VA Health Care: Nonprofit Corporations Enhance VA Research, but Would Benefit from Increased Oversight

GAO reviewed the Department of Veterans Affairs' (VA) nonprofit research corporations, which receive funds primarily from non-VA sources to conduct medical research at VA facilities. Since VA's nonprofit corporations were first established, there has been limited oversight of their operations and contributions to VA research. Nonprofit corporations support VA's research environment by funding a portion of the department's research needs, such as laboratory equipment and improvements to infrastructure, and by providing flexible personnel and contracting arrangements to respond to investigators' needs. To detect conflict of interest, investigators on research projects administered by VA's nonprofit corporations are subject to federal statutes and regulations applicable to federal employees concerning conduct and conflicts of interest and may be required to disclose their financial interests. Institutional conflicts of interest are unlikely to occur in VA's nonprofit research corporations because they cannot own stock, have an equity interest in private companies, or obtain intellectual property rights. VA has delegated responsibility for monitoring and overseeing the activities of nonprofit corporations to the directors of VA medical centers; however, VA headquarters does not oversee and monitor corporations' financial activities and ensure that identified deficiencies are corrected.