ELECTRONIC 

HEALTH RECORDS

Fiscal Year 2013 

Expenditure Plan 

Lacks Key Information 

Needed to Inform 

Future Funding 

Decisions

Report to Congressional Committees

July 2014

GAO-14-609

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-14-609, a report to 

congressional committees

July 2014

ELECTRONIC HEALTH RECORDS

Fiscal Year 2013 Expenditure Plan Lacks Key 

Information Needed to Inform Future Funding 

Decisions

Why GAO Did This Study

VA and DOD initiated the iEHR 

program with the intent of developing a 

single, common electronic health 

record system to replace their existing 

health record systems. However, the 

departments subsequently changed 

their approach and instead began 

pursuing separate efforts to modernize 

or replace their existing systems and 

ensure their interoperability. The 2013

appropriations act restricted the 

obligation of VA and DOD fiscal year 

2013 funds for the development of 

iEHR to not more than 25 percent until 

an expenditure plan that satisfied 

statutory conditions, including being 

reviewed by GAO, was submitted to 

the Senate and House Appropriations 

Committees. GAO’s objective was to 

determine the extent to which the iEHR 

expenditure plan satisfied six statutory 

conditions. To accomplish this, GAO 

analyzed the contents of the plan 

against the statutory conditions and 

applicable documentation, such as the 

President’s budget, to determine 

whether the plan met the conditions. 

What GAO Recommends

GAO is recommending that the 

departments ensure that any future 

expenditure plans include verifiable 

and accurate budget, cost, and 

spending information; a deployment 

timeline that is consistent with an 

integrated master schedule; a data 

standardization schedule; and the 

basis for their assertion of compliance 

with acquisition rules, requirements, 

guidelines, and systems acquisition 

management practices of the federal 

government. In joint comments on a 

draft of this report, DOD and VA 

concurred with GAO’s 

recommendation.

What GAO Found

The Departments of Veterans Affairs’ (VA) and Defense’s (DOD) fiscal year 2013 

integrated Electronic Health Record (iEHR) expenditure plan satisfied one and 

partially satisfied five of the six statutory conditions specified in the Consolidated 

and Further Continuing Appropriations Act, 2013. Specifically, the plan

• Satisfied the condition to relay detailed cost-sharing business rules by 

including a memorandum of agreement between the two departments that 

outlined cost-sharing provisions and principles within the VA/DOD 

Interagency Program Office (IPO). 

• Partially satisfied the condition to define the budget and cost baseline for the 

development of the iEHR program by including the budget and cost baseline 

from fiscal years 2012 through 2018 for each department. However, the 

baseline, as reported, was not based on accurate estimates that reflected 

changes in the program’s direction. 

• Partially satisfied the condition to identify the deployment timeline for the 

system. While the plan outlined milestone dates for achieving enhanced data 

interoperability and other near-term activities, it did not include a deployment 

timeline that could be linked to an integrated master schedule. 

• Partially satisfied the condition to break out information related to the IPO’s 

annual and total spending for each department on iEHR. For example, the 

plan included the total amount obligated as well as a funding profile that 

showed the funds available for execution in 2013. However, program officials 

could not provide the basis for the spending estimates, as reported. In 

addition, according to VA officials, estimates reported did not consistently 

reflect the current approach to pursue two separate systems. 

• Partially satisfied the condition to establish data standardization schedules by 

including high-level data mapping activities. However, the plan did not 

include a schedule for achieving data standardization. 

• Partially satisfied the condition to comply with acquisition rules, requirements, 

guidelines, and systems acquisition management practices of the federal 

government. IPO officials asserted compliance with acquisition rules, but the 

plan did not explain the basis for this assertion. 

Program officials stated that the focus of the work described in the plan was on 

the near-term activities that were prioritized following the change in approach to 

iEHR, but the budget and estimated spending amounts in the expenditure plan 

did not reflect the new direction of the program because the acquisition guidance 

from the department was not issued until after the plan had been completed. 

