U.S. GOVERNMENT PUBLISHING OFFICE

30–374 WASHINGTON : 2018

VA MAIL MANAGEMENT: THE CASE OF THE 

$11,257 PACKAGE 

HEARING 

BEFORE THE

SUBCOMMITTEE ON OVERSIGHT AND 

INVESTIGATIONS 

OF THE

COMMITTEE ON VETERANS’ AFFAIRS 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED FIFTEENTH CONGRESS 

FIRST SESSION 

TUESDAY, SEPTEMBER 12, 2017 

Serial No. 115–28 

Printed for the use of the Committee on Veterans’ Affairs 

( 

Available via the World Wide Web: http://www.fdsys.gov 

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(II) 

COMMITTEE ON VETERANS’ AFFAIRS 

DAVID P. ROE, Tennessee, Chairman 

GUS M. BILIRAKIS, Florida, Vice-Chairman 

MIKE COFFMAN, Colorado 

BRAD R. WENSTRUP, Ohio 

AMATA COLEMAN RADEWAGEN, American 

Samoa 

MIKE BOST, Illinois 

BRUCE POLIQUIN, Maine 

NEAL DUNN, Florida 

JODEY ARRINGTON, Texas 

JOHN RUTHERFORD, Florida 

CLAY HIGGINS, Louisiana 

JACK BERGMAN, Michigan 

JIM BANKS, Indiana 

JENNIFFER GONZALEZ-COLON, Puerto 

Rico 

TIM WALZ, Minnesota, Ranking Member 

MARK TAKANO, California 

JULIA BROWNLEY, California 

ANN M. KUSTER, New Hampshire 

BETO O’ROURKE, Texas 

KATHLEEN RICE, New York 

J. LUIS CORREA, California 

KILILI SABLAN, Northern Mariana Islands 

ELIZABETH ESTY, Connecticut 

SCOTT PETERS, California 

JON TOWERS, Staff Director 

RAY KELLEY, Democratic Staff Director 

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS 

JACK BERGMAN, Michigan, Chairman 

MIKE BOST, Illinois 

BRUCE POLIQUIN, Maine 

NEAL DUNN, Florida 

JODEY ARRINGTON, Texas 

JENNIFER GONZALEZ-COLON, Puerto Rico 

ANN MCLANE KUSTER, New Hampshire, 

Ranking Member 

KATHLEEN RICE, New York 

SCOTT PETERS, California 

KILILI SABLAN, Northern Mariana Islands 

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public hearing records 

of the Committee on Veterans’ Affairs are also published in electronic form. The printed 

hearing record remains the official version. Because electronic submissions are used to 

prepare both printed and electronic versions of the hearing record, the process of converting 

between various electronic formats may introduce unintentional errors or omissions. Such occurrences are inherent in the current publication process and should diminish as the process 

is further refined. 

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(III) 

C O N T E N T S 

Tuesday, September 12, 2017 

Page 

VA Mail Management: The Case of The $11,257 Package ................................... 1 

OPENING STATEMENTS 

Honorable Jack Bergman, Chairman ..................................................................... 1 

Honorable Ann Kuster, Ranking Member ............................................................. 3 

WITNESSES 

Mr. John Oswalt, Executive Director for Privacy, Office of Information and 

Technology, U.S. Department of Veterans Affairs ............................................ 4 

Prepared Statement ......................................................................................... 24 

Ms. Lori Rectanus, Director, Physical Infrastructure Issues, U.S. Government 

Accountability Office ............................................................................................ 5 

Prepared Statement ......................................................................................... 25 

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(1) 

VA MAIL MANAGEMENT: THE CASE OF THE 

$11,257 PACKAGE 

Tuesday, September 12, 2017 

U.S. HOUSE OF REPRESENTATIVES, COMMITTEE ON VETERANS’ AFFAIRS, SUBCOMMITTEE ON DISABILITY ASSISTANCE

AND MEMORIAL AFFAIRS, Washington, D.C. 

The Subcommittee met, pursuant to notice, at 10:34 a.m., in 

Room 334, Cannon House Office Building, Hon. Jack Bergman 

[Chairman of the Subcommittee] presiding. 

Present: Representatives Bergman, Poliquin, Arrington, Kuster, 

and Sablan. 

Also Present: Representative Roe. 

OPENING STATEMENT OF JACK BERGMAN, CHAIRMAN 

Mr. BERGMAN. Good morning. This hearing will come to order. 

I want to welcome everyone to today’s hearing examinating— 

‘‘examinating,’’ that is a new word. We come up with one every 

time here. We are not going to examinate. We will just examine 

today VA’s management of its mail operations. 

VA reports spending by far the most in the Federal Government on mail, $355 million in fiscal year 2016. That is more than the Social Security Administration or the Treasury Department, including the IRS. 

Considering the magnitude of spending, the Subcommittee looked 

into where the money goes. What we found surprised us. 

Every large agency reports its mail spending to the General 

Services Administration in great detail through what is called the 

SMART database. GSA posts the numbers on its public Web site. 

The general idea is transparency drives efficiency and savings. Let 

me repeat that. The general idea is that transparency drives efficiency and savings. 

In reality, after a look at the facility-by-facility data VA reported, 

bizarre and anomalous numbers immediately jumped out. It begged 

the question of whether anyone had ever reviewed and questioned 

the information. 

Here are some of the highlights: 

The VBA office in Huntington, West Virginia, reported sending 

Priority Mail for 3 cents each, while the Memphis medical center 

reported spending $39 per piece of Priority Mail. 

The Alexandria, Louisiana, medical center reported sending 

First-Class letters for 8 cents each, while the Decatur, Georgia, 

medical center reported sending the same letters for $58.29 each. 

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The Denver medical center reported sending nearly 10,000 airmail packages and nearly 65,000 UPS Ground packages at no cost. 

The VHA facilities in Temple and Waco, Texas, reported spending $40,000 to mail just 16 business reply letters. 

And, finally, the Decatur, Georgia, medical center also reported 

sending one FedEx Ground package at a cost of $11,257. 

These numbers are hard to believe. In a letter to former Chairman Miller, VA explained them as data entry errors by mailroom 

employees. For example, VA wrote that Priority Mail in Memphis 

actually cost $3.90 each. The business reply letters in Temple and 

Waco cost a total of $40. The FedEx package in Decatur was really 

$112. And the First-Class letters in Decatur never existed. 

These explanations were not very reassuring. More on that a little later. 

Recognizing the scope of the problem in the mail operation, we 

turned to GAO to conduct a wide-ranging review, and it released 

its report last month. 

VA seems to have a circular problem on its hands. The mail operation is bureaucratically fractured and governed by a 20-year-old 

policy. Hundreds of VA facilities are mailing using a hodgepodge of 

different meters, software, and other equipment. No one seems to 

be firmly in charge, and the extensive data collected every year is 

completely unreliable. The data is supposed to inform managerial 

improvements, but the managerial shortcomings seem to be corrupting the data. 

It is not clear to me that anyone truly knows how much VA really spends on mail. As big as the reported $355 million total is, it 

apparently does not include over 1,000 clinics, 300 vet centers, and 

the entire National Cemetery Administration, among others. Some 

facilities report nothing, while other facilities inflated their spending by a factor of 10 or 100, as VA explained. 

Patterns in VA’s reported spending are just as perplexing. After 

being roughly in line with Social Security and Treasury’s mail 

spending for a number of years, VA’s reported spending abruptly 

spiked by over $100 million in fiscal year 2014 and has stayed at 

that level. In some years, expenditures crept up while the number 

of mailings dropped. In other years, the number of mailings 

climbed but the expenditures barely budged. Notably, despite the 

spending spike beginning in 2014, the number of mailings is actually down. 

Perhaps what is most concerning is, from the outside, before 

scrutiny, this all appears to be a model of efficiency and open government—a Federal management regulation, detailed policy, and 

interactive data available to the public in an online dashboard. In 

reality, it is an intractable mess, a classic case of garbage in, garbage out. 

We are here today to shine a light on the problem and begin 

charting a course to fix it. While mail may not be the most exciting 

issue, these inefficiencies are clearly wasting real money. Veterans 

all over the country have pressing needs, and we simply cannot afford to operate this way anymore. 

I now yield to Ranking Member Kuster for her opening statement. 

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OPENING STATEMENT OF ANN KUSTER, RANKING MEMBER 

Ms. KUSTER. Thank you, Chairman Bergman. 

And thank you to our witnesses and to all of you who have joined 

us today. 

While ‘‘The Case of the $11,257 Package’’ is a catchy title, it is 

actually one example of inaccurate data reporting by the VA. In 

this case, a decimal was forgotten during manual data entry, so a 

package costing $112.57 was reported incorrectly to the General 

Services Administration. 

Unfortunately, we observe this all too often. VA struggles with 

cost accounting and the management of its finances in part due to 

outdated systems requiring manual data entry, increasing the risk 

of human error. Inconsistent procedures, policy, and oversight lead 

to a lack of accountability and increased cost to the taxpayer. 

Employees lack the training and resources they need and modern 

IT systems to ensure directives and policies are followed. Programs 

lack goals and measures of performance to gauge their effectiveness and efficiency. And data are inaccurately reported, this time 

to the GSA. 

