[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]
OVERSIGHT EFFORTS OF THE
U.S. DEPARTMENT OF VETERANS AFFAIRS (VA)
INSPECTOR GENERAL: ISSUES,
PROBLEMS AND BEST PRACTICES AT THE VA
=======================================================================
HEARING
before the
SUBCOMMITTEE ON OVERSIGHT AND
INVESTIGATIONS
of the
COMMITTEE ON VETERANS' AFFAIRS
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
FIRST SESSION
__________
FEBRUARY 15, 2007
__________
Serial No. 110-4
__________
Printed for the use of the Committee on Veterans' Affairs
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34-306 PDF WASHINGTON DC: 2007
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COMMITTEE ON VETERANS' AFFAIRS
BOB FILNER, California, Chairman
CORRINE BROWN, Florida STEVE BUYER, Indiana, Ranking
VIC SNYDER, Arkansas CLIFF STEARNS, Florida
MICHAEL H. MICHAUD, Maine DAN BURTON, Indiana
STEPHANIE HERSETH, South Dakota JERRY MORAN, Kansas
HARRY E. MITCHELL, Arizona RICHARD H. BAKER, Louisiana
JOHN J. HALL, New York HENRY E. BROWN, Jr., South
PHIL HARE, Illinois Carolina
MICHAEL F. DOYLE, Pennsylvania JEFF MILLER, Florida
SHELLEY BERKLEY, Nevada JOHN BOOZMAN, Arkansas
JOHN T. SALAZAR, Colorado GINNY BROWN-WAITE, Florida
CIRO D. RODRIGUEZ, Texas MICHAEL R. TURNER, Ohio
JOE DONNELLY, Indiana BRIAN P. BILBRAY, California
JERRY McNERNEY, California DOUG LAMBORN, Colorado
ZACHARY T. SPACE, Ohio GUS M. BILIRAKIS, Florida
TIMOTHY J. WALZ, Minnesota
Malcom A. Shorter, Staff Director
______
Subcommittee on Oversight and Investigations
HARRY E. MITCHELL, Arizona, Chairman
ZACHARY T. SPACE, Ohio GINNY BROWN-WAITE, Florida,
TIMOTHY J. WALZ, Minnesota Ranking
CIRO D. RODRIGUEZ, Texas CLIFF STEARNS, Florida
BRIAN P. BILBRAY, California
Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public
hearing records of the Committee on Veterans' Affairs are also
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C O N T E N T S
__________
February 15, 2007
Page
Oversight Efforts of the U.S. Department of Veterans Affairs (VA)
Inspector General: Issues, Problems and Best Practices at the
VA............................................................. 1
OPENING STATEMENTS
Chairman Harry E. Mitchell....................................... 1
Prepared statement of Chairman Mitchell...................... 22
Hon. Ginny Brown-Waite, Ranking Republican Member................ 2
Prepared statement of Congresswoman Brown-Waite.............. 22
Hon. Timothy J. Walz............................................. 3
WITNESS
U.S. Department of Veterans Affairs, Hon. George J. Opfer,
Inspector General.............................................. 3
Prepared statement of Mr. Opfer.............................. 23
MATERIAL SUBMITTED FOR THE RECORD
Post-Hearing Questions and Responses for the Record:
Hon. Harry E. Mitchell, Chairman, and Hon. Ginny Brown-Waite,
Ranking Republican Member, Subcommittee on Oversight and
Investigations, to Hon. George J. Opfer, Inspector General,
U.S. Department of Veterans Affairs, letter dated March 21,
2007....................................................... 27
OVERSIGHT EFFORTS OF THE U.S. DEPARTMENT OF VETERANS AFFAIRS (VA)
INSPECTOR GENERAL: ISSUES, PROBLEMS AND BEST PRACTICES AT THE VA
----------
THURSDAY, FEBRUARY 15, 2007
U.S. House of Representatives,
Committee on Veterans' Affairs,
Subcommittee on Oversight and Investigations,
Washington, DC.
The Subcommittee met, pursuant to notice, at 3 p.m., in
Room 334, Cannon House Office Building, Hon. Harry E. Mitchell
[Chairman of the Subcommittee] presiding.
Present: Representatives Mitchell, Walz, Rodriguez, Brown-
Waite.
OPENING STATEMENT OF CHAIRMAN MITCHELL
Mr. Mitchell. Good afternoon and welcome to the Oversight
and Investigations Subcommittee for the Veterans' Affairs
Committee. This is the meeting of February 15, 2007.
And I would like to begin by welcoming our new Members.
And, actually, you are probably not a new Member, are you? I am
the new Member, so I guess I welcome--and, Tim, welcome.
First, let me just give a little--and I also want to
welcome--forgive me if I make some mistakes here. I was talking
earlier about how I needed to know what the protocol here was.
And this looks like a very friendly group, so please bear with
me.
This is our very first Oversight Subcommittee hearing of
the 110th Congress. And today, the VA Inspector General will
provide an assessment of issues, problems, and best practices
at the VA.
We will also look for avenues in which the Subcommittee can
help the Inspector General do a better job. Thus far, it looks
like his team is doing a great job with the resources that are
allocated.
This Subcommittee has a long history of working with the VA
Inspector General. They are the first stop, the first call, so
to speak, where our Subcommittee needs a firsthand assessment
from a field location regarding operations at the VA's central
office.
I have asked the Inspector General to be accompanied by his
staff of experts in audit, contracting, healthcare, and
investigations. I am interested in their views and as honest
brokers as to how the VA as a very large Federal organization
is doing.
This topic and this hearing are our place to start our
oversight assessment of the VA. The IG has significant
knowledge and recent hands-on experience in matters that impact
the VA.
I would stress that we do not only want to hear about the
VA and what it is doing wrong. We want to hear about what the
VA is doing right. We want to hear about the best practices of
the VA, and we want to do what we can to see that those
practices grow and multiply.
The best situation is when the VA is proactive and
identifies and solves problems before they become real
problems. We all strive to be proactive, but all too often we
end up just being reactive. Out of necessity, we may do both on
this Subcommittee, but we will strive to be proactive as often
as practicable.
I will now ask my colleague and Ranking Republican Member,
Ms. Ginny Brown-Waite, if she has opening comments. I look
forward to working with her during the next 2 years, and I
recognize Ms. Brown-Waite for opening remarks.
[The prepared statement of Mr. Mitchell appears on pg. 22.]
OPENING STATEMENT OF HON. GINNY BROWN-WAITE
Ms. Brown-Waite. Thank you very much, Mr. Chairman, and
welcome to the Committee.
This is a Committee that, historically has worked in a very
bipartisan manner, because veterans are not Republicans or
Democrats. They are veterans needing our assistance.
I appreciate the Chairman yielding me time. This is the
first Subcommittee hearing for the Subcommittee on Oversight
and Investigations. And, I certainly appreciate the Inspector
General coming in and testifying before us regarding the
President's proposed budget for fiscal year 2008 as it relates
to your office.
The VA's Office of Inspector General is responsible for the
audit, investigations, and inspection of all VA programs and
operations. Given the recent demand for greater accountability
within the business lines at the VA, I am very sure that the
workload within your office has increased significantly in the
past year.
Therefore, I find the budget before us very disconcerting
in that the amount the Administration has requested for the
office is 72.6 million, which provides for 445 full-time
equivalent employees to support the activities of your office.
During fiscal year 2006, OIG identified over 900 million in
monetary benefits for a return of $12 for every dollar expended
by your office. The OIG closed 652 investigations; made 712
arrests, just in 1 year; 344 indictments; 214 criminal
complaints; and 833 administrative sanctions.
My understanding is that, if the President's numbers
prevail, it actually would amount in a reduction of 40
employees from your current staffing level.
I am very concerned that the funding levels the
Administration is requesting are not going to be sufficient to
continue the very excellent work that has been done by your
office. And I look forward to hearing testimony on this matter.
Again, Mr. Chairman, I thank you very much for yielding.
Mr. Mitchell. Thank you.
[The prepared statement of Ms. Brown-Waite appears on pg.
22.]
Mr. Mitchell. Mr. Walz.
OPENING STATEMENT OF HON. TIMOTHY J. WALZ
Mr. Walz. Thank you, Mr. Chairman, and also congratulations
to you. I am proud to work with you on this Committee. I know
your reputation far precedes you for your fairness and your
work ethic. So thank you.
And I would also like to thank our Ranking Member for such
an eloquent statement and a belief that what your office is
doing is something we absolutely believe in. You should be
commended for the work that you have done on the scarce amount
of resources that you have. Protecting those resources for our
veterans is a sacred responsibility, and you have taken that
obviously to heart and done a very good job with that.
I would concur with our Ranking Member that I am deeply
concerned that an area that has proven to be able to return
resources to us, an area that has been a good steward of the
public trust is an area that we are trying to cut a few corners
on. And I want to make sure that this Committee, this
Subcommittee, has a clear understanding of what we need to do
and how we need to articulate the needs that your office has so
that we can get those resources to you to continue with this
work.
And I fully believe that it may be one of the most
important positions that a lot of people do not know about that
is happening in an organization or in our VA system that I
think is absolutely critical, especially at this time.
So I thank you. I thank you for taking the time, all of
you, for coming today, sharing your expertise with us and
hopefully letting us know where we can make your job easier.
So thank you, Mr. Chairman.
Mr. Mitchell. Thank you.
At this time, we will begin with Mr. Opfer and make your
statement.
STATEMENT OF HON. GEORGE J. OPFER, INSPECTOR GENERAL, U.S.
DEPARTMENT OF VETERANS AFFAIRS; ACCOMPANIED BY JOHN D. DAIGH,
ASSISTANT INSPECTOR GENERAL, HEALTH; JAMES O'NEILL, ASSISTANT
INSPECTOR GENERAL, INVESTIGATIONS; BELINDA J. FINN, ASSISTANT
INSPECTOR GENERAL, AUDIT; MAUREEN REGAN, COUNSELOR TO THE
INSPECTOR GENERAL
Mr. Opfer. Thank you, Mr. Chairman and Members of the
Subcommittee. Thank you for the opportunity to appear before
you today.
I am accompanied by the senior members of my staff, Maureen
Regan, Counselor to the Inspector General; Dr. David Daigh, the
Assistant Inspector General for Healthcare Inspections; Belinda
Finn, our Assistant Inspector General for Auditing; and Jim
O'Neill, the Assistant Inspector General for Investigations.
I would like to recognize that we have had a long history
of working with this Committee, and I appreciate the oversight
by this Committee and interest in the work that we do. A lot of
it, as both of you said, Mr. Chairman and the Ranking Member,
is unfortunately we like to do more proactive work, but a lot
of times, we are in reactive mode.
Last year, we had to react to issues such as the cranial
implant situation, and there was the data loss, with a
significant impact on twenty-six and a half million veterans.
I am going to list some of our accomplishments. There is a
commercial that says things are priceless. How do I put a value
on maintaining the integrity of the quality and safety of care
in the VA hospitals? It is invaluable. How do I put a value on
maintaining the integrity of the data which is in the hands of
VA? It has a significant impact on the twenty-six and a half
million veterans and their families and would have an economic
impact.
That work was done collectively with the resources that we
had within the OIG. We did not just use the investigative
staff. We used everyone we had, and I am fortunate to have the
staff to do that.
