Armed Forces Institute of Pathology: Business Plan's Implementation Is Unlikely to Achieve Expected Financial Benefits and Could Reduce Civilian Role

GAO-05-615 Published: Jun 30, 2005. Publicly Released: Jun 30, 2005.
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Highlights

DOD has raised concerns about certain business practices of the Armed Forces Institute of Pathology (AFIP), including its role in civilian medicine. In response, AFIP implemented changes and drafted a business plan. On May 13, 2005, DOD recommended closing AFIP as part of the Base Realignment and Closure process. The Senate Committee on Armed Services, in a report accompanying the Ronald W. Reagan National Defense Authorization Act for Fiscal Year 2005, directed that GAO study AFIP's business plan. GAO (1) described the business plan's key initiatives and projected financial benefits, (2) evaluated the business plan's potential to improve internal controls and achieve financial benefits, and (3) assessed the likely impact of the business plan on the role of AFIP in military and civilian medicine. GAO reviewed the major assumptions and analyses for developing the plan and interviewed AFIP and DOD officials, and members of the civilian medical community.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Office of the Assistant Secretary of Defense (Health Affairs) In order to better manage changes being instituted at AFIP, the Assistant Secretary of Defense for Health Affairs should reevaluate the financial benefits projected in AFIP's business plan so that DOD will have a more reliable estimate of AFIP's revenues and expenses.
Closed – Not Implemented
Base Realignment and Closure (BRAC) 2005 directed the disestablishment of the Armed Forces Institute of Pathology (AFIP). Therefore, the recommendation for the Assistant Secretary of Defense for Health Affairs to reevaluate the financial benefits projected in AFIP's business plan will not be completed.

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