Decision To Close the Sacramento Loan Guaranty Office and Planned Study of Other Loan Guaranty Operations

HRD-80-16: Published: Nov 1, 1979. Publicly Released: Dec 3, 1979.

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The Veterans Administration (VA) administers its loan guaranty program through the Department of Veterans Benefits (DVB). VA is authorized to make loans directly to veterans in rural areas, small cities, and towns where private credit for VA-guaranteed home loans is not generally available. DVB maintains 58 regional offices, of which 49 have a loan guaranty division. Of these 49 regional offices, 11 maintain small satellite loan guaranty operations in distant locations within their respective regional jurisdictions. As of January 1979, there were 15 satellite offices staffed with from 1 to as many as 36 positions. At that time, the San Francisco regional office had three satellite offices, one each in Sacramento and Fresno, California, and in Reno, Nevada. A review was made of the VA decision to close the loan guaranty satellite office in Sacramento and to consolidate the operations and staff at that office with the VA San Francisco regional office.

The decision by VA to close the Sacramento loan guaranty office and to reassign the staff to the San Francisco regional office was based on the VA estimate of net benefits that would accrue, as well as VA ability to maintain an adequate level of service to the public in the Sacramento area. GAO believes that VA has shown that net benefits would accrue as a result of consolidating the operations and staff in the Sacramento loan guaranty office with the San Francisco regional office. In addition, it appeared that the San Francisco office procedures for processing the Sacramento workload would be adequate. VA actions, taken or planned, appeared comprehensive enough to ensure a level of service that would be equivalent to the service provided by the Sacramento office, providing VA properly: (1) schedules timely trips to the Sacramento area; and (2) implements solutions to telephone access problems, if any, that are identified as a result of ongoing studies.

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