United States Government Accountability Office

GAO Testimony 

Before the Subcommittee on Health, 

Committee on Veterans’ Affairs, House of 

Representatives

VA HEALTH CARE 

Preliminary Information on 

Resources Allocated for 

Mental Health Strategic 

Plan Initiatives 

Statement for the Record by Laurie E. Ekstrand 

Director, Health Care 

For Release on Delivery

Expected at 10:00 a.m. EDT 

Thursday, September 28, 2006 

 

GAO-06-1119T 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

September 28, 2006

VA HEALTH CARE

Preliminary Information on Resources 

Allocated for Mental Health Strategic Plan 

Initiatives 

Highlights of GAO-06-1119T, a statement 

for the record for the Subcommittee on 

Health, Committee on Veterans’ Affairs, 

House of Representatives

The Department of Veterans Affairs 

(VA) provides mental health 

services to veterans with

conditions such as post-traumatic 

stress disorder (PTSD) and 

substance abuse disorders. To 

address gaps in services needed by

veterans, VA approved a mental

health strategic plan in 2004. VA 

planned to increase its fiscal year 

2005 allocations for plan initiatives 

by $100 million above fiscal year 

2004 levels. VA also planned to 

increase its fiscal year 2006

allocations for plan initiatives by

$200 million above fiscal year 2004

levels---composed of $100 million 

for continuation of fiscal year 2005 

initiatives and an additional 

$100 million identified in the

President’s fiscal year 2006 budget 

request. 

GAO was asked to provide

preliminary information on VA’s 

allocation and use of funding for 

mental health strategic plan

initiatives in fiscal years 2005 and 

2006. A report on this work will be

issued later in the fall of 2006. 

GAO reviewed VA reports and 

documents on mental health 

strategic plan initiatives and 

conducted interviews with VA 

officials from headquarters, 4 of

21 health care networks, and 

7 medical centers. VA delegates 

decision making to its health care

networks for most budget and

management responsibilities 

regarding medical center

operations, and medical centers 

receive most of their resources 

from the networks. 

In fiscal year 2005, VA headquarters allocated $88 million of the $100 million 

VA officials intended for mental health strategic plan initiatives. VA allocated

about $53 million directly to medical centers and certain offices based on 

proposals submitted for funding and other approaches targeted to specific 

initiatives. VA solicited submissions from networks for specific initiatives to 

be carried out at their individual medical centers through requests for 

proposals (RFPs). In addition, VA headquarters officials said that VA 

allocated $35 million for this purpose through VA’s general resource 

allocation system to its 21 health care networks on a retrospective basis. VA 

made this decision several months after resources had been provided to the 

networks through the general allocation system. Moreover, VA did not notify 

network and medical center officials that these funds were to be used for 

plan initiatives. Health care network and medical center officials interviewed 

told GAO that they were not aware these allocations had been made. As a 

result, it is likely that some of these funds were not used for plan initiatives. 

Moreover, VA did not allocate the approximately $12 million remaining of 

the $100 million for fiscal year 2005 because, according to VA officials, there 

was not enough time during the fiscal year to do so. Medical center officials 

said they used the funds allocated directly to their medical centers for plan 

initiatives that included new mental health services and more of the services 

they already provided. For example, two medical centers used funds 

allocated to them through RFPs or other targeted approaches to increase the 

number of mental health providers at community based outpatient clinics. 

One of those medical centers also started a new 6-week PTSD day treatment 

program. However, some medical center officials reported that they did not 

use all funds allocated for plan initiatives by the end of fiscal year 2005, due 

in part to the length of time it took to hire new staff. 