Thus, the expenditure plan did not provide an accurate view of the cost of the 

work to be done, nor offer significant insight into the future path for building 

electronic health record interoperability between the departments. As such, the 

plan does not provide adequate information for Congress, VA, and DOD to use it 

as a basis for measuring program success, accounting for the use of current and 

future appropriations, and holding the departments accountable for achieving an 

interoperable electronic health record.

View GAO-14-609. For more information, 

contact Valerie C. Melvin at (202) 512-6304 or 

melvinv@gao.gov.
Page i GAO-14-609 iEHR Expenditure Plan

Letter 1 

Conclusions 4

Recommendation for Executive Action 5

Agency Comments 5

Appendix I Briefing for Congressional Committees 8

Appendix II Joint Comments from the Department of Defense and the 

Department of Veterans Affairs 44

Appendix III GAO Contact and Staff Acknowledgments 46

Abbreviations

DOD Department of Defense 

iEHR integrated Electronic Health Record

IT information technology 

IPO Interagency Program Office

VA Department of Veterans Affairs

Contents

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Page 1 GAO-14-609 iEHR Expenditure Plan

441 G St. N.W.

Washington, DC 20548

July 8, 2014

Congressional Committees

The Department of Veterans Affairs (VA) and the Department of Defense 

(DOD) operate two of the nation’s largest health care systems, providing 

health care to approximately 6.3 million veterans and 9.6 million active 

duty service members and their beneficiaries at estimated annual costs of 

about $53 billion and $49 billion, respectively. Both VA and DOD have 

long recognized the importance of advancing the use of shared health 

information systems and the potential to make patient information more 

readily available to their health care providers, reduce medical errors, and 

streamline administrative functions. Toward this end, electronic health 

records have become an essential part of their efforts to deliver quality 

care.

In February 2011, VA and DOD initiated a program to jointly develop a 

single electronic health record system, known as the Integrated Electronic 

Health Record (iEHR), which was to replace each department’s existing 

electronic health record system. The VA/DOD Interagency Program 

Office (IPO)1 was given responsibility for managing the iEHR program, 

which was to be deployed by 2017. However, in February 2013, the 

departments announced that they would not continue with the joint 

development of a single electronic health record system. This decision 

resulted from an assessment of the iEHR program that the secretaries 

requested in December 2012 because of their concerns about the 

program facing challenges in meeting deadlines, costing too much, and 

taking too long to deliver capabilities. Based on this assessment, the 

departments would focus on a new approach that would involve each 

department building or acquiring a separate core set of electronic health 

record capabilities and ensuring interoperability between their separate 

systems. They asserted that this new approach would be less expensive 

and faster.

 

1

The National Defense Authorization Act for Fiscal Year 2008 (Pub. L. No. 110-181, 

§1635, 122 Stat. 3, 460-463 (2008)) called for VA and DOD to set up an IPO to be a 

single point of accountability for their efforts to implement fully interoperable electronic 

health record systems or capabilities. The IPO charter was completed in January 2009. 
 

Page 2 GAO-14-609 iEHR Expenditure Plan

To facilitate oversight and inform decision making, the Consolidated and 

Further Continuing Appropriations Act, 2013,2 restricted the obligation of 

VA and DOD fiscal year 2013 funds for iEHR development to not more 

than 25 percent until an expenditure plan meeting statutory conditions 

was submitted to the Senate and House Appropriations Committees.

Specifically, the expenditure plan was to meet the following six statutory 

conditions:

• Define the budget and cost baseline for development of the iEHR.

• Identify the deployment timeline for the system for both agencies.

• Break out annual and total spending for each department.

• Relay detailed cost-sharing business rules.

• Establish data standardization schedules between the departments.

• Comply with acquisition rules, requirements, guidelines, and system 

acquisition management practices of the federal government.

As a seventh condition, the VA/DOD IPO was to submit the plan to GAO 

for review. This condition was satisfied when, on July 23, 2013, the IPO 

submitted to Congress and GAO its fiscal year 2013 iEHR expenditure 

plan.

