VA Health Care:

VA Is Struggling to Address Asset Realignment Challenges

T-HEHS-00-88: Published: Apr 5, 2000. Publicly Released: Apr 5, 2000.

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Stephen P. Backhus
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Office of Public Affairs
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Pursuant to a congressional request, GAO discussed the Veterans Health Administration's (VHA) management of the capital asset realignment process, focusing on: (1) VHA's progress to date; (2) any concerns regarding VHA's realignment process as designed; and (3) the potential effects of VHA's actions on the Department of Veterans Affairs' (VA) capital budgeting process.

GAO noted that: (1) VHA has been unsuccessful over the past 13 months in its efforts to design a capital asset realignment process; (2) VHA's efforts have focused on discussions of who should lead such a process, how stakeholders should participate, and how decisions are to be made; (3) VHA estimates, as it did 8 months ago, that it could be several months before its process is operational; (4) GAO's assessment of VHA's process, as designed, raises concerns about whether the right people are involved at the right times and in the right ways; (5) senior managers at headquarters may not be proactively involved in a leadership role at key decision points; (6) in addition, stakeholders with vested interests appear to be involved in decisionmaking, rather than advisory, roles; (7) activities supporting key components, such as options development and evaluation, are not sufficiently rigorous; (8) VHA may not be able to produce within a reasonable timeframe capital asset plans that are in the best interest of veterans; (9) VHA's slow progress creates dilemmas for VA's capital budgeting process; (10) in the short term, VHA and VA's Capital Investment Board face the challenge of maintaining and improving capital assets without sufficient information about future asset needs to ensure cost-effective capital investment decisions; (11) by contrast, if funding for projects is delayed until capital asset plans are completed, the longer-term challenge will be how to successfully finance and implement capital realignment investments potentially totalling billions of dollars; and (12) these challenges could be ameliorated, in part, if VA effectively manages short-term investment risks and Congress provides alternative financing arrangements for future investments.

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