These are the same root causes that resulted in the Veterans 

Health Administration’s placement on the GAO High Risk List. 

These issues place VA’s mail program at risk and cause me to 

question whether the physical security and accurate tracking of 

packages, some of those packages containing opioids and controlled 

substances, are at higher risk of diversion. 

In comparison to VA’s other challenges, like addressing the 

opioid epidemic or ending veteran suicide, management of VA’s 

mail expenditures and volume should be the least of its worries. 

However, I believe this is indicative of a larger problem. 

Military leaders often say that when troops are failing to do simple, routine tasks, such as keeping their uniforms in order or maintaining clean barracks—and I think General Bergman would 

agree—that this is a sign of a larger problem. In the same way, I 

think failure to manage mail is one sign of a larger problem at the 

VA. 

The VA must thoroughly examine the root causes of GAO studies 

and IG investigations and take serious steps to address them so 

that it can transform itself into the world-class veteran-centric organization that we have all come to expect. 

I hope this hearing will give us a chance to have a broader discussion on some of these challenges that the VA faces and the solutions and resources that are needed to ensure that our veterans receive the health care and benefits they deserve. 

Thank you, General Bergman. I yield back. 

Mr. BERGMAN. Thank you, Ranking Member Kuster. 

I would now like to welcome our panel, who is seated at the witness table. 

On the panel, we have Mr. John Oswalt, Executive Director for 

Privacy in the VA Office of Information and Technology. We also 

have Ms. Lori Rectanus, Director for Physical Infrastructure Issues 

at GAO. 

Mr. Oswalt, you are now recognized for 5 minutes. 

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STATEMENT OF JOHN OSWALT 

Mr. OSWALT. Good morning, Chairman Bergman, Ranking Member Kuster, and distinguished Members of the Subcommittee. 

Thank you for this opportunity to participate in your hearing on 

GAO’s mail management report entitled ‘‘Actions Needed to More 

Effectively Manage Outgoing Mail’’ and discuss what actions VA is 

taking to implement the resulting recommendations and improve 

VA’s mail management program. 

Before addressing the GAO findings, I would like to emphasize 

again what was said in your opening statements, that VA has not 

paid the exorbitant amounts previously reported to mail individual 

packages and letters. For example, the $11,257 package reported to 

GSA was never translated into an actual purchase or expense for 

VA. The actual cost, as indicated, was $112.57. In this case and 

others, human error, such as omitting a decimal point, resulted in 

widely inaccurate reporting on our part. 

Mail operations in VA are largely decentralized, with each administration executing their program to meet their unique and diverse needs. While these unique requirements require some degree 

of customization, there is a strong need for a robust enterprisewide strategy. 

VA accepts and understands the need for immediate and decisive 

action, and we are acting accordingly. We have developed and undertaken a comprehensive remediation plan that addresses GAO’s 

recommendations and to make VA a best practice across government in mail management. To better meet our mission, we must 

eliminate inefficiency that impedes serving our veterans that—the 

inefficiency siphons off valuable resources. 

As an organization that is primarily field-based, VA mail operations have evolved to meet the unique needs of our various components with limited central oversight. In the past, this homegrown 

approach may have worked to meet mailing requirements. However, the growth in mail volume over the past two decades, such 

as the shift to mail-out prescriptions, have rendered these homegrown mailing practices obsolete. VA has not kept up with new 

technologies and business practices. 

VA is working to create a more effective and efficient program 

and is using the GAO recommendations as our starting point. VA 

has established a department-wide integrated project team, or IPT, 

sponsored by the VA’s Deputy Chief of Staff, with membership 

from all relevant stakeholders. The IPT is charged with formulating plans and actions that address and satisfy the GAO recommendations and to build the administrative infrastructure to 

govern the mail management program at an enterprise level. 

Actions include but are not limited to: the comprehensive assessment and inventory of existing mail equipment and supporting 

software; conducting market research to determine what approach 

is best for VA, whether it is new capital investment, leasing, or obtaining mail operations as a managed service; conducting a costbenefit analysis of all of these options identified, and we will make 

a determination on what approach best meets the needs of VA. 

VA has updated and has published a revised VA Directive 6340 

that incorporates all new regulations and requirements. VA is currently updating VA Handbook 6340 that contains enterprise-wide 

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operating specifications on how to implement the now-revised policy. 

Individual administrations will write their own standard operating procedures, SOPs that incorporate the unique mission requirements specific to their mailing operations. VA will report on 

a semiannual basis the results of established goals and performance measures. 

VA is currently writing and classifying position descriptions for 

a dedicated VA mail manager position at an enterprise level and 

one supporting staff position. 

All mail managers will have to take annual mandatory training 

in accordance with Directive and Handbook 6340 and individual 

SOPs for their respective office. 

VA faces many challenges in meeting these goals, but we are up 

to the challenge. The men and woman of VA are unique in government in their commitment and dedication to fulfilling the mission 

of VA: serving veterans and their beneficiaries. It is this dedication 

that will make our efforts here successful. 

There is a great deal of work to be done, and we are already 

making progress toward addressing GAO’s concerns and are implementing their recommendations. 

This concludes my testimony, and I am prepared to answer any 

questions you or other Members of the Committee may have. 

Thank you. 

[THE PREPARED STATEMENT OF JOHN OSWALT APPEARS IN THE APPENDIX]

Mr. BERGMAN. Thank you, Mr. Oswalt. 

Ms. Rectanus, you are now recognized for 5 minutes. 

STATEMENT OF LORI RECTANUS 

Ms. RECTANUS. Thank you. 

Chairman Bergman, Ranking Member Kuster, and Members of 

the Subcommittee, thank you for the invitation to be here today to 

discuss VA’s mail program. 

VA reports that it sends more than 200 million pieces of mail per 

year to veterans and their dependents, and it reported that it spent 

over $350 million to do that, nearly double what it did in 2009. 

In July, we reported that VA needs to take actions to more effectively manage this program. Specifically, we found improvements 

were needed in how it tracks mail data, how it measures program 

performance, and how it provides authority for key program officials. We are pleased that VA agreed to take action in response to 

our recommendations. 

The biggest issue is that, currently, VA cannot reliably demonstrate what it spends on mail or what volume it handles. This 

is because it does not consistently track mail volume and costs 

across its facilities and administrations. Instead, every facility essentially does its own thing. For example, some facilities use manual spreadsheets to track mail activity, while others have purchased equipment, such as postage meters, that track the volume 

and costs. 

However, even when the facilities had equipment, because the 

equipment had varying capabilities, the type of information proleonard.horne on VACREP0180 with DISTILLER

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vided by the equipment varied. This occurs because VA’s administrations and facilities procure mailroom equipment independently. 

For example, each of VBA’s 56 regional benefit offices negotiates 

their own contracts, and VHA reported that the contracts can be 

established either by the VISN or at the medical centers themselves. As a result, what you get is a department-wide rollup that 

has little meaning. 

This is before you even consider the unreported, incomplete, or 

questionable data. While there are about 200 individual entities 

who report data to SMART, some key entities are not accounted 

for. We found the National Cemetery Administration hasn’t reported its mail volume or costs, and, when questioned, these officials did not know they were supposed to report. Additionally, VA’s 

1,000-plus community-based outpatient clinics do not report, and 

officials did not know if they were accounted for in others’ reports. 

In other cases, those who did report missed critical items, such 

as volume, expenditures, or undeliverable mail. Others reported 

data that were clearly inaccurate, as you have referred to—as another example, spending $9,000 to mail 29 pieces of mail. 

If VA strategically sourced equipment that consistently obtained 

and tracked mail activity, it would have complete, accurate, and reliable data, and it would likely save money by negotiating fewer 

contracts at higher levels of the Department. 

While VBA is trying to establish a blanket purchase agreement, 

these efforts have not included other administrations in a way that 

would maximize cost savings as well as help ensure a valid understanding of mail costs and volume. 

Regarding performance measures, VA cannot show that its mail 

operations are efficient and effective because it has not established 

department-wide goals and performance measures for operations. 

Instead, we found facilities, again, were doing their own thing for 

measures. Some facilities judged their performance based on customer service, while others reported using efficiency, cost, volume 

handled, or timeliness as measures. 

In the absence of department-wide measures that everyone 

works towards, VA can’t assess how administrations or facilities 

are doing. Only through having performance measures and holding 

facilities accountable to those measures can VA show that it is effectively carrying out the program. 

Finally, we found that the officials responsible for managing VA’s 

program likely have insufficient authority to do their jobs. We 

found a lack of clarity for who was responsible for carrying out the 

requirements in the mail policy. Mail managers also told us they 

do not believe they had the authority to even require basic operations, such as complying with requirements or ensuring accurate 

reporting. VA needs to clarify the authority and responsibilities of 

the agency and administration-level mail managers if it is to improve management and oversight of mail operations. 

In conclusion, VA has many critical responsibilities when it 

comes to serving our Nation’s veterans and their families and must 

allocate its resources appropriately and efficiently and know that 

its efforts are achieving the intended outcomes. That includes mail. 

We look forward to working with VA as it implements our recommendations to enhance the effectiveness of its mail program. 

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Chairman Bergman, Ranking Member Kuster, and Members of 

the Subcommittee, that concludes my statement, and I would be 

pleased to answer your questions. 

