
VAisintheprocessofintegratingthecurrentfinancialreportingandmanagementassurance
frameworkswithpubliclyreportedprimeawardFederalspendingonUSAspending.gov. VAiscomparing
andvalidatingtheaccuracyandcompletenessofprimeawardfinancialdatareportedto
Part IV - 1 Other Accompanying Information





USAspending.govwiththeSOSasintegrationproceeds. DiscrepanciesbetweenUSAspending.govand
theSOSandrelatedinternalcontrolsrequiredtomeetthereportingrequirementsarebeingaddressed
byVAastheintegrationprocesscontinues.
USAspending.govprimeawardfinancialdataforVAcontracts,grantsandinsuranceisasubsetofthe
obligationsincurredandreportedintheSBRandtheSOSfinancialsystemsbutisbasedonandreported
whenamountsarepaidnotwhenobligationsareincurredwhichcreatestimingandreconciliation
requirementsbetweenthetwosetsofdata. Additionally,thecurrentUSAspending.govdataisnot
integratedwithormaintainedinthesamefinancialmanagementandreportingsystemastheSBRand
theSOSanddoesnottrackorreportdatabyanobligationsincurrednumberasreportedintheSBRand
SOSfinancialmanagementsystem. VAiscurrentlyworkingonasystemsolutiontocosteffectively
addresstimingdifferencesandreconcilethedatainbothsystemstoenableittointegratethecurrent
financialreportingandmanagementassuranceframeworks,validatetheaccuracyandcompletenessof
theprimeawardfinancialdataandprovideassurancethatinternalcontrolsareoperatingeffectively
whenthesenewreportingrequirementsbecomeeffective.Thisprocessisnotmeanttosupplant
existingVAprocessescurrentlyestablishedthatreconcileUSAspending.govprimeawarddatawiththe
SBRortheSF133.
ThefollowingtablesummarizestheScheduleofSpendingfortheyearendedSeptember30,2013. At
thebottomofthesecondsectionentitledHowwastheMoneySpent/Issued?andthethirdsection
entitledWhodidtheMoneygoto?,aseparatelineentitled,ReconcilingAdjustmentforPriorYear
RecoveriesreflectsVAsestimateofrecoveriesofprioryearunpaidobligationsfor2013totaling$2.7
billion. ThisadjustmentwasrecordedasanincreaseinRecoveriesofPriorYearUnpaidObligations
andanincreaseinObligationsIncurredintheCombinedStatementofBudgetaryResourcesforthe
yearendedSeptember30,2013. TheScheduleofSpendingreportsObligationsIncurredasreportedin
theStatementofBudgetaryResourcesinaccordancewithOMBguidelines. However,VAssystems
requireextensivemodificationtoproperlyaccountfortheprioryearrecoveriesinthebaseleveloffund
accountandUSSGLdetailtoconformwithOMBandTreasuryguidelines. VAhascompletedthe
technicalassessmentanddetaileddesignrequirementstomodifyitscoreaccountingsystemandhas
beguntheprogrammingphaseofthedevelopment. Whenanautomatedsystemssolutionis
implemented,VAwillbeenabledtoproperlyidentifyprioryearrecoveries,systematicallymonitor
reapportionedbudgetauthorityandtrackbothforinternalandexternalfinancialreporting.Untilthat
time,VAhasimplementedamanualreviewprocesstoidentifyprioryearrecoveriesandquantifyan
estimatetoberecordedattheVAcombinedlevel,notatthedetailedfundaccountlevel. Therefore,the
adjustmentshavenotbeenreflectedintheBOCsbyAdministration,butsetoutseparatelytoreconcile
theinformationwithObligationsIncurred.
Part IV - 2 Other Accompanying Information







DEPARTMENTOFVETERANSAFFAIRS
SCHEDULEOFSPENDINGUNAUDITED(dollarsinmillions)
FORTHEYEARENDEDSEPTEMBER30,2013
Budgetary
NonBudgetary
Credit Program
What Money is Available to Spend?
TotalResources $ 163,344 $ 8,314
Less Amount Available but Not Agreed to beSpent (6,984)
Less AmountNot Available to beSpent



(3,917) (5,167)
TotalAmountsAgreedtobeSpent $ 152,443 $ 3,147
HowwastheMoneySpent/Issued?
VeteransHealthAdministration




PersonnelCompensationand Benefits $ 28,924 $
Other Contractual Services 13,468
SuppliesandMaterials 8,686
Land and Structures 2,956
Equipment 2,426
Rent,CommunicationsandUtilities 2,026
Grants,SubsidiesandContributions 1,626
Travel and Transportation of Persons 963
Other 129

VeteransBenefitsAdministration(Including
VeteransBenefits,LifeInsurance,Housing
CreditandAdministration)
InsuranceClaims and Indemnities* 67,371 1,120
Grants, Subsidies and Contributions** 14,767 227
PersonnelCompensation and Benefits 1,905
Other ContractualServices 503 221
Rent,CommunicationsandUtilities 136
Interestand Dividends 133 40
Landand Structures 3 1,513
Other 108 26

NationalCemeteryAdministration
Personnel Compensationand Benefits 133
Other Contractual Services 88
Grants, Subsidies andContributions 35
Supplies and Materials 10
Rent, Communications and Utilities 9
Other 12

IndirectProgramAdministration

Other ContractualServices 1,532

Personnel CompensationandBenefits 725


Equipment 500
SuppliesandMaterials 415
Rent,Communications andUtilities 111
Other

43
Reconciling Adjustment for Prior Year Recoveries

2,700
TotalAmountsAgreedtobeSpent $ 152,443 $ 3,147

Part IV - 3 Other Accompanying Information

DEPARTMENTOFVETERANSAFFAIRS
SCHEDULEOFSPENDINGUNAUDITED(dollarsinmillions)
FORTHEYEARENDEDSEPTEMBER30,2013
Budgetary
NonBudgetary
CreditProgram
WheredidtheMoneygoto?
VeteransHealthAdministration
Federal 8,506
NonFederal 52,698
VeteransBenefitsAdministration(Including
VeteransBenefits,LifeInsurance,Housing
CreditandAdministration)
Federal 2,170 54
NonFederal 82,756 3,093
NationalCemeteryAdministration
Federal 39
NonFederal 248
IndirectProgramAdministration
Federal 538
NonFederal 2,788
ReconcilingAdjustmentforPriorYearRecoveries 2,700
TotalAmountsAgreedtobeSpent $ 152,443 $ 3,147
*PrimarilyVeteranspensionanddisabilitycompensationcosts,insuranceprogramcostsandloanguarantyprogramlosses.
**PrimarilyVeteranseducationalreadjustmentbenefitprograms,specialadaptivehousingcostsandloansubsidyand
reestimatecosts.
Part IV - 4 Other Accompanying Information

SummaryofFinancialStatementAuditand
ManagementAssurances
Thefollowingtablesprovideasummaryofauditrelatedormanagementidentifiedmaterialweaknesses
andthenoncompliancewithFFMIAandFederalfinancialmanagementsystemrequirementsoutlinedin
the2013PerformanceandAccountabilityReport. Thetitleofeachmaterialweaknessisconsistent
throughoutthissectionandintheentiredocument. Thematerialweaknessandtheassociated
remediationplanisthesameastheauditrelatedmaterialweakness.
During2013,VAcontinueditsremediationplanstocorrecttheonematerialweaknessidentifiedinprior
yearsforInformationTechnology(IT)SecurityControls. AsofSeptember30,2013,VAcontinuesto
reportonematerialweaknessrelatedtoInformationTechnology(IT)SecurityControls.
Nonewmaterialweaknesseswerefoundinthedesignoroperationofinternalcontrolsduring2013asa
resultofVAsannualassessmentofinternalcontroloverfinancialreporting,operations,lawsand
regulations,andfinancialmanagementsystemsrequirementsinaccordancewithFMFIAsections2and
4. UnderFFMIASection803(a)for2013,VAreportednoncompliancewithFederalfinancial
managementsystemrequirementsrelatedtothematerialweaknessforInformationTechnology(IT)
SecurityControls. VAalsoreportednoncompliancewithFederalaccountingstandardsrelatedtothe
DebtCollectionImprovementAct.
Part IV - 5 Other Accompanying Information








Table 1 - Summary of Financial Statement Audit

Audit Opinion Unmodified
Restatement No
Material Weaknesses
Beginning
Balance New Resolved Consolidated
Ending
Balance
IT Security Controls

Total Material Weaknesses 1 0 0 0 1



Table 2 - Summary of Management Assurances

Effectiveness of Internal Control over Financial Reporting (FMFIA 2)
Statement of Assurance Unqualified
Material Weaknesses
Beginning
Balance New Resolved Consolidated Reassessed
Ending
Balance
Total Material Weaknesses 0 0 0 0 0 0

Effectiveness of Internal Control over Operations (FMFIA 2)
Statement of Assurance Unqualified
Material Weaknesses
Beginning
Balance New Resolved Consolidated Reassessed
Ending
Balance
Total Material Weaknesses 0 0 0 0 0 0

Conformance with Financial Management System Requirements (FMFIA 4)
Statement of Assurance Conform except for the non-conformance findings below
Material Non-
Conformances
Beginning
Balance New Resolved Consolidated Reassessed
Ending
Balance
IT Security Controls *

Total Non-Conformances 1 0 0 0 0 1

Compliance with Federal Financial Management Improvement Act (FFMIA)
Agency Auditor
1. System Requirements Noncompliance noted Noncompliance noted
2. Accounting Standards** No Noncompliance noted No Noncompliance noted
3. USSGL at Transaction Level No noncompliance noted No noncompliance noted

*Note: Material weaknesses and their associated remediation plans are the same as audit-related material
weaknesses.
**Note: As a result of a Secretarial decision not to charge Veterans interest and administrative costs on
benefit related debts, VA is not fully compliant with all provisions of the DCIA.
Other Accompanying Information Part IV - 6





ImproperPaymentsEliminationandRecoveryActof
2010(IPERA)Report
VAentered2013withthereductionofimproperpaymentsasitstopfinancialmanagementpriority. To
accomplishthisgoal,VAconcentratedeffortsonachievingtwomainobjectives: (1)toimprovestatistical
estimationandsamplingmethodologiesand(2)tobetterunderstandthecausesofimproperpayments.
Inworkingtowardstheseobjectives,VAestablishednewOMB approvedstatisticalsamplingtechniques;
begansystematicallyreviewing
programpayments;andparticipated
ininnovativeprojects,suchasthe
OMB/TreasuryDoNotPaySolution
pilot,tobetteridentifypotential
improperpayments. VAalsohas
manyprogramsandactivitiesinplace
toprevent,detect,andreduce
improperpayments(e.g.,
prepaymentandanalyticalreviews).
In2012,VAissued$132.6billionin
diversepaymentsofwhich$103.6
billionweresubjecttoIPERA
processesandreviews. The
remaining$29.0billioninpayments
relatetooutofscopeactivities,such
aspayrollandintragovernmental
transactions. Asaresultofamulti
yeareffortmadethroughoutVAandtheuseofproperstatisticalsamplingmethodologies,significant
reductionsinreportedimproperpaymentswereachieved;specifically,VAsimproperpaymentsdecreased
by50percentfrom$2.2billionin2011to$1.1billionin2012.
VAiscomprisedofthreeAdministrationsandacentralofficefunction. AbriefdescriptionofthefourVA
componentsfollows:
VHA
VHAmanages21VISNswithover150VAMCsnationwidetoprovideefficient,accessiblehealthcareto
Veteransintheirareas.
VBA
VBAmanagesfourareaofficesand56ROsworldwidetoensurenecessarybenefitsandservicesare
administeredtoServicemembers,Veterans,andtheirfamilies.
Improper Payments Elimination and Recovery Act of 2010 (IPERA) Part IV - 7







NCA
NCAmanages5MSNsand131nationalcemeteriesin39statesandPuertoRico,aswellas33soldiers
lotsandmonuments. NCAprovidesVeteransandtheirfamilieswithfinalrestingplacesinnationalshrines
andwithlastingtributesthatcommemoratetheirserviceandsacrificetoourNation.
StaffOffices
TheVACentralOfficeiscomprisedofeightentitiesthatserveasthemanagerial,policy,andadministrative
hubforDepartmentalactivities.
SectionI. ThissectiondescribestheriskassessmentsperformedforVAprograms.
Duringthisreportingperiod,VAstandardizedtheriskassessmentprocessbyprovidingVAwitha
systematicmethodforreviewingallprogramsandoutlays,andidentifyingthosesusceptibleto
significantimproperpayments. Moreover,inordertobetteralignwithOMBguidance,VAreevaluated
itsdefinitionofaprogramresultinginpreviouslyidentifiedprogramsbeingevaluatedandreportedas
multipleprograms.
VHA
VHAconductedriskassessmentson30programsandactivitiesanddetermined5programswere
susceptibletosignificantimproperpayments. Theseprogramsinclude: BeneficiaryTravel,Civilian
HealthandMedicalProgramoftheVA(CHAMPVA),NonVACareFee,StateHomePerDiemGrants,and
SuppliesandMaterials.
VBA
VBAconductedriskassessmentson25programsandactivitiesanddetermined3programswere
susceptibletosignificantimproperpayments. Theseprogramsinclude: DisabilityCompensation,
Pension,andVocationalRehabilitationandEmploymentBeneficiaryPayments(VR&E). VBAalsohad
threeeducationprograms(previouslyreportedasasingleprogram)includedfortestingeventhough
theywereassessedaslowrisk. Thiswasduetothefactthattheyhavenotyetreported2consecutive
yearsofimproperpaymentamountsbelowreportingthresholds. Thethreeeducationprogramsare
Post9/11GIBill(Chapter33);MontgomeryGIBillSelectedReserve(Chapter1606),andReserve
EducationalAssistanceProgram(Chapter1607). For2013,OMBgrantedawaiverofannualimproper
paymentreportingfortheinsuranceprogram.
NCA
NCAconductedariskassessmentoftheburialprogram;itwasassessedaslowrisk.
StaffOffices
StaffOfficesconductedriskassessmentsoneightprograms;allwereassessedaslowrisk.
SectionII. ThissectiondescribesthestatisticalsamplingprocessperformedforVAprograms.
VAssamplingmethodologysignificantlychangedfromprioryearstoensurecompliancewithIPERA
requirements. Specifically,VAutilizedstratifiedsamplingdesignstoseparatetheprogramuniverseinto
homogenousgroups,orstrata. Theprogramstratawereconstructedbasedonthedollaramountpaidusing
specializedstatisticalsoftware. Thesoftwareconstructsthestratainsuchawaythattheinvoiceswithina
stratumaresimilarinpaymentsize,butdissimilarbetweenthestrata. Thepaymentswereorderedby
Improper Payments Elimination and Recovery Act of 2010 (IPERA) Part IV - 8




















amountwithineachstrataandasystematicrandomsamplewasselectedtoensureaconsistent
representationofthepaymentuniverse. Thesamplesizeforeachstratumwascalculatedusinga
proportionalallocationmethod. Bythistechnique,stratumrepresenting50percentofthepaymentsfora
programhad50percentofsamples,andstratumrepresenting20percentofthepaymentshad20percentof
thesamples. Samplesizesvariedbyprogramandweredeterminedusinghistoricalerrorratesandpower
estimatesthatwouldmeetprecisionrequirements. OMBapprovedVAsnewsamplingmethodologyand
praiseditasaFederalbestpractice.
SectionIII. ThissectiondescribescorrectiveactionsplannedanderrortypesforVAprograms.
In2012,only6ofthe9testedprogramshadestimatedimproperpaymentsgreaterthan$10million.
Correctiveactionplansforeachofthoseprogramsfollow.
1. BeneficiaryTravel
DuetoCongressionallymandatedincreasesinmileagereimbursementratesinlate2008andincreased
utilizationofVAhealthcare,VAhasexperiencedadramaticgrowthintheBTPthathasstrainedcurrent
processesandcontrols. Improperpaymentstotaled$69.7millionwithdocumentationand
administrativeerrorsaccountingfor75percentoftheimproperpaymentsandverificationerrors
accountingfor25percentoftheimproperpayments. Improperpaymentsidentifiedthroughtesting
totaled$14,401,whichwillberecapturedthroughnormalcollectionactivitiesavailabletoVA.
CorrectiveActionPlan
CBOwillimplement,orhasimplemented
1
,thefollowingcorrectiveactionstoensuregreater
compliance. Withtheimplementationofthebelowactions,VAexpectstoreduceimproperpayments
by0.02percentagepointsin2014.
ProgramCompliance
InFebruary2013,theBeneficiaryTravelEligibilityReviewwasimplementedtofurtherreview
VeteransconvertedthroughtheIVMprocesswiththosewhohavereceivedmileagereimbursement
travelbenefits,allowingforscrutinyofpaymentsbasedonincome.
InMarch2013,datamininganalytictoolsbasedonsixpotentiallyproblematicbeneficiarybehaviors
werereleasedforuseinthefield. ReportingoffacilityutilizationandresultsbeganinJuly2013.
InJanuary2014,CBOwillimplementanonsiteassistanceprogramtoworkwithfacilitiesin
identifyingopportunitiestostrengthenbeneficiarytravelprocessimprovements,programintegrity,
andinternalcontrols.
TrainingProcessImprovements
InNovember2013,CBOimplementedclinicaldocumentationtoolsintheformofCPRStemplates
forproviderstocaptureVeteransclinicalneedforspecialmodetransportation,nearesttreating
facilitydetermination,andaidandattendanceeligibility.
InNovember2013,theCBOdeployedanapplicationprocessincludinganewbeneficiarytravel
claimsformwithimplementationinstructionsforusewhentheVeteranisnotrequesting
beneficiarytravelbenefitsinperson.
1Theactionsalreadyimplementedwerecompletedduringorafterthesamplingperiodfor2013,soimpactwaslimited;
however,internalcontrolsweresignificantlyimproved.
Improper Payments Elimination and Recovery Act of 2010 (IPERA) Part IV - 9











