Financial Audit:

Veterans Administration's Financial Statements for Fiscal Year 1986

AFMD-87-38: Published: Jul 29, 1987. Publicly Released: Jul 29, 1987.

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GAO examined the Veterans Administration's (VA) consolidated financial statements for fiscal year (FY) 1986, and reviewed VA internal controls and compliance with federal laws and regulations.

GAO found that: (1) it could not establish the book value of VA assets, including land, buildings, and equipment that VA acquired over periods dating back to 1930; (2) had VA calculated its insurance reserve balance under generally accepted accounting principles, its balance of $11.2 billion would have decreased by between $4 billion and $5.7 billion; (3) VA did not always properly bill patients who were not entitled to free care, and its records showed about $20.2 million in receivables for ineligible-patient care; (4) VA failed to comply with the Prompt Payment Act and the Veterans' Rehabilitation and Education Amendments of 1980, and may not have complied with the Debt Collection Act of 1982; and (5) except as noted, the VA financial statements presented fairly the VA financial position as of September 30, 1986, in accordance with generally accepted accounting principles applied on a consistent basis.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: VA is developing a decentralized hospital computer program billing package that will identify billing cases and generate bills. Primarily as a result of an increased use of this system and more detailed reviews of patient eligibility factors, VA has improved its activities significantly in this area. GAO no longer considers this a material control weakness.

    Recommendation: The Administrator of Veterans Affairs should direct the Department of Medicine and Surgery (DMS) to review the medical centers' compliance with VA procedures for determining the eligibility status of veterans from whom reimbursements should be received. For those centers where compliance is not being achieved, DMS should provide the Administrator with a detailed plan of corrective action.

    Agency Affected: Veterans Administration

  2. Status: Closed - Not Implemented

    Comments: On July 8, 1992, VA decided not to charge interest on compensation- and pension-related items. On August 1, 1994, the Veterans Benefits Administration notified the Office of Inspector General that VA does not intend to charge interest and administrative costs on delinquent loan guaranty debts.

    Recommendation: The Administrator of Veterans Affairs should conduct a review of delinquent VA debts and, accordingly, either assess the proper amount of interest and administrative costs, as required by law, or execute waivers if there are appropriate reasons for doing so.

    Agency Affected: Veterans Administration

 

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