[THE PREPARED STATEMENT OF LORI RECTANUS APPEARS IN THE

APPENDIX]

Mr. BERGMAN. Thank you, Ms. Rectanus. 

The written statements of those who have just provided oral testimony will be entered into the hearing record. We will now proceed to questioning. 

Ranking Member Kuster, you are recognized for 5 minutes. 

Ms. KUSTER. Thank you. 

So this is a question about the GAO investigation. I am wondering if you found evidence of fraud or waste in the mail mismanagement. 

Ms. RECTANUS. Thank you, Ranking Member. 

This review was not designed specifically to look for fraud, waste, 

or abuse, but, certainly, we did identify that when every facility orders their own equipment and does things differently you probably 

are losing opportunities for cost savings from more strategic 

sourcing. 

In terms of fraud and abuse, anytime you have self-reported information and there is no oversight of that, you run the risk of that 

potentially happening. However, we did not specifically find any examples of that. 

Ms. KUSTER. And it is my understanding that the mail procedures are based on a directive, 6340, that is at least 20 years old. 

It might be older than that. Did you get into that level in your investigation? 

Ms. RECTANUS. The policy directive that we had at the time of 

our review was from 1996, yes. There is a directive, and then there 

is a handbook that supports the directive. 

Ms. KUSTER. Do you know—or maybe for our witness from the 

VA: Is there anything underway to revisit the mail directive and 

this issue about each of the facilities making their own decisions 

about what equipment to purchase without attention to cost savings? 

This is to the VA witness. 

Mr. OSWALT. Oh, I am sorry. 

Ms. KUSTER. Yes. 

Mr. OSWALT. Well, as I indicated in my testimony, we have a 

cross-VA team now that is—the first step is to do the data gathering of what we actually have and get our arms around that, the 

goal being that we will have a centralized oversight of this but still 

allow the field-based operations to tailor their individual programs 

to meet those needs. 

It is worth mentioning— 

Ms. KUSTER. But something as basic as mail, why would that 

vary? I mean, why would it vary from VISN to VISN or region to 

region? 

We are just talking about—like, for example, you could have a 

volume discount contract with these carriers that would benefit everyone across the country and certainly benefit the taxpayers. You 

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are never going to get that if you insist on doing this region by region in a different way. 

Mr. OSWALT. I am sorry if I was confusing. The Administration, 

the Veterans Health Administration, the VBA, Veterans Benefits 

Administration, they each have their own programs. But within 

VHA it is uniform, the way they execute it, and the same for VBA. 

So there is— 

Ms. KUSTER. I would just suggest— 

Mr. OSWALT. VHA—excuse me? 

Ms. KUSTER. I would just suggest we try to go up another level 

and, for the entire Veterans Administration, all across the country, 

try to use the same equipment, get the same data, because you 

could negotiate an even larger discount. 

Mr. OSWALT. Right. And that is one of the goals we are striving 

for, is VBA currently is—as indicated in the testimony of my colleague, is that VBA is now implementing a consolidation of their 

operations using commercially cloud-based software that rolls together all the disparate parts of information that is needed to report to GSA. And it does it for each carrier, and it puts it all into 

one place. 

Ms. KUSTER. I mean, that is the irony; the carriers certainly 

know how much you spend. 

Mr. OSWALT. Right. 

Ms. KUSTER. That we have to go the other direction. 

So I am just suggesting that, as you are looking into that, you 

know, looking for ways of cost saving by getting a handle, you also 

have to deal with this issue of manual entry. The more you are 

using digital entry, the better off you will be. 

Mr. OSWALT. Well— 

Ms. KUSTER. Because the way the package, let the machine, you 

know, enter the information—because you are always going to have 

problems with manual entry. You are always going to have human 

error. 

So my time is short, but I do want to get a question out there. 

And you may not be prepared to respond, but I would like to hear 

back from the VA. 

This goes to a much bigger issue, but my understanding is that 

80 percent of the VA’s prescriptions are handled by Consolidated 

Mail Outpatient Pharmacy. And I would assume that is a pretty 

large part of this $355 million if 80 percent of the packages—now, 

I would also assume that that is being done because people feel 

that mail-order pharmacy is a way to—for convenience, but primarily to save money. 

And I am wondering two questions: One, has the VA taken into 

account the cost of the mailing back and forth to determine if indeed there are cost savings through having this high a percentage—this seems like an incredibly high percentage for mail-order 

pharmacy. 

But, secondly, I am much more focused, with the opioid crisis, on 

managing controlled substances. We have spoken with the United 

States Postal Service, the issues that they are having with diversion. Do you have any kind of quality control around diversion? 

And my time is up, so I will have to take that— 

Mr. OSWALT. I will have to take that for the record— 

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Ms. KUSTER. Thank you. 

Mr. OSWALT [continued].—and will get back to the Committee 

with that. 

Ms. KUSTER. Thank you. 

Mr. BERGMAN. Thank you, Ranking Member Kuster. 

Dr. Roe, you are recognized for 5 minutes, sir. 

Mr. ROE. Thank you, Mr. Chairman. 

I thank Chairman Bergman for holding a hearing on this issue. 

I also would like to express my appreciation to our predecessor, 

Chairman Miller, who is keeping an eye on us from over my shoulder here, for beginning the investigation. The mail spending figure we have, $355 million last year, is 

enormous. And I understand that there are major irregularities in 

the reported numbers, and the real amount could be even more or 

it could be less. 

First of all, we need to figure out what the accurate total is. VA 

should be able to do that. Most businesses can. Maybe you clean 

up the SMART data, or maybe the CFO counts expenditures, or 

maybe devise another solution. 

Then, VA needs to look at waste and inefficiencies. The Social 

Security Administrations communicates with 60 million beneficiaries, most of them seniors who still receive information via 

U.S. mail, for about $207 million. The IRS communicates with 140 

million taxpayers by letter for about $188 million. 

I find it hard to believe that all the mail VA sends is absolutely 

necessary, which is why I have worked on the RETIRE Act legislation to encourage electronic delivery of retirement data for ERISA 

employees. I am interested if there are barriers to VA taking a 

similar approach. 

Even given the number of letters and packages that VA now 

sends, it appears that potential savings are being left on the table. 

Using hundreds of different meters; sorting facilities are incredibly 

inefficient. Imagine how much VA could reduce cost by leveraging 

economies of scale, as Ms. Kuster just mentioned. Imagine how 

much easier it would be if all the equipment was compatible. Presumably, modern equipment, software equipment, can track all expenditures that pass through the meters and interface with the 

post office and shipping companies. 

As Chairman Bergman said, this problem does have a familiar 

theme. There is not enough oversight—there is not an oversight 

hearing yet in which IT or contracts do not come up. 

With that, just a couple of questions. 

Mr. Oswalt, you first. I understand that last year all the VBA 

regional offices started working on getting a common contract in 

place to buy all their mailing equipment and software together. It 

was supposed to be done at the end of this year. Now VA is telling 

GAO it will take several more years. Can you explain why it is taking so long? 

And I also like the new strategy that you laid out to update the 

mail management. But why did it take a GAO report to get this 

done? 

Mr. OSWALT. Well, I will answer your first question first, sir, that 

VBA has instituted or begun this process. And I was informed by 

their officials that in a 3- to 9-month timeframe this software that 

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they are purchasing and using on all the compatible equipment will 

be complete. 

And that will, as I indicated earlier, put all the information in 

one place. It will interface with GSA SMART and remove that 

human interface. It will interface with VA’s own accounting system 

for more accurate data there. 

Mr. ROE. Let me editorialize for just a second. Being in government space for a long time, in medicine, we billed Medicaid and 

Medicare. If we had been this sloppy in reporting to Medicaid and 

Medicare, I can promise you, you would be doing a perp walk somewhere. You would not be able to put this kind of sloppy data in 

front of Medicaid and Medicare and expect to get reimbursed and 

then expect not to explain this to the auditors when they came to 

your practice and looked at this. I mean, there is no way on this 

earth it would stand up to scrutiny, just to editorialize. 

Ms. Rectanus, what would a world-class mail operation look like? 

And are there any other Federal agencies that stand out that are 

doing this very well? 

Ms. RECTANUS. Thank you, sir. 

We did not do a comparative analysis for this review. Obviously, 

we did talk to GSA about which entities and organizations they 

thought were doing a better job. They were a little hesitant to identify key ones, but they did say that some of the challenges VA 

faces, in terms of having good data and ensuring accuracy, they 

struggle with. 

But they did identify, again, sort of the best practices that you 

would want to see—things like leveraging technology, things like 

seeking out the best discounts you can find, things like training, 

making sure all your folks have the training, and having a written 

policy that clearly lays out who is responsible and what your goals 

are. Again, one of the key requirements is having measures and 

targets and objectives to say, this is what we are holding ourselves 

accountable to. 

I can provide you some information for the record in terms of if 

there are some agencies we think are really role models in this 

area. 

Mr. ROE. Thank you. 

Thank you, Mr. Chairman. My time has expired, but I have a 

couple of questions I would like to submit for the record. 

Mr. BERGMAN. Thank you, Dr. Roe. 

Mr. Arrington, you are recognized for 5 minutes. 