SystemChanges
InDecember2012,asupplementaltooltotheVistAbeneficiarytravelapplicationwascreated,
implementingastandardizedonlinemileagemechanismtohelpensuremoreaccurateclaims
processing.
InApril2013,softwareenhancingtheElectronicTravelClaimsProcessingSystemwasdevelopedto
addressidentifiedsystemlimitations. Changesincludedimprovingprocessingandreporting
capabilities,supportingenhancedbenefitsadministration,anddecreasingriskforimproper
payments.
2. CHAMPVA
CHAMPVAisacomprehensivehealthcareprograminwhichVAsharesthecostofcoveredhealthcare
serviceandsupplieswitheligiblebeneficiaries. Improperpaymentstotaled$20.9millionwith
documentationandadministrativeerrorsaccountingfor60percentoftheimproperpaymentsand
verificationerrorsaccountingfor40percentoftheimproperpayments. Improperpaymentsidentified
throughourtestingtotaled$114,277,whichwillberecapturedthroughnormalcollectionactivities
availabletoVA.
CorrectiveActionPlan
CBOwillimplement,orhasimplemented,thefollowingcorrectiveactionstoensuregreatercompliance.
Withtheimplementationoftheseactions,VAexpectstoreduceimproperpaymentsby0.01percentage
pointsin2014.
ProgramCompliance
InJanuary2012,VAstartedconductingproperpaymentandeligibilityauditsonaquarterlybasisto
identifyimproperpaymentsassociatedwithincorrectamountpaid,ineligiblerecipient,duplicate
payments,anddataentryerrors.
TrainingProcessImprovements
InJuly2013,CBObeganqualityassurancereviewsforallvoucherexaminerstoensurethecorrect
amountispaidandeligibilityisaccurate. Twopercentoftheprocessedclaimsarerevieweddaily
foreachvoucherexaminer.
SystemChanges
InJune2012,CBObeganautomaticallygeneratingprepaymentqueriesfor15percentofclaimsthat
meetcriteriaforpossibleduplicatepayment,otherhealthinsurancecoverage,andhighdollar
claimsgreaterthan$10,000. CBOstaffresearchclaimsonadailybasistoreducepaymenterrors
associatedwiththeseissues.
InJune2013,datamatcheswereconductedwithCMSandDoDonamonthlybasistoimprove
timelyverificationofeligibilityandotherhealthinsurance.
InDecember2013,VHAandVBAwillconductdatamatchestoverifychangesineligibility.
Improper Payments Elimination and Recovery Act of 2010 (IPERA) Part IV - 10










3. NonVACareFee
Manyoftheimproperpaymentscanbeattributedtothemanualnatureofclaimsprocessingandthe
decentralizedclaimsprocessingsystemwithover2,000claimsprocessors,multiplesoftwareproducts,
andthecurrenttechnology. Improperpaymentstotaled$429.1millionwithdocumentationand
administrativeerrorsaccountingfor100percentoftheimproperpayments. Improperpayments
identifiedthroughtestingtotaled$501,100,whichwillberecapturedthroughnormalcollection
activitiesavailabletoVA.
CorrectiveActionPlan
CBOwillimplement,orhasimplemented,thefollowingcorrectiveactionstoensuregreatercompliance.
Withtheimplementationoftheseactions,VAexpectstoreduceimproperpaymentsby0.04percentage
pointsin2014.
ProgramCompliance
InDecember2012,VHAdevelopedSnapWeb,atooldesignedtoidentifypotentialduplicate
paymentsinaprepaymentstatus.
InJanuary2013,theCBOestablishedaVirtualAuditTeamthatisstructuredtoperformtheannual
IPERAauditandquarterlyproperpaymentauditsfortheNonVACareFeeprogram.
InDecember2013,VHAwillimplementacomprehensivesetofProgramIntegrityToolstoreduce
fraud,waste,andabuseandimprovepaymentaccuracyinaprepaymentstatus.
InDecember2013,VHAwilldeploytheNonVACareQualityInspectorToolwhichprovidespush
buttoninspectionofalloutpatientclaimsprocessedthroughtheFeeBasisClaimsSystem(FBCS)to
ensureproperpaymentinaprepaymentstatus.
SystemChanges
FBCSisaninterimsolutionlayeredontopoftheVistAFeesystem. Thisinitiativeallowsformore
timelyclaimsprocessing,eliminationofduplicatepayments,andreductionofmanualentryand
dataentryerrors. Implementationbeganin2010andwillconcludein2014.
InJuly2012,FBCSPatch12reducedtheerrorrateforthe3majorerrorcategories,including
improperschedule/methodpaid,ratediscrepancy,anddataentryfrom31.8percentto3.8percent.
InJuly2013,FBCSPatch39proactivelyreducedimproperpaymentsbyidentifyingpotential
duplicateclaims,addressingemergencyclaimtimelyfilingrequirementsunder38U.S.C.1725(Mill
Bill),andreviewinghighdollarclaimsover$25,000.
TheHealthcareClaimsProcessingSystemprojectisatechnologysolutionthatwillsubstantially
automatebusinessprocessesforthepaymentofNonVAhealthcareclaims,strengtheninternal
controls,andsignificantlyreduceimproperpayments. Enterprisedeploymentisscheduledfor
April2015throughMay2016.
ProgramSupport
InDecember2012,VHAsFieldAssistanceProgramexpandedtoprovideenhancedsitevisits
designedtoimprovelocaloperationsbyassessingfacilitiesNonVACareclaimsprocessesand
assistingwiththedevelopmentofeffectiveinternalcontrols.
Improper Payments Elimination and Recovery Act of 2010 (IPERA) Part IV - 11








4. StateHomePerDiemGrants
Manyoftheimproperpaymentscanbeattributedtotheuseofapaperbasedmanualdecentralized
claimsprocessingsystemandthelackofcompliancewithinternalpolicies. Improperpaymentstotaled
$135.2millionwithdocumentationandadministrativeerrorsaccountingfor100percentofthe
improperpayments. Improperpaymentsidentifiedthroughtestingtotaled$3.1million,whichwillbe
recapturedthroughnormalcollectionactivitiesavailabletoVA.
CorrectiveActionPlan
CBOwillimplement,orhasimplemented,thefollowingcorrectiveactionstoensuregreatercompliance.
Withtheimplementationoftheseactions,VAexpectstoreduceimproperpaymentsby6.0percentage
pointsin2014.
ProgramChanges
ByDecember2013,CBOwillsubmitanexecutivedecisionmemorandumtodramaticallychangethe
structureandevaluatebestpracticesoftheStateHomePerDiemprogram.
ProgramCompliance
InSeptember2013,CBOcompletedacomprehensive(i.e.,100percent)reviewandcollectionof
documentationsupporting2012payments. AdmissioninformationsuppliedbytheStateVeterans
HomewasreviewedforcompletenessandtoensurethatVHAauthorizedthecare. Where
applicable,VHAstaffupdatedtheauthorizations. Anewdatabasewasestablishedtocaptureand
retainadmissionandpaymentdocumentation.
BeginninginSeptember2013,CBOworkedwithVAMCstafftomitigateapplication(1010SH)and
otherdocumentationerrorstoensurecompliancewithStateHomePerDiemprogram
requirements.
ByDecember2013,CBOwillincreaseauditstafftoconducttheannualIPERAauditandquarterly
properpaymentaudits.
PolicyChanges
BySeptember2014,theStateHomePerDiemHandbookwillberevisedtofacilitatestandardization
ofprogramrequirements.
SystemChanges
ByFebruary2014,CBOwillimplementasystemwideelectronictrackingtool,whichwillcalculate
thedailycostofcareandvalidatepaymentaccuracy.
ByMarch2014,automationofthe1010SHapplicationisscheduledfordeployment,ensuring
completionofrequiredfields,enhancementoftransmission,andelectronicavailabilityoftheform.
ByMay2016,theStateHomePerDiemprogramwillbeincludedinthehealthclaimsprocessing
initiativesolution.
5. SuppliesandMaterials
VHAhasmadegreatstridesinimprovingpaymentaccuracyinthisarea. For2013,improperpayments
totaled$2.53millionwithdocumentationandadministrativeerrorsaccountingfor100percentofthe
improperpayments. BecausetheSuppliesandMaterialsprogramhasestimatedimproperpaymentsof
lessthan$10million,detailedcorrectiveactionplansandrecoverableimproperpaymentsarenot
reported.
Improper Payments Elimination and Recovery Act of 2010 (IPERA) Part IV - 12



















6. CompensationService
VAprovidescompensationtoVeteranswhoareatleast10percentdisabledbecauseofinjuriesor
diseasesthatoccurredorwereaggravatedduringactivemilitaryservice.Manyoftheimproper
paymentsweretheresultofincorrectinputclassificationorprocessingofpayments. Improper
paymentstotaled$321.1millionwithdocumentationandadministrativeerrorsaccountingfor
100percentoftheimproperpayments. Improperpaymentsidentifiedthroughtestingtotaled$5,710,
whichwillberecapturedthroughnormalcollectionactivitiesavailabletoVA.
CorrectiveActionPlan
VBAwillimplement,orhasimplemented,thefollowingcorrectiveactionstoensuregreatercompliance.
Withtheimplementationoftheseactions,VAexpectstoreduceimproperpaymentsby16percentin
thisprogramoverthenext2years.
ProgramCompliance
VBAcontinuestoimprovetrainingprogramstoreducedocumentationandadministrativeerrorsby
updatingcentralizedtrainingmaterial. Additionally,VBAimplementedthefollowingactionsto
strengthenefficiencyatROs:
ImprovementstoandExpansionofSkillsCertificationIn2013,VBAimplementedtheSkills
Certificationprogramtoimproveorganizationalperformanceandprofessionalismofclaims
personnel. Managerscontinuetoimplementimprovementstobettertrackindividualtasksofeach
VBAemployeeinvolvedinprocessingofVeteransclaims.
QRTIn2012,VBAfullyimplementedtheQRTprogramtoconductlocalqualityreviewswithinall
ROs. TheQRTsperformqualityreviewspriortoauthorizationtoensurecorrectbenefitsarebeing
paid. QRTmembersprovidefeedbackandtrainingonerrortrends,CentralOfficequalityreview
findings,andanyothertrainingthatlocalmanagementdeemsappropriate. Localanalysisand
feedbackarerequiredsothatappropriatemetricscanbereportedandtrackedtostrengthen
accuracyatROs.
TrendAnalysisVBAanalyzestheresultsofqualityassurancereviewsandprovidesdetailed
feedbacktoROsthroughavarietyofmethodsincludingmonthlySystematicTechnicalAccuracy
Review(STAR)errorreporting,whichrequiresfollowupandcorrectiveaction. VBAuseserrortrend
analysistodeveloptheannualmandatorytrainingcontainedintheNationalTrainingCurriculumfor
claimsprocessors. Trainingcurriculumandmaterialsareamendedregularlybasedoninformation
inthequalityassurancereports.
7. Pension
VAhelpsVeteransandtheirfamiliescopewithfinancialchallengesbyprovidingsupplementalincome
throughVeteransPensionandSurvivorsPensionbenefitprograms. Manyoftheimproperpayments
resultedfromtheabsenceofsupportingdocumentationnecessarytoverifytheaccuracyofapayment
orinabilitytoverifyrecipientinformation,toincludeincome,assets,and/orworkstatus. Improper
paymentstotaled$92.43millionwithdocumentationandadministrativeerrorsaccountingfor
71percentandverificationerrorsaccountingfor29percentoftheimproperpayments. Improper
paymentsidentifiedthroughourtestingtotaled$23,379,whichwillberecapturedthroughnormal
collectionactivitiesavailabletoVA.
Improper Payments Elimination and Recovery Act of 2010 (IPERA) Part IV - 13














CorrectiveActionPlan
VBAwillimplement,orhasimplemented,thefollowingcorrectiveactionstoensuregreatercompliance.
Withtheimplementationoftheseactionsinthisprogram,VAexpectstoreduceverificationerrorsby
16percentoverthenext2yearsanddocumentationandadministrativeerrorsby25percentoverthe
next2years.
ProgramCompliance
EstablishDeadlinesExistingproceduresrequirethatapplicantssubmitclaimsusingspecificforms
andprovidesupportingdocumentsbeforeVAmakesadeterminationofeligibilityforbenefit
payments. VBAcurrentlyhasprocedureswhichprescribehowdocumentationsupportinganaward
istobemaintainedinaclaimsfolder. However,theremaybetimeswhendocumentsarenotadded
tothefilesinatimelymanner. Tomitigatetheseerrors,VBAwillintroducestandardsestablishing
deadlinesastowhendocumentsshouldbeaddedtothepaperandelectronicclaimsfolders. VBA
willaddthesestandardstoitsQualityAssuranceprograms(i.e.,STAR)thatreviewtheaccuracyof
completedclaimsanditsQRTsthatassessinprocessqualityofclaims. Throughtheimplementation
ofthiscorrectiveaction,documentationandadministrativeerrorsshouldbereducedby25percent
overthenext2years.
TrendAnalysisVBAproceduresprovidedetailedguidanceforcalculatingbenefitamountsand
inputtingdataintovarioussystems. VBAwillanalyzetheerrorsdiscoveredfortrendsandwill
emphasizetheimportanceofaccuratecalculationsinitsSTARandQRTprograms. When
appropriate,QualityAssurancestaffwillprovideadditionaltrainingtoremedyerrors.
8. VocationalRehabilitationandEmployment(VR&E)
VBAmadesignificantimprovementsinidentifyingandeliminatingimproperpaymentsinthisprogram.
For2013,improperpaymentstotaled$2.15millionwithdocumentationandadministrativeerrors
accountingfor100percentoftheimproperpayments. BecausetheVR&Eprogramhadestimated
improperpaymentsoflessthan$10million,detailedcorrectiveactionplansandrecoverableimproper
paymentsarenotreported.
9. EducationChapter33,Chapter1606,andChapter1607
Forthesecondconsecutiveyear,Educationprogramrelatedimproperpaymentsremainedextremely
low. Incombination,EducationsChapter33,Chapter1606,andChapter1607hadimproperpayments
of$870thousandwithdocumentationandadministrativeerrorsaccountingfor100percentofthe
improperpayments. BecausetheEducationprogramshadestimatedimproperpaymentsoflessthan
$10million,detailedcorrectiveactionplansandrecoverableimproperpaymentsarenotreported.
Improper Payments Elimination and Recovery Act of 2010 (IPERA) Part IV - 14




SectionIV. ThetablebelowlistsVAsreportableprograms.
Table1
ImproperPayment(IP)ReductionOutlook20122016(Basedon20112015data)
($inmillions)
Program
2012(basedon 2011actualdata) 2013(basedon2012actualdata)
2014(basedon 2013
estimateddata)
2015(basedon2014
estimateddata)
2016(basedon2015
estimateddata)
OUTLAYS
($)
IP% IP$
OUTLAYS
($)
IP% IP$ OUTLAYS($) IP% IP$
OUTLAYS
($)
IP% IP$
OUTLAYS
($)
IP% IP$
Beneficiary
Travel
(1) 828
8.56 70.90
749
9.04 67.67
771
9.30 71.70
794
9.20 73.05
818
9.10 74.44
0.16 1.30 0.28 2.07 0.00 0.00 0.00 0.00 0.00 0.00
GrossAmount 8.72 72.20 9.32 69.74 9.30 71.70 9.20 73.05

9.10 74.44
CHAMPVA 849
0.35 3.00
924
1.82 16.84
952
1.85 17.61
981
1.20 11.77
1,010
1.20 12.12
3.07 26.10 0.44 4.08 0.40 3.81 0.29 2.85 0.28 2.83
GrossAmount 3.42 29.10 2.26 20.92 2.25 21.42 1.49 14.62

1.48 14.95
NonVACare
Fee
(2) 4,290
5.48 235.00
4,447
7.26 323.07
3,403
7.20 245.02
3,505
7.20 252.36
3,610
7.20 259.92
6.55 281.00 2.38 106.00 2.40 81.67 2.30 80.62 2.20 79.42
GrossAmount

12.03 516.00

9.64 429.07 9.60 326.69 9.50 332.98 9.40 339.34


StateHomePer
Diem Grants
787
3.62 28.50
848
15.76 133.68
873
9.90 86.43
899
9.80 88.10
926
9.70 89.82
1.13 8.90 0.18 1.55 0.00 0.00 0.00 0.00 0.00 0.00
GrossAmount 4.75 37.40 15.94 135.23 9.90 86.43 9.80 88.10 9.70 89.82
Suppliesand
Materials
2,052
5.30 108.90
2,230
0.11 2.51
2,295
1.49 34.20
2,364
1.48 34.99
2,435
1.47 35.79
0.19 3.80 0.00 0.02 0.00 0.00 0.00 0.00 0.00 0.00
GrossAmount 5.49 112.70 0.11 2.53 1.49 34.20

1.48 34.99

1.47 35.79
Compensation
(3) N/A
N/A N/A
48,181
0.64 307.99
60,937
0.64 390.00
65,433
0.64 418.77
69,730
0.54 376.54
N/A N/A 0.03 13.11 0.03 18.28 0.03 19.63 0.03 20.92
GrossAmount

N/A N/A 0.67 321.10

0.67 408.28

0.67 438.40

0.57 397.46
Pension
(3)
N/A
N/A N/A
5,268
1.66 87.70
5,228
1.66 86.79
5,575
1.66 92.54
5,942
1.34 80.28
N/A N/A 0.09 4.73 0.09 4.71 0.09 5.02 0.09 5.35
GrossAmount N/A N/A

1.75 92.43 1.75 91.50

1.75 97.56

1.43 85.63
VR&E 768
1.61 12.35
786
0.26 2.04
933
0.26 2.43
1,018
0.26 2.65
1,109
0.26 2.88
1.61 12.39 0.01 0.11 0.01 0.09 0.01 0.10 0.01 0.11
GrossAmount

3.22 24.74 0.27 2.15

0.27 2.52 0.27 2.75 0.27 2.99


Education
(4)
Chapter33
N/A
N/A N/A
8,769
0.00 0.00
9,689
0.00 0.00
10,890
0.00 0.00
11,835
0.00 0.00
N/A N/A 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
GrossAmount