In fiscal year 2006, as of September 20, 2006, VA headquarters had allocated 

$158 million of the $200 million planned for mental health strategic plan 

initiatives. VA allocated about $92 million of these funds directly to medical 

centers and certain offices to support new initiatives, using RFPs and other 

targeted funding approaches. VA also allocated about $66 million to support 

recurring costs of the continuing initiatives from the prior fiscal year. As of 

September 20, 2006, about $42 million of the $200 million for fiscal year 2006 

had not been allocated. Officials from seven medical centers we interviewed 

reported that they had used funds for plan initiatives, such as the creation of 

a new intensive mental health case management program. Officials at some

medical centers reported that they did not anticipate problems using all of 

the funds allocated to them through RFPs and other targeted approaches in 

fiscal year 2006. However, officials at other medical centers were less certain 

that they would use all of these funds for plan initiatives by the end of fiscal 

year 2006. 

GAO discussed the information in this statement with VA officials who 

agreed that the data are accurate, and provided updated data which are 

incorporated as appropriate. 

www.gao.gov/cgi-bin/getrpt?GAO-06-1119T.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Laurie E. 

Ekstrand at (202) 512-7101 or 

ekstrandl@gao.gov. 
Mr. Chairman and Members of the Subcommittee: 

We are pleased to have the opportunity to provide preliminary information 

from our work on the Department of Veterans Affairs (VA) resource 

allocation for mental health strategic plan initiatives for fiscal years 2005 

and 2006 and how those funds were used by selected medical centers in 

those 2 fiscal years. VA provides a range of inpatient and outpatient mental

health services to veterans with conditions such as depression, posttraumatic stress disorder (PTSD), and substance abuse disorders. In 

November 2004, the Secretary of VA approved a mental health strategic 

plan that identified additional services that VA planned to add to the 

baseline of mental health services that it already offered to meet veterans’

mental health needs.1

 This mental health strategic plan was intended to 

help VA’s leadership identify the actions and resources needed to begin 

eliminating the gaps between mental health services VA provided at the 

time of the plan’s formulation and those additional services VA anticipated 

it would need in the future. 

VA indicated at a 2005 congressional hearing2

 that it would provide 

$100 million above fiscal year 2004 levels for mental health strategic plan 

initiatives in fiscal year 2005 from available resources. In addition, in a 

2005 executive decision memo VA indicated its intent to increase its fiscal

year 2006 funding levels to $200 million above fiscal year 2004 levels for 

mental health strategic plan initiatives. This $200 million in funds for fiscal 

year 2006 was to be composed of $100 million for a continuation of fiscal 

year 2005 initiatives plus an additional $100 million included in the 

President’s budget request for fiscal year 2006, according to the executive

decision memo. However, these additional funds represented only a 

portion of the overall funds available to support VA mental health services

in those 2 fiscal years. VA’s appropriation for fiscal year 2006, for example,

included more than $31.5 billion for its medical programs,3

 of which VA 

expected to spend more than $2 billion on mental health services. VA 

headquarters allocates most of these resources to VA’s 21 regional health

 1

The plan is known formally as A Comprehensive Veterans Health Administration Strategic 

Plan for Mental Health Services. In this statement, we will refer to it as the mental health 

strategic plan. 

2

Full Committee Hearing on the Continuum of Care for Post Traumatic Stress Disorder

Before the House Comm. on Veterans’ Affairs, 109th Cong. (July 27, 2005). 

3

Total includes medical care collections, but does not include certain other amounts, such

as appropriations for construction. 

Page 1 GAO-06-1119T 
care networks4

 through a general resource allocation system and the 

networks in turn allocate resources to their medical centers. 

VA officials have stated that funds for mental health strategic plan 

initiatives are to be used to address priorities such as the expansion of 

PTSD services, postdeployment mental health services for veterans 

returning from combat in Iraq and Afghanistan and other areas—

Operation Iraqi Freedom (OIF) and Operation Enduring Freedom (OEF), 

respectively, and expansion of programs for the treatment of substance 

abuse disorders. Concerns have been expressed by members of Congress 

and others regarding the adequacy of resources that VA is devoting to 

provide mental health care for OIF and OEF veterans while also 

continuing to provide services for veterans who are currently receiving 

mental health care. 