I am in the twilight of my career, starting government
service in 1969, and I have only been the Inspector General
here for a year. But I have been fortunate my entire career
working with and for outstanding people. And nowhere is it more
paramount. I have been blessed to be working as the Inspector
General in the Department of Veterans Affairs and have these
outstanding people and to visit the field offices and to know
what they can do and to know what could be done if we had more
resources.
But I am not here to ask for resources. I am here to
explain what we have done and put some initiatives on the table
for consideration of the policymakers to see if this is a role
for the IG, if this is something that would be useful for you
in making the decisions that affect the veterans of this
country.
During the past 6 years, the OIG had a return on investment
of $31 for every dollar invested in the OIG operations. We have
produced $11.6 billion in monetary benefits and issued 1,200
reports, over 6,600 recommendations. We also completed nearly
15,000 criminal investigations. We have processed over 93,000
hotline contacts and completed over 7,300 reviews of
allegations of fraud, waste, abuse, and mismanagement.
OIG oversight is not only a sound fiscal investment. It is
investment in good government. To highlight some of the best
practices resulting from our work, the VHA has developed a
seamless transfer of medical records for returning war
veterans. Thousands of unscrupulous individuals who preyed on
our veterans by stealing their benefits and abusing fiduciary
responsibilities have been prosecuted as a result of our
investigations.
We have produced unqualified opinions in VA's financial
statements and identified material weaknesses that need
correcting. We have also recovered more than $104 million from
contractors who overcharged VA.
We have identified systemic problems in major procurements
and serious deficiencies in VA's IT security, such as the work
I outlined in the theft of the records concerning the twenty-
six and a half million veterans.
Despite our accomplishments, I believe that there is much
more we could and should be doing if this is the role for the
IG in the future.
While we do the most we can with the resources provided,
there are many issues that we are not able to review. For
example, we refer over 70 percent of all the hotline cases that
we receive back to the Department for review.
As indicated in my written statement, there are several key
challenges facing VA that we are not able to review with
existing resources. For example, in healthcare, the VA is
challenged in its delivery of care to the returning war
veterans. Compliance by VA researchers with policies that
protect patients and ensure not only sound scientific results
is also an area of concern.
VA's research is budgeted for 1.8 billion in fiscal year
2008, which makes the research program commensurate with the IT
budget for VA for 2008. A significant amount of funds are being
appropriated for VA or are in the process of being reviewed by
Congress.
The increasing geriatric veteran population also presents
VA with a growing challenge. Veterans 85 years and older
enrolled in VA health systems is expected to exceed 675,000 by
year 2012. As VA searches for organizational efficiencies, the
question of whether the VISN model that they have now in VHA is
the best infrastructure to manage the medical care and
resources needs to be addressed.
Also drug diversion steals valuable medicine from patients,
and makes patients vulnerable to harm from providers impaired
by drug use.
I think the timeliness and accuracy of processing claims is
a top priority.
Veterans would benefit from OIG work aimed at reviewing
VBA's quality assurance program for rating decisions, and
assessing the factors contributing to the serious backlog of
claims.
The VA's internal controls and accountability of VA funds
remain an area of high concern. The OIG, I believe, has an
important role to play in overseeing the development of the new
integrated financial and logistics system to ensure that VA
corrects these material weaknesses.
Systemic deficiencies in VA procurement include lack of
communication, insufficient planning, poorly written contracts,
inadequate competition, and inadequate contract administration.
Independent oversight efforts would benefit VA in determining
how best to address these deficiencies.
VA's budget request for fiscal year 2008 estimates a need
of 1.9 billion for IT. I believe independent oversight is
needed to ensure that system development controls are
effective, the requirements are accurately identified and
planned, contracts are used to support the projects in the best
interest of the government and to achieve the desired results.
As I outlined before, protecting VA data is and will remain
a primary focus of ours. It is the society that we live in, the
technological age, whether at work or at home.
I would like to emphasize that my office will continue, I
believe, to provide a positive return on investment. While I
believe the VA OIG has accomplished a great deal in improving
VA, we are faced with the challenges I have just discussed, and
I need to greatly expand on the oversight to meet these
challenges.
In closing, I would like to add that my current resource
level is sufficient to meet the mandatory statutory obligations
that have been placed on the IG by Congress, such as reviewing
the consolidated financial statement, the FISMA, and other
congressional mandates.
However, I believe like most agencies VA is faced with
evolving challenges and changing demands. If the OIG is really
going to be an agent for positive change, future resource
levels need to be commensurate with this challenge.
Thank you for the opportunity to appear here before you
today. My staff and I will be glad to answer any questions that
the Committee would have for us.
[The prepared statement of Mr. Opfer appears on pg. 23.]
Mr. Mitchell. Thank you very much, Mr. Opfer.
Let me just ask a couple of quick questions. One, you
mentioned how you uncovered some of the contractors who had
overcharged and overbilled and so on.
When you find those kind of people, what happens to them?
Do they get put back on a list because there is a lack of
competition? Are they blackballed? Are they no longer allowed
to bid? What happens to them?
Mr. Opfer. Let me have Maureen Regan explain that part of
the contractors. There were areas of debarment and other things
like that. If it was a criminal nature that we could prove,
then that would go to our investigations office. But let
Maureen explain.
Ms. Regan. The agency has the authority to debar them from
future contracts. Whether or not it goes through the debarment
process depends on a number of factors.
One of them may be how old the conduct was. They also have
the opportunity to enter into similar to a corporate integrity
agreement. There has been a number of cases we have worked on
that affect other agencies and they may have the responsibility
to do a debarment or a corporate integrity agreement.
In criminal cases, they do get referred for debarment to
our agency if it is against us.
Mr. Mitchell. One last question, if you do not mind. In
response to what Ms. Brown-Waite spoke of, I think we are all
concerned with your staffing level, and you mentioned that. And
the great job that you and your staff are doing is just
terrific.
And as you know, the ratio of the Inspector Generals to the
number of people who work in a particular department--for
example, my understanding is that the Department of Veteran
Affairs is the second largest department in the Federal
Government and, yet, you have the lowest number of employees in
relation to the parent agency.
And seeing the great success you have had with the people
that you have working for you, don't you think it would be
great for all of us and certainly good business practices if we
raised that ratio?
Thinking of HUD, for example, and the Department of
Education, both of them have full-time equivalents of Inspector
Generals of 33 times greater than the VA has.
And I think the ratio was something like .2 percent. So it
is very, very low. So we are really getting a bang for our
buck. But maybe we can get better if you had more staff.
Mr. Opfer. Mr. Chairman, you are correct. If you look at
the IG's Office in relationship to the 26 statutory IGs at the
Cabinet agencies, if you go by the ratio of FTEs in comparison
to the IG's Office with the parent agency, we would be 26. We
would be last.
If we look at the ratio of budget authority in comparison
to the OIG's budget with the parent agency, we would rank 20th
out of 26. So we are last in the ratio of FTE to FTE with the
parent agency and third from the bottom of the budget
authority.
From my own experience prior to coming to VA as the
Inspector General, I served as the Deputy Inspector General in
the Department of Labor, and it was a great organization and I
enjoyed working there.
The comparison I am trying to make is that agency was of
17,000 employees, and the IG's Office in DoL is about the same
size as mine, and, actually, in fiscal year 2008, they would be
larger than the VA OIG and that is for an agency of 17,000
employees.
Mr. Mitchell. Thank you.
Ms. Brown-Waite.
Ms. Brown-Waite. I thank the Chairman.
I think I threw the Chairman off a little bit when I told
him we may be related because I have a granddaughter by the
name of Mitchell. My daughter is a Mitchell. And so we are
going to check those family trees.
You all do such a great job in the Inspector General's
Office, and I mean that sincerely. And, you know, I can be a
very, very harsh critic. But the work that you do, we need to
be, if anything, plussing up those numbers because of the fact
of the dollars saved.
But would you help us to understand the real impact if you
lose 40 FTEs? What current services or audits would be
affected, and tell me the effect that it would have on the
Fugitive Felon program?
Mr. Opfer. Yes, Congresswoman. Let me give a bit of an
answer and then I will rely on the program managers to respond
specifically, the Office of Investigations to respond to your
Fugitive Felon question. And David Daigh will respond to the
healthcare initiatives that would be affected, and Belinda Finn
will talk about the audit program.
But overall, in a quick summary, in Healthcare, the OIG
inspectors would not review the quality of care and patient
safety issues at the outpatient clinics. The inspectors would
have to cancel most of the planned work on VA research and the
identification of best practices and PTSD treatment.
Probably an inspection of the VA pharmacy and medical
device programs would have to be delayed or put off completely.
We would have to cancel an initiative to expand audit oversight
in the VA information systems that would address the material
weaknesses that we find in our financial statements and
vulnerabilities.
We would have to cancel three national audits. One would be
in looking at the accountability controls over some sensitive
IT equipment, an audit of VA DoD electronic data, and an audit
of VHA's internal controls of financial activities.
I would rather have Jim explain the Fugitive Felon program
and if we have time, I would have the program officers
elaborate more into the healthcare initiative and the audit
initiative.
Jim.
Mr. O'Neill. Yes. This would be one program that probably
would not be impacted directly. We have automated a lot of this
program. It has been very successful and I would love to tell
you about it if you are interested in the number of veterans
and beneficiaries who have been identified in the program, and
the number of arrests.
In terms of the process, the data is retrieved from a
variety of sources, NCIC, 13 different states, the U.S.
Marshals, and it is matched electronically against VA records.
We have automated the notification as much as possible to the
warrant holders in terms of addresses that we may or may not
have for them.
Typically we get involved personally in these
investigations in a couple ways. One is when we learn that a
veteran who has a warrant is going to appear at a medical
center for an appointment and if we are proximate to that
location, we may get involved because the burden of that is
only a couple of hours, because we always involve local police
to represent the warrant holder, and the arrest is actually
made by them, and our agents are instructed to provide cover
for the arrest, but not to necessarily effect it.
Then we do it on occasion when the warrant is for a heinous
crime and there is serious violence and particularly when the
local department asks for assistance, we do our best to assist
them. We believe that this helps us when we need their help.
Ms. Brown-Waite. Could you just give us an idea of the
number of felons that have been identified through this
process?
Mr. O'Neill. Yes. Actually, I looked it up. As of September
30th, we had identified 26,763 VA beneficiaries who were
identified as having an active felony warrant. Once we identify
them, of course, the information is passed on to the warrant
holders.
We also pass on the information to comply with the law to
VBA who would cease monetary benefits after due process and to
VHA to let them know they do not have to provide anything but
emergency medical care.
Then both VHA and VBA identify the amount that has been
spent, and we provide them the data to do this, from the time
the individual was a fugitive felon. There is a start date on
that statute. I forget it now. But if it falls within that
statute, we identify that date so that they can initiate
recovery because the law allows VA to recover the money.
Ms. Brown-Waite. I know my time has expired, but one quick
question----
Mr. Mitchell. Sure.
Ms. Brown-Waite [continuing]. Mr. Chairman, if you will
indulge me. How many felons have you found actually as
employees of the VA? And I hate to ask that question, but while
we are talking about felons, we might as well get it all out
here.
Mr. O'Neill. Well, I cannot answer how many felons are in
VA, but we have identified 154 fugitive felons. We are not
doing background checks. We are doing wanted person checks in
NCIC and in all the databases we have access to.