N/A N/A 0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00


Education
Chapter1606
(4) N/A
N/A N/A
146
0.33 0.48
159
0.33 0.53
155
0.33 0.51
155
0.33 0.51
N/A N/A 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
GrossAmount

N/A N/A 0.33 0.48 0.33 0.53 0.33 0.51

0.33 0.51
Education
Chapter1607
(4) N/A
N/A N/A
88
0.44 0.39
54
0.44 0.24
40
0.44 0.17
31
0.44 0.14
N/A N/A 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
GrossAmount

N/A N/A 0.44 0.39 0.44 0.24

0.44 0.17

0.44 0.14
Overpaymentsarereportedintheshadedcellsandunderpaymentsarereportedinthenonshadedcellsadjacenttotheprogramname.
NotestoTable1:
Improper Payments Elimination and Recovery Act of 2010 (IPERA) Part IV - 15







(1) DuetochangesinVHAssamplingmethodologyfor2013,alargerportionoftheBTPsspecialmodetransportationclaimswereselectedfor
reviewcomparedtothepreviousyear.
(2) TheNonVACareFeeprogramincludesasignificantnumberofpaymentsforNonInstitutionalCarethatforincreasedvisibilityand
accountabilitywillbeseparatedin2014.
(3) In2012,VBAreportedCompensationandPensiontogetherwhichresultedinanestimatedimproperpaymentrateof
2.58percentand$1,385billionimproperpayments. ItwouldnotbecosteffectiveforVBAtorecalculateinformationfor
prioryearactivity.
(4) In2012,VBAreportedalleducationprogramstogetherwhichresultedinanestimatedimproperpaymentrateofzero
percentandzeroimproperpayments. ItwouldnotbecosteffectiveforVBAtorecalculateinformationforprioryear
activity.
SectionV. ThissectiondescribesVAsImproperPaymentRecaptureandRecoveryAuditefforts.
VHA
VHAperformedandreportedonrecaptureauditsforallprogramswithoutlaysof$1millionormore.
VHAutilizedbothinternalandexternalpaymentrecaptureactivitiestoprevent,detect,andrecover
improperpayments.
InternalAuditandRecoveryEfforts
ProgramIntegrityTool CBOisimplementingacomprehensivesetofProgramIntegrityToolsto
reducefraud,waste,andabuseandimprovepaymentaccuracyinaprepaymentstatus.
SnapWebDuplicatePaymentProgram Designedtoidentifypotentialduplicatepaymentsina
prepaymentstate.
QualityInspectorTool Providespushbuttoninspectionofalloutpatientclaimsprocessedthrough
FBCStoensureproperpaymentinaprepaymentstatus.
DependentBenefitAuditTeam Theauditteamidentifiesoverpaymentsthrough: amonthlyproper
paymentaudit;abiannualeligibilitydeterminationaudit;anannualpossibleduplicatepayment
audit;andspecialauditsidentifiedfromotherauditfindingsorrequestedbymanagement.
HighDollarReviews Voucherexaminersconductprepaymentreviewson15percentofallclaims
over$10,000.
ClaimCheck/ClaimScrubberTool Performsavalidationcheckpriortoreleasingpayments.
ExternalAuditandRecoveryEfforts
CBOretainsoutpatientrecoverycontractsforNonVACareFee,CHAMPVA,andSpinaBifida.
RootCauseofImproperPayments
VHAidentifiedthatamajorityofpaymenterrorswereduetothefollowing: 1)paperbasedmanual
processingsystems;2)decentralizedprocessing;and3)theabsenceofsupportingdocumentation.
CollectionProcess
OverpaymentsarecollectedthroughVAsdebtmanagementprocess.
VBA
VBAperformedandreportedonrecaptureauditsforallprogramswithoutlaysof$1millionormoreby
usingacombinationoffullcasequalityreviewsand,wherefeasible,paymentreviewsforpossible
duplicatesandoverpayments. Reviewswereconductedbygovernmentpersonnelafteracontracted
reviewconcludedthatoutsourcingrecaptureauditsfortheCompensationandPensionprogramswas
notfeasibledueto: 1)recapturechallengescausedbytheVeteranbeneficiarypopulation;
2)operationalandlegislativeissues;and3)dataquality.
Improper Payments Elimination and Recovery Act of 2010 (IPERA) Part IV - 16





ThemajorityofVBAprogramsperformqualityreviewsandhaveestablisheduniquecriteriaforselecting
casestoreview. VBAdiligentlyworkedtotrack,monitor,andrecoveroverpaymentseligiblefor
recoverythroughcombinedeffortsoftheDebtManagementCenter(DMC),theAdministrativeandLoan
AccountingCenter(ALAC),andROs.
RootCauseofImproperPayments
VBAidentifiedthatamajorityofpaymenterrorswereduetothefollowing: 1)absenceofsupporting
documentation;2)incorrectinputclassificationorprocessingofpayments;3)incorrectpaymentrates
oreffectivedates;and4)inabilitytoverifyrecipientinformation,toincludeincome,assets,and/orwork
status. In2012,VBAbeganimplementationofitscomprehensiveTransformationPlan,aseriesoftightly
integratedpeople,process,andtechnologyinitiativesdesignedtoeliminatethebacklogandachievethe
goalofprocessingallclaimswithin125daysandwith98percentaccuracyby2015. Thesweeping
multifacetedchangeswillinherentlyimproveinternalprocesscontrolsandsignificantlyreduce
improperpaymentsasaresultofimprovedaccuracy.
CollectionProcess
DMC,afranchisefund(feeforservice)organization,isresponsibleforcollectingdebtsresultingfroman
individualsparticipationinVAsDisabilityCompensation,Pension,orEducationprograms. Onceadebt
hasbeenestablished,itisreferredtotheDMC,whichaggressivelypursuesthecollectionofalldebts
throughlumpsumpaymentstothemaximumextentpossible. Ifadebtorisfinanciallyunabletopay
thedebtinonelumpsum,paymentmaybeacceptedinregularinstallmentsorthroughcollectionby
offsetfrombenefitpayments. InsituationswhereadebtcannotbecollectedbyDMC,itisreferredto
theTreasuryOffsetProgram(TOP). TheDMCwillonlyforwardlegallyenforceabledebtstoTOP,
providedafinaldeterminationhasbeenmadethatadebtisdueandtherearenolegalbarriersto
collectionaction.
VBAlocalofficesareresponsibleforcollectingdebtsresultingfromautomobilegrants,loansales,
propertymanagement,loanportfolio,loanproduction,loanadministration,SAH,reportingfees,state
approvingagencies,VR&Econtractcounseling,andgeneraloperatingexpensepayments. Improper
paymenterrorratesintheseareasarelowasVBAprocesseshavesystemiccontrolsorprepayment
auditsinplacetopreventimproperorduplicatepayments. Forduplicateorimproperpayments
identified,VBAdeterminescollectability,and,ifneeded,establishesadebtinthecoreFMS.
Inaccordancewith38U.S.C.5302,VBAmaywaivebenefitdebtsarisingasaresultofparticipationina
benefitsprogramwhencollectionwouldbeagainstequityandgoodconscienceandnoevidenceexists
offraud,misrepresentation,orbadfaith. WhenVBAhasdeterminedadebtexists,itwillpromptly
demandpaymentofthedebtinwriting. VBAwillnotifythedebtorofhisorherrightsandremediesand
theconsequencesoffailuretocooperatewithcollectionefforts. Thedebtorhastherighttodisputethe
existenceoramountofthedebtortorequestawaiverfromcollectionofthedebt. VBAmaywaive
benefitdebtswhenthefactsandcircumstancesoftheparticularcaseindicateaneedfor
reasonablenessandmoderationintheexerciseofthegovernmentsrightsandifthewaiverrequestwas
madewithinthespecifiedtimeframes.
NCAandStaffOffices
NCAandtheStaffOfficesrelyupontheFinancialServicesCenter(FSC)toperformrecapturerecovery
activitiesfortheirpayments.
Improper Payments Elimination and Recovery Act of 2010 (IPERA) Part IV - 17





FSC
MostVAvendorpaymentactivitiesarecentralizedattheFSC,afranchisefund(feeforservice)
organization,whichservicesVHA,VBA,NCA,andtheStaffOffices. FSCperformsbothpre and
postpaymentrecaptureandrecoveryauditactivitiesforthepaymentsitdisburses.
PrePaymentReview
Threetimesaday,FSCmatchesscheduledcommercialvendorpaymentsagainstotherpaymentsand
againsttheprevious90daysofdisbursedpaymentstoidentifyandpreventduplicatepaymentsbefore
theirsubmissiontotheDepartmentoftheTreasuryfordisbursement. Duplicatepaymentsidentified
throughthisprocessarecancelledbeforethepaymentsaremade.
PostPaymentReview
FSCalsoperformsseveralpostpaymentreviewstodetectimproperpayments:
Paymentfilesinexcessof$2,500arematchedagainstdisbursedpaymentsovertheprevious2fiscal
yearstoidentifyduplicatepayments.
Variousperformancemeasurereviewsofpaymentsareconductedusingstatisticalsamplingto
verifytheiraccuracyandtimeliness.
ReviewsareconductedonFSCissuedinterestpenaltypaymentsover$50todetermineifinterest
wasactuallyduetothevendor.
Vendorstatementsarereviewedtorecoveranyoutstandingprioryearvendorcreditsnotpreviously
collected.
VAwideemployeeperformance/incentiveawardpaymentsarereviewedtoidentifyduplicate
awardpayments.
Inaddition,FSCperiodicallyreviewsauditreportspreparedbyVAsOIGandtheGAOtoidentify
additionalpotentialareasofinterest.
RootCauseofImproperPayments
FSChasidentifiedseveralrootcausesforimproperpaymentsincludingerroneousinputofinvoice
numbers,dates,orvendoridentificationnumbers,andvendorinvoicinginconsistenciessuchas
resubmittedinvoicesusingdifferentinvoicenumbers,dates,orpurchaseordernumbers. FSChas
implementedcorrectiveactionstoincludeincreaseduseofelectronicinvoicingandopticalcharacter
recognitiontechnologytominimizeimproperpayments. Thisprocessextractskeypaymentdatafrom
paperinvoicestoreduceinputerrorsalongwithabusinessrulesengineensuringconsistencyin
paymentprocessingandstreamlinedprocedures.
CollectionProcess
Forimproperpaymentsdetectedinpostpaymentreviews,thefollowingrecoveryactionsareusedby
FSC,asappropriate,torecoverthefundsfromthevendor/employee.
OnpaymentspaidviaEFT,wheretheimproperpaymentamountwasthefullamountoftheEFT
payment,FSCprocessesaLetterofReversal/LetterofIndemnityinanattempttorecoverthefunds
byhavingthebankreversetheerroneoustransactionbacktoDepartmentofTreasuryasareturned
EFT.
Incaseswheretheimproperpaymentispaidviacheckorwheretheimproperamountwaslessthan
thefullamountoftheEFT,FSC/VAfacilitiesprocessabillofcollectionrequestingthevendorreturn
thefundsfortheimproperamount.
Improper Payments Elimination and Recovery Act of 2010 (IPERA) Part IV - 18










Afteraminimumof45days,ifthebillofcollectionhasnotbeenrepaidandnocorrespondencehas
beenreceivedfromthevendordisputingthebillorrequestingadditionalinformation,FSCsetsup
aninternaloffsettocollectthefundsfromthenextFSCissuedpayment(s)tothevendoruntilthe
billissatisfied.
Ifallattemptstocollectthedebtareunsuccessful,FSCsendsthedebttoTOPtocollectthefunds
fromthenextgovernmentissuedpayment(s)tothevendororemployeeuntilthebillissatisfied.
Improper Payments Elimination and Recovery Act of 2010 (IPERA) Part IV - 19





Table2
PaymentRecaptureAuditReporting
($inmillions)
(1)
P
r
o
g
r
a
m

o
r

A
c
t
i
v
i
t
y
T
y
p
e

o
f

P
a
y
m
e
n
t

(
c
o
n
t
r
a
c
t
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(
Beneficiary
Travel Benefit $742 $6 84 $0.139 $0.072 52% $0.067 48% $0 0% n/a n/a $0.139 $0.072 $0.067 $0

CHAMPVA
(3)
Benefit $25 $2 5 $11.679 $16.598 142% $1.162 10% $0.326 3%

$79 $207.8 $90.7 $224.4 $7.0 $0.326


NonVACare

Fee
(4)

Benefit $186 $1 86 $0.071 $0.071 100% $0 0% $0 0% $56.37 $44.7 $56.37 $44.77 $11.6 $0
StateHomePer
DiemGrants
(4)

Grant $873 $8 73 $0.011 $0.011 100% $0 0% $0 0% n/a n/a $0.011 $0.011 $0 $0


Supplies and
Materials Other $896 $895 $0.160 $0.122 77% $0.038 23% $0 0% n/a n/a $0.160 $0.122 $0.038 $0
Other VHA
Programs1
(5)
Other $7,369 $7,367 $1.612 $1.409 87% $0.203 13% $0 0% n/a n/a $1.612 $1.409 $0.203 $0
Other VHA
Programs2
(6)
Other $451 $450 $0.114 $0.109 96% $0.005 4% $0 0% n/a n/a $0.114 $0.109 $0.005 $0
FSC VHA

Other
Activities Contract $126 $126 $0.010 $0.010 100% $0 0% $0 0% n/a n/a $0.010 $0.010 $0 $0
Compensation Benefit $48,181 $28 $0.202 $0.126 62% $0.076 38% $0 0.12% n/a n/a $0.202 $0.126 $0.076 $0
Pension Benefit $5,268 $0.712 $0.005 $0.001 25% $0.004 75% $0 0% n/a n/a $0.005 $0.001 $0.004 $0
VR&E Benefit $73.13 $2.4 $0.106 $0.095 89% $0.006 6% $0.005 5% n/a n/a $0.106 $0.095 $0.006 $0.005
Education Benefit $6,585 $4.159 $0.014 $0.009 62% $0.005 38% $0 0% n/a n/a $0.014 $0.009 $0.005 $0
Insurance Benefit $1,386 $17.11 $0.054 $0.032 59% $0.022 41% $0 0% n/a n/a $0.054 $0.032 $0.022 $0
LoanGuaranty Benefit $4,373 $2,247 $5.196 $2.173 42% $3.023 58% $0 0% n/a n/a $5.196 $2.173 $3.023 $0
OtherDirect
Benefits Benefit $5,993 $4.38 $0.182 $0.126 69% $0.055 31% $0.001 0.05% n/a n/a $0.182 $0.126 $0.055 $0.001
VBA GOEFund Other $21.46 $17.26 $0.006 $0.006 100% $0 0% $0 0.2% n/a n/a $0.006 $0.006 $0 $0
FSC VBA Other Other $412.79 $416.83 $0.164 $0.081 49% $0.083 51% $0 0% n/a n/a $0.164 $0.081 $0.083 $0
NCA Burial
Programs Other $183 $182.9 $0.019 $0.019 100% $0 0% $0 0% n/a n/a $0.019 $0.019 $0 $0
FSC Staff
Offices Contract $4,141 $4,114 $0.627 $0.515 82% $0.112 18% $0 0% n/a n/a $0.627 $0.515 $0.112 $0
NotestoTable2:
(1) VAisreportingimproperpaymentsidentified,recovered,andoutstandingfortheperiodofOctober1,2011,toSeptember30,2012.
Therefore,insomecasestheamountrecoveredisgreaterthantheestablishedamount.
(2) VAreengineereditsIPERAprogramandthisisthefirstyearsomeprogramsarereportingrecoverydata.
(3) CHAMPVAdataiscombinedwithCBOprograms: ForeignMedical,SpinaBifida,andCaregiverStipend. Amountsrecoveredfor
20042011includesunsolicitedfundscollectedbackfromCBO.
(4) 2012identifiedrecoveredamountsforNonVACareFeeandStateHomePerDiemGrantsisincompleteduetoCBOsaudit
contingencycontractsnotineffectfor2012.
(5) OtherVHAprograms1,usingMedicalCareFunds,includesthefollowingprogramsforreportingpurposes: ActivitieswithOther
FederalAgencies;VHA Communications,Utilities,andOtherRent;CompensatedWorkTherapy/IncentiveTherapy;VHA Equipment;
Grants HomelessPerDiemProgram;VHA LandandStructures;VHA OtherServices;VHA PersonalServicesandBenefits;
ConsolidatedMailOutpatientPharmacy;PharmacyMedicalFacilities;VHA PrintingandReproduction;Prosthetics,and
VHA Transportation.
Improper Payments Elimination and Recovery Act of 2010 (IPERA) Part IV - 20