Mr. ARRINGTON. Mr. Chairman, thank you and Ranking Member 

Kuster for holding this hearing. I think, while it may not be exciting to some people, I think it is incredibly important that we have 

effective and efficient operations for the Federal Government, especially when you are a service organization, especially when you are 

serving our heroes. 

And I am incredibly discouraged by the consistent feedback on 

IT, on union time, disability claim disputes, and the list goes on 

and on, with a pattern of lack of management, who is responsible, 

do they have the authority, do they have the resources, are there 

goals, are there performance measures, are there reviews to see if 

we are doing a good job. I feel like the taxpayer is being fleeced 

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over and over because of the lack of this not-so-exciting issue of operations and management. 

The core issue—and I agree with Ms. Kuster, this is just a symptom of the root problem, and that is lack of accountability. Now, 

I hope and pray to God that this accountability act that we all 

passed and was signed by the President will give the tools to this 

administration and to you, Mr. Oswalt, and your colleagues to actually do the job you were hired to do on behalf of the taxpayer and 

the veteran, okay? 

So I hope—but, you know, once somebody has the tools and they 

are empowered, I think now you can hold them accountable with 

a good conscience. That is how I feel about this. 

Mr. Oswalt, when did we know about this problem of either inconsistent, unreliable data collection and data outcome and just the 

mismanagement of the mailing operation in general? 

Mr. OSWALT. Sir, I don’t believe there was any one moment 

where there was an a-ha moment. As I indicated, the mail program 

has been in place for a long time. I think Chairman Miller’s letter 

to VA a couple years ago was when it really started to roll and we 

really started to gain traction. And there are individuals within VA 

who have tried to raise this as an issue, but the course of events 

has just overtaken—but Chairman Miller’s letter— 

Mr. ARRINGTON. Yeah. So a year ago, when he wrote the letter. 

But it seems like this has been going on for many years. And so 

I am concerned when it takes the Chairman of a Congressional 

Committee to inquire about mailing operations before somebody 

wakes up and says, ‘‘We are not managing this very well. We are 

wasting a bunch of money.’’ So that is number one. 

I assume, Ms. Rectanus, that there are best practices. I read 

something about GSA rolling out some best practice governmentwide. Did that best practice initiative have any effect governmentwide? And why didn’t VA join that initiative to make their mailing 

operations more effective, cost-effective? 

Ms. RECTANUS. GSA has put out regulations in the FMR that are 

sort of at the fundamental minimum, if you will, of what a government mail management program should be. However, there is lots 

of information out there about best practices. 

GSA cannot compel agencies to do more than what is in the management regulation. And yet they try—they try to encourage. They 

provide training. They do some education. They provide bulletins. 

But they do not have oversight or enforcement authority to force 

agencies to do anything more than kind of what is the basic information. 

Mr. ARRINGTON. Well, because if they are—you know, I think the 

school of thought by most folks who have run anything would be, 

if you at least compare yourself to others and you are that far out 

of whack, somebody ought to probably lose their job, and then they 

ought to implement some reforms in that process. But, clearly, that 

hasn’t happened. 

You know, we were talking about improper payments the last 

time I sat at this table in an oversight hearing. And my question 

was, who is responsible, ultimately, for improper payments? And 

they said, seven CFOs. If there is more than one person, then nobody is responsible. And I asked, when is the last time somebody 

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lost their job over improper payments? And I said, get back to the 

Committee on it. Nobody has lost their job on that. 

Here is my question, and I will leave you some time to answer 

it, Mr. Oswalt. Who is responsible for the mailing operation? Who 

reports to the Secretary? And then who reports to that person? 

Give me that org chart flow. 

And then I would ask you to submit to the Committee the last 

time somebody was fired on account of not managing the mailing 

operation. 

Mr. OSWALT. Okay. I will take that for— 

Mr. ARRINGTON. Would you respond to the org chart flow? I want 

to know— 

Mr. OSWALT. Well, as indicated, it is a decentralized program. So 

each administration head, each undersecretary has the authority 

for their program—or staff office head. And then there is the need 

to have a VA enterprise-wide mail manager, which currently is 

under the CIO’s position. And that is a coordinating policy role. 

Mr. ARRINGTON. I have gone over my time. I yield back. 

And if there is time for further questions, Mr. Chairman, I would 

be happy to continue down this line of thinking. 

Mr. BERGMAN. Thank you, Mr. Arrington. 

Mr. Poliquin, you are recognized for 5 minutes. 

Mr. POLIQUIN. Thank you, Mr. Chairman. I appreciate it very 

much. 

Thank you, Mr. Oswalt, for being here. 

And thank you also to the folks from the GAO. 

Mr. Oswalt, how long have you been at the VA? 

Mr. OSWALT. Thirty-one years. 

Mr. POLIQUIN. I am sorry? 

Mr. OSWALT. Thirty-one years. 

Mr. POLIQUIN. Thirty-one years. Okay. Have you been involved 

in this part of the VA for 31 years? 

Mr. OSWALT. No, sir. 

Mr. POLIQUIN. Okay. How long have you been in this position? 

Mr. OSWALT. I have been in my current position for just over 2 

years. 

Mr. POLIQUIN. Okay. And to follow up with what Mr. Arrington 

was saying, does all of the mail operations report to you? 

Mr. OSWALT. No, sir. 

Mr. POLIQUIN. Okay. So what is your relationship with the mail 

operations around the country? 

Mr. OSWALT. I am an executive in the organization Quality, Privacy, and Risk, which has responsibility for the enterprise mail 

function. 

Mr. POLIQUIN. Okay. So you are supposed to make sure that the 

taxpayers aren’t getting ripped off when it comes to the cost of the 

mail programs around the country, right? 

Mr. OSWALT. As a VA employee in general, yes, sir. 

Mr. POLIQUIN. Okay, great. So if I understand you correctly, all 

the VA facilities around the country operate autonomously when it 

comes to mail programs, right? 

Mr. OSWALT. They operate within their own administrations. 

Mr. POLIQUIN. Okay, great. 

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Now, to send a First-Class letter anywhere in the country, what 

does it cost? Well, it is your job, right? You should know. It is 49 

cents, isn’t it? 

Mr. OSWALT. That is—yes, sir. 

Mr. POLIQUIN. Okay. Well, I am surprised you didn’t know that. 

Okay. It is 49 cents to send a letter from me to Jodey, from me 

to the Chairman, or from me to you. Okay. 

Now, would someone explain this to me? In Alexandria, Virginia, 

they sent 3,713,070 First-Class letters for a cost of 8 cents each. 

How is that possible? 

Oh, wait a minute. In Decatur, Alabama, they sent 712,695 

First-Class letters, costing $58.29 each. What is going on here? 

Mr. OSWALT. As I indicated in my testimony, that is probably, 

most likely, I would say, due to errors in the manual entry into the 

GSA SMART database. 

Mr. POLIQUIN. Okay. Who is responsible for overseeing that? Is 

that you? 

Mr. OSWALT. No, sir. 

Mr. POLIQUIN. Okay. Who is it? 

Mr. OSWALT. The individual mail managers within the administration. 

Mr. POLIQUIN. Does this make any sense to you over at the GAO? 

Ms. RECTANUS. Yes. And I would appreciate if I could get a 

chance to comment. 

Mr. POLIQUIN. Please. 

Ms. RECTANUS. Obviously, if you start to dissect the data too 

much, you really don’t have a lot of faith, because it is not just— 

the rate per piece is a derived figure based on what has been put 

in for expenditures and volume. So, if any of those numbers are 

wrong in any respect, then the rate per piece is inaccurate. 

Mr. POLIQUIN. So you are telling us— 

Ms. RECTANUS. It is important— 

Mr. POLIQUIN [continued].—So you are telling us, ma’am, that 

the data that the VA submitted to us in our oversight to make sure 

the taxpayers and our veterans aren’t getting ripped off is wrong. 

Ms. RECTANUS. It is self-reported data. 

Mr. POLIQUIN. It is self-reported data. 

Ms. RECTANUS. But that doesn’t— 

Mr. POLIQUIN. So it doesn’t come through you; it comes through 

these folks. 

Ms. RECTANUS. I am sorry? 

Mr. POLIQUIN. It comes not from you but from these folks, right? 

Ms. RECTANUS. I am sorry, I still couldn’t hear you. 

Mr. POLIQUIN. It does not come through. The data we have comes 

through Mr. Oswalt. 

Ms. RECTANUS. It is directly reported by VA through the GSA 

SMART tool. 

Mr. POLIQUIN. Okay. 

So, with the data all over the map here—for example, you folks 

over at the VA sent out 200-—what the heck is it? It doesn’t matter—200,000, 225,000 pieces of mail, 220,000 pieces of mail, and it 

cost the taxpayers $355 million a couple years ago, whereas Treasury and Social Security sends out more mail but costs a lot less. 

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So, right off, as a former State treasurer up in Maine and standing up for our veterans so we make sure we have every dollar they 

deserve to take care of them when they come back from the battlefield, I am looking at this and I am saying, how could this possibly 

be? And you are just confirming that. This is self-reported data. 

And there is nobody at the top that is watching this. 

Is that right? 