In this statement we are providing preliminary information on VA’s 

spending for mental health strategic plan initiatives in fiscal years 2005

and 2006. We are currently examining the allocation and use of these 

additional funds targeted to mental health strategic plan initiatives. 

Therefore, we focus on the increase from fiscal year 2004 targeted on

these initiatives—-$100 million in fiscal year 2005 and $200 million in fiscal 

year 2006. In this statement we provide (1) information on how much of 

the $100 million for mental health strategic plan initiatives in fiscal year 

2005 was allocated and how those funds were used by selected medical 

centers, and (2) information on how much of the $200 million for mental 

health strategic plan initiatives in fiscal year 2006 was allocated and how 

those funds were used by selected medical centers. A more detailed report 

concerning these issues and how VA tracked the use of the funds allocated

will be issued later in the fall of 2006.

To provide information on how much of the $100 million for fiscal year 

2005 and $200 million for fiscal year 2006 for mental health strategic plan

initiatives was allocated to networks, medical centers, and certain offices, 

we reviewed the plan itself as well as reports and other documents related 

to the development, implementation, and funding of the mental health

strategic plan. We also conducted interviews with VA headquarters 

 4

VA headquarters delegates decision making regarding financing and service delivery for

health care services to its 21 health care networks, including most budget and management 

responsibilities concerning medical center operations. Medical centers typically include 

one or more hospitals as well as other types of health care facilities such as outpatient

clinics and nursing homes.

Page 2 GAO-06-1119T 
officials with responsibilities related to mental health services, budgeting,

and the allocation of financial resources. We used a September 20, 2006, 

cut off date for reviewing VA’s allocation of the $200 million for 

implementing the mental health strategic plan in fiscal year 2006. We took

steps to ensure that the data VA provided to us on the funding allocated in 

fiscal years 2005 and 2006 were sufficiently reliable for our purposes. We 

reviewed the data for internal consistency and compared the data to other 

VA information as well as information we obtained through interviews 

with VA officials. We did not independently verify the accuracy of the data. 

To describe how funds were used by selected medical centers, in May and 

June 2006, we conducted site visits to 2 of VA’s 21 health care networks 

and 3 medical centers located in those networks, and we also conducted

phone interviews with officials in 2 other networks and 4 medical centers 

located in those networks.5

 We selected these 4 networks because VA had

identified them as having gaps in substance abuse and/or mental health 

services prior to the implementation of the mental health strategic plan, 

and because they received varying levels of funding—from relatively high 

to relatively low—in fiscal year 2005 for mental health strategic plan 

initiatives. We interviewed clinical and administrative officials at these 

networks and medical centers, and at 3 community based outpatient 

clinics (CBOC)6

 associated with these medical centers and 5 Vet Centers.7

The findings from our site visits and phone interviews with network and 

medical center officials cannot be generalized to other medical centers or 

networks. We discussed the information in this statement with VA officials 

who have responsibilities related to mental health services, budgeting, and 

the allocation of financial resources. These officials agreed that the data

are accurate and they also provided updated data which we incorporated 

as appropriate. We performed our work from January 2006 through 

September 2006 in accordance with generally accepted government 

auditing standards. 

 5

Throughout this report, the phrase “how funds were used by medical centers” refers to

information provided by medical center officials regarding the hiring of staff, purchase of 

certain equipment, and other purposes. These activities would be expected to result in

obligations and expenditures of funds either immediately or in the future. 

6

CBOCs provide medical services, which may include mental health services, on an

outpatient basis in local communities. VA has about 800 CBOCs nationwide. 

7

Vet Centers provide mental health services, including readjustment counseling and

outreach services, to all veterans who served in any combat zone. There are 207 such 

centers that operate in all 50 states, the District of Columbia, Guam, Puerto Rico, and the 

U.S. Virgin Islands. 