(6) OtherVHAprograms2,usingNonMedicalFundsincludesthefollowingprogramsforreportingpurposes: MedicalFacilities;Recovery
Act;MedicalandProstheticResearch;DoDVAHealthCareSharingIncentiveFunds;DoDVAMedicalFacilityDemonstrationFund;
CanteenService,andGeneralPostFund.
Table3
PaymentRecaptureAuditTargets
(1)
($inmillions)
Programor
Activity
Typeof
Payment
2012Amount
Identified
2012Amount
Recovered
2012
RecoveryRate
2013Recovery
RateTarget
2014Recovery
RateTarget
2015
Recovery
RateTarget
BeneficiaryTravel Benefit $0.139 $0.072 52% 55% 60% 65%
CHAMPVA Benefit $11.679 $16.598 142% 85% 90% 95%
NonVACareFee Benefit $0.071 $0.071 100% 85% 90% 95%
StateHomePer
DiemGrants Grant $0.011 $0.011 100% 85% 90% 95%
Suppliesand
Materials Other $0.160 $0.122 77% 80% 85% 90%
OtherVHA
Programs1 Other $1.612 $1.409 87% 85% 90% 95%
OtherVHA
Programs2 Other $0.114 $0.109 96% 85% 90% 95%
FSCOtherVHA
Activities Contract $0.010 $0.010 100% 85% 85% 85%
Compensation
(2)
Benefit $0.202 $0.126 62% 62% 62% 62%
Pension
(2)
Benefit $0.005 $0.001 25% 25% 25% 25%
VR&E Benefit $0.106 $0.095 89% 85% 85% 85%
Education
(2)
Benefit $0.014 $0.009 62% 62% 62% 62%
Insurance
(2)
Benefit $0.054 $0.032 59% 59% 59% 59%
LoanGuaranty Benefit $5.196 $2.173 42% 42% 42% 42%
OtherDirect
Benefits
(2)
Benefit $0.182 $0.126 69% 69% 69% 69%
VBAGOEFund Other $0.006 $0.006 100% 85% 85% 85%
FSC VBAOther Other $0.164 $0.081 49% 85% 85% 85%
NCABurial
Programs Other $0.019 $0.019 100% 85% 85% 85%
FSC StaffOffices Contract $0.627 $0.515 82% 85% 85% 85%
NotestoTable3:
(1) VAisreportingimproperpaymentsidentified,recovered,andoutstandingfortheperiodofOctober1,2011,toSeptember30,2012.
Therefore,insomecasestheamountrecoveredisgreaterthantheestablishedamount.
(2) Baseduponhistoricaldebtcollectionratesaswellas,dueprocessaffordedtoeachVeteran,itisnotreasonabletorecover85percent
duringafiscalyear. VAiscurrentlyseekingOMBDirectorapprovalofalowerrecoverytargetmoreappropriateforbenefittypedebts.
Improper Payments Elimination and Recovery Act of 2010 (IPERA) Part IV - 21












Table4
AgingofOutstandingOverpayments
($inmillions)
Programor
Activity
TypeofPayment
(contract,grant,benefit,
loanorother)
2012Amount
Outstanding(0 18
months)
2012Amount
Outstanding(18months
to2years)
2012Amount
Outstanding(over2
years)
BeneficiaryTravel Benefit $0.064 $0.003 $0
CHAMPVA Benefit $0.950 $0.212 $0
NonVACareFee Benefit $0 $0 $0
StateHomePerDiemGrants Grant $0 $0 $0
SuppliesandMaterials Other $0.038 $0 $0
OtherVHAPrograms1 Other $0.152 $0.051 $0
OtherVHAPrograms2 Other $0.005 $0 $0
FSCOtherVHAActivities Contract $0 $0 $0
Compensation Benefit $0.076 $0 $0
Pension Benefit $0.004 $0 $0
VR&E Benefit $0.006 $0 $0
Education Benefit $0.005 $0 $0
Insurance Benefit $0.022 $0 $0
LoanGuaranty Benefit $3.023 $0 $0
OtherDirectBenefits Benefit $0.055 $0 $0
VBAGOEFund Other $0 $0 $0
FSC VBAOther Other $0.083 $0 $0
NCABurialPrograms Other $0 $0 $0
FSC StaffOffices Contract $0.112 $0 $0
Table5
DispositionofRecapturedFunds
($inmillions)
ProgramorActivity
Typeof
Payment
(contract,
grant,
benefit,loan
orother)
Agency
Expensesto
Administer
theProgram
Payment
Recapture
AuditorFees
Financial
Management
Improvement
Activities
Original
Purpose
Officeof
Inspector
General
Returnedto
Treasury
AllVHAPrograms
(1)
All $0 $0 $0 $18.404 $0 $0
Compensation
(2)
Benefit $0 $0 $0 $0.126 $0 $0
Pension
(2)
Benefit $0 $0 $0 $0.001 $0 $0
VR&E
(2)
Benefit $0 $0 $0 $0.095 $0 $0
Education
(2)
Benefit $0 $0 $0 $0.009 $0 $0
Insurance
(2)
Benefit $0 $0 $0 $0.032 $0 $0
LoanGuaranty
(2)
Benefit $0 $0 $0 $2.173 $0 $0
Improper Payments Elimination and Recovery Act of 2010 (IPERA) Part IV - 22




ProgramorActivity
Typeof
Payment
(contract,
grant,
benefit,loan
orother)
Agency
Expensesto
Administer
theProgram
Payment
Recapture
AuditorFees
Financial
Management
Improvement
Activities
Original
Purpose
Officeof
Inspector
General
Returnedto
Treasury
OtherDirectBenefits
(2)
Benefit $0 $0 $0 $0.126 $0 $0
VBAGOEFund
(3)
Other $0 $0 $0 $0.006 $0 $0
FSC VBAOther
(3)
Other $0 $0 $0 $0.081 $0 $0
NCABurialPrograms
(3)
Other $0 $0 $0 $0.019 $0 $0
FSC StaffOffices
(3)
Contract $0 $0 $0 $0.515 $0 $0
NotestoTable5:
(1) Title38oftheU.S.C.allowsVHAtoretainandusetherecoveryfundsasnoyearfunding. ThissignificantbenefittoVA
assuresthatlengthycollectionactivities,typicallyrequiredtoconducttheserecoveryactions,donotnegativelyimpactthe
abilitytousethesefunds. Inaddition,thisbenefitguaranteesstrongparticipationbyassuringfullrecoveryformedical
facilities.
(2) VBAprogramsreceivemandatoryfundingandarenotsubjecttoIPERAallocations. Allrecoveriesarereturnedtothefund
foritsoriginalpurpose.
(3) Improperpaymentsidentifiedandrecoveredwerefromprogramswherethefundshadnotexpired. Allrecoverieswere
returnedtothefundfororiginalpurpose.
Table6
OverpaymentsRecapturedOutsideofPaymentRecaptureAudits
($inmillions)
Sourceof
Recovery
Amount
Identified
(2012)
Amount
Recovered
(2012)
Amount
Identified
(20042011)
Amount
Recovered
(20042011)
Cumulative
Amount
Identified
(20042012)
Cumulative
Amount
Recovered
(20042012)
VHACBOActivities
(1)
$0 $11.5 $0 $0 $0 $11.5
VBAIPIAHighRiskProgram
Testing $0.048 $0 $0 $0 $0.048 $0
SupplyFund
(2)
$14.16
(3)
$4.02
(3)
$201.59 $178.70 $215.75 $182.72
NotestoTable6:
(1) CBOoverpaymentsrecapturedoutsideofpaymentrecaptureauditsfor2012consistsofunsolicitedfundsreceived. 2011
effortsarereportedunderTable2.
(2) OALCworkswiththeOIGOfficeofContractReview(OCR)torecoverfundsowedVAduetodefectivepricingandprice
reductionviolations. AspartoftheOIGpostawardcontractreviews,staffalsolooksforandcollectsoverchargesthatwere
theresultofthecontractorchargingmorethanthecontractprice. OtherreviewsconductedbyOCRincludehealthcare
resourceproposals,claims,andspecialpurposereviews.
(3) VAisreportingamountsidentifiedandrecoveredfortheperiodofOctober1,2011,toSeptember30,2012.
SectionVI. ThissectiondescribeshowVAsleadershipisheldaccountableforreducingandrecovering
improperpayments.
TheDepartmentsImproperPaymentsGovernanceBoard,ledbyVAsChiefFinancialOfficerandother
keysenioraccountableofficialsandprogrammanagerswithintheAdministrations,isfocusedon
achievingIPERAcompliance,identifyingrootcausesofimproperpayments,establishingreductiongoals
andimplementingcorrectiveactionstoreduce/preventimproperpayments.
VHA
Improper Payments Elimination and Recovery Act of 2010 (IPERA) Part IV - 23











Annually,VHApublishesaDirectorExecutiveCareerFieldperformanceplantocommunicatetosenior
executivestheexpectationsofVA. Theplanincludesthegoaloffinancialstewardship,whichisto
supporttheoverallDepartmentalgoalofbestpracticesinfinancialandbusinessprocesses. EachVISN
ensurescontinualmonitoringoffacilityperformancesonkeyfinancialandbusinesscompliance
indicators. In2013,reductiontargetswereincorporated,whereapplicable,intoVISNDirectors
PerformancePlansforIPERA2012highriskprograms.
VBA
TheUnderSecretaryforBenefits(USB)continuestoemphasizeaccountabilityandintegrityatevery
level;underscoringthecommitmenttoachievingthegoalssetforthinIPERA,theUSBappointedits
ChiefFinancialOfficerandDeputyChiefFinancialOfficerassenioraccountableofficialsforachieving
IPERAcompliance. Furthermore,VBAcreatedacommitteeofprogrammanagers,programofficialsand
keyaccountableofficersfromallbusinesslinesspecificallyforthepurposeofestablishingand
implementingguidelinesandpoliciestomeetimproperpaymentreportingrequirements.
Additionally,VBAiscurrentlyintheimplementationphaseoflaunchingtheVBATransformation
Plan. VBAsleadershiphasdevelopedgoalsandinitiativestotransformVBAintoastreamlined,high
tech21
st
centuryorganization,whichwillenableVBAtoprocessCompensation,PensionandDICclaims
within125daysofreceiptwitha98percentaccuracyrateby2015. WithVeteransandtheirfamilies
alwaysattheforefrontofallVBAstrategicgoals,theTransformationPlanisdesignedtotransformthree
majorareas: people,processes,andtechnology. Thesweepingmultifacetedchangeswillinherently
improveinternalprocesscontrolsandsignificantlyreduceimproperpaymentsasaresultofincreased
automationandimprovedaccuracy.
RegionalOfficeDirectors,VeteransServiceCenterManagers,PensionManagementCenterManagers,
andallmanagementpersonnelsharethesameperformancestandardswithrespecttothedeliveryof
CompensationandPensionbenefits. Nonsupervisoryfieldemployeeshaveperformancestandardsthat
measurequalityandproduction. WithinboththeCompensationandPensionprograms,management
andstaffareresponsibleforthemeasurementofquality,developmentofcountermeasuresand
training,anddevelopmentoflegislativeandtechnologicalchanges,wherepossible,toavoid,reduce,
andrecoveroverpayments.
SectionVII. ThissectiondescribesVAsinformationsystemsandinfrastructuretoreduceimproper
payments.
VAhastheinternalcontrols,humancapital,informationsystems,andotherinfrastructuretoreduce
improperpaymentstotheleveltheagencyhastargeted. WhileVAhasthenecessaryinformation
infrastructuretomeetcurrentimproperpaymentlevels,systemenhancementsasdescribedin
SectionIIIofthisreportandadditionalinformationtechnologyfundswouldallowfurtherreductionin
improperpayments.
SectionVIII. ThissectiondescribesVAsstatutoryandregulatorybarriers.
Forcertainbenefits,Veteransand/ortheirbeneficiariesareentitledtonoticeofanydecisionmadeby
VAaffectingthepaymentofbenefits(per38CFR3.103). Thisresultsincontinuedpaymentatimproper
ratesforaminimumof60daysfollowingdiscovery. Sincetheprinciplesofdueprocessaremandated
Improper Payments Elimination and Recovery Act of 2010 (IPERA) Part IV - 24







bytheConstitution,continuedpaymentsduringthenotificationofindebtednessperiodareanecessary
costofadministeringVBAprograms.
Althoughprogramdesignisnotoneofthethreeerrorcategoriesforreportingimproperpaymentsin
AppendixCtoOMBCircularA123,itisamajorcauseofimproperpayments. Veteransand/or
beneficiariesareresponsiblefornotifyingVBAofanyeventthatmayaffectbenefitpayments,suchas
deathordependencychange. Latenotificationsoftheseeventswillsubsequentlycauseimproper
paymentsuntiladequatenotificationisreceived. Thoughtherearecurrentlydatamatchingsystemsin
place,thesesystemsrelyonoutsidepartiesfornotification,whichagain,resultinimproperpayments
untilpropernoticeisprovided.
SectionIX. Thissectiondescribesadditionalcomments,ifany,onoverallagencyefforts,specificprograms
bestpractices,orcommonchallengesidentified,asaresultofIPERAimplementation.
ItisabalancingactfortheDepartmenttoensureVeteransandtheirfamiliescontinuetoreceiveneeded
benefitsintherightamount,attherighttime,whilemakingprogresstowardsreducingandpreventing
improperpayments.
Improper Payments Elimination and Recovery Act of 2010 (IPERA) Part IV - 25


Definitions
DefinitionsofSupportingMeasures
Pleasenote: KeyMeasuresaredefinedintheKeyMeasuresDataTable(seepageII48). Thebelowmeasuresare
SupportingMeasures..
AccuracyrateofVocationalRehabilitationprogramcompletiondecisions
ThismeasureisdesignedtomonitortheaccuracyofdecisionsmadetodeclareaVeteranrehabilitatedor
discontinuedfromaprogramofservices. (VR&E)
Appealsresolutiontime(FromNODtofinaldecision)(Averagenumberofdays)
ThismeasurerepresentstheaveragelengthoftimeittakestheDepartmenttoprocessanappealfromthedatea
claimantfilesaNoticeofDisagreement(NOD)atthelocalregionalofficeuntilacaseisfinallyresolved,including
resolutionataregionalofficeorbyafinaldecisionbytheBoard. (BVA/CompensationandPension)
Averagedaystocompleteoriginalsurvivorspensionclaims
Thismeasurerepresentstheaveragelengthoftime(indays)ittakestoprocessSurvivorsclaimsfromthedatethe
claimisreceivedbyVAtothedatetheclaimiscompleted.(EndProduct190)(Pension)
AverageprocessingtimeforVAregulationsrequiringadvancenoticeandpubliccomment
(2stages)(numberofmonths)
ThisperformancemeasurerecordstheaveragetimeittakesVAprogramofficestopublishtheirregulations. The
timestartswhentheOfficeofRegulationPolicyandManagementintheOfficeofGeneralCounselissuesapublic
RegulationIdentificationNumber(RIN)andendswhenafinalruleispublishedintheFederalRegister. Itdoesnot
includetimespentinplanningorresearchpriortoissuanceofaRIN.
TheAdministrativeProcedureAct(APA)requiresFederalagenciestoprovideadvancenoticeoftheirintended
regulationsbypublishingproposedrulesintheFederalRegisterandaffordingmembersofthepublican
opportunitytoprovidewrittencommentsontheagencysproposals. Agenciesmustthenconsiderthepublics
commentsandrespondtotheminasecondpublication,whichconstitutesthefinalrulethatwillbecomethe
agencysregulation. This2stageprocessalsoincludes290dayreviewsbyOMBpursuanttoExecutiveOrder
12866,RegulatoryPlanningandReview. (DepartmentalManagement)
AverageprocessingtimeforVAregulationswithoutadvancenoticeandpubliccomment
(1stage)(numberofmonths)
ThisperformancemeasurerecordstheaveragetimeittakesVAprogramofficestopublishtheirregulations. The
timestartswhentheOfficeofRegulationPolicyandManagementintheOfficeofGeneralCounselissuesapublic
RINandendswhenafinalruleispublishedintheFederalRegister. Itdoesnotincludetimespentinplanningor
researchpriortoissuanceofaRIN. TheAPAexemptscertainkindsofFederalregulationsfromtherequirements
toprovideadvancenoticeandanopportunityforthepublictocomment. Theseregulationscanbepublishedin
theFederalRegisterasfinalrulesandbecomeeffectivewithoutbeingprecededbyproposedrules. This1stage
processincludesonly190dayreviewbyOMBandcanbeaccomplishedmorequicklythanthe2stageprocess.
Accordingly,theaverageprocessingtimesforthesekindsofregulationsaremeasuredseparately. (Departmental
Management)
Theaverageproportionofpatientsresponding"Always"toreceivingtimelyappointments,careandinformation
Thismeasurerepresentsthepercentofsurveyrespondentswhorespondedfavorablyregardingaccesstocareand
personalhealthcareinformation.
(VHA)
Definitions of Supporting Terms Part IV - 26














AveragedaystocompleteburialclaimsThismeasurerepresentstheaveragelengthoftime(indays)ittakesto
processburialallowanceclaimsfromthedatetheclaimisreceivedbyVAtothedatetheclaimiscompleted. (End
Product160seriesexcept165)(Pension)
BVAcycletime(Averagenumberofdays)
BVAcycletimemeasuresthetimeacasespendsattheBoard,otherthanthetimethecasefileisinthepossession
ofaVeteransServiceOrganization. (BVA)
ClinicalPracticeGuidelinesIndexIV
TheClinicalPracticeGuidelinesIndexisacompositemeasurecomprisedoftheevidenceandoutcomesbased
measuresforhighprevalenceandhighriskdiseasesthathavesignificantimpactonoverallhealthstatus.(VHA)
Commercialsmallbusinesspaymenttimeliness
Thepercentofsmallbusinessespaidwithin15daysofreceiptofproperdocumentation.
NationalaccuracyrateFiduciarywork
Thismeasurerepresentsapercentageoffieldexaminationsandaccountauditscompletednationallyand
determinedtobetechnicallyaccurate. TheaccuracyratefortheNationisacompilationofthePensionand
FiduciaryServicesreviewofasamplingoffieldexaminationsandaccountauditscompletedbythesixfiduciary
hubsandtheManilafiduciaryactivity. Accuracyrateisdeterminedbydividingthetotalnumberofcaseswithno
errorsbythenumberofcasesreviewed.(Fiduciary)
Compensationmaintenanceclaimsaveragedaystocomplete
Theaveragelengthoftime(indays)ittakestocompleteclaimsforcompensationthatdonotrequirearating
determination. ItismeasuredfromthedatetheclaimisreceivedbyVAtothedatethedecisioniscompleted. The
measureiscalculatedbydividingthetotalnumberofdaysrecordedfromreceipttocompletionbythetotal
numberofcasescompleted. (Compensation)
Customersatisfactionsurveyscores
Customersatisfactionscores(measuredonascaleof1through5,with5beingthehighestpossiblescore)are
basedonsurveysreturnedtoOIGbytheprincipalsimpactedbyinvestigations,auditsandevaluations,healthcare
inspections,andcontractreviews. Ininstanceswherecustomersurveysarereturnedwithlowerthananticipated
ratings,managementmayfollowupwithsurveyparticipantstoidentifyanyissuesthatcausedlowratingsand
possiblesolutions. (OIG)
Educationcallcenterclientsatisfactionindexscore
Theindexscoreisacalculationofeducationcallcentercustomerratedperformancescores,weightedrelativeto
theimportancethecustomergiveseachfactortooverallsatisfactionwiththeeducationcallcenter.Thismeasures
theoverallcustomerexperienceanddetermineswhichareasofserviceneedimprovement.Thecustomersare
respondentswhohaverecentlycontactedtheeducationcallcenterregardingeducationbenefits.(Education)
EducationclaimscompletedperFTE
Thismeasurerepresentsthenumberoforiginalandsupplementaleducationclaimscompleteddividedbythe
numberofdirectFTEinthePresidentialBudget.(Education)
Employmentrehabilitationrate
Theemploymentrehabilitationrateiscalculatedasfollows: (1)thenumberofdisabledVeteranswhosuccessfully
completeVAsvocationalrehabilitationprogramandacquireandmaintainsuitableemploymentdividedby(2)the
totalnumberleavingtheprogramfromthefollowingtwocasestatuses5:rehabtoemployabilityor6:
employmentservicesboththoserehabilitatedplusdiscontinuedcaseswithaplandevelopedinoneoftwocase
statuses(RehabilitationtoEmployability,orEmploymentServices)minusthoseindividualswhobenefitedfrombut
lefttheprogramunderoneoftwoconditions:(a)theVeteranacceptedanemploymentpositionincompatiblewith
disabilitylimitations,(b)theVeteranisemployablebuthasinformedVAthathe/sheisnotinterestedinseeking
employment,orisnotemployedandnotemployableformedicalorpsychologicalreasons.(VR&E)
Definitions of Supporting Terms Part IV - 27