Ms. RECTANUS. Are you asking— 

Mr. POLIQUIN. Yeah, I am. Well, I will ask Mr. Oswalt. 

Mr. Oswalt— 

Ms. RECTANUS. This self-reported data are made in such a way 

that it is impossible for anyone to confirm the accuracy of that 

data. 

That being said, however, it is possible to have different prices, 

because each location works discounts with its service providers. 

Mr. POLIQUIN. You mean like this price. In Waco, Texas, $40,000 

spent on 16 pieces of business reply mail, or $2,500 per letter. That 

is what you mean, right? 

Ms. RECTANUS. That seems a little extreme. Correct. 

Mr. POLIQUIN. So that is 2,500 bucks. Supposed to cost 49 cents. 

This is 25. 

So how in the heck, Mr. Oswalt—you have been there 31 years, 

2 years in this job. How in the world can we trust the data? What 

in the world is going on there? 

Mr. OSWALT. Well, that is the reason we are undertaking this 

top-to-bottom reform, sir, because of these problems that have been 

identified. 

Mr. POLIQUIN. How long have these problems been identified? Is 

this the first you have heard of it? 

Mr. OSWALT. When Chairman Miller’s letter arrived, that was 

the first exposure I had to this issue, yes, sir. 

Mr. POLIQUIN. Well, who had the job before you? 

Mr. OSWALT. The job didn’t exist. 

Mr. POLIQUIN. The job didn’t exist before 2 years ago. 

So we are spending $355 million a year on mail throughout the 

VA system, and nobody thought that it would be a good idea to 

make sure people are looking out for the taxpayer and for our veterans. Is that what you are saying? 

Mr. OSWALT. No, sir that is not what I am saying. 

Mr. POLIQUIN. Tell me what you are saying. 

Mr. OSWALT. I am saying that each individual administration 

has their own appropriation, and they have the stewardship over 

those funds, and they, in turn, manage the mail program. 

From an enterprise-wide standpoint, the oversight was lacking. 

And that is what we are trying to correct now through various 

types of actions we are taking. 

Mr. POLIQUIN. Now we are getting somewhere, Mr. Chairman. 

Finally, someone who is responsible for this mess and this lack of 

information, this inconsistency, and this waste admits that there 

has been no oversight. Good. Too bad it took this long to do it. 

I yield back my time. 

Mr. BERGMAN. Thank you, Mr. Poliquin. 

Ms. Rectanus, you have been very clear that the mail data is still 

unreliable. In January 2016, the Committee asked VA to fix some 

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of the most egregious problems with the reported data, and in 

March 2016 VA committed to do so. Yet it seems like some of the 

problems the Committee staff found continue to exist to this day. 

Can you explain what is going on here, what is still wrong? 

Ms. RECTANUS. We confirmed for some of the commitments that 

VA made in its letter that they carried through on those. They did 

provide training to their folks on how to submit data. We did look 

at some of the numbers that the Chairman had identified and saw 

that they had changed. 

Our bigger question was, just because they had changed, it 

doesn’t mean that they are necessarily correct. Some had not 

changed. 

So I think what is the problem is that, when every facility is 

doing their own thing, they are not operating under consistent definitions, they have different input data, it is very difficult for them 

to go in and fix it, because they don’t even necessarily know whether the new data they are putting in is any good. 

Mr. BERGMAN. Okay. Do we know, are all the facilities reporting? 

Ms. RECTANUS. At this point, we know that there are 200 entities 

who report. There are 400 authorized users throughout VA. And if 

you just start doing the math, you know that there are 1,000 

CBOCs that we can’t find in there. There are 170 medical centers, 

and less than 170 report. So we know that there are some that are 

not reporting. What we don’t know is whether they are reporting 

through some other means. 

The CMOPs started to report in 2014. We have some sense that 

most of them report. What was happening with them before 2014 

and all those prescriptions we don’t know? 

Mr. BERGMAN. Okay. 

Mr. Oswalt, you have stated that this was—not my words—a decentralized program. 

Mr. OSWALT. Yes, sir. 

Mr. BERGMAN. Is it time for a centralized program? 

Mr. OSWALT. It is time for more central oversight, yes, sir. 

Mr. BERGMAN. That is not what I asked. 

Mr. OSWALT. I would say that, given the disparity in what each 

administration handles, you know, mailing prescriptions versus 

mailing— 

Mr. BERGMAN. Let me repeat my question. We have seen that 

the decentralization has not worked, even from the standpoint of 

reporting, regardless of the expenditures. Is it time for a centralized program? 

Because mail is mail. Shipping costs, if you will, through the 

mail are pretty much whether you mail it from your house or mail 

it from your business or mail it from your government office. 

Is it time for a centralized look? 

By the way, I am a big fan of decentralization of operations. As 

a Marine, when I am in the field, I don’t want higher headquarters 

getting in my decision loop because they are not boots on the 

ground. But I guarantee you, there are times that they need to be 

in the loop because they have the bigger picture and are going to 

make sure that I have the supplies and my Marines have the supplies they need to do the fight. 

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So I am going to ask one more time. Is it time for a centralized 

approach from the VA? 

Mr. OSWALT. I will answer, sir, by saying that, in meeting the 

recommendations of GAO, where they are asking us to examine different ways of procuring information, yes, it is time to centralize 

activities like procurement and reporting. 

The individual operations, I don’t think, as you indicated, a centralized authority is best for day-to-day operations. But for procurement— 

Mr. BERGMAN. Well, you mentioned in your statement about 

going to a cloud-based approach. 

Mr. OSWALT. Yes, sir. 

Mr. BERGMAN. Is there any entity that you know of at whatever 

reporting level within your system that doesn’t understand what 

the cloud is? 

Mr. OSWALT. I think that is fairly well understood. 

Mr. BERGMAN. Okay. So we take the tools that we have today, 

as opposed to the tools we had 10 years ago or 20 years ago or even 

5 years ago, and utilize them to decide at what level of centralization, you know, operations should occur. 

This is probably leading the witness, but, Mr. Oswalt, do you 

truly believe that the mail operations in the VA are effective and 

efficient at this point? 

Mr. OSWALT. No, sir, they are not. 

Mr. BERGMAN. Okay. So what is it going to take? 

Mr. OSWALT. I think it is going to take a centralization of oversight and reporting, as we indicated. 

Plus, it is also going to take redoing our business processes and 

our practices. As I indicated in my testimony, we let it go to seed. 

We were asleep at the switch and let this behemoth just kind of 

go where it went. But now, you know, we have seen the light, and, 

working with our GAO partners and GSA, we are bringing it back 

under a centralized authority for that. 

And it is going to take technology. As I indicated, VBA is currently implementing a 3- to 9-month plan to centralize under the 

undersecretary there all of their mail operations and not have 56 

regional offices doing their own thing. 

Mr. BERGMAN. Well, again, there is a difference between centralized oversight and centralized authority and centralized execution—centralized execution. And I can’t even say that right. 

But, you know, I see my time has expired. I have talked to the 

Ranking Member here; I know she does not have any more questions. 

But, Mr. Arrington, you said—and anyone else who would like to 

do a second round. 

Mr. ARRINGTON. I will defer to the Chairman, because he may 

have to go and I have to the time to stay, so—okay. 

Mr. Chairman, if I may? 

Mr. BERGMAN. You are recognized for 5 minutes. 

Mr. ARRINGTON. Again, I appreciate you guys being here. 

Wasn’t there supposed to be an IT person on this panel today? 

Mr. OSWALT. I work in the Office of Information Technology, sir. 

Mr. ARRINGTON. Okay. I thought there was a third panelist, but 

maybe I misread that. 

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So you said that it has been decentralized, the mailing operations, over the years, and that the enterprise-wide point of accountability and oversight prior to whatever new plan we are going 

to come up with was the IT officer, the CIO? 

Mr. OSWALT. The CIO is the ultimate accountable official, senior 

agency official. 

Mr. ARRINGTON. And how long has the CIO been in his or her 

position? 

Mr. OSWALT. There is an acting CIO who has been in place since 

January. 

Mr. ARRINGTON. And prior to that? 

Mr. OSWALT. The former CIO, she was in place, I think, approximately 2 years before the change of administration. 

Mr. ARRINGTON. And is that a political position? 

Mr. OSWALT. Yes, sir. 

Mr. ARRINGTON. And what about the career deputy to the political? How long has that person been in there, the senior-most career person? 

Mr. OSWALT. The incumbent of that position now, she has been 

in that position probably, I would say, for 4 months. Prior to that, 

it was—the acting CIO now is technically in that position. 

Mr. ARRINGTON. So how long was the current acting— 

Mr. OSWALT. He was in that position for a year. And before that, 

the other principal deputy assistant secretary was in the position 

for, I think, approximately 8 years. 

Mr. ARRINGTON. You know, there is not a lot of continuity. That 

is a problem, obviously. Because you would assume somebody with 

the pay that they receive as a CIO, career or political, and their 

tremendous responsibility to oversee the many aspects of that job, 

including in this case the mail operations, that they would have 

run some report or asked that question prior to the Chairman of 

a Congressional Committee sending a letter and then uncovering 

that we have had years of mismanagement or no management of 

the mailing operation. So that is extremely disconcerting to me. 

