VA Health Care:
Improved Planning Needed for Management of Excess Real Property
GAO-03-326: Published: Jan 29, 2003. Publicly Released: Jan 29, 2003.
The Department of Veterans Affairs (VA) has changed from a hospital-based system to primary reliance on outpatient care. As a result, VA expects that the number of unneeded buildings will increase. Veterans' needs could be better served if VA finds ways to minimize resources devoted to these buildings. VA must have an effective process to find alternate uses or dispose of unneeded property. In August 2002, VA completed a pilot test for realigning its health care system in the Great Lakes network. The pilot identified 30 buildings that are no longer needed to provide health care to veterans. VA is currently studying how to realign assets in its 20 remaining networks. GAO was asked to review VA's management of unneeded buildings in its Great Lakes network.
The Great Lakes network has developed or implemented alternative use or disposal plans for 21 of the 30 unneeded, vacant buildings. VA has leased 10 of the buildings to the Chicago Medical School and is negotiating a lease for 3 buildings with Catholic Charities of Chicago. Four buildings were demolished, and 4 buildings will be demolished in order to construct new facilities or to expand an existing cemetery. The network identified three obstacles that hinder alternative use or planning for the remaining buildings: (1) VA has been unable to find organizations interested in using the vacant, unneeded buildings due primarily to their location or physical condition; (2) VA may spend more to demolish buildings than it would spend to maintain the buildings as is; and (3) VA is reluctant to transfer disposal responsibility for the buildings to the General Services Administration, primarily because (a) VA would incur costs for environmental and other requirements that could exceed potential savings through avoidance of routine maintenance costs, and (b) any proceeds may only be used for the construction of VA nursing homes.
Recommendation for Executive Action
Status: Closed - Implemented
Comments: For CARES purposes, VA tested and implemented an improved systemwide model for managing excess property. Improvements to VA's capital asset model include (1) hiring new Capital Asset Managers in each of its health care networks to facilitate the disposal or leasing of excess property; (2) developing a score card to track vacant space, utilization, and condition of facilities; (3) participating in a federal effort to establish asset management principles and performance measures; and (4) creating a departmentwide information technology system for analyzing, monitoring, and managing its capital assets. Capital Asset Realignment for Enhanced Services (CARES) resulted in decisions regarding the continued use of VA's existing structures, such as whether to continue to use, renovate, lease, or dispose of buildings.
Recommendation: To ensure that the newly developed Capital Asset Realignment for Enhanced Services model for managing excess buildings will provide an effective decision-making tool that could be used in the other networks, the Secretary of Veterans Affairs should conduct a pilot test of the model in the Great Lakes network and make modifications, if needed.
Agency Affected: Department of Veterans Affairs