Page 3 GAO-06-1119T 
In summary, VA headquarters allocated $88 million of the $100 million VA 

officials said would be used for mental health strategic plan initiatives in 

fiscal year 2005 by using several approaches. VA allocated about 

$53 million directly to medical centers and certain offices based on 

proposals submitted for funding and other approaches targeted to specific 

initiatives. VA solicited submissions from networks for specific initiatives 

to be carried out at their individual medical centers through requests for 

proposals (RFPs). In addition, VA headquarters officials said that they 

allocated $35 million for mental health strategic plan initiatives through 

VA’s general resource allocation system to its 21 health care networks, 

which, in turn, could allocate these resources to individual medical 

centers. VA’s decision that $35 million of the funds allocated through its 

general resource allocation system was for plan initiatives was a 

retroactive decision. VA made this decision several months after resources 

had been provided to the networks through the general allocation system. 

Moreover, VA did not notify networks and medical centers that these 

funds were to be used for plan initiatives. Network and medical center 

officials we interviewed in 4 networks told us that they were unaware that 

any portion of their general allocation was to be specifically used for 

mental health strategic plan initiatives. The approximately $12 million 

remaining of the $100 million was not allocated by any approach because, 

according to headquarters officials, there was not enough time during the 

fiscal year to allocate the funds. Officials we interviewed at 7 medical 

centers in 4 networks reported using resources allocated directly to their 

medical centers for plan initiatives that included new mental health 

services and more of the services they were already providing. Some 

medical center officials told us that they had not been able to spend all of 

the funds provided for mental health strategic plan initiatives during the 

fiscal year in part because of the length of time it takes to hire new staff. 

As of September 20, 2006, VA headquarters had allocated $158 million of

the $200 million VA planned for mental health strategic plan initiatives in 

fiscal year 2006 by using several approaches. VA allocated about 

$92 million of these funds directly to medical centers and certain offices to 

support new mental health strategic plan initiatives, using RFPs and other

approaches targeted to specific initiatives. VA also allocated about 

$66 million to support the recurring costs of continuing mental health 

strategic plan initiatives that were funded in fiscal year 2005 through RFPs 

and other targeted approaches. About $42 million of the $200 million for 

fiscal year 2006 had not been allocated as of September 20. According to 

VA officials, a portion of the $42 million not allocated is a result of partialyear allocations made for projects that were funded later in the fiscal year 

and that are expected to receive 12-month allocations for fiscal year 2007. 

Page 4 GAO-06-1119T 
Officials we interviewed at 7 medical centers said they had used funds to 

implement plan initiatives such as a new mental health intensive case 

management program. However, officials at some medical centers told us 

that they were uncertain that they would be able to use all the funds for 

plan initiatives by the end of the fiscal year. 

VA provides health care services to more than 5 million patients annually. 

This care includes mental health services to veterans in inpatient and 

outpatient settings in a variety of VA health care facilities including 

medical centers, CBOCs, and Vet Centers. Mental health services are 

provided for a range of conditions such as depression, PTSD, and 

substance abuse disorders. Resources for these and other health care 

services are allocated by VA headquarters through a general resource 

allocation system—the Veterans Equitable Resource Allocation (VERA) 

system—to its 21 health care networks. Although the VERA system is used 

to allocate funds, it does not designate funds for specific purposes or 

prescribe how those funds are to be used. 

Background 

In November 2004, the Secretary of VA approved the mental health 

strategic plan. This mental health strategic plan contained recommended 

initiatives for improving VA mental health services by addressing a range 

of issues, including, for example, improving awareness about mental 

illness and filling gaps in access to mental health services. Some of the 

service gaps identified were in treating veterans with serious mental 

illness,8

 female veterans, and veterans returning from combat in Iraq and 

Afghanistan. Within VA, the Office of Mental Health Services (OMHS) is 

responsible for coordinating with the networks and medical centers on the 

overall implementation of the mental health strategic plan. This includes 

formulating strategies for allocating funds to medical centers and certain

offices for plan initiatives. Such strategies include, for example, the use of

RFPs to decide how the mental health strategic plan funds are to be 

allocated to medical centers. 