I appreciate what you said, Mr. Oswalt. Sometimes I just need 

to hear that the folks at that table are hearing us and that they 

agree and that they own it. And to say that you all have been 

asleep at the switch is refreshing to me. And I want to commend 

you for saying that. We need to hear more people sort of fess up 

to the dysfunction at this department. 

And, again, I sure hope that our current Secretary will roll up 

his sleeves and begin fixing these things. 

What is the plan? Do you have a plan? 

Mr. OSWALT. As I indicated, right now, we are gathering what 

we have—we don’t know what we have—in a top-to-bottom listing 

of hardware and other assets. We are in the midst of that right 

now. 

Mr. ARRINGTON. So I think it is wise to gather information and 

all that. It has been 2 years. I wouldn’t even come to that table 

without saying, ‘‘Here is the plan. We are going to centralize this 

oversight. We are going to restructure this. We are going to put 

controls in place. We are going to have authority where it didn’t 

exist. We are having performance measures.’’ I wouldn’t come to 

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this table without a plan if I were showing up at an oversight hearing. I wouldn’t. 

And if I were the Secretary, I would be so embarrassed by this, 

I probably would show up and say, ‘‘Guys, I just want you to know, 

this preceded me, and I am going to come with a plan, and let me 

articulate the framework of that plan.’’ 

Two years, we ought to have a plan. I understand you have to 

gather information— 

Mr. OSWALT. Well, that is just one aspect of the plan, sir. 

Mr. ARRINGTON. Okay. So you feel like you do have a plan. 

Mr. OSWALT. Right. We are bound to report back to GSA in 60 

days from the issuance of the report, and we will have a project 

plan in place with dates at that time. 

Mr. ARRINGTON. Okay. And who is going to be accountable to the 

Secretary on this? 

Mr. OSWALT. The direction or the creation of this integrated 

project team came from the VA Chief of Staff herself, under the 

sponsorship of the Deputy Chief of Staff. I am kind of the point 

person on gathering— 

Mr. ARRINGTON. Is the CIO going to continue to be responsible— 

Mr. OSWALT. For the time being— 

Mr. ARRINGTON [continued].—to report to the Secretary on this 

issue? 

Mr. OSWALT. Yes, sir. As indicated, we just updated our 20-yearold policy, and that contains that the CIO position, the Assistant 

Secretary for IT, is the responsible official. 

Mr. ARRINGTON. I love what Peter Drucker says: What gets 

measured gets done. And, obviously, the converse is true. If you are 

not measuring it, it is not getting done. Too much is not getting 

done at the VA, and the taxpayers are being fleeced, and the veterans aren’t being served by that. 

I hope the next time we meet the plan is being implemented and 

executed, adjustments are being made, and the outcomes are provable, that we are providing cost-effective mailing operations. 

Thank you. 

Mr. OSWALT. Yes, sir. 

Mr. BERGMAN. Thanks. 

Mr. Poliquin, you are recognized for 5 minutes. 

Mr. POLIQUIN. Thank you very much, Mr. Chairman. 

Thank you again, Mr. Oswalt, for being so candid. And I want 

to follow up with some of what Mr. Arrington said. He is spot-on. 

If I heard you correctly, the CIO is the head banana that is responsible for reporting to Mr. Shulkin when it comes to this issue, 

and that is likely to continue to be the case, from what I heard a 

moment ago. Is that correct? 

Mr. OSWALT. That is my current understanding of the policy direction, yes. 

Mr. POLIQUIN. Okay. And you named two or three different individuals—not their names, but two or three individuals who have 

been acting CIOs for a period of time. 

Mr. OSWALT. Correct. 

Mr. POLIQUIN. Okay. What are the names of those people? 

Mr. OSWALT. The current acting CIO is Mr. Rob Thomas. 

Mr. POLIQUIN. Okay. And before that? 

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Mr. OSWALT. It was in a political position. Ms. LaVerne Council. 

Mr. POLIQUIN. And before that? 

Mr. OSWALT. The confirmed CIO was Roger Baker. But then, 

after he left, there was an interim of Stephen Warren. 

Mr. POLIQUIN. Okay. So there are four people you mentioned. It 

probably goes back 10 years, roughly. 

Mr. OSWALT. Yes. 

Mr. POLIQUIN. Okay. And are those political appointees? I 

didn’t—- 

Mr. OSWALT. It is a political position. 

Mr. POLIQUIN. Okay. 

Mr. OSWALT. Two of the individuals were political appointees, 

and the other two were career. 

Mr. POLIQUIN. Are those four people that have overseen this 

mess still at the VA? Any of them? 

Mr. OSWALT. Mr. Thomas is still a VA employee, yes, sir. 

Mr. POLIQUIN. And he is the acting CIO now, correct? 

Mr. OSWALT. Correct. 

Mr. POLIQUIN. Okay. So he was involved in this, and he is still 

at the VA. 

Mr. OSWALT. I don’t know to what level he was involved in it, 

sir. He— 

Mr. POLIQUIN. But he was responsible because he was the acting 

CIO, right? And he reports to the Secretary about this issue. So he 

was the head person involved in this when nothing was happening, 

and he is still at the VA. 

Mr. OSWALT. He is currently the official, sir. He has been in the 

position since January. 

Mr. POLIQUIN. Okay. His name again is? 

Mr. OSWALT. Rob Thomas. 

Mr. POLIQUIN. Okay. Thank you. 

Let me ask you a couple questions, if I can, Mr. Oswalt. 

Out of Decatur, Georgia, the VA reported that there was a pack- age shipped for $11,257, but later the VA explained to us that it 

was actually $112. Okay? Is that your understanding? 

Mr. OSWALT. Yes, sir. 

Mr. POLIQUIN. Okay. What was in that package? What cost 112 

bucks? 

Mr. OSWALT. Sir, I do not know. We could try and find that— 

Mr. POLIQUIN. Would Mr. Thompson know? 

Mr. OSWALT. No, sir, he would not know. 

Mr. POLIQUIN. Okay. But he is responsible. 

Mr. OSWALT. He is not responsible for the contents of the package. 

Mr. POLIQUIN. Are you? 

Mr. OSWALT. No, sir. 

Mr. POLIQUIN. Okay. But if we wrote to Mr. Thompson or to you, 

you could find out what was in that package for us. 

Mr. OSWALT. I will work with the Veterans Health Administration to find out, sir. 

Mr. POLIQUIN. In other words, you will get an answer for us. 

‘‘Work with’’ means you will get an answer for us, right? 

Mr. OSWALT. I will try and find out the contents, yes, sir. 

Mr. POLIQUIN. Good. Thank you. 

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How did you make a mistake from $11,257 to 112 bucks? How 

is that possible? 

Mr. OSWALT. In the SMART database, it does not automatically 

put in the decimal point. 

Mr. POLIQUIN. So it is not that smart, is it? 

Mr. OSWALT. That is— 

Mr. POLIQUIN. Okay. So you have a system that is supposed to 

track all this stuff that doesn’t use decimal points. 

Mr. OSWALT. It is not like with an ATM, where you are getting out $400 and at first it is 40 cents, $4—it does not go— 

Mr. POLIQUIN. Wow. Okay. So is that in your plan to fix? 

Mr. OSWALT. With the—oh, sorry. 

Mr. POLIQUIN. Yes? 

Ms. RECTANUS. Well, I was going to say, that is the GSA tool. 

The GSA tool, in the instructions, it says, ‘‘Do not put in decimal 

points.’’ 

Mr. POLIQUIN. Yeah. Are you going to fix this? 

Ms. RECTANUS. If you put in 1-1-2-4-6, it is going to show up as 

a whole number, not— 

Mr. POLIQUIN. Yeah. Are you going to fix this? Who is going to 

fix this? 

Ms. RECTANUS. GSA has provided instructions to people to not 

put in decimal points and to round. 

Mr. POLIQUIN. Who is ‘‘people’’? At your shop or your shop? 

Mr. OSWALT. At GSA. 

Ms. RECTANUS. GSA. 

Mr. POLIQUIN. At GSA. 

Mr. OSWALT. And my understanding, too, is there is a new 

version of SMART being— 

Mr. POLIQUIN. I hope it is smarter than the current version of 

SMART. 

Are you going to fix this or not? GAO, are you going to fix this 

or not? 

Ms. RECTANUS. GSA is— 

Mr. POLIQUIN. GSA. 

Ms. RECTANUS.—on deck to fix this, yes. 

Mr. POLIQUIN. You are going to fix it. Okay, good. So we are on 

the record, you are going to fix it. Good. We are getting someplace. 

All right. Mr. Oswalt, I mentioned this to you earlier before. In 

Alexandria, Louisiana, they were sending out First-Class mail for 

8 cents each, but a stamp costs 49 cents. Is there any bulk mail 

operation in the country you know about that can send stuff out 

for 8 cents? 

Mr. OSWALT. I do not know of any right now, sir, but I— 

Mr. POLIQUIN. Okay. So how do you explain this? 

Mr. OSWALT. Either it was the result of a negotiated pricing 

schedule due to volume or, again, it could have been an error in 

the SMART database. I do not know, but I will try and find out 

for the record, sir. 

Mr. POLIQUIN. Yeah, okay. Good. 