So we did identify 154 employees. Ninety-six have been
arrested. The remainder were not arrested for a variety of
reasons. The warrant holder does not want to pay for
extradition, so the employee is encouraged to go satisfy the
warrant, clear up the problem, or occasionally we will find out
that actually it was a misdemeanor. It was reported improperly
to NCIC or whatever. So that would account for the remainder.
Ms. Brown-Waite. Thank you.
Thank you, sir, for indulging me.
Mr. Mitchell. Thank you.
Mr. Rodriguez.
Mr. Rodriguez. Thank you very much, Mr. Chairman.
And let me just continue to follow up. I am curious. You
said you had 26,000 felons. And how do I say this? What
percentage of that has to do with drug related?
Mr. O'Neill. Well, sir, I would----
Mr. Rodriguez. You do not know?
Mr. O'Neill. I would not hazard a guess because we have not
quantified that. However, I can tell you that a lot of the
warrants are for probation and parole violations which, in
essence, is a felony, but we do not necessarily always know the
predicate offense.
Mr. Rodriguez. You do not know the reason. Okay. Because I
know that in prison, we have about 80 percent are due to drug
related, and a large number of our veterans, especially Vietnam
veterans--I do not want to stereotype--but a lot of them, you
know, were, I know, engaged in drugs. And I kind of have a----
Mr. O'Neill. Well, I can tell you this, sir, that we have
arrested, I recall, someone on the Tennessee ten most wanted
list. We have had murderers, sexual predators, child sexual
rapists. We have a lot of violent predators that we caused to
be arrested.
I probably did not say this, but we have confirmed with the
law enforcement agencies who are the warrant holders that 1,294
fugitive felons have been arrested based upon the information
we provided them. Now, we expect that number is much higher
because it is a self-reporting mechanism where they tell us
that our data helped them arrest. So we actually think it is
higher.
Mr. Rodriguez. Twelve hundred over what, a year or----
Mr. O'Neill. Oh, no. This would be from the beginning of
the program, 1,294.
Mr. Rodriguez. Okay. Which is how long?
Mr. O'Neill. I would say it was about--I did not bring the
beginning date, but it was about 2002 or 2003.
Mr. Rodriguez. Okay. So it has been 4 years, about 1,200
people. So the other 26,000 were others? It was not any of your
doing?
Mr. O'Neill. Pardon me, sir?
Mr. Rodriguez. You said 1,200 were as a result of your
work. And so I gather the other 20 something thousand was not?
Mr. O'Neill. Well, we do not know what happened to the
remainder, whether they were arrested, whether they were
arrested before we even forwarded the information that we had,
or whether they were arrested based upon our information. But
the departments have not told us.
Mr. Rodriguez. Thank you.
I was going to ask regarding the audit if that is okay. On
the audit, and I have not seen it and I apologize, you know,
and I do not even know if we have it before us, but on the
audit report that you have, I know I get a lot of complaints
about vacancies that have not been filled. Is that reflective
on the audit in terms of----
Mr. Opfer. I am not sure, Congressman, I understand which
particular audit you are referring to.
Mr. Rodriguez. I gather you do an audit of the VA?
Mr. Opfer. We do a series of audits, some of them in the
program offices and various things.
Mr. Rodriguez. Staffing, you know.
Mr. Opfer. Dr. Daigh did one on staffing.
Mr. Rodriguez. Okay. Because I keep getting reports of the
number of vacancies that are carried, I guess for the purposes
of the budget, but a live person is not there.
Dr. Daigh. Sir, I am not aware that we publish vacancies
not filled. But if you are talking about management of human
capital, we are very interested in that. For instance, we have
aggressively advocated that VHA develop standards so that they
know how many doctors and nurses they should employ, and I
believe that one of the initiatives that audit has under
proposal here would be to look at human capital and see how
VISNs are staffed and see what the staffing relationships are
throughout VA.
So I cannot directly answer your question in terms of human
capital management, we are very interested in that.
Mr. Rodriguez. Okay. How do you assess whether what is
being said is actually occurring?
Dr. Daigh. With respect to?
Mr. Rodriguez. Staffing.
Dr. Daigh. Yes, sir.
Mr. Rodriguez. I was a school board member, and one of the
ways they packed the budget was on staffing. They said we are
going to have 150 teachers when in reality, they only had 125
or whatever. And they used that other money for something else.
I am sorry. I do not know how bluntly I could put it.
Dr. Daigh. Yes, sir. We believe that manpower costs are a
significant driver for the cost of delivering healthcare, among
other things, and we believe that VHA needs to develop
standards for how many specialists and nurses they would like
to hire.
VA has made tremendous progress in determining how many
primary care providers they should have by determining a panel
size so that they would have one family practice or internal
medicine physician per 1,200 patients or a number that is
reasonable. But they have made much less progress in
determining subspecialty provider standards.
In our reports, we have pushed VHA to produce those
standards. And we believe that with respect to radiologists,
they are nearing production of a standard for radiologists and
that they have done a great amount of work to develop standards
for other specialties.
Mr. Rodriguez. So I gather we have some of that data
already available, and how much work is being done with the
number of staff that they have now?
Dr. Daigh. We are currently not doing a great deal of work
on seeing whether the numbers are appropriate because we are
trying to get VHA to agree on what the appropriate ratio
between patients and staffing should be so that we could agree
on how many people they should employ.
Mr. Rodriguez. Okay. But I gather you do not see that as an
area of difficulty or a problem?
Dr. Daigh. We do see that as an area of difficulty and both
with respect to administration of VISNs and with respect to the
number of nurses and physicians that they need to employ. We
think it is imperative that these staffing standards be
developed and adhered to.
Mr. Rodriguez. So who checks on them if you are not doing
it? Is the GAO the ones who check on that for hospital
standards or stuff like that, for existing standards now that
exist out there for accreditation of hospitals and clinics?
Dr. Daigh. My group goes to each of the 150, thereabout,
major medical facilities on a 3-year schedule. And we devote
most of our energies to assuring that processes are in place to
ensure that veterans get quality healthcare, that peer review
is ongoing, that other fundamental administrative processes
occur so that if an error occurs in the hospital, the hospital
will react appropriately to that.
Mr. Rodriguez. But are there not some set standards already
for hospitals that exist out there, and are we close to any of
those standards? There has got to be some degree of
accreditation in cer-
tain hospitals already, national standards? Do we go by those at
all?
Dr. Daigh. JCAHO accredits hospitals, and that would be an
organization different than ours. And we apply some JCAHO
standards to the work we do. The standards that we normally try
to apply are VA's policies that they have agreed to and then
there are standards for healthcare outcomes that have been
promulgated by entities outside of the VA.
Mr. Rodriguez. How do we compare, I guess if we are going
to look at our hospitals for the VA, how do we compare our
hospitals in comparison to other hospitals that exist in the
country?
Dr. Daigh. Well, one example that we have published that is
important is our efforts to look at specific outcomes. The VA
has held as a standard that they would screen for colon cancer
72 percent
of the patients enrolled to their facilities. We checked that st
andard.
What we did was we looked at how many patients were
actually diagnosed with colon cancer, looked at the medical
records, and went backward and determined that, yes, they did
screen 72 percent of the patients or actually better than that.
In our review, they screened 90 percent of the patients.
The problem was the time to make a diagnosis of colon
cancer was way too long, in the order of months. We reported
that data both by facility during our CAP reports and we rolled
that data up and reported to VHA and the stakeholders in the
summary report.
And VHA is now making significant strides to decrease the
time between screening for colon cancer and then making a
diagnosis of colon cancer. So we have tried to take existing
standards and explore VHA's compliance with those standards.
Mr. Rodriguez. Okay.
Mr. Mitchell. Thank you, Mr. Rodriguez.
Ms. Brown-Waite.
Ms. Brown-Waite. Thank you, Mr. Chairman.
I have a report, the semiannual report to Congress that was
done September 2006. And in it, it lists reports that have been
unimplemented for over a year.
Some of these, having been on this Committee, this is my
fifth year on the Committee, and, Mr. Rodriguez, you have been
on the Committee, too, I am sure some of these will sound
familiar to you, things such as the audit of the part-time
physician time and attendance, only this shows nine out of
seventeen recommendations have been implemented.
An issue real close to me is the issue at the VA Medical
Center in Bay Pines. Not all of the recommendations have been
implemented. This relates to the CoreFLS System. When you make
these recommendations, and they are not implemented, can we
cost that out? In other words, when they do not implement
these, I know Congress stays on them, which is one of the
reasons why we ask for this report. But have you ever been able
to quantify when they do not implement them?
Mr. Opfer. Congresswoman, you are right. The ``IG Act''
requires us to list the recommendations not implemented within
a year in our semiannual reports and the last report, I think
we listed 22 reports with, I believe, 77 recommendations that
were more than a year old. I think one recommendation was over
4 years old and eleven were over three.
The consequence, I believe, of not implementing these OIG
recommendations in a timely manner can be significant. I think
you have a problem then in your projected cost savings, what
could have been achieved during that period when they are not
implementing the recommendations. Inefficiencies still continue
to go unresolved. Poor services to the veterans can be
perpetuated.
To address this a little bit more robustly in our office,
because, as you know, we only can issue the recommendations, I
am looking at our own followup procedure. My goal is not to
accept any response from the Department as far as our
recommendations if the implementation plan is over a year. When
they respond to our recommendations, if the implementation plan
will be taking over a year, we are going to be pushing back
very strongly to make sure there is justification why it would
take over a year.
Also, I think we want to start doing a quarterly followup
within the IG Office of looking at the recommendations, where
the agency is in achieving the recommendations. I think we need
to be a little more aggressive too.
If we feel one of the program offices, no matter what level
that it is, if we really have a sincere belief that they are
deliberately not implementing our recommendation or stalling,
then I believe I need to elevate that to the Deputy Secretary
and the Secretary.
Also, we just met, my staff met with one of our program
offices. For example, if it is an audit recommendation or a
healthcare recommendation, that would be the two primary ones,
that they will become more involved in reviewing what the
Department says they are implementing to make sure we are doing
some verification that it has truly been implemented.
But we have to do this with the existing resources, both
ratcheting up to the Deputy Secretary level and possibly the
Secretary level, and also having the program officers that know
the issues being more engaged with the Department in looking at
what they are doing to implement those recommendations.
Ms. Brown-Waite. And certainly, if you have your staff cut
you will never be able to do it, absolutely never be able to
follow up on these.
But I think it is incumbent on the Committee Members here
also to take a look at these reports and let the Secretary and
Under Secretary know that these are serious--I do not want to
call them flaws--but they are serious problems that need to be
remedied.
Mr. Opfer. I agree. My experience in the IG community has
been since 1994, serving as an Inspector General to different
agencies. And I have always found that when Congress weighs in,
the Committees with the agencies, the IG reports are taken much
more seriously.
Mr. Mitchell. Thank you. I have one question.
The IG has been very critical of VA's compliance with the
``Federal Information Security Management Act.'' And it has
reported on FISMA's weakness and vulnerability since 2001.
In May of 2006, the VA eventually reported a loss of
information of our veterans that had the potential to
compromise millions of veterans' identities. And in 2007, at
Birmingham there was another incident involving lost data.
Two questions on this. First, how does the VA react to your
recommendations and what other areas of concerns besides FISMA
and information security has the IG made recommendations that
are not being followed?
