GAO discussed the Veterans Benefits Administration's (VBA) efforts to modernize and streamline its business processes. GAO noted that: (1) VBA is experiencing information technology acquisition problems and serious management and technical weaknesses; (2) VBA needs to adopt a clearly articulated business strategy to solve its service-delivery problems, coordinate its reengineering efforts, and cope with constrained resources; (3) VBA is developing strategic and information resources management plans that it will use in preparing its fiscal year 1998 budget request; (4) the National Academy of Public Administration will assess ways to make VBA claims processing more efficient; (5) VBA needs to develop performance goals and measures aimed at improving the quality of service; (6) VBA is reengineering its compensation and pension business processes, but it must improve its management of its information technology investments by developing critical cost, benefit, and risk information; (7) VBA has acquired some computer equipment before completing its reengineering analysis and may have to discard the equipment; and (8) VBA is not following sound software and systems development practices.