 8

For the purposes of the mental health strategic plan, VA defined veterans with serious 

mental illness to be “those who currently or at any time during the past year: (1) have a

diagnosed mental, behavioral or emotional disorder of sufficient duration to meet the

Diagnostic and Statistical Manual of Mental Disorders (Fourth Edition) criteria, that 

(2) results in a disability (i.e. functional impairment that substantially interferes with or 

limits one or more major life activities).” This definition included adults who would meet 

these criteria during the year without the benefit of treatment or support services. 

Page 5 GAO-06-1119T 
VA headquarters allocated $88 million of the $100 million that VA officials 

said would be used for mental health strategic plan initiatives in fiscal year 

2005 by using several approaches. About $53 million was allocated directly

to medical centers and certain offices and $35 million was allocated 

through its general resource allocation system to its health care networks, 

according to VA officials. The remaining $12 million of the $100 million 

was not allocated by any approach, headquarters officials said, because

there was not enough time during the fiscal year to allocate the funds. 

Officials we interviewed at 7 medical centers in 4 networks reported using 

allocated funds to provide new mental health services and to provide more 

of existing services. However, some medical center officials reported that

they did not use all allocated funds for plan initiatives by the end of the 

fiscal year, due in part to the length of time it took to hire new staff. 

VA Allocated $88 of 

the $100 Million 

Planned for Mental 

Health Strategic Plan 

Initiatives in Fiscal 

Year 2005, but 

Officials Reported 

That Not All Allocated 

Funds Were Used for 

Plan Initiatives

VA Allocated 

Approximately $53 Million 

Directly to Medical

Centers and Certain 

Offices 

VA headquarters allocated about $53 million directly to medical centers 

and certain offices based on proposals submitted for funding and other 

approaches targeted to specific initiatives related to the mental health

strategic plan in fiscal year 2005. VA headquarters developed and solicited

submissions from networks for specific initiatives to be carried out at their 

individual medical centers through requests for proposals (RFPs). VA 

made resources available through these RFPs and other targeted 

approaches to medical centers for plan initiatives to support a range of 

specific mental health services based, in part, on the priorities of VA 

leadership and legislation for programs related to PTSD, substance abuse, 

and other mental health areas, according to VA headquarters officials. 

Nearly $20 million of the $53 million allocated by using RFPs and other 

targeted approaches was for mental health services related to legislation,

according to VA officials.9

 9

The Veterans Health Care, Capital Asset, and Business Improvement Act of 2003, Pub. L. 

No. 108-170, §108, 117 Stat. 2042, 2046-47, required VA to allocate a minimum of $25 million 

in each of fiscal years 2004, 2005, and 2006 to carry out a program to expand and improve 

the provision of specialty mental health services for veterans, including PTSD and 

substance abuse services. Congress also required VA to ensure that after these allocations, 

total expenditures related to treatment of substance abuse and PTSD were not less than 

$25 million above the total expenditures on such programs in fiscal year 2003, adjusted for 

increases in the costs of delivering those services. The Homeless Veterans Comprehensive 

Assistance Act of 2001, Pub. L. No. 107-95, §2043, 115 Stat. 903, 913, authorized VA to

establish up to 10 new domiciliary programs for homeless veterans. 

Page 6 GAO-06-1119T 
Most of the approximately $53 million allocated—about $48 million—went 

to VA medical centers. PTSD services and OEF/OIF veterans’ mental 

health care received an allocation of about $18 million, with Compensated 

Work Therapy (CWT) receiving the second highest total—nearly 

$10 million. Other initiatives receiving funding included substance abuse 

services, mental health services in nursing homes, domiciliary expansion, 

and psychosocial rehabilitation for veterans with serious mental illness. 