Kate, we are going to be in touch with Mr. Oswalt’s office. Make 

sure we get that answer too. 

It sounds like there is a real lack of not only accountability but 

the ability to track these issues accurately. And then you come to 

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us and ask for $186 billion to fund the VA. You come to us for taxpayer money, when the VA is supposed to be responsible for taking 

care of our kids that come back from the battlefield, and you can’t 

tell us where this money is going, how it is spent, and who is keeping track of it. And it took us a half-hour to find out who is responsible. 

Let me ask you one more. Denver reported thousands of airmail 

and ground packages at no cost. And then I got a letter here later 

explaining that—no, actually, confirming this. 

Who is Bob Snyder, Chief of Staff? 

Mr. OSWALT. He was the former VA Chief of— 

Mr. POLIQUIN. Is he working at the VA now? 

Mr. OSWALT. He is retired. 

Mr. POLIQUIN. He is retired. How long was he there? 

Mr. OSWALT. In various positions at VA for approximately 7 or 

8 years. 

Mr. POLIQUIN. Okay, 7 or 8 years. The Chief of Staff, Bob Snyder, who is now retired, sent a letter to this Committee saying that 

sending out thousands of airmail packages cost zero. Is that possible? 

Mr. OSWALT. No, sir. 

Mr. POLIQUIN. Okay. So there is another problem with your 

SMART problem. 

Mr. OSWALT. It is obviously an error. 

Mr. POLIQUIN. Okay. 

I mean, this Committee hearing, Mr. Chairman, is very important for all of America to see that we have 265,000 people at the 

VA that the taxpayers are funding at the cost of $180 billion, and 

we have our kids coming back from the battlefield that need help, 

and we have no sense of control that I can see at the VA, confirmed 

by you folks at the GSA, of spending $355 million per year on mail. 

So I think this has been very helpful. 

And I appreciate—Mr. Oswalt, I am not picking on you personally, but you are in the hot seat. And so are you. And so we appreciate you being here very much. I know you are going to fix this, 

and I will be watching and the rest of the people on this Committee 

will be watching. 

Thank you very much, Mr. Chairman. I yield back my time. 

Mr. BERGMAN. Thank you, Mr. Poliquin. ‘‘VA Mail Management: The Case of the $11,257 Package,’’ that 

was the title of this hearing. You know, it kind of sounds like a 

sleuthing show you would see on TV. When you peeled the onion 

back, it just appeared as though nobody had peeled the onion back 

from a management and oversight perspective along to see what 

was happening. We didn’t spend $11,257 on a package, but that is 

a symptom of a root cause, that nobody thought to see, to check, 

to wonder. That is unnerving, at best. 

Thank you, witnesses, for being with us today and sharing your 

testimony. The panel is now excused. 

The mail management problems that we have discussed this 

morning seem to be symptoms, as I mentioned earlier, of deep-seated organizational challenges within the VA. We hear about them 

all the time: VBA and VHA do not cooperate. Facilities throughout 

the country operate dramatically different. The central office does 

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22 

not know what the field is doing and, I would suggest to you, vice 

versa. The contracts, to say the least, are in disarray but certainly 

don’t represent some kind of a standard operating procedure and 

implementation that allows for best pricing across the spectrum. 

Policy is outdated. IT is inadequate. 

We are all familiar with the saying that if you have seen one VA 

hospital, you have seen one VA hospital. Apparently, it is also true 

that if you have seen one VA mailroom, have seen one VA mailroom. 

You know, my background in flying and in Marine Corps operations—standardized, monitored operations are paramount to the 

success of the organization. Standardized starts from communications from the top down, input from the bottom up, and then the 

higher headquarters, in this case those higher levels of the VA, 

coming out with standardized operations that can be executed locally to the best effort and the best outcome. We don’t have that. 

If anything should be predictable and efficient, it is a mailroom. 

This is not a changing environment every day. The mailroom workers and the mail managers should know that what they do is important, that they do serve a purpose of, number one, literally delivering the mail, but, number two, being accountable for doing it 

right. It is one of the building blocks that the rest of the VA operations rely on. 

I expect the Department to devote sufficient talent and energy to 

implementing GAO’s recommendations and not only fixing the 

abysmal situation but looking forward to see how we create it for 

the future, because mail delivered today is not going to be delivered 

the same way 5 or 10 years from now. We need to be on the leading 

edge of the curve, not on the tail end that is getting whipsawed 

around by the inefficiencies of a detached bureaucracy. 

Further, I would ask that the VA clean up the SMART data 

when it reports this year. I hope the next time someone reports an 

$11,257 package or any other bizarre entries mentioned today, it 

sends red flags, it sends whatever you want to call it out, and people start to question it at the lowest level and say, ‘‘Hey, does this 

seem right?’’ Because if you don’t, you are not making progress. 

And as we have talked about in various Oversight and Investigation hearings here, it is that sense of urgency. I am still, after this 

hearing this morning, not feeling that sense of urgency and—I will 

add one more turn to it—skin in the game at all levels of those who 

draw a paycheck in support of operations for our veterans and their 

care and their well-being. 

I want to see the sense of urgency, and I know the whole panel 

does, because when you look at all the Committee work we do here 

on the Hill, this Committee is absolutely one of the most bipartisan, singularly focused on doing what is right for the veterans, of 

any Committee that exists. 

I ask unanimous consent that all Members have 5 legislative 

days to revise and extend their remarks and to include extraneous 

material. 

Without objection, so ordered. 

I would like to once again thank our witnesses and audience 

members for joining us here this morning. 

This hearing is now adjourned. 

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[Whereupon, at 11:41 a.m., the Subcommittee was adjourned.] 

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(24) 

A P P E N D I X 

Prepared Statement of John D. Oswalt 

Good morning, Chairman Bergman, Ranking Member Kuster, and distinguished 

members of the Subcommittee. Thank you for this opportunity to participate in your 

hearing on the Government Accountability Office (GAO) mail management report 

entitled, ‘‘Actions Needed to More Effectively Manage Outgoing Mail,’’ and to discuss the actions and efforts underway at VA to address those recommendations, 

issues, and concerns. 

Overview 

Before I address directly the GAO findings, I want to provide you with an overview of VA’s Mail Management Program and discuss VA’s commitment to improving 

the program. 

In accordance with Federal regulations and VA policy, VA has an established policy for Department-wide Mail Management Program. Although VA does have such 

a program; it is not what it should be. The Mail Management Program for VA is 

in need of an overhaul as evidenced by the GAO’s findings. Mail operations in VA 

are largely decentralized programs with each administration and their various subcomponents adapting the execution of these programs to their own unique and diverse needs. While these unique requirements dictate a great deal of how VA outgoing mail is managed, there is a need for an enterprise-wide over-arching strategy 

to eliminate outdated practices and improve the program with the goal being better 

service to Veterans and their families and a better return on investment for the 

American taxpayer. VA accepts and understands the need for action and we have 

developed and undertaken a comprehensive remediation plan that not only addresses the recommendations of GAO but also will make VA a leader across government 

in mail management. Our mission is too important and too critical to allow inefficiency to impede serving our Veterans and siphon off valuable resources supporting 

outdated practices. 

On an annual basis, VA mails millions of letters and parcels to Veterans and their 

families. These range from medications, to documents on benefits and compensation, 

to memorial certificates to surviving family members. Just as every Veteran’s needs 

are unique, so too are the mailing requirements for the VA offices that serve these 

Veterans. As an organization that is primarily field based, VA mail operations have 

often evolved to meet these unique needs with limited central oversite. While in the 

past this may have worked to meet mailing requirements, the growth in mail volume over the past two decades, as evidenced by the shift towards pharmaceutical 

mailings instead of in-house pick-up, and the increase in the Veteran population 

with more complex benefit and compensation issues, has resulted in making many 

of these ‘‘homegrown’’ mailing practices obsolete. VA must now take advantage of 

new technologies and new business models to effectively and efficiently manage such 

a diverse and sprawling mailing requirement. VA has plans in place that we believe 

will accomplish this and we are using the GAO recommendations as our starting 

point. We will institute a continuous improvement model to ensure we do not rest 

on our accomplishments or allow the program to fall behind again. 

GAO Report 

To achieve this goal, VA has established a department-wide Integrated Project 

Team (IPT) sponsored by the VA Deputy Chief of Staff and whose membership is 

comprised of all relevant and appropriate stakeholders. The IPT is charged with formulating plans and actions that address GAO recommendations and to put in place 

the administrative infrastructure to govern the mail program at an enterprise level. 

Specifically, actions to address the recommendations include but are not limited to: 

Recommendation 1: Develop and document a plan to source contracts for mailing equipment in a more strategic manner. Such strategic contract sourcing should 

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25 

enable facilities to obtain equipment to track mail volume and expenditure data 

more consistently and to maximize cost savings. 

VA is conducting a comprehensive assessment and inventory of existing mail 

equipment and supporting software. This includes identifying end of useful life-cycle 

for capital equipment, estimates of sunk costs for equipment still in use, estimating 

replacement costs and gathering industry best practices and conducting market research. We are exploring several options including new capital investment, leasing 

equipment/software options and obtaining mail operations as a managed service. 