TheenterpriseVAAmericanCustomerServiceIndexforinternalcustomersatisfactionwithVAITservices
Thisindex(notpercentage)iscalculatedannuallyusingsurveydata. InFY2013,asurveywasconductedin
October2012andthedatafromall44,000respondentstothissurveywasusedtocalculatecustomersatisfaction
withvariousITproductsandservicesusingtheAmericanCustomerSatisfactionIndex,whichisawidelyused
measurementmethodthatallowsanorganizationtocompareitscustomerservicedeliverytosimilar
organizations. (OIT)
Independentlivingrehabilitationrate
Theindependentlivingrehabilitationrateiscalculatedasfollows: (1)thenumberofdisabledVeteranswho
successfullycompleteVAsvocationalrehabilitationprogramwithdisabilitiesforwhomemploymentisinfeasible
butwhoobtainindependenceintheirdailylivingwithassistancefromtheprogramdividedby(2)thetotalnumber
leavingtheprogramfromcasestatus4(independentliving)boththoserehabilitatedplusdiscontinuedcases
withaplandevelopedinindependentliving. (VR&E)
Monetarybenefits(dollarsinmillions)fromaudits,investigations,contractreviews,inspections,andother
evaluations
MonetarybenefitsrepresenttheactualandpotentialmonetarybenefitsidentifiedduringtheconductofOIG
investigations,audits,inspections,contractreviews,andotherevaluations. (OIG)
NationalaccuracyrateBurialclaims
Thismeasurerepresentsthepercentageofburialclaims(EP160seriesexceptEP165)completedanddetermined
tobetechnicallyaccurate. Accuracyrateisdeterminedbydividingthetotalnumberofcaseswithnoerrorsbythe
numberofcasesreviewed. (Pension)
Nationalaccuracyrate(Compensationmaintenanceclaims)
Thismeasurerepresentsclaimsprocessingaccuracyforcompensationclaimsthatdonotrequirearatingdecision.
Reviewcriteriainclude: addressingallissues,VCAAcompliantdevelopment,correctdecision,correcteffective
rate,andcorrectpaymentdateifapplicable. Accuracyrateisdeterminedbydividingthetotalnumberofcases
withnoerrorsinanyofthesecategoriesbythenumberofcasesreviewed. (Compensation)
NationalaccuracyrateOriginalandreopenedpensionclaims
Thismeasurerepresentsclaimsprocessingaccuracyforpensionclaimsthatnormallyrequireadisabilityordeath
ratingdetermination.Reviewcriteriainclude:addressingallissues,VCAAcompliantdevelopment,correctrating
decision,correcteffectivedate,andcorrectpaymentrateifapplicable.Accuracyrateisdeterminedbydividingthe
totalnumberofcaseswithnoerrorsinanyofthesecategoriesbythenumberofcasesreviewed.(Pension)
Nationalaccuracyrate Pensionmaintenanceclaims
Thismeasurerepresentsclaimsprocessingaccuracyforpensionclaimsthatnormallyrequireadisabilityordeath
ratingdetermination. Reviewcriteriainclude: addressingallissues,VCAAcompliantdevelopment,correct
decision,correcteffectivedate,andcorrectpayment rateifapplicable. Accuracyrateisdeterminedbydividing
thetotalnumberofcaseswithnoerrorsinanyofthesecategoriesbythenumberofcasesreviewed. (Pension)
Nationalcallcenterclientsatisfactionoverallscore
Thismeasurerepresentstheoverallcustomer'sexperienceandenablesVAtoassesskeyattributessuch
ascourtesyoftherepresentative;knowledgeoftherepresentative;overallconcernofthecustomersneeds;
usefulnessoftheinformationprovidedtoaddress theproblem,question,orrequest;timelinessofresolvingthe
problem,question,orrequest;andpromptnessinspeakingwithcustomers. Thesekeyattributeswillhelpto
identifyprocessimprovementsthroughoutthenationalcallcenters. Inaddition,thismeasurerepresentsthe
overallcustomer'sexperiencewithVBA'sVRMtechnologytransformationefforts(e.g.,VirtualHold,Customer
RelationshipManagement/UnifiedDesktop,etc.)andwillfurtherenableVAtoidentifyprocessesandindustrybest
practicesforimplementation.(Compensation)
Definitions of Supporting Terms Part IV - 28




Numberofarrests,indictments,convictions,criminalcomplaints,pretrialdiversions,andadministrative
sanctions
ThisnumberrepresentstheoutputresultingfromtheconductofanOIGinvestigationintoallegationsofcriminal
activitiesrelatedtoprogramsandoperationsofVAorintoallegationsagainstseniorVAofficialsandotherhigh
profilemattersofinteresttoCongressandtheDepartment. (OIG)
NumberofauditqualificationsidentifiedintheauditorsopinionontheVASupplyFund
ThismeasurereportshowmanyauditqualificationsareidentifiedeachyearininSupplyFundsconsolidated
financialstatements. AuditsareperformedinaccordancewithGovernmentAuditingStandardsissuedbythe
ComptrollerGeneraloftheUnitedStatesandtherequirementsoftheOMBBulletinNo.0704,"Audit
RequirementsforFederalFinancialStatements,"asamended. Auditqualificationsareeithersignificant
deficienciesormaterialweaknesses. Asignificantdeficiencyisdefinedasacontroldeficiency,orcombinationof
deficiencies,thatadverselyaffectsVAsabilitytoinitiate,authorize,record,processorreportexternalfinancial
datareliablyinaccordancewithgenerallyacceptedaccountingprinciplessuchthatthereismorethanaremote
likelihoodthatamisstatementofVAsannualorinterimfinancialstatementsthatismorethaninconsequentialwill
notbepreventedordetected. Amaterialweaknessisasignificantdeficiency,orcombinationofsignificant
deficiencies,thatresultsinmorethanaremotelikelihoodthatamaterialmisstatementoftheannualorinterim
financialstatementswillnotbepreventedordetected.
Numberofdisbursements(deathclaims,loans,andcashsurrenders)perFTE
Thismeasureiscalculatedbydividingthenumberofdisbursements whichincludesdeathclaims,loans,andcash
surrenders bythetotalnumberofFTEwhoprocessthosedisbursements. (Insurance)
NumberofhomelessVeteransonanygivennight
Homelessnessisverydifficulttoquantifygiventheinherenttransientnatureofthisproblem. The"numberof
homelessonanygivennight"isanestimateofthenumberofhomelessVeteransbasedonthreeDepartmentof
HousingandUrbanDevelopmentspointintimecountestimatesofhomelessness. (VHAOPIA)
Numberofmaterialweaknesses
AuditsareperformedinaccordancewithGovernmentAuditingStandardsissuedbytheComptrollerGeneralofthe
UnitedStatesandtherequirementsoftheOMBBulletinNo.0704,"AuditRequirementsforFederalFinancial
Statements,"asamended. ThismeasurereportshowmanymaterialweaknessesareidentifiedeachyearinVAs
consolidatedfinancialstatements. (DepartmentalManagement)
NumberofregisteredeBenefitsusers
ThenumberofindividualswhohaveobtainedaDepartmentofDefenseSelfServiceLogon,whichisthesecure
credentialforaccessingtheeBenefitsWebPortal. (Compensation)
Numberofreports(audit,inspection,evaluation,contractreview,andCAPreports)issuedthatidentify
opportunitiesforimprovementandproviderecommendationsforcorrectiveaction
ThismeasureshowsthenumberofreportsissuedbytheOIGinwhichsubstantivecorrectiveactions,intheform
ofaudit,inspection,evaluation,contractreviewandCAPreportrecommendationsaredocumentedandwhich
requireremedialactionbytheDepartment. (OIG)
Definitions of Supporting Terms Part IV - 29





Overallcommercialvendorpaymenttimeliness
Thepercentofcommercialvendorspaidwithin15daysofreceiptofproperdocumentation.(Departmental
Management)
Overallsatisfactionrate(Compensation)
ThismeasurerepresentsthepercentageofrespondentstotheCompensationandPensioncustomersatisfaction
surveywhowere"verysatisfied"or"somewhatsatisfied"withthewayVAhandled/ishandlingtheircompensation
claim. (Compensation)
Overallsatisfactionrate(Pension)
ThismeasurerepresentsthepercentageofrespondentstotheCompensationandPensioncustomersatisfaction
surveywhowere"verysatisfied"or"somewhatsatisfied"withthewayVAhandled/ishandlingtheirpensionclaim.
(Pension)
Paymentaccuracyrate
Thismeasureassesseshowwelldecisionsreflectpaymentattheproperrateforthecorrectperiodoftime.
(Education)
Percentofannualmajorconstructionoperatingplanexecuted
Thismeasurerepresentsplannedmajorconstructionawardscomparedtoactualawardsforthegivenfiscalyear.
(DepartmentalManagement)
PercentofbeneficiariesthatbelievetheirVAeducationalassistancehasbeeneitherveryhelpfulorhelpfulin
theattainmentoftheireducationalorvocationalgoal
ThismeasurewilldeterminetheproportionofbeneficiarieswhoreporttheirVAeducationalbenefitshelpedthem
accomplishtheireducationalorvocationalgoal. (Education)
PercentofbeneficiariesverysatisfiedorsomewhatsatisfiedwiththewayVAhandledtheireducationclaim
Thismeasurerepresentsthenationalpercentageofrespondentstotheeducationcustomersatisfactionsurvey
whowere"verysatisfied"or"somewhatsatisfied"withthewayVAhandledtheireducationbenefitsclaim.
(Education)
Percentofcontractscompetitivelyawarded
Thismeasurecomparesthedollarvalueofcontractsawardedcompetitivelyversusthetotaldollarvalueof
contractsawarded.
Percentofcontractsthatareawardedwithinrequiredprocurementactiontimeframes(numberofweeks
betweentechnicalclearanceofthefinalconstructiondocumentsandawardofcontracts)
ThismeasurecapturesthepercentageoftotalconstructioncontractstheOfficeofAcquisition,Logistics,and
Constructionawardedwithin17weeksofthetechnicalclearancebaseduponthenumberofactualcontracts
awardedversusplannedawards.
Percentofcontractsthatmeettheestablishedprocurementactionleadtimes/milestonedates
Thismeasureanalyzesthepercentageofcontractawardsmadeontimeinaccordancewiththeacquisitionplan
establishedforthecontractinVAsElectronicContractManagementSystem.
Percentofcurrentyearelectricityconsumptiongeneratedwithrenewableenergysources
Thismeasureiscalculatedbysummingallqualifyingrenewableelectricityconsumption,dividingbythesumofall
electricityconsumption,andexpressingtheresultasapercentage. (DepartmentalManagement)
Definitions of Supporting Terms Part IV - 30







Percentofemployeesinmissioncriticalandkeyoccupationswhoparticipatedinacompetencybasedtraining
programwithinthelast12months
Missioncritical/keyoccupationsarethoseoccupationsthathavebeenidentifiedfromtheworkforcethatare
criticaltosupportthemissionandtheaccomplishmentofVAsagencygoals,objectives,andinitiatives.
CompetencyBasedTrainingProgramisaprogramthatcontainscompetenciespertainingtotheknowledge,skills,
andabilitiesneededtobuildahighlycompetentorganizationcapableofmeetingcurrentandfuturechallenges.
(DepartmentalManagement)
Percentofestablishedmentalhealthappointmentscompletedwithin14daysofthedesireddateforthe
appointment
ThismeasurerepresentsthepercentageofVeteranswhohavebeenpreviouslyseenindesignatedmentalhealth
clinicswithascheduledappointmentwithin14dayoftheirdesireddate. (VHA)
Percentofestablishedprimarycareappointmentscompletedwithin14daysofthedesireddateforthe
appointment
ThismeasurerepresentsthepercentageofVeteranswhohavebeenpreviouslyseenindesignatedprimarycare
clinicswithascheduledappointmentwithin14dayoftheirdesireddate. (VHA)
Percentofestablishedspecialtycareappointmentscompletedwithin14daysofthedesireddateforthe
appointment
ThismeasurerepresentsthepercentageofVeteranswhohavebeenpreviouslyseenindesignatedspecialtycare
clinicswithascheduledappointmentwithin14dayoftheirdesireddate. (VHA)
Percentoffacilitiescustomersthataresatisfiedwithservicesbeingprovided
Thismeasureprovidesacustomersatisfactionscore(measuredonascaleofonethrough10with10beingthe
highestpossiblescore)basedonsurveysfromVAfacilitydirectors.
Percentofgravesitesthathavegradesthatarelevelandblendwithadjacentgradelevels
Thispercentagerepresentsthenumberofgravesitesthatarelevelandblendwithadjacentgradelevelsdividedby
thenumberofgravesitesassessed. (Burial)
Percentofheadstonesandmarkersthataredeliveredundamagedandcorrectlyinscribed
Thispercentagerepresentsthenumberofheadstonesandmarkersthatareundamagedandcorrectlyinscribed
whenreceived,dividedbythenumberofheadstonesandmarkersordered. (Burial)
Percentofheadstonesand/ormarkersinnationalcemeteriesthatareattheproperheightandalignment
Thispercentagerepresentsthenumberofheadstonesandmarkersinnationalcemeteriesthatareattheproper
heightandalignmentdividedbythetotalnumberassessed. (Burial)
Percentofheadstones,markers,andnichecoversthatarecleanandfreeofdebrisorobjectionable
accumulations
Thispercentagerepresentsthenumberofheadstones,markers,andnichecoversthatarecleanandfreeofdebris
orobjectionableaccumulationsdividedbythetotalnumberassessed. (Burial)
PercentofIDESparticipantswhowillbeawardedbenefitswithin30daysofdischarge
ThismeasurerepresentsparticipantsintheIDESprogramawardedVAcompensationbenefitswithin30daysafter
theirdateofdischarge. (VBA)
Percentofmajorleaseacquisitionsthatmeetfinaldirectleaseacquisitiontargetdate
Thismeasurerepresentsplannedmajorleaseacquisitionsawardscomparedtoactualawardsforthegivenyear.
Definitions of Supporting Terms Part IV - 31





PercentofmilestonesachievedindeployingandimplementingtheVRM
ThispercentagerepresentsthenumberofVRMSmilestonesdeliveredduringthefiscalyeardividedbythenumber
ofCRMSmilestonesplannedtobedeliveredduringthefiscalyear. (DepartmentalManagement)
PercentofmilestonesachievedindeployingandimplementingtheVeteransRelationshipManagementSystem
(VRMS)
ThispercentagerepresentsthenumberofVRMSmilestonesdeliveredduringthefiscalyeardividedbythenumber
ofCRMSmilestonesplannedtobedeliveredduringthefiscalyear. (DepartmentalManagement)
PercentofmilestonesachievedindeployingandimplementingtheVirtualLifetimeElectronicRecord(VLER)
ThispercentagerepresentsthenumberofVLER(nonhealth)milestonesdeliveredduringthefiscalyeardividedby
thenumberofVLER(nonhealth)milestonesplannedtobedeliveredduringthefiscalyear. (Departmental
Management)
Percentofmilestonesachievedtowardsdeploymentandimplementationofapaperlessdisabilityclaims
processingsystem
ThispercentagerepresentsthenumberofVeteranBenefitsManagementSystem(VBMS)milestonesdelivered
duringthefiscalyeardividedbythenumberofVBMSmilestonesplannedtobedeliveredduringthefiscalyear.
(DepartmentalManagement)
PercentofMontgomeryGIBillorPost9/11GIBillparticipantswhosuccessfullycompletedaneducationor
trainingprogram
ThismeasurerepresentsthepercentageofServicemembersandVeteranswhoreceivedPost9/11GIBillor
MontgomeryGIBilleducationbenefitsandobtainedadegreeorcertificate. (VBA)
Percentofnewprimarycareappointmentscompletedwithin14daysofthecreatedatefortheappointment
ThismeasurerepresentsthepercentageofVeteranswhoarenewtoprimarycarewhohaveacompleted
appointmentwithin14daysoftheappointmentcreatedate. (VHA)
Percentofnewspecialtycareappointmentscompletedwithin14daysofthecreatedatefortheappointment
ThismeasurerepresentsthepercentageofVeteranswhoarenewtospecialtycarewhohaveacompleted
appointmentwithin14daysoftheappointmentcreatedate. (VHA)
Percentofnewmentalhealthappointmentscompletedwithin14daysofthecreatedatefortheappointment
ThismeasurerepresentsthepercentageofVeteranswhoarenewtomentalhealthwhohaveacompleted
appointmentwithin14daysoftheappointmentcreatedate. (VHA)
PercentofNonVAclaimspaidin30days
ThepercentageofNonVAclaimswhichwereprocessedwithin30days,thispercentageincludestheprocessing
timeforpaid,deniedandrejectedclaims. (MedicalCare)
PercentofpatientsratingVAhealthcareas9or10(onascalefrom0to10)
Thismeasurerepresentsthepercentofsurveyrespondentswhoratedtheirhealthcare9or10(onascaleof0
10). Themeasureisreportedforoutpatientcareandinpatienthospitalstays. (VHA)
Percentofpensionmaintenanceclaimspendinginventorythatismorethan90daysold.
Thepercentageofpensionmaintenanceclaimspendinginventorythatismorethan90daysoldismeasuredbythe
numberofdayspendingforeachpensionclaimnotrequiringaratingdecision. Thismeasureincludes
EPs: HospitalAdjustment(EP135);Dependency(EP137);IncomeAdjustment(EP150); EligibilityVerification
ReportReferrals(EP155);IncomeVerificationMatch(EP154);EligibilityDeterminations(EP297);andPre
determinationclaims(EP607). Themeasureiscalculatedbydividingthetotalnumberofsuchclaimspending90
daysorgreaterbythetotalnumberofclaimspending. (VBA)
Definitions of Supporting Terms Part IV - 32