Mr. Opfer. Certainly. And I will give part of this answer
on the FISMA to my AIG for audit.
But in the area of IT security, I think that they are
trying to address the issues, but you had a culture established
for years. And we have some leadership problems, not at the
main VA, but leadership and accountability and responsibility
has to be put down at the hospital level, all the facilities.
They have to take ownership. There has to be responsibility.
If you have sensitive data, you need to be responsible for
how you control that data. They are implementing policies and
procedures. But, again, for instance, you would need
independent oversight.
But issuing policies and procedures does not necessarily
get to the root of the problem. You have to go out and verify
whether they are being fully implemented, are they being
complied, and if not, are you taking appropriate action against
the people. It is a cultural change that we need to do in VA.
As far as the FISMA, I would like Belinda to expand on that
answer a little bit.
Ms. Finn. We are currently finalizing our 2006 report on
FISMA. In that report, we did a followup on earlier issues and
also reported some new problems that the Department needed to
address.
They have been responding very positively to our findings
in that they have issued, as Mr. Opfer said, policies and
procedures. The problem is ensuring compliance of the policies
and procedures. It is not automatic as we have seen from recent
events. A policy on encrypting a hard drive does not
necessarily mean that all the hard drives are encrypted.
We have a number of recommendations to the Department
dealing with access controls and system controls. Most of that
report is not published in the public domain, so we probably
need to talk separately.
Other areas that we are looking at, actually right now, we
are focusing most of our IT efforts on our work related to the
financial statement audit and the FISMA. So we really do not
have a lot of other results that we can talk about.
We would certainly like to do more audit work looking at
actual compliance. We would like to look at controls over
removable media. We would like to evaluate all the implementing
instructions and how they have been complied with.
Mr. Mitchell. Thank you.
It sounds to me, in both the questions that Ms. Brown-Waite
asked and I asked, it is one thing to offer some suggestions
and procedures, but it is another thing to be able to follow
up. And that seems to be the crux of all of this.
Let me just ask hypothetically. Would you be able to absorb
200 FTEs in 2008 and if you could, how long would it take for
them to be productive?
Mr. Opfer. If we received an increase of that size, I think
we could absorb 200 FTEs. What we would try to do is an
aggressive recruitment at the journey-level both from the
auditors and investigators and healthcare inspectors so you can
bring them in with very little training in our programs and
start being productive.
Conceptually, we have the initiatives, as I outlined in my
statement, where we would use those people. Recruiting should
not be a hard issue.
About two years ago in our Office of Investigation, just
for two 1811 positions in our Washington office, we had over 50
experienced agents from the FBI, Secret Service, and other OIGs
apply for those positions. These are highly-qualified
individuals. When we put out an announcement for entry-level
positions, they had over a thousand responses.
The mission of VA is something that people like, paying
back, helping the veterans who deserve the help. And it is not
me. I am the new guy in town. The Office of Inspector General
in VA has an outstanding reputation in the IG community and has
received a number of awards from the President's Council on
Integrity and Efficiency for investigations, healthcare
inspections, and audits. This is prior to my watch, so I am not
tooting my horn.
In healthcare, Dr. Daigh has a unique responsibility. I am
the only IG's Office that has a healthcare inspection unit that
has an actual medical professional staff. We have done a great
job at being proactive, looking at things. Dr. Daigh has
brought in extremely talented people.
I do not think that we would have a hard time recruiting
the people. I think almost as they walk in the door, we will
get increased monetary returns. Certainly they would at least
pay for themselves and certainly in the out years, the second
year, I think you would see tremendous increases that they
would be able to produce for us.
Mr. Mitchell. Thank you.
I am going to ask Mr. Rodriguez if he has a question, but
at the same time, I hope you will excuse me. I have got to go.
And I turn it over to you, and thank you very much.
Mr. Rodriguez [presiding]. Thank you.
Let me ask you. I think in your report, you had talked
about some of the areas where you felt you were lacking or you
could do a little bit better. And one of them was looking at
mental health; is that correct?
Dr. Daigh. Yes, sir. If I could comment a minute. I think
the returning war veterans, that mental health issues are among
the highest priority issues that they face. My primary mission,
as I stated, is to ensure the veterans get quality healthcare.
And most of my resources are consumed in trying to do that for
the 150 something hospitals that VA has.
Veteran mental health issues, in order to address it in a
way that I think will bring satisfactory results, I think,
requires us to take a more in-depth look at the care actually
provided at the sites where healthcare should be provided.
So what I propose that we should do is to look at outcomes
of patients who were treated at individual facilities, sit down
and talk about the outcomes for those patients with the
physicians at those facilities, report our findings as to
whether the care was appropriate or not in our cap reports, and
then roll up additional data that we uncover as we look at
systematic issues in the mental health spectrum across the
system and national reports to give data that would be helpful
in addressing national policies.
I would also point out that there are 800 CBOCs roughly and
200 vet centers, each of which has a mission in providing
mental health activities and care for veterans away from
veterans' medical centers.
Mr. Rodriguez. I have been getting reports of the needs of
some of the family members. And I do not know. Do we have to do
something for the family members to get service now or are they
entitled to services?
I am not aware. That is why I am asking, because I was
hearing about the young people that are--in fact, there were, I
think, possible suicides on the part of family members of
veterans.
Dr. Daigh. Yes, sir. That is a complex issue. We recently
published a report on traumatic brain-injured veterans who
fought in Iraq or Afghanistan. And in that report, we
highlighted the fact that medical care after discharge from the
VA and more importantly supportive care after veterans are
discharged from the VA, if you live distant from a major
medical center can be problematic. We are continuing to follow
up on that issue.
The specific issue that you address, I think, relates to
the different status of different folks who leave DoD. For
instance, a Reservist might be in a different status than a
National Guard Member who might be in a different status from
an active duty who all might leave under different
circumstances.
We are currently exploring this issue in a current study
looking at the benefits that are available to individuals
depending on their status when they leave DoD. So I think that
is a very complex question to answer in terms of what an
individual is entitled to.
A simple example might be with respect to healthcare is
that some individuals might leave with TRICARE healthcare
benefits. Some individuals might leave with VA healthcare
benefits. Some individuals might leave with neither. Some might
leave with both. So that complexity exists all across the
benefit spectrum for individuals who are veterans.
Mr. Rodriguez. In your report, you also talk about the
material weaknesses that need correcting in the area of
procurement. And you mention also since 2001, they have
recommended more than two billion in potential cost savings by
contracting officers negotiating fair or reasonable prices.
Let me ask you, especially because I know we highlighted
the negotiations with the pharmaceutical companies on
prescription drug coverage, but there was also a report that
came out by the organization ``Families USA'' where--and I am
curious to know if the pharmaceutical companies, because I know
that that report indicated that they upped the prices prior to
us moving on the Medicare piece of legislation 2 years ago, and
whether there has been any major changes in that area or
whether the negotiations on the part of the VA have been, you
know, somewhat positive or, you know, how those costs have
changed. Have you looked at that at all?
Ms. Regan. We have a group called the Office of Contract
Review and they do the pre-award audits for all the
pharmaceutical contracts and the Med-Surge contracts awarded by
the National Acquisition Center. So these are going to be your
Federal supply schedule contracts.
Part of that, in answer to your question, is going to be it
depends on when they had their contract awarded. If it is a
covered drug, which is, I think, more of what you are talking
about, the ``Veterans Healthcare Act'' had a ceiling price for
drugs that are on the Federal supply schedule that VA,
Department of Defense, Coast Guard, and Public Health Service
can buy from.
If their contract has been awarded, they can only go up a
certain percentage every year depending on the CPIU. If it is a
new contract, they can renegotiate the price.
I do not think I have seen what I would call a significant
increase across the board in pricing. A lot of the pricing
depends on competition. And so you may see it go down, but we
have not seen where the prices have gone up significantly in
order to verify the statement that you heard.
Mr. Rodriguez. Thank you.
Make sure we get some additional questions right in. Okay?
Does the VA have adequate legal contracting oversight for its
portfolio of contracts? Excuse me. Ms. Regan.
Ms. Regan. I think at the field facilities, they could
probably use more support in contracting. A lot of times, they
do a lot of scarce medical specialist contracts, contracts for
specialists, for physicians. And they get into negotiations
where the university is represented by counsel, but there is no
counsel--there is not a sufficient number of attorneys to help
the VA in the same negotiations to work day to day with them.
So with the number of contracts that are out in the field, they
could use more contract attorneys working directly with them.
Mr. Rodriguez. So we do not have them at the present time
then?
Ms. Regan. No. There is not a sufficient amount of
attorneys to do that work. It is very specialized.
Mr. Rodriguez. Okay. Thank you.
And let me just as we are talking about--I was in the San
Antonio community, and we had moved on a clinic there. And I
was told that our staff there was pretty good at that aspect of
it in terms of looking at that--but that that was not
necessarily the case in the main office.
So I was wondering from a perspective of the agency, does
it rely mainly on the local hospitals out there or the local
states to follow through or, you know, is there some lack of
expertise in the agency that needs to be beefed up in certain
areas?
I know we just mentioned legal, but are there other areas
that, you know, in terms of either, housing and other types of
contracts that need to be looked at or----
Ms. Regan. Are you talking about just on the contracting
side?
Mr. Rodriguez. Yes, the contracting side and also--because
I know that on clinics now, we are not purchasing facilities.
We are basically contracting out and moving in. That is my
understanding, or am I wrong?
Ms. Regan. I am not sure if I can answer that question. I
have not seen enough of that.
Mr. Rodriguez. Okay. So I gather, because I was told that
the agency still did not have the expertise in some of those
specific areas.
Are there areas where we really need to beef up on the
expertise of the agency for procurement and those kind of
things and contracting?
Mr. Opfer. I think we have issued a number of reports on
procurement and have been very critical of the whole
procurement process. And that is one of the initiatives that we
have. I think if we had additional resources, we certainly
would want to go into that. That is a big ticket item for the
agency.
And I think within the last couple of months, we have
issued at least three or four reports that are very critical of
the procurement processes within the agency, and it is not in
one area.
Mr. Rodriguez. Have you found them to follow through on
that or what is lacking there from your perspective?
Ms. Regan. I think at this point, we have issued a number
of reports on major contracts that were issued, particularly
for IT services in which there were a number of problems.
What we are in the process of doing now is to take the work
over the last couple years and kind of look for the trends that
were in there, and we plan on issuing a report that looks at
the overall problems and where we found problems consistently
throughout these contracts. And those would be large contracts
awarded at the central office level.
We have put out reports in the past about buying practices
at facilities in 2001, resulted in a Procurement Reform Task
Force, and they have a buying hierarchy now to leverage our
buying power at the facility level.
We have not been able to go out and--we have not had the
resources to go out and look at how compliant, whether or not
it is being complied with and how it has affected spending.
With the healthcare resource for physicians, we wrapped all
that work up last year. I guess it was in 2005. They put out a
new directive and made people more accountable to do better
contracting. They actually have steps in there they are
supposed to use, including looking at their resources and what
resources do I actually need.
And, again, that is another issue that audit would like to
go out and look at, to look at the implementation of that
policy and how it has affected healthcare and contracting.
Mr. Rodriguez. Let me yield to my colleague.
Ms. Brown-Waite. I was just going to ask if you would be
kind enough to yield, Mr. Chairman.
I have a constituent waiting for me up in my office, and I
am going to have to leave. But one question along the lines
that the Chairman was asking.