VA headquarters issued five RFPs from October 2004 to January 2005 that

described the specific types of services for which mental health strategic 

plan funding was available. Review panels headed by mental health 

experts within VA reviewed the proposals, ranked them, and provided 

their rankings to VA’s leadership. Once funding decisions were made, VA 

allocated funding directly to the medical centers for the mental health

strategic plan initiatives. VA also used other funding approaches targeted

to specific initiatives. For example, headquarters officials allocated 

funding to medical centers to expand mental health services at CBOCs 

that had fewer mental health visits than a standard VA identified for this 

purpose. VA also used other targeted funding approaches to determine 

which medical centers would receive some of the funds for PTSD, OIF and 

OEF veterans’, and substance abuse services. In addition, VA targeted 

funds to mental health initiatives in Polytrauma Centers—centers within 

certain VA medical centers that provide specialized treatment for veterans 

of OIF and OEF who have complex rehabilitation needs. 

VA headquarters officials said that allocations made for initiatives in fiscal

year 2005 through RFPs and other approaches targeted to specific 

initiatives would be made for a total of 2 to 3 fiscal years. These officials 

said they anticipated that medical centers would hire permanent staff 

whose positions would need to be funded for more than 1 year. The 

expectation of VA leadership was that after funds allocated through these 

approaches were no longer available, medical centers would continue to 

support these programs using their general operating funds received

through VA’s general resource allocation system. 

VA Allocated $35 Million 

through Its General 

Resource Allocation 

System to Its Health Care 

Networks on a 

Retrospective Basis 

VA allocated $35 million for mental health strategic plan initiatives in fiscal 

year 2005 through its general resources allocation system to its health care 

networks, according to VA headquarters officials. The decision to allocate

these resources to VA’s networks for mental health strategic plan 

initiatives was retrospective and VA did not notify networks and medical 

centers of this decision. Although VA headquarters made fiscal year 2005 

general resource allocations to the networks in December 2004, the 

Page 7 GAO-06-1119T 
decision that $35 million of the funds allocated at that time were for 

mental health strategic plan initiatives was not finalized until April 2005, 

several months after the general allocation had been made. VA

headquarters officials said that they made the decision to allocate 

$35 million from the general resource allocation system because these 

resources would be more rapidly allocated than if they had been allocated

through RFPs. However, other VA headquarters officials told us that the 

decision was also made, in part, because VA did not have sufficient 

unallocated funds remaining after the December 2004 general allocation to

fund $100 million for mental health strategic plan initiatives through RFPs 

and other targeted approaches. 

VA headquarters officials, as well as network and medical center officials, 

indicated that there was no guidance to the networks and medical centers 

instructing them to use specific amounts from their general fiscal year 

allocation for mental health strategic plan initiatives. Network and medical 

center officials we spoke with were unaware that any specific portion of 

their general allocation was to be used for mental health strategic plan 

initiatives. Several VA medical center officials noted, however, that some 

of the funds in their general allocation were used to support their mental 

health programs generally, as part of their routine operations. However, 

because network and medical center officials we interviewed did not 

know that funds had been allocated for mental health strategic plan 

initiatives through VA’s general resource allocation system, nor did VA 

headquarters notify networks and medical centers throughout VA of this 

retroactive allocation, it is likely that some of these funds were not used 

for plan initiatives. 

VA Did Not Allocate About 

$12 Million Planned for 

Mental Health Strategic 

Plan Initiatives 

VA did not allocate the approximately $12 million remaining of the 

$100 million planned for mental health strategic plan initiatives in fiscal 

year 2005 because, according to VA headquarters officials, there was not 

enough time during the fiscal year to allocate the funds through the RFP 

process or other approaches targeted to specific initiatives. Officials said 

that when resources were allocated later in the fiscal year through an RFP 

rather than at the beginning, the amount allocated was only a portion of 

the annualized cost. The full annualized cost could be supported in the 

next fiscal year. For example, if a project with an annual cost of $4 million 

was allocated mid way through the fiscal year, only half the annual cost 

was allocated at that time—-$2 million. The expectation was that the full 

$4 million would be available for the project over 12 months in the next 

fiscal year. The $12 million that VA did not allocate for fiscal year 2005 was 

intended for certain mental health strategic plan initiatives based on an 

Page 8 GAO-06-1119T 
allocation plan developed by VA for the $65 million it planned to allocate 

through RFPs and other approaches. VA headquarters officials said that 

funds not allocated for mental health strategic plan initiatives were 

allocated for other health care purposes. 