Percentofrespondentswhoagreeorstronglyagreethatthequalityoftheheadstoneormarkerreceivedfrom
VAwasexcellent
Thismeasurerepresentsthenumberofsurveyrespondentswhoagreeorstronglyagreethatthequalityofthe
headstoneormarkerreceivedfromVAisexcellentdividedbythetotalnumberofsurveyrespondents,expressed
asapercentage. (Burial)
PercentofrespondentswhoagreeorstronglyagreethatthequalityofthePresidentialMemorialCertificate
receivedfromVAwasexcellent
Thismeasurerepresentsthenumberofsurveyrespondentswhoagreeorstronglyagreethatthequalityofthe
PMCreceivedfromVAisexcellentdividedbythetotalnumberofsurveyrespondents,expressedasapercentage.
(Burial)
PercentofrespondentswhowouldrecommendthenationalcemeterytoVeteranfamiliesduringtheirtimeof
need
Thismeasurerepresentsthepercentofsurveyrespondentswhoagreeorstronglyagreethattheywould
recommendthenationalcemeterytoVeteranfamiliesduringtheirtimeofneed. (Burial)
PercentoftargetedpopulationofOEF/OIF/ONDVeteranswithaprimarydiagnosisofPTSDwhoreceivea
minimumof8psychotherapysessionswithina14weekperiod
ThismeasurerepresentsthepercentofOEF/OIF/ONDVeteransseekingcareinVAwithaprimarydiagnosisof
PTSDwhohavereceivedatleast8individualevidencebasedpsychotherapysessionsoverthespanofa14week
period. (MedicalCare)
PercentofTitle5employeeshiredthroughcompetitiveexaminingprocesswithin80days
BasedupontheOPMTimetoHireInitiativeforhireswhereanannouncementwaspostedonUSAJobs,this
measureiscalculatedbydividingthenumberofTitle5employeeshiredthroughthecompetitiveexamining
processwithin80daysbythetotalnumberofTitle5employeeshiredthroughthecompetitiveexaminingprocess.
(DepartmentalManagement)
Percentoftotalhearingsthatareconductedviavideoteleconference(VTC)
Thismeasureiscalculatedbydividingthenumberofhearingsconductedbyvideoconferencebythetotalnumber
ofhearingsheld. Hearingsareheldeitherbyvideoteleconference,inpersoninthefield,orinpersonatBVAs
Washington,DCoffice. (BVA)
PercentoftotalHUDVASHvouchersthatresultedinaVeteranachievingresidentstatus(SupportsAgency
PriorityGoal)
ThisisameasureofthepercentageofallocatedvouchersthatresultedinaVeteranachievingresidentstatusand
thereforearenolongercountedashomeless.
Percentoftotalprocurementdollarsawardedtobusinesseslocatedinhistoricallyunderutilizedbusinesszones
ThisisameasureofthetotalcontractdollarsawardedtoqualifiedHUBZone(historicallyunderutilizedbusiness
zones)firms,dividedintototalprocurement. QualifiedHUBZonesmallbusinessesarethosecertifiedbytheSmall
BusinessAdministrationaseligiblebasedontheirlocationin,andhiringfrom,economicallydistressed
areas. TheseHUBZoneareasaredesignatedbasedondisproportionatelyhighunemploymentor
disproportionatelylowhouseholdincome.
PercentoftotalprocurementdollarsawardedtoServiceDisabledVeteranOwnedSmallBusinesses
ThisnumberrepresentsthepercentageoftotaldollarsspentwithServiceDisabledVeteranOwnedSmall
Businessesbasedontotalsmallbusinesseligibledollarsreported. DataareobtainedfromtheFederal
ProcurementDataSystemNextGeneration(FPDSNG),providedbytheFederalProcurementDataCenterat
https://www.fpds.gov. FinaldataarebasedontheSmallBusinessAdministration(SBA)GoalingReport. "Service
DisabledVeteranOwnedSmallBusinessconcernmeansasmallbusinessconcern"(1)Meansasmallbusiness
concern(i)Notlessthan51percentofwhichisownedbyoneormoreservicedisabledVeteransor,inthecaseof
anypubliclyownedbusiness,notlessthan51percentofthestockofwhichisownedbyoneormoreservice
Definitions of Supporting Terms Part IV - 33









disabledVeterans;and(ii)Themanagementanddailybusinessoperationsofwhicharecontrolledbyoneormore
servicedisabledVeteransor,inthecaseofaservicedisabledVeteranwithpermanentandseveredisability,the
spouseorpermanentcaregiverofsuchVeteran. Inaddition,somebusinessesmaybeownedandoperatedbyan
eligiblesurvivingspouse. (2)ServicedisabledVeteranmeansaVeteran,asdefinedin38U.S.C.101(2),witha
disabilitythatisserviceconnected,asdefinedin38U.S.C.101(16). Inaddition,ServiceDisabledVeteranOwned
SmallBusinessesparticipatinginsetasidesorsubcontractsauthorizedbyVAAR819.7001mustbelistedonthe
VetBiz.govVendorInformationPages(VIP)Database. (DepartmentalManagement)
PercentoftotalprocurementdollarsawardedtoVeteranOwnedSmallBusinesses
ThisnumberrepresentsthepercentageoftotaldollarsspentwithVeteranOwnedSmallBusinessesbasedontotal
smallbusinesseligibledollarsreported. DataareobtainedfromtheFPDSNG,providedbytheFederal
ProcurementDataCenterathttps://www.fpds.gov. FinaldataarebasedontheSBAGoalingReport. "Veteran
OwnedSmallBusinessconcernmeansasmallbusinessconcern(1)Notlessthan51percentofwhichisownedby
oneormoreVeterans(asdefinedat38U.S.C.101(2))or,inthecaseofanypubliclyownedbusiness,notlessthan
51percentofthestockofwhichisownedbyoneormoreVeterans;and(2)Themanagementanddailybusiness
operationsofwhicharecontrolledbyoneormoreVeterans. Inaddition,VeteranOwnedSmallBusinesses
participatinginsetasidesorsubcontractsauthorizedbyVAAR819.7001mustbelistedontheVIPDatabase.
(DepartmentalManagement)
PercentofVAITprojectsdeliveringfunctionalityon6monthorlessintervals
Thispercentagerepresentstheoverallontimemilestonesdeliveredduringthefiscalyeardividedbythenumber
ofallmilestonesplannedtobedeliveredduringthefiscalyear.(DepartmentalManagement)
PercentofVeteransbeingdischargedfromaninpatientMentalHealthunitwhoreceiveoutpatientmental
healthfollowupcarewithin7daysofdischarge
ThismeasurerepresentsthepercentageofVeteransdischargedfromaninpatientmentalhealthunitwhoreceive
outpatientmentalhealthfollowupcarewithin7daysofdischargeincludinguseoftelephoneandtelemental
healthcaredelivery. (VHA)
PercentofVeteransorbeneficiarieswhocontactedVADebtManagementCenterstollfreephonelinewithout
abusysignal
PercentageofVeteransandbeneficiarieswhoreachedtheDebtManagementCentertotalkwithafinancial
administrativespecialistregardingtheirdebt. Abusysignalwouldbereceivedifalloftheopenlinesarebeing
usedorapowerorsystemoutageoccurs.
PercentofVeteransparticipatingintelehealth
This measure represents the percentage of eligible Veterans who have received telehealth services during the fiscal
year. This is a composite of the eligible Veterans who have received home telehealth, clinical video telehealth, and
store and forward telehealth services during the fiscal year. (VHA)
PercentofVeteranswhoreport"yes"totheshareddecisionmakingquestionsintheInpatientSurveysofthe
HealthExperiencesofPatients(SHEP)
Thismeasurerepresentsthepercentofsurveyrespondentswhorespondedfavorablyregardingtheirsatisfaction
withtheirlevelofinvolvementintheirowncare.
PercentofvisitorstoVAswebsitethatindicatedthattheyaresatisfied/highlysatisfiedwithinformation
presented
Thismeasurerepresentsthosewebsitevisitorswhorespondtoquestionspresentinarandomsampleonline
customerservicesurveythattheyareeithersatisfiedorhighlysatisfiedwiththeinformationpresented.
Percentageofprosecutionssuccessfullycompleted
Thismeasurerepresentsthosecasesreferredforprosecutionforwhichaconviction,pretrialdiversion,ora
deferredprosecutionwasobtained. (OIG)
Definitions of Supporting Terms Part IV - 34







Percentageofrecommendationsimplementedwithin1yeartoimproveefficienciesinoperationsthrough
legislative,regulatory,policy,practices,andproceduralchangesinVA
ThismeasurerepresentsthepercentageofrecommendationsmadeinOIGreportsthatareimplementedbythe
Departmentwithin1yearinordertoimproveoperations. (OIG)
Percentageofrecommendedrecoveriesachievedfrompostawardcontractreviews
Thismeasurerepresentsthepercentageofrecommendedrecoveriesfrompostawardcontractreviewsthatare
actuallybilledandcollectedbytheDepartment. (OIG)
PercentageofVAemployeeswhoareVeterans
ThisisthepercentageofemployeeswhoareidentifiedasVeteransinthePersonnelAccountabilityandIntegrated
DataSystems.(DepartmentalManagement)
ProgramReviewAccuracyRate(Housing)
ThismeasurerepresentstheoverallaccuracyrateofLoanGuarantyoperationsacrossLoanProduction,
Construction&Valuation,LoanAdministration,andSpeciallyAdaptedHousing. Forthenumberofoversightitems
reviewedacrosstheseareas,itrepresentsthepercentageofwhichwerefoundtohavenoerrors. (LoanGuaranty)
RateofhomeownershipforVeteranscomparedtothatofthegeneralpopulation
ThismeasurerepresentsthepercentageofVeteranswhoowntheirhomescomparedtothepercentageofthe
generalnonVeteranpopulationwhoowntheirhomes. (LoanGuaranty)
Returnoninvestment(monetarybenefitsdividedbycostofoperationsindollars)
Thismeasurerepresentsthemonetarybenefitsderivedfrominspections,reports,investigations,evaluationsand
otheroversightperformedbyOIGdividedbythecostofdoingthoseactivities. (OIG)
SAHgranteeswhobelieveadaptationsobtainedundertheprogramhavehelpedthemlivemoreindependently
AperiodicsurveyissenttoSAHprogramgrantees. ThismeasurerepresentsthepercentageofSAHgrant
recipientswhoindicatedviasurveythatadaptationsmadetotheirhomesincreasedtheirindependenceof
living. Theoutputofthismeasureisthepercentageofrespondentswhorepliedwithayestothequestionof
Doyourhousingadaptationshelpyoulivemoreindependently?(Housing)
VeteranssatisfactionlevelwiththeVALoanGuarantyProgram
ThismeasurerepresentsthepercentageofVeteransansweringtheLoanGuarantycustomersatisfactionsurvey
whowere"verysatisfied"or"somewhatsatisfied"withtheprocessofobtainingaVAhomeloan. (LoanGuaranty)
VeteranssatisfactionwiththeVR&Eprogram
ThismeasurerepresentsthepercentofVeteranswhoanswered"verysatisfied"or"somewhatsatisfied"overall
withtheVR&Eprogram(ofthosewhocompletedorwithdrewfromtheprogram). (VR&E)
WeightedSatisfactionIndexrelatedto: (1)timelinessoflegalservices(VAclientorganizationcentered);(2)
responsivenessoflegalservices(VAclientorganizationcentered);(3)tortprocessingtimes(Veterancentered);
and(4)OGCemployeesatisfaction
Theindexiscalculatedasfollows:OGCinternalcasetrackingofaveragedaystoprocessethics,research,and
personnellawtypesofcasesweightedat10%,administrativetortclaimsadjudicatedwithin180daysweightedat
10%;allemployeesurveymeasurementofemployeesatisfactionwithacombinedweightof20%for(1)employee
perceptionofcustomersatisfaction,(2)qualityofwork,and(3)employeeperceptionofcustomerservice;and
OGCClientSatisfactionSurveymeasureswithTimelinessweightedat20%andResponsivenessweightedat20%.
Definitions of Supporting Terms Part IV - 35






DefinitionsofFinancialandOtherTerms
Accountspayable
ThistermisdefinedasthemoneyVAowestovendorsandotherFederalentitiesforproductsandservices
purchased. Thisistreatedasaliabilityonthebalancesheet. (Financial)
Accountsreceivable
ThistermisdefinedastheamountofmoneythatisowedtoVAbyacustomer(includingotherFederal
entities)forproductsandservicesprovidedoncredit. Thisistreatedasacurrentassetonthebalance
sheetandincludessuchitemsasamountsduefromthirdpartyinsurersforVeteranshealthcareandfrom
individualsforcompensation,pension,andreadjustmentbenefitoverpayments. (Financial)
Acquiredloans
ThistermisdefinedasVAguaranteedloansindefaultthatVApurchasesfromtheprivatesectormortgagelender
andservicestheloanwiththeVeterandirectlyafterVAdeterminestheVeterancanservicethedebtservice
payments. ThistypeofloanispartoftheVAloanguarantyprogram.(Financial)
Allowance
ThistermisdefinedastheamountsincludedinthePresidentsbudgetrequestorprojectionstocoverpossible
additionalproposals,suchasstatutorypayincreasesandcontingenciesforrelativelyuncontrollableprogramsand
otherrequirements. AsusedbyCongressintheconcurrentresolutionsonthebudget,allowancesrepresenta
specialfunctionalclassificationdesignedtoincludeamountstocoverpossiblerequirements,suchascivilianpay
raisesandcontingencies. Allowancesremainundistributeduntiltheyoccurorbecomefirm,thentheyare
distributedtotheappropriatefunctionalclassification(s). (Financial)
Apportionment
ThistermisdefinedasadistributionmadebyOMBofamountsavailableforobligationinanappropriationorfund
account. Apportionmentsdivideamountsavailableforobligationbyspecifictimeperiods(usuallyquarters),
activities,projects,objects,oracombinationthereof. Theamountssoapportionedlimittheamountofobligations
thatmaybeincurred. (Financial)
Appropriatedfunds
Thistermisdefinedasgeneralfundexpenditureaccountsestablishedtorecordamountsappropriatedbylawfor
thegeneralsupportofFederalGovernmentactivitiesandthesubsequentexpenditureofthesefunds.Itincludes
spendingfrombothannualandpermanentappropriations.(Financial)
Appropriation
ThistermisdefinedasthespecificamountofmoneyauthorizedbyCongressforapprovedwork,programs,or
individualprojects. (Financial)
AppropriationAuthority
ThistermisdefinedastheauthoritygrantedbyCongressfortheagencytospendGovernmentfunds. (Financial)
Averagedailycensus
Thenumberistheaveragenumberofpatientsenrolledinthespecifiedprogramsoverthecourseoftheyear.
SpecifiedprogramsincludeHomeandCommunityBasedCareprograms(e.g.,HomeBasedPrimaryCare,
PurchasedSkilledHomeHealthCare,SpinalCordInjuryHomeHealthCare,AdultDayHealthCare(VAand
Contract),HomeHospice,OutpatientRespite,CommunityResidentialCare,andHomemaker/HomeHealthAide
Services). (MedicalCare)
Balancesheet
Thistermisdefinedasasummaryofalltheassetstheagencyownsandtheliabilitiesowedagainstthoseassetsas
ofapointintime(theendofthefiscalyearforVAisSeptember30). Thisstatementalwaysshowstwo
Part IV - 36 Definitions of Financial and Other Terms





consecutivefiscalyearsnapshotssothereadercancomparetheinformation. Thereisno"ownersequity"ina
Federalagencyasthereisinanongovernmentcompany. However,weinsteadreportour"netposition,"whichis
theamountofunexpendedappropriationauthority. (Financial)
Baseline(Performance)
Theprocessofestablishingthroughstatisticalanalysis,research,orotherempiricalevidence,thebasisfora
performancetarget. Thebaseliningprocessmostoftenoccurswhenanewmeasureisbeingdeveloped.
BudgetAuthority
Thistermisdefinedastheauthorityprovidedbylawtoenterintoobligationsthatwillresultinimmediate
orfutureoutlaysinvolvingFederalGovernmentfunds,exceptthatbudgetauthoritydoesnotinclude
authoritytoinsureorguaranteetherepaymentofindebtednessincurredbyanotherpersonorgovernment.
Thebasicformsofbudgetauthorityareappropriations,authoritytoborrow,andcontractauthority. Budget
authoritymaybeclassifiedbytheperiodofavailability(1year,multipleyear,noyear),bythetimingof
congressionalaction(currentorpermanent),orbythemannerofdeterminingtheamountavailable
(definiteorindefinite). (Financial)
Budgetaryresources
Budgetaryresourcesareformsofauthoritygiventoanagencyallowingittoincurobligations. Budgetary
resourcesincludenewbudgetauthority,unobligatedbalances,directspendingauthority,andobligation
limitations. (Financial)
CARESCapitalAssetRealignmentforEnhancedServices
CARESistheVAprogramdesignedtoassessVeteranhealthcareneedsinVHAnetworks,identifyservicedelivery
optionstomeetthoseneedsinthefuture,andguidetherealignmentandallocationofcapitalassetstosupport
thedeliveryofhealthcareservices. (MedicalCare)
ChiefFinancialOfficersActof1990
ThislegislationwasenactedtoimprovethefinancialmanagementpracticesoftheFederalGovernmentandto
ensuretheproductionofreliableandtimelyfinancialinformationforuseinthemanagementandevaluationof
Federalprograms. (Financial)
ClinicalVideoTelehealth(CVT)
Thisistheuseofrealtimeinteractivevideoconferencing,sometimeswithsupportiveperipheraltechnologies,to
assess,treatandprovidecaretoapatientremotely.Typically,CVTlinksthepatient(s)ataclinictotheprovider(s)
atanotherlocation.CVTcanalsoprovidevideoconnectivitybetweenaproviderandapatientathome.CVT
encompassesawidevarietyofclinicalapplicationssuchasspecialtyandprimarycare.
Earmarkedfunds
ThistermisdefinedasfundswhereVAhasprogrammanagementresponsibilityandthatarefinancedby
specificallyidentifiedrevenues,oftensupplementedbyotherfinancingsources,andarerequiredbystatutetobe
usedfordesignatedactivitiesorpurposes. Theyareaccountedforseparatelyfromthegovernmentsgeneral
revenues. VAsearmarkedfundsconsistoftrusts,special,andrevolvingfundsandremainavailableovertime.The
U.S.Treasurydoesnotsetasideassetstopayfutureexpendituresassociatedwithearmarkedfunds. (Financial)
ExchangeRevenue
ExchangerevenuesarisewhenaFederalentityprovidesgoodsandservicestothepublicortoanother
governmententityforaprice. (Financial)
FederalCreditReformActof1990
ThislegislationwasenactedtoimprovetheaccountingforcostsofFederalcreditprograms. (Financial)
Part IV - 37 Definitions of Financial and Other Terms