Tell me about the Unisys contract, that they were paid $20
million so that you could get out of the contract with no
deliverables. Is that accurate?
Ms. Regan. We looked at the Unisys contract at the time
where it had been determined, I think by both parties, that it
was not working and they needed to end the relationship. And
the issue we were asked to look at was what was the best way
for the VA to get out of it or what was in the best interest.
Did they have a right to terminate for cause because Unisys
did not deliver the product during the deadlines that were set
in the contract or was it in the government's best interest to
buy the product that had been developed thus far and that had
not been accepted by the VA for payment?
We determined at that time there was grounds to terminate
for cause under the commercial item provisions in the Federal
acquisition regs. But VA felt very strongly that the project
was moving along, that they had several of the deliverables, or
I think they called them iterations, but they were deliverables
that were almost complete that they wanted to buy and not have
to start over again.
The settlement that was recommended was to pay
approximately $8.5 million, which was the percentage of work
done, and then the rest of the money was supposed to be for
travel if Unisys submitted appropriate documentation to support
the travel.
They settled for $9.5 and bought the product. And then I
understand some of the travel has been paid, but I have not
seen any documentation on it.
We did check the product. We had one of our experts, and he
said it was a good product and was moving along. We looked at
all the program records. At the time, we thought that we were
going to complete the product. I think there have been $16.7
million that was paid before this point in time and we accepted
deliverables. So it was only another $12 million to settle it.
Ms. Brown-Waite. So $16.7 million. That does not include
the $12 million?
Ms. Regan. Right. It is about $30 million all together.
Sixteen point seven million dollars had been paid over time for
deliverables that had been accepted during various parts of the
development of the program.
Ms. Brown-Waite. And the project, I am told, does not work.
Is this another CoreFLS System?
Ms. Regan. We understood that the project is not complete
and that at the time we made our recommendation, which was in
September, that the agency was going to hire a contractor to
complete it with the work that had been turned over or
purchased from Unisys. At the time we issued our report, a
decision had been made that it was not going to be completed
because of funding issues.
Ms. Brown-Waite. I would like to have some followup on that
issue, not here. My time has expired. I do have a constituent
waiting. But I would like to followup with you on that. And Mr.
Wu will be in touch with you.
Ms. Regan. Okay. Thank you.
Ms. Brown-Waite. Thank you.
Mr. Rodriguez. You talked in your presentation about
needing some additional resources commensurate on the changes
and the challenges in your packet. Also information management
mentioned the need for additional oversight that was needed and
especially on information technology and information security
and that you still had not done some of the audits. That is
because they are being done now or because you need additional
resources in order to pull that off?
Ms. Finn. We actually had to cancel two planned audits in
the information technology area, so we are not going to be able
to do those.
Mr. Rodriguez. And the reasons why?
Ms. Finn. Because we did not have enough resources.
Mr. Rodriguez. Okay. And what kind of resources do you need
in order to pull off, you know--for example, those audits were
for what? Was it comprehensive in nature or just some site
assessments?
Ms. Finn. No. They were specific topics and how VA was
handling specific--one of them was information exchange with
the Department of Defense.
Mr. Rodriguez. That is critical.
Ms. Finn. Yes. These are critical areas.
Mr. Rodriguez. Do we have a system now because I know I
have had people come to me, and one of them was--I guess I'll
mention him--Dr. Weiss, who keeps talking to me for the last 2
years that he has got this data where we can follow through on
people because we had talked about a technology that we could
follow through as they left the military and we could grasp
that data and have that information and so that that would not
be duplication.
Have we kind of come together with that or are we still
working on that?
Dr. Daigh. Sir, I cannot give you a comprehensive answer,
but I will say that in a report we did at Tampa on the death of
a Marine a couple of years ago, maybe a year and a half ago, we
found the transfer of medical records between DoD and VA at
that facility was a significant problem.
We followed up that inspection by revisiting in an
unannounced fashion about a year later, and we found that they
had made significant progress in providing records from DoD to
the VA.
We also found that the larger problem was probably in
getting records from civilian sites where the transfer between
the DoD site, which has an electronic record, and the VA had
improved, but from the civilian side, it was not so good.
On the computerized patient record that we have on our
desk, we can see, when we click on patients, we can see that
one can get access to DoD data. It is not always there and it
does not right now cover everyone. But we have seen progress in
this area over time.
Mr. Rodriguez. But what do we need to do legislatively that
might--because I thought we had already worked on that for a
few years to try to streamline that process so when a soldier
left into the veteran status that instead of redoing
everything, that we could just follow through and maybe get
some of that data. Is that occurring or is there something that
we can still do legislatively to make that happen?
Dr. Daigh. Sir, I am not an expert really in electronic
medical records. I have seen where there is--it has been an
ongoing effort, and I am as frustrated as from your question I
take you are that there is not a seamless movement of records
between the systems.
Mr. Rodriguez. But it is apparent that you do not have
enough resources to do those audits anyway. Is that correct?
Dr. Daigh. That would be correct, sir.
Ms. Finn. That is correct right now.
Mr. Rodriguez. Okay. And so you are asking for what,
additional----
Mr. Opfer. We really were not asking for specific numbers.
We put out initiatives that we thought should be considered.
Mr. Rodriguez. Considered as you do the assessments?
Mr. Opfer. Right. And I think on the medical records, that
probably would be a good question that VHA could probably give
you a status of where they are in dealing with DoD. I think Dr.
Kussman would be the right one to give you a response for the
agency. I know that they have had discussions with DoD. I,
quite frankly, do not know what level or where they are on that
project.
Mr. Rodriguez. You also mentioned a need to--well, I think
was it the procurement aspect of it and then the IT aspect of
it? Any other areas that you feel that there might be some gaps
upon looking and reviewing?
Dr. Daigh. Yes, sir. I think there is one area that would
benefit from improved oversight and that would be VHA's
research program, which is currently about $1.6 billion between
appropriated moneys from the VA, NIH, and then non-appropriated
moneys.
There are about 2,500 FTE involved in the VHA research
community. There are about 85 nonprofits. There are about 150
some odd medical centers, about 85 nonprofits who exist to hold
moneys for research efforts by VA physicians, many of whom hold
appointments at affiliated medical centers.
Mr. Rodriguez. How many nonprofits?
Dr. Daigh. There are about 92, I believe, authorized, about
85 active. And that data is--I can update it exactly, but it is
in the current budget.
Mr. Rodriguez. And who looks at those nonprofits?
Dr. Daigh. Sir, the Board of Directors for the nonprofits
is in large measure comprised of individuals who work at the
VA. So the Director and the ACOS for research and others are,
by large measure.
Mr. Rodriguez. Do you have the authority to oversee those
nonprofits, I guess?
Dr. Daigh. We do.
Mr. Rodriguez. Okay. Have you looked at any of those?
Dr. Daigh. Yes, sir. Well, the healthcare inspections have
published two reports recently. We have other ongoing work that
will be published soon. And I believe that there are issues
with respect to human protections, conflict of interest,
management of moneys, animal protections, and radiation safety.
Many of the research efforts require the use of radioactive
materials, some of which is at very low level, but nevertheless
requires compliance with rules and regulations. And I believe
from the work, we have done that, whereas in the healthcare
side of VHA, I think that physicians and providers are used to
making the right decision about providing healthcare and they
understand what the risks are, and they are careful in a way
that we all have come to expect.
And from what I have seen from the body of the work this
year on the research side, I think the researchers are too
aggressively trying to get their research accomplished and too
quick to sidestep some of the policies that are in place. At
the senior level management, one would much prefer that they
took the time to do things exactly correctly and delay the work
if that is required and not sidestep appropriate policy.
Mr. Rodriguez. And I agree with you. I think that there is
a lot, and I think we are seeing that now, a lot more research
coming out that is basically funded by the same people that
might be impacted by the results.
I would hope that we would have an opportunity to look at
that a little closer, especially within our system, and
hopefully we will not have it, because I know we have that in
the private sector a lot. And that is an area of serious
concern. I know because that impacts directly in terms of
certain types of approaches or medications or, diagnoses or,
other things that are utilized.
If there are no other questions, then do any of you have
any comments? You have the last word.
Mr. Opfer. No, Congressman. Thank you very much. I
appreciate the opportunity to appear here. And I have had the
opportunity for about 15 months here of working very closely
with the staff and this Committee, and it has been a very
productive and open and very candid relationship.
And I do appreciate the interest that the Committee Members
and the Committee staff have expressed in the work of the
Office of the Inspector General. So on behalf of our staff, I
would like to say thank you for your interest in our work.
Mr. Rodriguez. Well, thank you very much.
You did not want to give me a last figure for how much you
need? I am an appropriator.
Mr. Opfer. I will take anything you give me.
Mr. Rodriguez. Okay. Thank you, sir. Thank you very much.
Mr. Opfer. All right. Thank you.
[Whereupon, at 4:15 p.m., the Subcommittee was adjourned.]
A P P E N D I X
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Prepared Statement of Hon. Harry E. Mitchell
Chairman, Subcommittee on Oversight and Investigations
I would like to begin today by welcoming our new Members from both
sides of the aisle, welcoming our witnesses, and our guests.
This is our first Oversight Subcommittee hearing of the 110th
Congress. Today, the VA Inspector General will provide an assessment of
issues, problems, and best practices at VA. We may also look for
avenues in which this Subcommittee can help the Inspector General to
better do his job. Thus far, it looks like his team is doing a great
job with the resources allotted.
This Subcommittee has a long history of working with the VA
Inspector General. They are the first stop, the first call so-to-speak,
when our Subcommittee needs a first-hand assessment from a field
location or regarding operations at VA's Central Office.
I have asked the Inspector General to be accompanied by staff
experts in audit, contracting, healthcare and investigations. I am
interested in their views--as honest brokers--as to how the VA, as a
very large Federal organization, is doing.
This topic and this hearing are our place to start our oversight
assessment of VA. The IG has significant knowledge and recent hands-on
experience in matters that impact VA. I would stress that we do not
only want to hear about what VA is doing wrong--we want to hear about
what it is doing right--we want to hear about best practices at VA and
we want to do what we can to see those best practices grow and
multiply.
The best situation is when VA is proactive and identifies and
solves potential problems before they become real problems. We all
strive to be proactive, but all too often we end up just being
reactive.
Of necessity, we may do both on this Subcommittee, but we will
strive to be proactive as often as practicable.
I will now ask my colleague and Ranking Republican Member, Ms.
Ginny Brown-Waite if she has opening comments. I look forward to
working with her during these next 2 years.
I recognize Ms. Brown-Waite for opening remarks.
Prepared Statement of Hon. Ginny Brown-Waite, Ranking Republican
Member, Subcommittee on Oversight and Investigations
Thank you, Mr. Chairman, for yielding.
This is the first Subcommittee hearing for the Subcommittee on
Oversight and Investigations, and I appreciate the Inspector General
coming in to testify before this Subcommittee regarding the President's
proposed budget for FY 2008, as it relates to the Office of the
Inspector General.
The VA's Office of Inspector General (OIG) is responsible for the
audit, investigation, and inspection of all VA programs and operations.
Given the recent demand for greater accountability within all the
business lines at the VA, I am sure that the workload within the Office
of Inspector General has increased significantly in the past year.