Medical Center Officials 

Reported Using 

Allocations for Mental 

Health Strategic Plan 

Initiatives, but Not Using 

All Funds Allocated for 

Plan Initiatives 

Officials we interviewed from seven medical centers in four networks 

reported using funds allocated to them for mental health strategic plan 

initiatives through RFPs and other targeted approaches, but they said that

some of these funds were not used for plan initiatives in fiscal year 2005. 

Officials said they used funds allocated to provide new mental health 

services and to provide more of existing services included in plan 

initiatives. For example, two medical centers used funds to increase the 

number of mental health providers available at CBOCs. One of those 

medical centers also implemented a new 6-week PTSD day treatment 

program in which veterans live in the community but come to the medical 

center daily for counseling, group therapy, and other services. 

Officials at some medical centers reported that they were not able to use 

all of their fiscal year 2005 funding for plan initiatives by the end of the 

year as planned and cited several reasons that contributed to this 

situation. The length of time it takes to recruit new staff in general and the 

special problems of hiring specialized staff, such as psychiatrists, were 

cited. In some cases the need to locate or renovate space for programs 

contributed to delays in using mental health strategic plan funds, 

according to medical center officials.

Medical centers varied in how they treated fiscal year 2005 funds that were 

allocated by VA for mental health strategic plan initiatives but not used for 

those initiatives. Some reported that they carried over the funds for use in 

the next fiscal year.10 Officials at some medical centers reported that they

used these funds for other health care purposes. For example, officials at 

one medical center said they used funds that they did not spend on mental 

health strategic plan initiatives to support other mental health programs. 

VA headquarters officials advised participants from networks and medical 

centers in a weekly conference call in August 2005 that if they were unable 

 10VA may carry over from one fiscal year to the next unobligated balances of funds made 

available without fiscal year limitation and other funds appropriated for multiple fiscal 

years. 

Page 9 GAO-06-1119T 
to hire staff for initiatives in fiscal year 2005, they should use the funds 

allocated only for mental health services. 

As of September 20, 2006, VA headquarters had allocated $158 million of

the $200 million to be used for VA mental health strategic plan initiatives 

in fiscal year 2006 by using several approaches. About $92 million of these 

funds was allocated directly to medical centers and certain offices to 

support new mental health strategic plan initiatives for fiscal year 2006. VA

also allocated about $66 million to support the recurring costs of the 

continuing mental health initiatives that were funded in fiscal year 2005. 

The remaining $42 million had not been allocated as of September 20. 

Officials at some medical centers expected to spend all of the allocations 

they received during fiscal year 2006. However, officials at some medical 

centers were uncertain that they would spend all their allocations for plan 

initiatives during the fiscal year. 

As of September 20, 

2006, VA Had 

Allocated $158 Million 

of the $200 Million 

Planned for Mental 

Health Strategic Plan 

Initiatives in Fiscal 

Year 2006, but Some 

Officials Were 

Uncertain If All Funds 

Would Be Used for 

Plan Initiatives

VA Allocated about $158 

Million Directly to Medical 

Centers and Certain 

Offices 

VA headquarters had allocated about $158 million directly to medical 

centers and certain offices by September 20, 2006, through RFPs and other 

approaches targeted to specific initiatives related to the mental health

strategic plan in fiscal year 2006. About $92 million was for new mental 

health strategic plan activities, and about $66 million was to support the 

recurring costs of continuing mental health strategic plan initiatives that 

were first funded in fiscal year 2005. As in fiscal year 2005, the new 

resources went to support a range of mental health services in line with 

priorities of VA’s leadership and legislation, according to VA officials. 

Funding for services for PTSD, OIF and OEF veterans, substance abuse, 

and CBOC mental health services accounted for nearly three-fifths of the 

funds allocated for new initiatives. As of September 18, 2006, VA had not 

allocated resources for mental health strategic plan initiatives through its 

general resource allocation system and VA headquarters officials said VA 

was not planning to do so. 