FederalFinancialManagementImprovementAct(FFMIA)
TheFFMIArequiresagenciestoproducetimelyandreliablefinancialstatementsthatdemonstratetheir
compliancewithFederalfinancialmanagementsystemsrequirements,Federalaccountingstandards,andtheU.S.
Governmentstandardgeneralledger. IfanagencybelievesitssystemsarenotFFMIAcompliant,itmustdevelopa
remediationplantoachievecompliancewithin3years. (Financial)
FederalInformationSecurityManagementActof2002(FISMA)
Thepurposesofthisactareto:
Provideacomprehensiveframeworkforensuringtheeffectivenessofinformationsecuritycontrolsover
informationresourcesthatsupportFederaloperationsandassets.
RecognizethehighlynetworkednatureofthecurrentFederalcomputingenvironmentandprovideeffective
Governmentwidemanagementandoversightoftherelatedinformationsecurityrisks,includingcoordination
ofinformationsecurityeffortsthroughoutthecivilian,nationalsecurity,andlawenforcementcommunities.
ProvidefordevelopmentandmaintenanceofminimumcontrolsrequiredtoprotectFederalinformationand
informationsystems.
ProvideamechanismforimprovedoversightofFederalagencyinformationsecurityprograms.
Acknowledgethatcommerciallydevelopedinformationsecurityproductsofferadvanced,dynamic,robust,
andeffectiveinformationsecuritysolutions,reflectingmarketsolutionsfortheprotectionofcritical
informationinfrastructuresimportanttothenationaldefenseandeconomicsecurityofthenationthatare
designed,built,andoperatedbytheprivatesector.
Recognizethattheselectionofspecifictechnicalhardwareandsoftwareinformationsecuritysolutionsshould
belefttoindividualagenciesfromamongcommerciallydevelopedproducts. (InformationSecurity)
FederalInformationSystemsControlAuditManual(FISCAM)
Thismanualdescribesthecomputerrelatedcontrolsthatauditorsshouldconsiderwhenassessingtheintegrity,
confidentiality,andavailabilityofcomputerizeddata. ItisaguideappliedbyGAOprimarilyinsupportoffinancial
statementauditsandisavailableforusebyothergovernmentauditors. Itisnotanauditstandard. (Information
Security)
FederalManagersFinancialIntegrityAct(FMFIA)of1982
ThislegislationrequiresFederalagenciestoestablishprocessesfortheevaluationandimprovementoffinancial
andinternalcontrolsystemsinordertoensurethatmanagementcontrolobjectivesarebeingmet. (Financial)
Franchisefund
VAsfundiscomprisedofsixenterprisecentersthatcompetitivelysellcommonadministrativeservicesand
productsthroughouttheFederalGovernment. ThefundsaredepositedintotheFranchiseFund. TheCenters
operationsarefundedsolelyonafeeforservicebasis. Fullcostrecoveryensurestheyareselfsustaining.
(DepartmentalManagement)
FundBalancewiththeTreasury
ThistermisdefinedastheaggregateamountoffundsinVAsaccountswiththeDepartmentoftheTreasury
forwhichitisauthorizedtomakeexpendituresandpayliabilities. Thisaccountincludesclearingaccount
balancesandthedollarequivalentofforeigncurrencyaccountbalances. (Financial)
GovernmentManagementReformActof1994
Thislegislationwasenactedtoprovidemoreeffectiveandefficientexecutivebranchperformanceinreporting
financialinformationtoCongressandcommitteesofCongress. (Financial)
HeritageAssets
HeritageAssetsareuniqueandaregenerallyexpectedtobepreservedindefinitely. Heritageassetsmayhave
historicalornaturalsignificance;beofcultural,educational,orartisticimportance;orhavesignificantarchitectural
characteristics. (Financial)
Part IV - 38 Definitions of Financial and Other Terms


HomeTelehealth(HT)
ThisisaprogramintowhichVeteransareenrolledthatappliescareandcasemanagementprinciplestocoordinate
careusinghealthinformatics,diseasemanagementandHomeTelehealthtechnologiestofacilitateaccesstocare
andtoimprovethehealthofVeteranswiththespecificintentofprovidingtherightcareintherightplaceatthe
righttime.ThegoalofHTistoimproveclinicaloutcomesandaccesstocarewhilereducingcomplications,
hospitalizations,andclinicoremergencyroomvisitsforVeteransinpostacutecaresettingsandhighriskpatients
withchronicdisease.
IntegratedElectronicHealthRecord(iEHR)
TheiEHRprogramisacollaborativepartnershipbetweentheVAandDoDtomodernizehealthcareinformation
systemsandachievesignificantimprovementinthecapturing,storingandsharingofelectronichealth
information. iEHRwillprovideunprecedentedvaluetopatients,clinicians,andtheagenciesinvolved.iEHRwill
reducetheburdenfeltbyServicemembersandVeteranstotrackandmaintaintheirhealthinformationand
records.
InteragencyProgramOffice(IPO)
IPOservesasthesinglepointofaccountabilityinthedevelopmentandimplementationoftheiEHRandVLER
healthsystems,capabilities,andinitiatives.ThisincludesallcurrentandfuturejointhealthITimplementations
suchastheJamesA.LovellFederalHealthCareCenterinNorthChicago,Illinois,withtheobjectiveofachievingfull
interoperabilitybetweenDoDandVA.
Intragovernmentalassets
TheseassetsarisefromtransactionsamongFederalentities. Theseassetsareclaimsofthereportingentity
againstotherFederalentities. (Financial)
Intragovernmentalliabilities
TheseliabilitiesareclaimsagainstthereportingentitybyotherFederalentities. (Financial)
Inventory
Aninventoryisatangiblepersonalpropertythatis(1)heldforsale,includingrawmaterialsandworkinprocess,
(2)intheprocessofproductionforsale,or(3)tobeconsumedintheproductionofgoodsforsaleorinthe
provisionofservicesforafee. (Financial)
Management(orinternal)controls
Thistermisdefinedassafeguards(organization,policies,andprocedures)usedbyagenciestoreasonablyensure
that:(1)programsachievetheirintendedresults;(2)resourcesareusedconsistentwithagencymission;(3)
programsandresourcesareprotectedfromwaste,fraud,andmismanagement;(4)lawsandregulationsare
followed;and(5)reliableandtimelyinformationisobtained,maintained,reported,andusedfordecisionmaking.
(Financial)
Materialweakness
Thistermisdefinedasasignificantdeficiency,orcombinationofsignificantdeficiencies,thatresultsinmorethan
aremotelikelihoodthatamaterialmisstatementofthefinancialstatements,orothersignificantfinancialreports,
mayoccurandnotbedetectedwithinatimelyperiodbyemployeesinthenormalcourseofperformingtheir
assignedfunctions. (Financial)
MemorialServiceNetwork
NCA'sfieldstructureisgeographicallyorganizedintofiveMemorialServiceNetworks(MSN). Thenational
cemeteriesineachMSNaresupervisedbytheMSNDirectorandstaff. TheMSNofficesarelocatedin
Philadelphia,Pennsylvania;Atlanta,Georgia;Indianapolis,Indiana;Denver,Colorado;andOakland,California. The
MSNDirectorsandstaffprovidedirection,operationaloversight,andengineeringassistancetothecemeteries
locatedintheirgeographicareas. (Burial)
Part IV - 39 Definitions of Financial and Other Terms












NationalInstituteofStandardsandTechnology(NIST)anditsComputerSecurityDivision
NISTisanonregulatoryFederalagencywithintheU.S.CommerceDepartment'sTechnologyAdministration.
NIST'smissionistopromoteU.S. innovationandindustrialcompetitivenessbyadvancingmeasurementscience,
standards,andtechnologyinwaysthatenhanceeconomicsecurityandimproveourqualityoflife. TheComputer
SecurityDivisionisoneofeightdivisionswithinNIST'sInformationTechnologyLaboratory. Themissionofthe
ComputerSecurityDivisionistoimproveinformationsystemssecurity. (InformationSecurity)
NativeAmericanloans
ThistermisdefinedasdirectloansthatarespecialfinancingenablingNativeAmericanstopurchaseahomeon
Federallyrecognizedtrustland. ThistypeofloanispartoftheVAloanguarantyprogram.(Financial)
Netcostofoperations
NetcostofoperationsisthegrosscostincurredbyVAlessanyexchangerevenueearnedfromitsactivities.
Thegrosscostofaprogramconsistsofthefullcostoftheoutputsproducedbythatprogramplusanynon
productioncoststhatcanbeassignedtotheprogram. (Financial)
Netposition
NetpositioncomprisestheportionofVAsappropriationsrepresentedbyundeliveredordersand
unobligatedbalances(unexpendedappropriations)andthenetresultsofthereportingentitysoperations
sinceinception,plusthecumulativeamountofpriorperiodadjustments(cumulativeresultsofoperations).
(Financial)
Netprogramcost
Netprogramcostisthedifferencebetweenaprogramsgrosscostanditsrelatedexchangerevenues. Ifa
programdoesnotearnanyexchangerevenue,thereisnonettingandthetermusedmightbetotalprogramcost.
(Financial)
NotestotheConsolidatedFinancialStatements
Thenotesprovideadditionaldisclosuresthatarenecessarytomakethefinancialstatementsmoreinformativeand
notmisleading. Thenotesareanintegralpartofthefinancialstatements. (Financial)
Obligations
Obligationsrepresenttheamountofordersplaced,contractsawarded,servicesreceived,andothertransactions
occurringduringagivenperiodthatwouldrequirepaymentsduringthesameorfutureperiod. (Financial)
Offsettingcollections
Offsettingcollectionsincludereimbursements,transfersbetweenFederalandtrustfundaccounts,offsetting
governmentalcollections,andrefunds. Foraccountingpurposes,earnedreimbursementsarealsoknownas
revenues. Theseoffsettingcollectionsarenettedagainstgrossoutlaysindeterminingnetoutlaysfromsuch
appropriations. (Financial)
Offsettingreceipts
Offsettingreceiptsarecollectionsthatareoffsetagainstgrossoutlaysbutarenotauthorizedtobecreditedto
expenditureaccounts. Offsettingreceiptsaredepositedinreceiptaccounts. Likeoffsettingcollections,theyresult
from(1)businessliketransactionsormarketorientedactivitieswiththepublic,(2)intragovernmentaltransfers,
and(3)collectionsfromthepublicthataregovernmentalinnaturebutrequiredbylawtobeclassifiedas
offsettingreceipts. Offsettingreceiptsareoffsetstogrossbudgetauthorityandoutlays,usuallyattheDepartment
orAdministrationlevel,butsomeareunavailableforexpenditure. Unlikeoffsettingcollections,offsettingreceipts
cannotbeusedwithoutbeingappropriated. (Financial)
OMBCircularNo.A123
OMBissuedCircularNo.A123toprovideguidancetoFederalmanagersonimprovingtheaccountabilityand
effectivenessofFederalprogramsandoperationsbyestablishing,assessing,correcting,andreportingon
managementcontrols. (Financial)
Part IV - 40 Definitions of Financial and Other Terms


OMBCircularNo.A127
OMBissuedCircularNo.A127toprescribepoliciesandstandardsforexecutivedepartmentsandagenciesto
followindeveloping,operating,evaluating,andreportingonfinancialmanagementsystems. (Financial)
OMBCircularNo.A130,AppendixIII
OMBissuedCircularNo.A130,AppendixIIItoestablishaminimumsetofcontrolstobeincludedinFederal
automatedinformationsecurityprograms;assignFederalagencyresponsibilitiesforthesecurityof
automatedinformation;andlinkagencyautomatedinformationsecurityprogramsandagencymanagement
controlsystemsestablishedinaccordancewithOMBCircularNo.A123. (InformationSecurity)
Outlay
Outlayistheamountofchecks,disbursementofcash,orelectronictransferoffundsmadetoliquidateaFederal
obligation. OutlaysalsooccurwheninterestontheTreasurydebtheldbythepublicaccruesandwhenthe
governmentissuesbonds,notes,debentures,monetarycredits,orothercashequivalentinstrumentsinorderto
liquidateobligations. (Financial)
Programevaluation
Thistermisdefinedasanassessment,throughobjectivemeasurementandsystematicanalysis,ofthemannerand
extenttowhichFederalprogramsachieveintendedoutcomes. (DepartmentalManagement)
PromptPaymentAct
ThePromptPaymentFinalRule(formerlyOMBCircularNo. A125,"PromptPayment")requiresexecutive
departmentsandagenciestopaycommercialobligationswithincertaintimeperiodsandtopayinterestpenalties
whenpaymentsarelate. (Financial)
Property,Plant,andEquipment
Property,plant,andequipmentconsistoftangibleassets,includingland,thathaveestimatedusefullivesof2
yearsormore,notintendedforsaleintheordinarycourseofoperations,andhavebeenacquiredorconstructed
withtheintentionofbeingused,orbeingavailableforuse,bythereportingentity. (Financial)
PTSDposttraumaticstressdisorder
PTSDisananxietydisorderthatcanoccurfollowingtheexperienceorwitnessingoflifethreateningevents,such
asmilitarycombat,naturaldisasters,terroristincidents,seriousaccidents,orviolentpersonalassaultssuchas
rape. PeoplewhosufferfromPTSDoftenrelivetheexperiencethroughnightmaresandflashbacks,havedifficulty
sleeping,andfeeldetachedorestranged. Thesesymptomscanbesevereenoughandlastlongenoughto
significantlyimpairthepersonsdailylife. CommonPTSDstressorsinVeteransincludewarzonestress(e.g.,
combatandexposuretomasscasualtysituations),thecrashofamilitaryaircraft,orsexualassault. VAis
committedtoprovidinganintegrated,comprehensive,andcosteffectivecontinuumofcareforVeteranswith
PTSD. (MedicalCare)
ResearchandDevelopment
Researchanddevelopmentinvestmentsareexpensesincludedinthecalculationofnetcoststosupportthesearch
forneworrefinedknowledgeandideasandfortheapplicationoruseofsuchknowledgeandideasforthe
developmentofnewandimprovedproductsandprocesses,withtheexpectationofmaintainingorincreasing
nationaleconomicproductivitycapacityoryieldingotherfuturebenefits. (Financial)
Revolvingfunds
Thistermisdefinedasafundusedtofinanceacycleofbusinesslikeoperationsthroughcollectionsofamounts
receivedfromthesaleofproductsorservices. Thecollectionsareusedtofinanceitsspending,usuallyonaself
sustainingbasis. RevolvingfundsrecordthecollectionsandtheoutlaysofrevolvingfundsinthesameTreasury
account. Arevolvingfundisaformofpermanentappropriationreceivingauthoritytospendthecollections;the
funddoesnotgenerallyreceiveappropriations. (Financial)
Part IV - 41 Definitions of Financial and Other Terms