The objective of our review was to determine the extent to which the fiscal 

year 2013 iEHR expenditure plan satisfied the statutory conditions. On 

April 23, 2014, we provided the Senate and House Appropriations 

Subcommittees on Defense and Military Construction, Veterans Affairs, 

and Related Agencies a written briefing that outlined the results of our 

review. The purpose of this report is to provide the published briefing 

slides and to officially transmit our study results to the Secretaries of the 

Departments of Veterans Affairs and Defense. The slides, which discuss 

our scope and methodology, are reprinted in appendix I.

We conducted this performance audit from October 2013 to July 2014 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objective. We believe that 

 

2

Pub. L. No. 113-6, 127 Stat. 198, 293-294, 399-400 (2013).
 

Page 3 GAO-14-609 iEHR Expenditure Plan

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objective.

In summary, our review determined that the fiscal year 2013 iEHR 

expenditure plan satisfied one and partially satisfied five of the six 

statutory conditions specified in the Consolidated and Further Continuing 

Appropriations Act and analyzed as part of our study. The plan

• Satisfied the condition to relay detailed cost-sharing business rules by 

including a memorandum of agreement between the two departments 

that outlined cost-sharing provisions and principles within the IPO.

• Partially satisfied the condition to define the budget and cost baseline 

for the development of the iEHR program by including the budget and 

cost baseline from fiscal years 2012 through 2018 for each 

department. However, the baseline, as reported, was not based on 

accurate estimates that reflected changes in the program’s direction 

and related decisions made by the departments.

• Partially satisfied the condition to identify the deployment timeline for 

the system. While the plan outlined milestone dates for achieving 

enhanced data interoperability and other near-term activities, it did not 

include a deployment timeline that could be linked to an integrated 

master schedule.

• Partially satisfied the condition to break out information related to the 

IPO’s annual and total spending for each department on iEHR and 

related activities. For example, the plan included the total amount 

obligated as well as a funding profile that showed the funds available 

for execution in 2013 for each of the departments. However, program 

officials could not provide the basis for the spending estimates, as 

reported in the plan. In addition, according to VA officials, some of the 

estimates reported were not accurate or did not consistently reflect 

the current approach by the departments to pursue two separate 

systems. 

• Partially satisfied the condition to establish data standardization 

schedules by including high-level data mapping activities, such as 

verifying current data mappings. However, the plan did not include a 

schedule for achieving data standardization.

• Partially satisfied the condition to comply with acquisition rules, 

requirements, guidelines, and systems acquisition management 

practices of the federal government. IPO officials asserted compliance 
 

Page 4 GAO-14-609 iEHR Expenditure Plan

with acquisition rules, but the plan did not explain the basis for this 

assertion.

The plan focused on several near-term activities to accelerate the 

interoperability of health data between departments, with cost estimates 

and timelines that are not described in terms of achieving the overall 

electronic health record capability. IPO officials stated that the focus of 

the work described in the plan was on the near-term activities that were 

prioritized following the change in approach to iEHR announced in 2013. 

However, they agreed that the budget and estimated spending amounts 

in the expenditure plan did not reflect the new direction of the program 

because the acquisition guidance from the department was not issued 

until after the plan had been completed.

The statutorily mandated expenditure plan for iEHR is a congressional 

oversight mechanism aimed at ensuring that planned expenditures are 

justified, performance against plans is measured, and accountability for 

results is ensured. While the IPO’s expenditure plan for fiscal year 2013 

included information that fully or partially addressed all six of the statutory 

conditions, the budget, cost, and spending information was not always 

verifiable and accurate. In addition, the plan lacked a deployment timeline 

and a data standardization schedule that could be linked to the program’s

integrated master schedule and the basis for the assertion of compliance 

with acquisition rules, requirements, guidelines, and systems acquisition 

management practices of the federal government. Further, the plan did 

not provide a meaningful representation of the iEHR approach as it has 

evolved over the past year. IPO officials stated that the focus of the work 

described in the plan was on the near-term activities that were prioritized 

following the change in approach to iEHR announced in 2013, but the 

numbers in the expenditure plan did not reflect the new direction of the 

program because the acquisition guidance from the department was not 

issued until after the plan had been completed. Thus, the expenditure 

plan did not provide an accurate view of the cost of the work to be done, 

nor offer significant insight into the future path for building electronic 

health record interoperability between the departments. As such, the plan 

does not provide adequate information for Congress, VA, and DOD to use 

it as a basis for measuring program success, accounting for the use of 

current and future appropriations, and holding the departments 

accountable for achieving an interoperable electronic health record.

