Department of Veterans Affairs' Lack of Timely and Accurate Information on Unexpended Balances Limits Effective Management and Congressional Oversight

In 2007, GAO reported that VA's systems lacked readily available and accurate information to track and provide the status of construction projects to VA management for its Veterans Health Administration (VHA) and National Cemetery Administration (NCA) projects. For example, it took several months for VA to provide GAO with corrected information on VHA and NCA construction projects. VA receives funding for major and minor construction projects as separate line items within its appropriation. NCA's minor construction information system consisted of text reports that were not compiled. Both VHA and NCA have an electronic project information system to track the status of major projects. However, these information systems did not contain readily available data, as both VHA and NCA relied on contacting project management personnel to update the project status. Additionally, VA lacked effective policies and procedures designed to identify completed construction projects. Consequently, VA did not have readily available information in its construction accounts about unexpended balances that were no longer needed and could have been redirected to other needs. GAO recommended that VA establish policies and procedures to update and keep the project information systems current. In response, as of October 2010 VA has updated project information systems and guidance for both VHA and NCA Minor and Major Projects. As a result, VA now is better positioned to manage unexpended balances in its construction accounts to ensure effective management of these funds at VHA and NCA.

In 2007, GAO found that VA's systems lacked readily available and accurate information to track and provide the financial status of construction projects to VA management for its Veterans Health Administration (VHA) and National Cemetery Administration (NCA) projects. For example, it took several months for VA to provide GAO with corrected financial information on VHA and NCA construction projects. VA receives funding for major and minor construction projects as separate line items within its appropriation. The information in VA's Financial Management System (FMS) for both VHA and NCA minor construction projects showed math errors, lacked project status, and had negative balances. Additionally, VA lacked effective policies and procedures designed to identify completed construction projects. Consequently, VA did not have readily available information in its construction accounts about unexpended balances that were no longer needed and could have been redirected to other needs. GAO recommended that VA establish policies and procedures to update and keep current the project financial management system that will notify VA management when payments have exceeded project funding. Since 2009, VA has updated policies and procedures such as training manuals to address errors in the existing financial management system while awaiting a planned replacement system that has not yet been procured. As a result, VA now is better positioned to manage unexpended balances in its construction accounts to ensure effective management of these funds at VHA and NCA.

In 2007, GAO found that VA lacks effective policies and procedures designed to identify completed construction projects that have funds remaining in its Veterans Health Administration (VHA) and National Cemetery Administration (NCA) Major and Minor Projects. VA receives funding for major and minor construction projects as separate line items within its appropriation. Unexpended balances are common in construction projects and authorized transfers between VA project accounts take place. The approximately $11 million in unexpended balances that we found during our review were no longer needed for the projects they were originally designated for. Also, in some cases the projects had been completed for several years. GAO recommended that VA establish policies and procedures to periodically identify completed projects for close-out and redirect the unexpended balances in a timely manner to other construction needs within VA. In response, VA updated existing policies and procedures for general ledger and maintenance of funding allotments. For example, prior to the GAO audit, VHA's Capital Asset Management and Planning Service (CAMPS) had established a course of action to compare the project tracking database to the financial database to ensure unexpended balances were not left on closed projects. However, this practice was done annually and will now be completed quarterly. Additionally, the VHA Minor Construction Handbook was updated and NCA now monitors project status and identifies completed projects for closeout and removal of unexpended balances per a directive dated July 28, 2009. As a result, VA now is better positioned to manage unexpended balances in its construction accounts to ensure effective management of these funds at VHA and NCA.