Page 10 GAO-06-1119T 
As of September 20, 2006, VA did not allocate about $42 million of the 

$200 million planned for mental health strategic plan initiatives in fiscal 

year 2006 by any approach. VA officials said that a portion of these 

unallocated funds are related to the timing of allocations that were made 

for plan initiatives through RFPs and other funds targeted to medical 

centers. Specifically, some of the allocations through RFPs were made 

well into the fiscal year. VA allocated only the amount of funds through 

these approaches for fiscal year 2006 that would fund the projects through 

the end of the fiscal year, and not the full 12-month cost which VA expects 

to fund in fiscal year 2007. Because some of these allocations were made 

in the later part of fiscal year 2006, these allocations were smaller than 

they would be on a 12-month basis and accounted for part of the 

$42 million not allocated. VA officials said they anticipated that these 

funds would be available in fiscal year 2007. 

Officials from seven medical centers we interviewed in May and June of 

2006 reported using funds allocated to them through RFPs and other 

approaches to support new 2006 mental health initiatives and to continue

to support the initiatives first funded in fiscal year 2005. For example, one 

medical center used funding for a new mental health intensive case 

management program. Officials at some medical centers reported that they

did not anticipate problems using all of the funds they had received in

fiscal year 2006. However, others were less certain they would be able to 

use all of the funds. Officials at several medical centers were not sure they 

would be able to hire all of the new staff related to mental health strategic 

plan initiatives by the end of the fiscal year. In May 2006, officials at two 

medical centers that we interviewed said that they did not know whether 

they would receive additional funds through RFPs to spend in fiscal year 

2006, and as a result they were uncertain whether they would be able to 

use all of their fiscal year 2006 funds for plan initiatives by the end of the 

fiscal year. 

Our preliminary findings show that VA allocated additional resources for 

mental health strategic plan initiatives in fiscal years 2005 and 2006 to help

address identified gaps in VA’s mental health services for veterans. VA 

intended to allocate $100 million for plan initiatives in fiscal year 2005. The 

allocations that were made resulted in some new and expanded mental 

health services to address gaps, according to officials at selected medical 

centers. However, approximately $12 million of the $100 million was not 

allocated by any method and $35 million was allocated through VA’s 

general resource allocation system on a retrospective basis and without 

VA Did Not Allocate about 

$42 Million for Mental 

Health Strategic Plan 

Initiatives 

Medical Center Officials 

Reported Using 

Allocations for Mental 

Health Strategic Plan 

Initiatives, but Were 

Uncertain Whether All 

Funds Allocated Would Be 

Used for Plan Initiatives 

Concluding 

Observations 

Page 11 GAO-06-1119T 
notifying networks and medical centers that resources for plan initiatives

had been allocated in the general allocation that networks received several 

months earlier. Finally, some portion of the approximately $53 million that 

was allocated directly to medical centers was not used for plan initiatives 

in part because the timing of the allocation of the funds did not leave time 

to hire needed staff by the end of the fiscal year. As a result, it is likely that 

a substantial portion of the 

$100 million intended for mental health strategic plan funds in fiscal year 

2005 was not used for plan initiatives. A larger amount of the planned 

mental health strategic plan funds was allocated in fiscal year 2006, 

although as of September 20, 2006, about a fifth of the $200 million 

planned for these initiatives was not allocated. However, it is unclear 

whether medical centers will be able to spend all of the fiscal year 2006 

mental health strategic plan funds for plan initiatives by the end of the 

year, in part because of how late in the year the funds were allocated. 

For further information about this statement, please contact Laurie E. 

Ekstrand at (202) 512-7101 or ekstrandl@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on the 

last page of this statement. James Musselwhite, Assistant Director, and 

Robin Burke made key contributions to this statement. 

Page 12 GAO-06-1119T 

GAO Contact and 

Staff 

Acknowledgments 

(290573) 
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