Therefore, I find the budget before us very disconcerting, in that
the amount the Administration has requested for the Office of the
Inspector General is $72.6 million, and allows for 445 Full Time
Equivalent Employees (FTEE) to support the activities of the OIG.
During FY 2006, OIG identified over $900 million in monetary benefits,
for a return of $12 for every dollar expended on OIG oversight.
The OIG closed 652 investigations, made 712 arrests, 344
indictments, 214 criminal complaints, 316 convictions, and 833
administrative sanctions. My understanding is that the requested
funding level would result in a reduction of 40 FTEE from current
staffing levels.
I am concerned that the funding levels the Administration is
requesting may not be sufficient to continue the work that is currently
being performed by the OIG, and I look forward to hearing Mr. Opfer
testify on this matter, as well as others.
Again, thank you, Mr. Chairman, for yielding.
Prepared Statement of Hon. George J. Opfer,
Inspector General, U.S. Department of Veterans Affairs
INTRODUCTION
Mr. Chairman and Members of the Subcommittee, I am pleased to be
here today to address the Office of Inspector General's (OIG's)
oversight efforts in terms of issues, problems, and best practices at
the Department of Veterans Affairs (VA). We provide independent
oversight that addresses mission-critical activities and programs in
healthcare delivery, benefits processing, financial management,
procurement practices, and information management. We plan our work in
each of these strategic areas, which are aligned with the Department's
strategic goals.
Today, I will present to you my observations of OIG's overall
impact since 2001, and the challenges we face in providing effective
oversight of the second largest Cabinet level Department to ensure it
effectively carries out its mission of serving America's veterans. We
have accomplished much, but there is much more we can do.
With me today are the Assistant Inspectors General (AIGs) for
Investigations, Audit, and Healthcare Inspections; and the Counselor to
the Inspector General, who will answer questions about their specific
programs. The AIGs conduct criminal and administrative investigations,
national audits, healthcare inspections, and other reviews in the five
strategic areas. For fiscal year (FY) 2007, the proposed joint
resolution provides the OIG funding to support 445 full-time
equivalents (FTE) from appropriations. This is a reduction of 40 FTE
from the previous year. Our Office of Contract Review performs preaward
and postaward reviews under a reimbursable agreement with VA, which
funds an additional 25 FTE. These reviews of VA contracts produce
significant recoveries to the VA Supply Fund, as well as many
improvements in processes and practices in the procurement arena.
RETURN ON INVESTMENT
In the 6-year period FY 2001-2006, OIG delivered a return on
investment of $31 for every dollar invested in OIG operations. We
produced $11.6 billion in monetary benefits from recommended better use
of funds, savings, costs avoidances, recoveries, questioned costs,
restitutions, and civil judgments. We issued 1,169 audit and inspection
reports with 6,601 recommendations to improve services to veterans and
to improve the economy and efficiency of VA programs, operations, and
facilities. Almost 90 percent of these recommendations have been
implemented by VA to date. OIG also completed almost 15,000
investigative actions resulting in arrests, indictments, convictions,
administrative sanctions, and apprehension of fugitives, and processed
over 93,000 Hotline contacts, which resulted in completion of over
7,300 reviews of allegations of fraud, waste, abuse, and mismanagement.
OIG oversight is not only a sound fiscal investment, it is an
investment in good government and public assurance. For example, you
cannot put a monetary value on a patient's life saved through better
healthcare standards or removing an abusive provider from patient care.
To highlight some best-practice accomplishments resulting from our
healthcare inspection work, the Veterans Health Administration (VHA)
developed new national policies for colon cancer diagnosis and
treatment, management of pressure ulcers, management of surgical items
that can be left in the body, and seamless transfer of medical records
for returning war veterans transitioning from active duty to VA medical
care. Our investigative work has led to the successful prosecution of
medical providers who have harmed, and in some cases murdered,
patients. We have performed oversight work aimed at developing mandated
physician and nursing staffing standards. In the benefits area, our
work has led to the successful prosecution of thousands of unscrupulous
individuals who preyed on veterans by stealing benefits checks, abusing
fiduciary responsibilities, and making false claims.
Audits have identified billions of dollars in better use of funds
through improved practices. In financial management, we have produced
unqualified opinions of VA financial statements for many years while
identifying material weaknesses that need correcting. In procurement,
preaward reviews since 2001 have recommended more than $2 billion in
potential cost savings by contracting officers negotiating fair and
reasonable prices. Postaward reviews of Federal Supply Schedule
contracts resulted in more than $104 million in hard-dollar recoveries
that went back to the VA Supply Fund. Audit reviews have identified
systemic information technology (IT) system development deficiencies in
major procurements, such as CoreFLS. Our mandated Federal Information
Security Management Act audits have identified serious deficiencies in
VA's IT security. We have also successfully completed investigative
work on major IT data loss cases, such as the loss and recovery of the
data on 26.5 million veterans and active duty personnel.
Despite our significant accomplishments, I believe we have only
scratched the surface on what we can contribute to helping improve VA
programs and activities. For example, while we do the most we can with
the resources provided, there are many issues we are unable to review
within existing resource levels. For example, we cannot investigate or
review all Hotline complaints. In fact, we must refer 70 percent of all
Hotline cases to the Department for review. I believe VA would benefit
from an independent and objective review of these cases by the OIG
because the OIG-performed substantiation rate is 20 percent higher than
the Department. Furthermore, business is growing--our Hotline contacts
are up 16 percent over this point last year. We also decline more
criminal investigation cases than we prefer due to our high per capita
agent caseload of 16 to 1, which is one of the highest in the OIG
community.
We focus our resources on the most important and urgent issues
facing VA at the time and will always do so, but this often results in
delaying review of other important high priority planned oversight
work. I would now like to take this opportunity to discuss some of
these high priority issues by strategic area.
HEALTHCARE DELIVERY
OIG work has helped VHA improve the quality of medical care through
our focused reviews, healthcare inspections, audits, and
investigations. During the past 6 years, the OIG has invested about 40
percent of its resources in overseeing healthcare issues.
Issues that have received little attention in past years but offer
significant opportunity for systemic improvement involve services
provided to returning war veterans, medical research activities, care
of elder veterans, VHA's Veterans Integrated Service Network (VISN)
structure, and drug diversion at VA medical centers and mail-out
pharmacies.
Operations Enduring Freedom and Iraqi Freedom (OEF/OIF) veterans
are receiving care, as are other veterans, in a nationwide system of
over 150 medical centers, 800 Community Based Outpatient Clinics, and
over 200 Vet Centers. While we believe the quality of medical care in
VHA facilities is generally excellent, VA is challenged to deliver
mental health services and provide seamless transition of care from
active duty to veterans who live in areas distant from VA facilities.
Compliance by VA researchers with policies that protect patients and
ensure sound scientific results is another area of concern. VA research
is budgeted at $1.8 billion in FY 2008, which makes the research
program commensurate with the entire VA IT budget. The increasing
geriatric veteran population presents VA with constantly changing
challenges to care for elders at VA facilities, contract nursing homes,
and at home. Veterans 85 years and older enrolled in VA healthcare are
expected to exceed 675,000 by 2012.
As VA searches for organizational efficiencies, the question of
whether the VISN model offers VHA the best infrastructure to manage its
healthcare resources and provide access to quality care needs to be
addressed. The size of operations and the highly decentralized nature
of these activities add to the complexity of this issue.
Drug diversion steals valuable medicines from patients who need
them and makes patients vulnerable to harm from providers impaired by
drug use. VA has over 1,300 sites nationwide where drugs are provided
or stored with unique circumstances that can be exploited by those
seeking to steal drugs. VA would benefit from independent OIG
systematic facility reviews--immediately focusing on information
contained in automated dispensing systems--to identify and investigate
instances of drug diversion.
BENEFITS PROCESSING
The Veterans Benefits Administration (VBA) faces rising workload
levels, in terms of both absolute numbers and complexity, and is
anticipating receiving 800,000 claims in both FYs 2007 and 2008 from
returning war veterans and veterans of earlier periods. The pending
inventory of disability claims alone rose to almost 400,000 by the end
of FY 2006.
The timeliness and accuracy of processing these claims remain a top
priority for VBA. For example, VBA reports progress in reducing its
error rate for compensation core rating work to 12 percent, but this
rate remains unacceptably high in a program of over $40 billion. I
believe VBA and veterans would benefit from OIG oversight work aimed at
reviewing VBA's quality assurance program for rating decisions and an
assessment of other contributing causes of timeliness problems to
address the serious backlog of claims in VBA.
FINANCIAL MANAGEMENT
Although VA has received a series of unqualified audit opinions, it
has three material weaknesses that impact its ability to safeguard and
account for VA financial operations. The lack of an integrated
financial management system increases the risk of materially misstating
financial information and requires significant labor-intensive manual
processes to prepare auditable reports for the Department. Other
material weaknesses are deficiencies in financial operations oversight
and continuing problems with IT security controls.
The annual audit of VA's Consolidated Financial Statement does not
address other important financial activities or provide a detailed
review of individual accounts. We do not know, for example, if other
high risk areas, such as VA financial, statistical, budget, and
performance measures and reports, including the validity of automated
VA data, are accurate and reliable. Additionally, VA's internal
controls over, and accountability for, the use of VA funds remain an
area of high concern.
I believe the OIG has an important role to play in overseeing the
development process of new integrated financial and logistics systems
to ensure that they systematically address the needs of VA and correct
material weaknesses.
PROCUREMENT PRACTICES
VA spends over $6 billion annually in supplies, services,
construction, and equipment. In the past 6 years, we have issued a
number of reports involving individual failed procurements that
resulted in large dollar losses to VA and serious delays in significant
projects needed to improve VA infrastructure. Systemic deficiencies
include the lack of effective communication, little or no acquisition
planning, poorly written contracts, inadequate competition, poor
contract administration, and inadequate legal support.
We believe the organizational structure of VA's procurement
activities and the lack of oversight and accountability are factors
that have significantly contributed to these problems. Because
procurement activities are decentralized, it is difficult to conduct an
in-depth oversight program on a nationwide basis. There is no central
database identifying contracts that have been awarded, individual
purchase orders, or the amount of money spent on goods and services.
Effective oversight can improve contracting practices and help
avoid losses due to fraud, waste, abuse, and mismanagement. To this
end, I believe VA would benefit from national audits conducted by staff
who possess the specialized skills, knowledge, and experience in the
rapidly changing environment of Federal acquisitions. Efforts are also
needed to determine whether VA procurement activities could benefit
from the same centralization that VA is implementing in IT.
INFORMATION MANAGEMENT
VA's budget request for FY 2008 estimates a need to spend $1.86
billion for the IT appropriation. At a time when VA is realigning its
IT governance and resources, OMB identified dozens of VA systems on its
high risk watch lists. VA's automated information systems have not
provided management with sufficient information for effective
decisionmaking, are not fully integrated, and are difficult to use. The
current IT consolidation within VA is a critical first step to
establishing an effective IT governance structure, but does not
guarantee success. It remains to be seen whether VA's realignment will
enhance operational effectiveness, provide standardization, and
eliminate duplication in the delivery of information management
services.
Independent oversight is needed to ensure system development
controls are effective, requirements are accurately identified and
planned, and contracts used to support projects protect the
Department's interests and achieve optimum results. VA will continue to
face challenges in implementing its enterprise architecture, and
ensuring that it addresses the entire range of managerial, operational,
and technical controls necessary to oversee the IT architecture.