Conclusions
 

Page 5 GAO-14-609 iEHR Expenditure Plan

To ensure that Congress has the information necessary to effectively 

oversee the efforts of VA and DOD to deliver an interoperable health 

record and hold the departments accountable for program results, we 

recommend that the Secretary of Defense and the Secretary of Veterans 

Affairs direct the appropriate organization to ensure that any future 

expenditure plans

• include verifiable and accurate budget, cost, and spending information 

reflecting the approach to the departments’ electronic health records 

programs;

• provide a deployment timeline that is consistent with an integrated 

master schedule and shows how deployment activities are related to 

one another within the scope of the electronic health records 

programs;

• include a data standardization schedule for facilitating interoperability 

as it relates to the departments’ electronic health records programs; 

and

• provide the basis for an assertion of compliance with acquisition rules, 

requirements, guidelines, and systems acquisition management 

practices of the federal government.

We received written comments on a draft of this report, signed jointly by 

the Under Secretary of Defense for Acquisition, Technology, and

Logistics, U.S. Department of Defense and the Executive in Charge and 

Chief Information Officer, Office of Information and Technology, U.S. 

Department of Veterans Affairs. In the joint comments (reprinted in 

appendix II), the agencies concurred with our recommendation.

We are sending copies of this report to interested congressional 

committees. We are also sending copies to the Secretary of Defense and 

the Acting Secretary of Veterans Affairs. In addition, the report is 

available at no charge on GAO’s website at http://www.gao.gov.

If you or your staffs have any questions on matters discussed in this 

report, please contact me at (202) 512-6304 or melvinv@gao.gov. 

Contact points for our Offices of Congressional Relations and Public 

Recommendation for 

Executive Action

Agency Comments
 

Page 6 GAO-14-609 iEHR Expenditure Plan

Affairs may be found on the last page of this report. GAO staff who made 

significant contributions to this report are listed in appendix III.

Valerie C. Melvin

Director, Information Management

 and Technology Resources Issues
 

Page 7 GAO-14-609 iEHR Expenditure Plan

List of Committees

The Honorable Richard J. Durbin

Chairman

The Honorable Thad Cochran

Ranking Member

Subcommittee on Defense

Committee on Appropriations

United States Senate

The Honorable Tim Johnson

Chairman

The Honorable Mark Kirk

Ranking Member

Subcommittee on Military Construction, Veterans Affairs,

 and Related Agencies

Committee on Appropriations

United States Senate

The Honorable Rodney Frelinghuysen

Chairman

The Honorable Pete Visclosky

Ranking Member

Subcommittee on Defense

Committee on Appropriations

House of Representatives

The Honorable John Culberson

Chairman

The Honorable Sanford Bishop, Jr.

Ranking Member

Subcommittee on Military Construction, Veterans Affairs,

 and Related Agencies

Committee on Appropriations

House of Representatives
Appendix I: Briefing for Congressional 

Committees

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Appendix I: Briefing for Congressional 

Committees
Appendix I: Briefing for Congressional 

Committees

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Appendix I: Briefing for Congressional 

Committees

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Appendix II: Joint Comments from the 

Department of Defense and the Department of 

Veterans Affairs

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Appendix II: Joint Comments from the 

Department of Defense and the Department 

of Veterans Affairs
Appendix II: Joint Comments from the 

Department of Defense and the Department of 

Veterans Affairs

Page 45 GAO-14-609 iEHR Expenditure Plan
Appendix III: GAO Contact and Staff 

Acknowledgments

Page 46 GAO-14-609 iEHR Expenditure Plan

Valerie C. Melvin at (202) 512-6304 or melvinv@gao.gov

In addition to the contact named above, Neelaxi Lakhmani (Assistant 

Director), Nancy Glover, Jacqueline K. Mai, and Jennifer Stavros-Turner 

made key contributions to this report.

Appendix III: GAO Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments

(311516)
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