Significantdeficiency
Asignificantdeficiencyisacontroldeficiency,orcombinationofcontroldeficiencies,thatadverselyaffectsthe
entitysabilitytoinitiate,authorize,record,process,orreportfinancialdatareliablyinaccordancewithgenerally
acceptedaccountingprinciplessuchthatthereismorethanaremotelikelihoodthatamisstatementoftheentitys
financialstatements,thatismorethaninconsequential,willnotbepreventedordetectedbytheentitysinternal
control. (Financial)
Specialfunds
Thistermisdefinedasanappropriationaccountestablishedtorecordappropriations,obligations,andoutlays
financedbytheproceedsofspecialfundreceipts,whicharededicatedcollectionsbylawforaspecificpurposeor
program. MedicalCareCollectionsFundandleaseoflandandbuilding(NCAFacilitiesOperationFund)arespecial
funds.(Financial)
StateandtribalorganizationVeteranscemeteries
StateandtribalorganizationVeteransCemeteries,whichcomplementVAssystemofnationalcemeteries,provide
burialoptionsforeligibleVeteransandtheirfamilymembers. Thesecemeteriesmaybeestablishedbystatesor
tribalorganizationswiththeassistanceofVAsVeteransCemeteryGrantsProgram(VCGP). TheVCGPprovides
grantstostatesandtribalorganizationsofupto100percentofthecostofestablishing,expanding,orimproving
stateandtribalorganizationVeteranscemeteries. (Burial)
Statementofbudgetaryresources
Thistermisdefinedasafinancialstatementthatprovidesassurancethattheamountsobligatedorspentdidnot
exceedtheavailablebudgetauthority,obligationsandoutlayswereforthepurposesintendedinthe
appropriationsandauthorizinglegislation,otherlegalrequirementspertainingtotheaccounthavebeenmet,and
theamountsareproperlyclassifiedandaccuratelyreported. (Financial)
Statementofchangesinnetposition
ThistermisdefinedasafinancialstatementthatprovidesthemannerinwhichVAsnetcostswerefinancedand
theresultingeffectontheDepartmentsnetposition. (Financial)
Statementofnetcosts
Thistermisdefinedasafinancialstatementthatprovidesinformationtohelpthereaderunderstandthenetcosts
ofprovidingspecificprogramsandactivities,andthecompositionofandchangesinthesecosts. (Financial)
Statementofwrittenassurance
AstatementofwrittenassuranceisrequiredbytheFMFIA. Eachyear,theheadofeachexecutiveagencymust
prepareastatementthattheagencyssystemsofinternalaccountingandadministrativecontrolfullycomplywith
therequirementsofthelaw,orthattheydonotcomply. Inthelattercase,theheadoftheagencymustprovidea
reportthatidentifies(1)thematerialweaknessesintheagencyssystemofinternalaccountingandadministrative
controlsand(2)theplansandschedulesforcorrectinganysuchweaknesses. (Financial)
Statusofbudgetaryresources
Thistermisdefinedastheobligationsincurred,theunobligatedbalancesattheendoftheperiodthatremain
available,andunobligatedbalancesattheendoftheperiodthatareunavailableexcepttoadjustorliquidateprior
yearobligations. (Financial)
StewardshipProperty,Plant,andEquipment(PP&E)
ThistermisdefinedasassetswhosephysicalpropertiesresemblethoseofgeneralPP&Ethataretraditionally
capitalizedinfinancialstatements. However,duetothenatureoftheseassets,(1)valuationwouldbedifficultand
(2)matchingcostswithspecificperiodswouldnotbemeaningful. StewardshipPP&Econsistsofheritageassets,
nationaldefensePP&E,andstewardshipland. (Financial)
Part IV - 42 Definitions of Financial and Other Terms



StoreandForwardTelehealth(SFT)
Thistermreferstotheuseoftechnologiestoacquireandstoreclinicalinformation(e.g.data,image,soundand
video)thatisthenforwardedtoorretrievedbyaprovideratanotherlocationforclinicalevaluation.SFTinVA
usesaclinicalconsultpathwayandVistAImaginginconjunctionwithTeleReadertoprovidescreening,diagnostic
andtreatmentserviceswheretimeand/ordistanceseparatethepatientandprovider.

Telehealth
Thistermisdefinedastheuseofelectroniccommunicationsandinformationtechnologytoprovideandsupport
healthcarewhendistanceseparatestheparticipants.Itincludeshealthcarepractitionersinteractingwith
patients,andpatientsinteractingwithotherpatients.(MedicalCare)

Telemedicine
Thistermisdefinedastheprovisionofcarebyalicensedindependenthealthcareproviderwhodirects,
diagnoses,orprovidesclinicaltreatmentviaelectroniccommunicationsandinformationtechnologywhendistance
separatestheproviderandthepatient.(MedicalCare)

TraumaticBrainInjury
Astructuraland/orphysiologicaldisruptionofbrainfunctionresultingfromanexternalforce.

UnobligatedBalances
Thistermisdefinedasbalancesofbudgetaryresourcesthathavenotyetbeenobligated.(Financial)

VADomiciliary
AVAdomiciliaryprovidescomprehensivehealthandsocialservicesinaVAfacilityforeligibleVeteranswhoare
ambulatoryanddonotrequirethelevelofcareprovidedinnursinghomes.(MedicalCare)

VAhospital
SeeVAMedicalCenter

VAMedicalCenter
AVAMedicalCenterisahospitalfacilitythatprovidesadiverserangeofhealthcareservicestoVeterans.
Note:Eachdivisionofanintegratedmedicalcenteriscountedasaseparatehospital.(MedicalCare)

VAnationalcemetery
AVAnationalcemeteryprovidesgravesitesfortheintermentofdeceasedVeteransandtheireligiblefamily
members.VAs131nationalcemeteriesarenationalshrinesthatareimportantsitesforpatrioticand
commemorativeevents.(Burial)

VAregionaloffice
AVAregionalofficeislocatedineachstateplusPuertoRicoandthePhilippines.Theregionalofficesreceiveand
processclaimsforVAbenefits.(VBA)

Vendeeloans
ThistermisdefinedasdirectloansissuedbyVAtoathirdpartyborrowerfortheacquisitionpriceofforeclosed
realestatesoldbyVAafterthetransferofthepropertytoVAbyaprivatesectormortgagelenderupondefaultof
aloansubjecttotheVALoanGuarantyprogram.(Financial)

VeteransIntegratedServiceNetwork(VISN)
VAs21VISNsareintegratednetworksofhealthcarefacilitiesthatprovidecoordinatedservicestoVeteransto
facilitatecontinuitythroughallphasesofhealthcareandtomaximizetheuseofresources.(MedicalCare)

VirtualLifetimeElectronicRecord(VLER)
Definitions of Financial and Other Terms Part IV - 43



VLERisamultifacetedbusinessandtechnologyinitiativethatincludesaportfolioofhealth,benefits,personnel,
andadministrativeinformationsharingcapabilities.ItprovidesVeterans,Servicemembers,theirfamilies,care
givers,andserviceproviderswithasinglesourceofinformationforhealthandbenefitsinawaythatissecureand
isauthorizedbytheVeteranorServicemember.(VBA)
Definitions of Financial and Other Terms Part IV - 44




Abbreviationsand
Acronyms
ACA
AffordableCareAct
ACSI
AmericanCustomerSatisfactionIndex
AFGE
AmericanFederationofGovernment
Employees
ALAC
AdministrativeandLoanAccountingCenter
ALS
AmyotrophicLateralSclerosis
AMAS
AutomatedMonumentApplicationSystem
AMC
AppealsManagementCenter
APA
AdministrativeProceduresAct
ARRA
AmericanRecoveryandReinvestmentActof2009
BDD
BenefitsDeliveryatDischarge
BDN
BenefitsDeliveryNetwork
BFFS
BeneficiaryFiduciaryFieldSystem
BHIE
BiDirectionalHealthInformationExchange
BOSS
BurialOperationsSupportSystem
BPA
BlanketPurchaseAgreement
BPEB
BenefitsPortfolioExecutiveBoard
BPSC
BenefitsPortfolioSteeringCommittee
BTP
BeneficiaryTravelProgram
BVA
BoardofVeteransAppeals
C&A
CertificationandAccreditation
C&P
CompensationandPension
CAMS
CapitalAssetManagementSystem
CAP
CombinedAssessmentProgram
CARES
CapitalAssetRealignmentforEnhanced
Services
CBO
ChiefBusinessOffice
CBOC
CommunityBasedOutpatientClinic
CFS
ConsolidatedFinancialStatements
CHAMPVA
CivilianHealthandMedicalProgramofthe
DepartmentofVeteransAffairs
CIP
CriticalInfrastructureProgram
CIO
ChiefInformationOfficer
CMOP
ConsolidatedMailOutpatientPharmacy
CMS
CentersforMedicareandMedicaidServices
COOP
ContinuityofOperationsPlan
Abbreviations and Acronyms Part IV - 45


COTS
CommercialOfftheShelf
COVERS
ControlofVeteransRecordsSystem
CPGI
ClinicalPracticeGuidelineIndex
CPEP
CompensationandPensionExamination
Program
CRC
Colorectalcancer
CRISP
ContinuousReadinessinInformation
SecurityProgram
CRMS
CustomerRelationshipManagement
System
CSRS
CivilServiceRetirementSystem
DBQ
DisabilityBenefitsQuestionnaire
DMC
DebtManagementCenter
DIC
DependencyandIndemnityCompensation
DMDC
DefenseManpowerDataCenter
DoD
DepartmentofDefense
DOOR
DistributionofOperationalResources
DRO
DecisionReviewOfficer
EA
EnterpriseArchitecture
EFT
ElectronicFundsTransfer
EGOV
ElectronicGovernment
EP
EndProducts
EVM
EarnedValueManagement
EVR
EligibilityVerificationReports
EWL
ElectronicWaitList
F&FE
FiduciaryandFieldExamination
FAR
FederalAcquisitionRegulations
FASAB
FederalAccountingStandardsAdvisory
Board
FASB
FinancialAccountingStandardsBoard
FBCS
FeeBasisClaimsSystem
FDC
FullyDevelopedClaims
FECA
FederalEmployeesCompensationAct
FERS
FederalEmployeesRetirementSystem
FFMIA
FederalFinancialManagement
ImprovementAct
FHIE
FederalHealthInformationExchange
FISCAM
FederalInformationSystemsControlAudit
Manual
Part IV - 46 Abbreviations and Acronyms



FISMA
FederalInformationSecurityManagement
Act
FMFIA
FederalManagersFinancialIntegrityAct
FMS
FinancialManagementSystem
FMTC
FinancialManagementTraining
Conferences
FOBT
FecalOccultBloodTest
FPDSNG
FederalProcurementDataSystemNext
Generation
FRPC
FederalRealPropertyCouncil
FSC
FinancialServicesCenter
FTE
FulltimeEquivalent
FTF
FreezetheFootprint
FY
FiscalYear
GAO
GovernmentAccountabilityOffice
GPRA
GovernmentPerformanceandResultsAct
GRC
Governance,RiskandCompliance
GSO
GovernmentServicesOnline
HAC
HealthAdministrationCenter
HCIP
HumanCapitalInvestmentPlan
HCN
HealthCareNetwork
HIPAA
HealthInformationPortabilityand
AccountabilityAct
HR
HumanResources
HRA
HumanResources&Administration
HRPP
HumanResearchProtectionProgram
HUD
HousingandUrbanDevelopment
IA
InteragencyAgreement
IDES
IntegratedDisabilityEvaluationSystem
iEHR
IntegratedElectronicHealthRecord
IHS
IndianHealthService
IPERA
ImproperPaymentsEliminationand
RecoveryAct
IPO
InteragencyProgramOffice
IRS
InternalRevenueService
ISA
InterconnectionSecurityAgreements
ISO
InformationSecurityOfficers
IT
InformationTechnology
IVM
IncomeVerificationMatch
Part IV - 47 Abbreviations and Acronyms



IWT
InstructorWebbasedTraining
JFMIP
JointFinancialManagementImprovement
Program
LGY
LoanGuaranty
LTC
LongTermCare
MCCF
MedicalCareCollectionsFund
MCO
MissionCriticalOccupations
MOU
MemorandumofUnderstanding
MSN
MemorialServiceNetwork
MTF
MilitaryTreatmentFacility
NAC
NationalAcquisitionCenter
NAGE
NationalAssociationofGovernment
Employees
NCA
NationalCemeteryAdministration
NDMS
NationalDisasterMedicalSystem
NIST
NationalInstituteofStandardsand
Technology
NOD
NoticeofDisagreement
NRP
NationalResponsePlan
NSOC
NetworkandSecurityOperationsCenter
NVC
NonVAMedicalCare
OAEM
OfficeofAssetEnterpriseManagement
OAI
OrganizationalAssessmentand
Improvement
OALC
OfficeofAcquisition,Logistics,and
Coordination
OBC
OfficeofBusinessContinuity
OBO
OfficeofBusinessOversight
OBPI
OfficeofBusinessProcessIntegration
OC
OperationsCenter
OCR
OfficeofContractReview
OEF/OIF/OND
OperationEnduringFreedom/Operation
IraqiFreedom/OperationNewDawn
OGC
OfficeofGeneralCounsel
OIG
OfficeofInspectorGeneral
OIT
OfficeofInformationandTechnology
OLCS
OnLineCertificationSystem
OM
OfficeofManagement
OMB
OfficeofManagementandBudget
OPM
OfficeofPersonnelManagement
Part IV - 48 Abbreviations and Acronyms



OWCP
OfficeofWorkersCompensationProgram
P&LO
Procurement&LogisticsOffice
PAID
PersonnelandAccountingIntegratedData
PAR
PerformanceandAccountabilityReport
PBO
PMASBusinessOffice
PII
PersonallyIdentifiableInformation
PIP
ProstheticsInventoryPackage
P.L.
PublicLaw
PMAS
ProgramManagementAccountability
System
PMC
PensionMaintenanceCenter
PMP
ProjectManagementPlan
POA&M
PlansofActions&Milestones
PP&E
Property,Plant&Equipment
PPA
PromptPaymentAct
PSC
ProstheticServiceCard
PTSD
PostTraumaticStressDisorder
QA
QualityAssurance
QRT
QualityReviewTeam
RIN
RegulationIdentificationNumber
RO
RegionalOffice
RPO
RegionalProcessingOffice
RVSR
RatingVeteransServiceRepresentative
RVU
RelativeValueUnit
SACF
StrategicAcquisitionCenter Frederick
SAH
SpeciallyAdaptedHousing
SAM
StrategicAssetManagement
SAO
SystematicAnalysisofOperations
SBA
SmallBusinessAdministration
SCI
SpinalCordInjury
SCIP
StrategicCapitalInvestmentPlan
SCIPSAT
StrategicCapitalInvestmentPlan
AutomatedTool
SES
SeniorExecutiveService
SFFAS
StatementofFederalFinancialAccounting
Standards
SGLI
ServicemembersGroupLifeInsurance
Part IV - 49 Abbreviations and Acronyms



SHEP
SurveysoftheHealthExperiencesof
Patients
SMC
StrategicManagementCouncil
SPAWAR
SpaceandNavalWarfareSystemsCenter
SPI
SeparatelyPricedItem
SSA
SocialSecurityAdministration
STAR
SystematicTechnicalAccuracyReview
STDP
SystemtoDrivePerformance
STR
ServiceTreatmentRecord
STVHCS
SouthTexasVeteransHealthCareSystem
TBI
TraumaticBrainInjury
TOP
TreasuryOffsetProgram
TPSS
TrainingandPerformanceSupportSystem
TSO
TrainingSupportOffice
USB
UnderSecretaryforBenefits
U.S.C.
UnitedStatesCode
VA
VeteransAffairs
VAAR
VAAcquisitionRegulation
VAMC
VAMedicalCenter
VARO
VARegionalOffice
VASH
VASupportiveHousing
VASRD
VAScheduleforRatingDisabilities
VBA
VeteransBenefitsAdministration
VBMS
VeteransBenefitsManagementSystem
VCAA
VeteransClaimsAssistanceAct
VCGP
VeteransCemeteryGrantProgram
VESO
VeteranEmploymentServicesOffice
VETSNET
VeteransServicesNetwork
VGLI
VeteransGroupLifeInsurance
VIP
VendorInformationPages
VLER
VirtualLifetimeElectronicRecord
VHA
VeteransHealthAdministration
VISN
VeteransIntegratedServiceNetwork
VistA
VeteransInformationSystemand
TechnologyArchitecture
VRM
VeteransRelationshipManagement
VR&E
VocationalRehabilitationandEmployment
Part IV - 50 Abbreviations and Acronyms




VSC
VeteransServiceCenter
VSO
VeteransServiceOrganization
VSR
VeteransServiceRepresentative
VSSC
VHASupportServiceCenter
Part IV - 51 Abbreviations and Acronyms



VAOnline: FastandEasyAccesstoInformation
ThetablebelowprovideslinkstoseveralWebsitesthatprovideinformationforandabout
Veterans.
WhatInformationDoYouNeed? WebSite
VAsHomePage
www.va.gov
VAsPARSubmissionandStrategicPlans www.va.gov/performance
VAsBudgetSubmission www.va.gov/budget/products.asp
HealthCareinVA www1.va.gov/health/index.asp
VAHealthQualityandSafetyPerformance www.hospitalcompare.va.gov
ManagingMyHealthasaVeteran www.myhealth.va.gov
MedicalResearchinVA www.research.va.gov
ClinicalTrainingOpportunitiesandEducation
Affiliates
www.va.gov/oaa
Employment
www.vetsuccess.gov
www.vaforvets.va.gov
EducationBenefitsforVeterans
www.gibill.va.gov
eBenefits
www.ebenefits.va.gov
VowtoHireHeroes
www.benefits.va.gov/vow
BurialandMemorialBenefitsforVeterans www.cem.va.gov
OpportunitiesforVeteranOwnedSmall
Businesses
www.vetbiz.gov
MinorityVeterans www.va.gov/centerforminorityVeterans/
WomenVeterans www.va.gov/womenvet
SurvivorsAssistance www.va.gov/survivors
Operations,SecurityandPreparedness www.osp.va.gov
RecentlyPublishedVARegulations www.va.gov/ORPM/
Part IV - 52 Web Links

WhatInformationDoYouNeed? WebSite
VAsSocialMediaSites www.va.gov/opa/SocialMedia.asp
HumanResourcesandAdministration vacareers.va.gov/veterans
Reports,Surveys,orStatisticsRegardingthe
VeteranPopulation
www.va.gov/vetdata/
FreedomofInformationAct www.foia.va.gov/
PrivacyPolicyInformation www.va.gov/privacy/
VADirectivesandHandbooks www.va.gov/vapubs/
GreenVA www.green.va.gov
CenterforFaithbasedandNeighborhood
Partnerships
www.va.gov/cfbnpartnerships/
HomelessnessInfo www.va.gov/homeless/
Part IV - 53 Web Links