We have not been able to provide comprehensive audit oversight of
information security controls over VA systems. VA has identified almost
600 IT systems. To date, we have only been able to review a very small
percentage of these systems. I believe VA would benefit from more
national audits of information management and governance, IT
investments, and information and system security. This will help VA
improve its management practices and security controls over its
sensitive information, thereby helping VA institute changes that could
prevent further exposure of sensitive data.
The loss of VA data on millions of veterans and active duty
military personnel last year highlights the challenges facing the VA in
the area of information security. As we briefed your staff, we
currently are reviewing the circumstances involving a missing external
hard drive containing sensitive data from a VA facility in Birmingham,
Alabama. These reviews are complex and labor intensive.
Concern with protecting VA data is and will remain a primary focus
for years to come. This is not just a VA concern, but a national issue
that reflects the technological age we live and work in. This is an
area that will continue to require significant OIG resources and
oversight in the future. To this end, I believe VA would benefit from
an OIG rapid response capability, using teams consisting of criminal,
administrative, and computer forensic investigators who would
immediately assess the magnitude of the breach and implement an
investigative protocol built upon successful methods used in prior
incidents.
CONCLUSION
My office will continue to provide oversight of VA programs through
a combination of proactive and reactive audits, healthcare inspections,
and criminal and administrative investigations. We will continue to
provide positive return on investment not only in terms of monetary
impact, but also in management collaboration, good government, and
public trust. While I believe the OIG has accomplished a great deal in
improving VA, we are faced with the evolving challenges I have set
forth above and the need to greatly expand oversight to meet these
challenges.
In closing, I would like to add that my current resource level is
sufficient to meet my mandatory obligations and respond to high
priority issues raised by the Congress and VA. However, I believe VA,
like most agencies, is faced with evolving challenges and changing
demands. If the OIG is going to be an agent of positive change, future
resource levels need to be commensurate with this challenge.
Thank you again for the opportunity to discuss these issues with
you today. My staff and I would be pleased to answer any questions.
POST-HEARING QUESTIONS AND RESPONSES FOR THE RECORD
Questions from Hon. Harry E. Mitchell, Chairman, and
Hon. Ginny Brown-Waite, Ranking Republican Member,
Subcommittee on Oversight and Investigations, to
Hon. George J. Opfer, Inspector General,
U.S. Department of Veterans Affairs
U.S. Department of Veterans Affairs
Inspector General
Washington, DC
March 21, 2007
The Honorable Harry Mitchell, Chairman
The Honorable Ginny Brown-Waite
Subcommittee on Oversight and Investigations
Committee on Veterans' Affairs
U.S. House of Representatives
Washington, DC 20515
Dear Mr. Chairman and Congresswoman Brown-Waite:
Thank you for the opportunity to appear before the Subcommittee on
February 15, 2007, to discuss the Oversight Efforts of the VA Office of
Inspector General: Issues, Problems and Best Practices at the U.S.
Department of Veterans Affairs.
Enclosed are our responses to the followup questions from you and
Congresswoman Ginny Brown-Waite. If you need further information on the
work of the Office of Inspector General, please do not hesitate to
contact me.
Sincerely,
George J. Opfer
Inspector General
__________
For the Inspector General
1. State your view of the Department's management of its Workman's
Compensation Program. What do you estimate the cost savings would be
with more aggressive case management?
Response: In August 2004, the OIG issued a report on the costs of
VA's Workers' Compensation Program (WCP) that found that WCP case
management was ineffective and that program fraud existed (Audit of
Department of Veterans Affairs Workers' Compensation Program Costs,
Report No. 02-03056-182). In our FY 2004 report, we estimated $588
million in WCP costs could potentially be avoided for lifetime claimant
benefits through improved case management. We also estimated $108
million in WCP compensation costs could potentially be avoided for
projected lifetime claimants through improved fraud detection. The
Department concurred with the potential cost savings in our report and
the need for enhanced WCP management throughout VA.
VA has implemented significant initiatives to address the findings
and recommendations presented in our 2004 report. For example, VA
formed a Workers' Compensation (WC) Strategic Planning Committee,
comprised of representatives from throughout the Department in October
2004, and VA's Strategic Management Council approved the WC strategic
plan in February 2005. Programs were developed to promote professional
development, case file review, WC education, and quality assurance
programs. Action was also taken to develop performance criteria to
measure WCP case management effectiveness. While a number of
improvement actions involve complex organizational issues, improved
program oversight is being achieved in a collaborative manner through
the WCP Steering Committee. VA has implemented actions to evaluate the
adequacy of compliance with WCP performance criteria and is working
with the Department of Labor to contain and reduce program costs.
2. In your estimation, where do you think there are excessive
employees in the Department or offices with redundant or duplicative
missions?
Response: VA has recently taken steps to consolidate Information
Technology (IT) personnel who were decentralized throughout all VA
offices. This consolidation presents VA with the opportunity to
identify and eliminate redundant positions. Similar opportunities exist
with the current decentralization of procurement throughout VA, which
needs to be addressed as part of a larger effort to fix VA's
acquisition problems. These problems are outlined in response to
Question One addressed to the Counselor to the Inspector General.
3. Have you reviewed patient waiting times--specifically mental
health appointments? PTSD?
Response: We have not specifically reviewed mental health
appointment waiting times but we have reviewed the broader issue of
waiting times (Audit of VHA's Outpatient Scheduling Procedures, Report
No. 04-02887-169, July 2005). This review addressed the Veterans Health
Administration's (VHA) compliance with outpatient scheduling procedures
to determine the accuracy of the reported patient waiting times and
facility waiting lists.
VHA measures patient waiting times by comparing the desired
appointment dates to the actual appointment dates and strives to
schedule at least 90 percent of all next available appointments for
veterans within 30 days. Only 65 percent of these appointments were
scheduled within 30 days of the desired dates based on our analysis. We
reported outpatient scheduling procedures need improvement nationwide.
As part of this audit, 116 of the 1,104 outpatient appointments
examined were mental health appointments. We determined that 11 of the
116 appointments were incorrect--they were either the wrong desired
date or the wrong appointment type.
We are conducting a current review of VHA's outpatient waiting
times. The scope includes eight specialties, audiology, cardiac, eye
care, gastroenterology, mental health, orthopedics, primary care, and
urology. We expect to issue a final report in June 2007.
4. You stated that from 2001-2006 the OIG delivered a 31 to 1
return on investment. We understand that last year, the OIG's return on
investment was somewhat lower--at a figure closer to 12 to 1. At the
same time, you report that you faced a dramatic resource loss in the
OIG of some 40 FTE. What impact did the loss of personnel have on the
reduced return on investment?
Response: The return on investment of OIG oversight fluctuates from
year to year depending on the magnitude of individual audit,
investigative, contract review, and healthcare inspection results;
however, it has always been a positive ratio over the past 6 years. At
the time we reported FY 2006's 12 to 1 return on investment, the 40
Full-Time Equivalents (FTE) reduction had not occurred, so it did not
contribute in any way to that figure. We anticipate seeing the FY 2007
reduction in OIG FTE impacting next year's return on investment. Using
the average return on investment over the past 6 years of 31 to 1 in
terms of a return per planned FTE, we estimate a reduction of 40 FTE
would result in a drop of approximately $174 million in monetary impact
of OIG operations annually.
5. What would happen to both the net revenues returned to the
Department as a result of fines, penalties, cost avoidance and the
like, and to the basic return on investment per dollar invested in the
OIG, if the number of FTE in the OIG were to grow back to FY 2006
levels? What if the number of FTE at the VA OIG were to increase to the
next smallest statutory IG's ratio of FTE to parent organization FTE,
and you had a staff of about 750? Would this reap more benefits than it
would cost?
Response: Our long-term experience demonstrates a positive return
on investment year after year, so we estimate that any increase of the
OIG FTE resource level would reap more benefits than the increased FTE
would cost. Using the 31 to 1 return on investment that OIG has
achieved over the past 6 years, the restoration of 40 FTE would be
expected to result in $174 million in return on investment annually.
We estimate a staffing increase of 280 FTE to reach 750 FTE would
be expected to result in about $1.2 billion in additional monetary
benefits annually for VA.
6. The IG conducts Combined Assessment Program, or ``CAP,'' reviews
of VA facilities nationwide. How often does a facility face a review,
and are you able to reassess each facility to assure that followup
actions are complete whenever findings indicate the need for further
action?
Response: On average, we review VA medical centers on a 3 year
cycle. Facilities that are deemed to be at the most risk are reviewed
in consecutive years. OIG has a followup process for all
recommendations including those in CAP reports. This process involves
the facility certifying they have taken corrective action and the OIG
agreeing with the certification. On selected critical issues, in
addition to the written certification, an onsite inspection may occur.
7. We note in your testimony that IG audits have identified
billions of dollars in better use of funds through improved practices,
cost avoidances, and other methods. How does the IG establish a
baseline and measure the results of its actions to account for this
claim?
Response: In our semiannual report to Congress, we include the
monetary benefits of recommendations contained in OIG reports issued
during the reporting period. The monetary benefits are determined using
Government Auditing Standards (GAS) set by the Comptroller General of
the United States. By following GAS, the OIG ensures that the monetary
benefits reported are reasonable, prudent, and quantified. OIG audit
work uses comparative and statistical sampling techniques to ensure the
validity of data serving as the basis for identifying and reporting
monetary benefits. Statistical techniques allow us to project the
results to larger populations. Through the report drafting and comment
process, we solicit and consider our audit clients' concerns, assess
the viability and appropriateness of using alternative estimates, and
work to reach agreement with audit clients to ensure the reliability
and reasonableness of the monetary benefits reported.
8. Why has the VA had so much difficulty fielding information
technology systems and programs? I refer to HR LINK$, CoreFLS, PFSS,
and VETSNET--especially the BDN replacement component of VETSNET. Each
of these has either failed or had large cost overruns. What is VA doing
wrong?
Response: We found that program offices in these and other
procurements for services failed to adequately plan for the
procurement, which ultimately led to their demise. In particular, the
program offices failed to adequately define their requirements. The
second deficiency was poor contract administration by both the program
and contracting offices. This includes the failure to monitor
performance and take corrective action in a timely manner. We also have
identified the use of open-ended contracting vehicles, such as blanket
purchase agreements and other indefinite delivery indefinite quantity
type contracts, and option year contracts, as contributing to the
failures of contracts for services needed to develop IT systems and
programs.
9. The VA OIG invested significant time and effort into the May
2006 data loss. You interviewed numerous witnesses and specialists, and
produced a report that was refreshing in its candor. Did the IG
validate the explanation the VA employee gave for having numerous
databases such as mustard gas and project SHAD? Were the VA
researcher's activities confined to the research he described? If so,
why did he have the SHAD and mustard gas databases?
Response: The OIG validated the explanation the VA employee gave
for having each of the numerous databases on his hard drive, most of
which were discovered on the recovered external hard drive. He was
assisting the Veterans Benefits Administration (VBA) outreach efforts
by identifying former military personnel whose names and service
numbers, but not Social Security numbers, were contained in what has
become known as the ``mustard gas'' spreadsheet by comparing them with
data stored in other database files he possessed. The Project 112/SHAD
database was part of the ``mustard gas'' spreadsheet that was included
in the VBA outreach project. Finally, it should be noted that this
spreadsheet was not found on the recovered external hard drive.
