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Pursuant to a congressional request, GAO reviewed: (1) whether the Department of Veterans Affairs' (VA) budget provides enough resources for the Veterans Benefits Administration (VBA) to manage and implement all of the priorities that must be addressed in the information technology area; (2) whether VBA is making progress in its information technology management; and (3) how other government agencies have been able to measure the return on investments made in information technology. GAO noted that: (1) while the VBA overall fiscal year 1997 budget is known, the amount planned for VBA information technology is not yet available; (2) although VBA officials have performed a substantial analysis to determine the extent of the year-2000 problem, VBA has not yet completed this analysis; (3) the magnitude of effort that will be required to modify systems to run beyond December 31, 1999 will not be known until this analysis is completed; (4) VBA modernization investment activities have yielded some improvement in hardware and software applications, but GAO analysis of past and current VBA information technology initiatives shows that VA lacks the critical cost, benefit, and risk information necessary to determine whether it has made worthwhile investments; (5) some private- and public-sector organizations have achieved significant performance improvements by managing their information technology resources within an overall management framework that aligns technology with business needs and priorities; and (6) according to VBA officials, VBA has begun to implement the three-phased management approach for selecting, controlling, and evaluating information technology-related projects.

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