For the Assistant Inspector General for Healthcare Inspections
1. Last year the IG investigated a situation where nonsterile
prosthetic implants were implanted in patients at a VA hospital. This
Committee is aware of another situation at VHA where part of an
invasive medical device was not correctly sterilized at several medical
centers. In each situation, both the instance of an unsafe medical
practice and apparent delays of sometimes circuitous routes that the
bad information traveled before it came to our full attention are of
concern. What is the IG doing to promote safe practices during invasive
medical procedures, and do you believe that the notification process is
working properly?
Response: Following last year's hearing in patient safety issues
before the House Subcommittee on Oversight and Investigations,
Committee on Veterans' Affairs, we met with senior VHA officials to
discuss supply processing and distribution policy and practice. VHA
subsequently initiated a series of actions to address these issues,
including the publication in January 2007 of VHA Directive 2007-001,
Ensuring Sterility of Non-biological Implantable Devices. We also
recently completed a national review on operating room safety, Review
of Patient Safety in the Operating Room in Veterans Health
Administration Facilities (Report No. 05-00379-91, February 28, 2007).
The OIG will continue to examine patient safety through the environment
of care and quality management portions of CAP reviews and through
inspections related to complaints received by the VA OIG Hotline. OIG
work underway includes an Office of Audit project on the acquisition
and management of surgical implants to assess the effectiveness of VHA
oversight and we expect to issue a final report in August 2007. The OIG
has not specifically evaluated the patient notification process as it
relates to invasive medical procedures.
2. What are the pressing quality-of-care issues that affect
returning war veterans, and how could the OIG contribute to
improvements in their care?
Response: Two important issues are the management of mental health
issues to include Post Traumatic Stress Disorder (PTSD) and related
conditions, and the availability of quality medical care at sites that
are distant from the medical center.
Outcome based reviews of PTSD, affective disorders, and substance
abuse disorders, in a sample of veterans recently evaluated at the
medical center, would permit OIG to make specific recommendations to
improve local care and include information on how individual medical
centers respond through our CAP reports.
A review of the policies and outcomes for care provided to
returning war veterans at the more than 800 outpatient clinics and 200
Vet Centers would similarly improve veterans' medical care. As
highlighted in the OIG report, Healthcare Inspection Health Status of
and Services for Operation Enduring Freedom/Operation Iraqi Freedom
Veterans after Traumatic Brain Injury Rehabilitation (No. 05-01818-165,
July 12, 2006), veterans have significant supportive care requirements
upon discharge from inpatient care. OIG inspections would report on
VHA's efforts to provide these veterans with required services and
medical care with the effect of improving the full scope of care
provided to veterans.
Other issues that we are concerned with are the effective use and
maintenance of high-technology prosthetic devices, the full lifetime of
the veteran's management of orthopedic injuries of returning war
veterans with amputations, and VA's ability to provide specialized care
to war veterans with serious blast injuries to the head, eyes, and
extremities.
3. How would you approach assessment of VHA researchers' compliance
with appropriate policies and regulations, and what would you expect to
find?
Response: In addition to national reviews of VHA research, the OIG
would perform a compliance-based review of the research activities at
each facility visited during a CAP inspection. This review would
address topics that include compliance with policies that address human
research protection, animal welfare, security of research data, and
radiation safety. Based on prior work, the OIG would expect to find
that the research community may be taking unacceptable risk by
sidestepping the strict interpretation of applicable current policy. As
a result, some research protocols may not include appropriate human
protection measures, that research data may not be properly
compartmentalized and secured, and that policies may not be updated to
reflect the current national standard.
4. What are the key issues facing VA in providing care for the
elderly?
Response: The quality of medical care provided at VHA facilities is
generally excellent. However, the provision of supportive care for
elders varies across the nation. Included in the issues that the OIG
could evaluate are local demands for supportive care such as nursing
home and in-home assistance programs; specialty care such as
cardiology, neurology, and orthopedic surgery; and VHA's current local
progress at meeting these demands through the multiple programs that
are currently available. This could be accomplished as national
programmatic reviews that are targeted to address issues of concern to
the elderly, as well as part of the CAP hospital inspection process.
For the Counselor to the Inspector General
1. What do you see as the major problems impacting VA in the area
of procurement?
Response: Our work has identified significant problems at most
stages in the procurement process. This includes planning, soliciting
and evaluating proposals, and contract administration. The most
significant problem influencing all these deficiencies is VA's
organizational structure for acquisitions. Procurement activities are
so decentralized that VA does not know what was purchased, who it was
purchased from, who made or approved the purchase, whether it was a
contract or open market purchase, what was paid, or whether it was a
fair and reasonable price. A majority of the acquisition workforce does
not work for the Office of Acquisition and Materiel Management, but for
various entities within VA such as VHA and VBA.
Although the Office of Acquisition and Materiel Management has
authority to issue warrants to contracting officers and issue policy,
it does not have authority to conduct oversight to ensure that the
contracting officers are complying with laws and regulations or acting
in the best interest of the Government. As a result, there is little to
no VA oversight of procurement activities and no accountability.
Oversight is an important internal control. Lack of oversight not only
results in acquisitions that are not in the best interest of the
Government, it allows for criminal activity to go undetected. This
includes bribery, kickbacks, and theft.
With respect to individual procurements, we have found that most
failed procurements are the result of poor acquisition planning, poor
contract administration, or both. For example, we often find that
program offices do not adequately define their needs or the timeframe
needed to complete the procurement, identify the type of contract that
is best suited to meet the need, how performance will be monitored, or
perform the required independent cost estimates needed to budget
appropriately. Lack of effective communication between the program and
contracting offices during the planning process also contributes to
these problems.
We also find deficiencies on the part of the program and
contracting offices resulting in poor contract administration. The most
significant are the failure to monitor contract performance, take
action in a timely manner when the contractor fails to comply with the
contract's terms and conditions, and ensure that invoices are supported
by the proper documentation before authorizing payment.
2. Are adequate legal counsel staff and contract supervision
resources used by VA to oversee its portfolio of contracts? What impact
does VA's emphasis on competitive sourcing-type activities have on
legal and contracting resources?
Response: Based on our reviews of contracting actions, we have
identified a problem with the lack of legal support. There are an
insufficient number of attorneys in the Office of General Counsel to
provide adequate legal support on a daily basis to the contracting
entities located at VA facilities nationwide. In our view, both
contracting and program offices would benefit from onsite legal support
during all phases of the acquisition process.
We have not performed sufficient work to determine whether the
ratio of experienced contracting officers to the number of contracts
being managed is an issue either locally or nationwide. However, the
results of our audits and reviews of VA contracts have shown a need for
better oversight of VA's contracting practices.
We also have not performed sufficient work to determine the impact,
if any, that an emphasis on competitive sourcing-type activities has on
legal and contracting resources. However, based on our pre- and post-
award reviews of contracts awarded by VA medical facilities pursuant to
38 U.S.C. Sec. 8153 to obtain healthcare resources, we have identified
a need for greater legal support to ensure that the contracts are
legally sound, to provide assistance in negotiations, and to assist
contracting officers in making decisions relating to contract
administration.
For the Assistant Inspector General for Investigations
1. You mentioned the need for a proactive approach to drug
diversion. What additional steps can the OIG take to detect and deter
drug diversion at VA facilities?
Response: With additional staff, each field investigator would be
assigned ownership of one, but not more than two, VA Medical Centers
and Consolidated Mail Outpatient Pharmacies for the purpose of
proactively identifying and eliminating drug diversion. This would be
accomplished by frequent examination of paper and electronic audit
trails associated with the receipt, storage, dispensing, and
destruction of pharmaceuticals; onsite assessment of controls and
vulnerabilities at each site; close interaction with staff in order to
increase awareness of signs of drug diversion and to cultivate sources
of information about such activity; and increasing our partnership with
VHA management in Headquarters and the field to address this problem.
We would specifically concentrate our efforts first on facilities that
have implemented Pandora, an automated tool designed to detect drug
diversion.
A comprehensive diversion mitigation strategy cannot be limited to
just our internal concerns. Diversion schemes may occur at any point
along a continuum from receipt of the drugs into the VA system, up to
the actual delivery of pharmaceuticals to the veteran. While the
individuals who divert drugs may use the drugs themselves, these
diverted drugs also have the potential of being illegally sold on the
streets of our communities. Therefore, we also proactively seek
beneficial partnerships with Federal, state, and local law enforcement
whose jurisdictional responsibilities complement our own. With
additional criminal investigators we would be better positioned to
participate on task forces, thereby enhancing our ability to identify
and disrupt potential diversion schemes, and maximize our ability to
investigate and arrest offenders.
2. What impact have the major data breaches been on OIG resources?
What would you estimate is needed to address future data loss cases?
Response: The major data breaches have consumed significant OIG
resources. For example, approximately 3,600 staff hours were devoted in
May and June 2006 to the criminal and administrative investigations of
the Montgomery County, MD, data theft. The current criminal and
administrative investigations on the data loss in Birmingham, Alabama,
presently involve 20 employees working full-time and performing
significant amounts of travel.
Due to the complex nature of data loss cases, we estimate that we
would need additional staff to address future data loss cases. We
estimate that we need an additional 30 FTE to address future data loss
cases and to assist the Department in addressing network security. This
staff would include computer forensics specialists, database analysts,
network security specialists, forensic auditors, as well as criminal
and administrative investigators. This group would assess network
security and critical information assets protection, conduct
penetration testing, and investigate network intrusion.
For the Assistant Inspector General for Auditing
1. How can the OIG improve its oversight of VA's procurement and
acquisition programs and activities?
Response: While past audit efforts have addressed individual or
localized problems such as contract award and administration and supply
chain management issues, we would like to expand OIG oversight to
address more nationwide issues. With additional resources, we would
establish an audit division dedicated to procurement and acquisition
programs and activities. This division would be comprised of staff with
the specialized skills, knowledge, and experience needed to address the
rapidly changing and complex environment of Federal acquisitions. The
division would provide for a more systematic, disciplined, strategic,
and proactive approach to reviewing VA's procurement and acquisition
processes.
For example, more audit work is needed to examine staffing,
organization, processes, and procurement actions of VA's current
decentralized approach to acquisition. We would expand our oversight of
historically problematic areas such as Government Purchase Card Program
activities, acquisitions supporting major IT systems and development,
and the award and administration of clinical services contracts, along
with other major business line acquisitions. We would also increase our
oversight at VA's local facilities and major acquisition support
centers such as the National Acquisition Center.
2. How can the OIG help VBA address problems with the accuracy and
timeliness of claims?
Response: Currently, we are conducting several audits of VBA claims
processing activities. These audits include:
Examining whether VA regional offices process Operation
Enduring Freedom/Operation Iraqi Freedom veterans' claims accurately
and promptly (final report expected in September 2007).
Determining if VA's compensation system messages are an
effective control for ensuring the accuracy of compensation claim
payments (final report expected in September 2007).
Determining if VA regional offices promptly process
nonrating claims such as death pension claims and disability and death
dependency claims (final report expected in July 2007).
With additional staff, we could perform national audits to evaluate
the impact of various resource and procedural shortcomings and
recommend specific actions to fix those issues. These audits would be
based on a comprehensive strategy to provide information on all claims
processing activities instead of evaluating individual activities.