Our future plans include, conducting a cost-benefit analysis of all options identified 

and making a determination on what approach best meets the needs of VA’s mission 

delivery. Following a selection of a new strategy, we will develop cost estimates, coordinate this need with the appropriation process, develop an acquisition strategy, 

and set up a project management team. We will conduct several pilot projects and 

take lessons learned and apply to the enterprise-wide phase-in and deployment 

schedule. 

Recommendation 2: Update VA Directive 6340 to incorporate agency-wide goals 

and performance measures for mail operations. 

VA has updated and published a revised VA Directive 6340 that incorporates all 

new regulations and requirements. We are currently updating VA Handbook 6340 

that contains enterprise operating specifications on how to implement the revised 

policy. The Handbook will include requirements for agency-wide goals and performance measures. To account for any specific needs of the administrations, we are requiring individual administrations to write and publish Standard Operating Procedures (SOPS) that incorporate the unique mission requirements specific to their 

mailing operations. VA is planning to gather and report on a semi-annual basis the 

results of established goals and performance measures and creating protocols for 

routine review and updating of Directive, Handbook, and SOPs. 

Recommendation 3: Determine and document the authority and responsibilities 

of the agency and administration-level mail managers to enable them to better manage and oversee mail operations. 

VA is currently writing and classifying Position Descriptions for a dedicated Mail 

Manager position and one supporting staff position. We will allocate funding for 

these positions and then advertise, and make selections to fill them. We will have 

each facility director with a mail program identify by name a mail manager with 

a written assignment to that facility level person, maintain a database with those 

names, and conduct an annual review to ensure assignments are current. Each SOP 

will contain clear and unambiguous internal reporting structures consistent with 

GSA SMART requirements and all mail managers will take mandatory training on 

an annual basis in accordance with Directive and Handbook 6340 and individual 

SOPs for the respective office. 

Conclusion 

VA faces many challenges in meeting these goals (resources, staffing, acquisitions, 

and competing priorities) but I believe we are up to the challenge. The men and 

women of VA are unique in government in their commitment and dedication to fulfilling the mission of VA; serving Veterans and their beneficiaries. It is this dedication that will make our efforts here successful. 

While we acknowledge there is a great deal of work to be done, we are already 

making considerable progress towards addressing GAO’s concerns associated with 

mail management and are in the process of implementing their recommendations 

to centralize VA’s mail management operation creating a more efficient and effective 

program. 

Mr. Chairman, this concludes my testimony. Thank you for the opportunity to testify before the Committee today. I am prepared to respond to any questions you and 

Members of the Committee may have. 

f 

Prepared Statement of Lori Rectanus 

Management and Oversight of Mail Operations Could Be Improved 

Chairman Bergman, Ranking Member Kuster, and Members of the Subcommittee: 

I am pleased to be here today to discuss our recent report on the Department of 

Veterans Affairs’ (VA) mail management program. VA sends more than 200 million 

pieces of mail per year to veterans and their dependents who rely on this mail for 

medications and critical information about medical appointments, disability comleonard.horne on VACREP0180 with DISTILLER

26 

1GAO, High-Risk Series: An Update, GAO 15 290 (Washington, D.C.: Feb. 11, 2015); and 

GAO, High-Risk Series: Progress on Many High-Risk Areas, While Substantial Efforts Needed 

on Others, GAO 17 317 (Washington, D.C.: Feb. 15, 2017). 2GAO, Veterans Affairs: Actions Needed to More Effectively Manage Outgoing Mail, GAO 17 

581 (Washington, D.C.: August 31, 2017). 3 41 C.F.R. pt. 102–192. 

4GAO, Standards for Internal Control in the Federal Government, GAO 14 704G (Washington, D.C.: Sept. 10, 2014). 5We did not interview officials from the National Cemetery Administration based on the administration’s low mail volume relative to VHA and VBA. 6SMART data are reported annually for the entire fiscal year, and therefore fiscal year 2016 

data are the most current available. 7 USPS noted that its revenue and volume data were not comparable to VA’s SMART data 

for validation purposes. 8 Although we found VA’s SMART data to be generally unreliable, we used the data to select 

VA facilities because VA has no other centralized data that include mail expenditures and volume. The reliability of the mail expenditure and volume data is not material to our findings 

for the 10 facilities. 

pensation, pension benefits, and more. VA’s reported mail costs-approximately $355 

million in 2016-are among the highest in the federal government. Moreover, VA’s 

reported costs have nearly doubled since 2009. In prior work, GAO has raised concerns about how VA identifies its resource needs and ensures that resources are efficiently used across the agency. 1

My testimony today summarizes key findings from our July 2017 report on VA’s 

mail management. 2 Our objective was to examine the extent to which VA manages 

its outgoing mail effectively. In that work, we reported that VA cannot provide assurance that facilities are managing their mail effectively because VA lacks key elements of an effective mail management program-namely reliable mail cost and volume data, agency-wide performance measures, and agency officials with appropriate 

authority to manage the program. We made three recommendations for VA to manage its mail program more effectively. VA agreed with our recommendations but has 

not yet provided any information on what steps it will take to implement them. 

To perform this work, we identified federal mail management requirements in the 

Federal Management Regulation, which governs mailing activities in federal agencies, 3 and applicable federal internal control standards. 4 We interviewed management officials from VA Central Office, the Veterans Benefits Administration (VBA), 

the Veterans Health Administration (VHA), and the Consolidated Mail Outpatient 

Pharmacy (CMOP) program on mail management practices across the agency. 5 We 

also interviewed officials from the U.S. Postal Service (USPS) and VA’s two primary 

mailing equipment providers. We reviewed the reliability of the mail expenditure 

and volume data VA reported to the General Services Administration’s (GSA) Simplified Mail Accountability Reporting Tool (SMART) in fiscal years 2015 and 2016. 6

In an effort to assess the validity of VA’s reported mail volume and costs, we reviewed VA’s reported fiscal year 2015 and 2016 expenditure and volume data with 

its service providers, USPS, United Parcel Service (UPS), and FedEx. 7 We collected 

information on the mail practices in place at the 10 VA facilities with the highest 

mail volume reported in SMART in fiscal year 2015. 8 Findings from these facilities 

provide examples of VA’s mailing practices but are not generalizable to all VA facilities. Our July 2017 report includes further details on the scope and methodology 

of our work, which was conducted in accordance with generally accepted government 

auditing standards. 

Background 

In carrying out its mail program, each VA administration-VHA, VBA, and the National Cemetery Administration-and local facility has discretion regarding how to 

handle outgoing mail. For example, facilities can choose which service provider they 

use to send the mail, such as USPS, FedEx, or UPS. In addition to choosing service 

providers, VA facilities may enter into contracts to purchase or lease mailing equipment such as postage meters. See figure 1 for a description of the services each administration and their associated facilities provide, and examples of outgoing mail. 

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9 41 C.F.R. pt. 102–192. The FMR also includes requirements for agency mail programs related to payment processes and finance systems and written mail security policies and plans. 

Financial and security requirements are not included in the scope of this review. 10Large agencies are those whose collective total payments to all mail service providers equal 

or exceed $1 million per fiscal year. 41 C.F.R. §§ 102–192.35, 102–192.85. 11 41 C.F.R. § 102–192.95. 12 41 C.F.R. §§ 102–192.110, 102–192.115. 13 41 C.F.R. §§ 102–192.120, 102–192.125. 

VA, like other federal agencies, is required to follow certain provisions regulating 

mail management in the FMR to ensure they have the policies, procedures, and 

data to manage their mail operations efficiently and effectively. 9 Specifically, large 

federal agencies like VA must provide annual mail management reports to GSA 

using the web-based SMART application, 10 which include data on expenditures paid 

to mail service providers, mail volume, and volume and expenditures for mail that 

was undeliverable as addressed. 11 Additionally, all federal agencies must have performance measures for mail operations at the agency level and in all mail facilities 

and program levels, 12 and an agency mail manager who should be at a managerial 

level to enable the official to speak for the agency on mail management. 13

VA is Not Managing Its Mail Program Effectively 

Fragmented Process for Procuring Mailing Equipment Has Contributed to 

VA’s Inability to Track and Report Reliable Mail Cost and Volume Data 

We found that the mail data-including volume as well as costs-VA reports to GSA 

are unreliable. Specifically, we found problems in VA’s fiscal year 2015 and 2016 

SMART data related to unreported, incomplete, or questionable data. For example, 

mail data for many facilities-including VA’s 1,055 community-based outpatient clinics and 300 vet centers-were not accounted for, while other facilities submitted mail 

expenditure data without mail volume, or volume data without expenditures. Facilities also did not consistently report data on mail that was undeliverable as addressed. Still other facilities submitted data that were inaccurate due to typographical errors by VA personnel. 

VA’s mail data are unreliable because individual facilities, which the department 

relies on to track mail volume and cost data, use inconsistent processes to do so. 

For example, facilities may use different mailing equipment to track volume and 

costs, some of which has the capability to track mail data by service provider and 

class of mail, while other facilities’ equipment may not be configured or may be too 

old to accept the software. Some facilities also rely on manual-entry methods such 

as spreadsheets to track mail data, or bills and receipts. Given the range of tracking 

methods and capabilities, VA has no agency-wide system to track mail expenditure 

and volume data, and mail managers have limited ability to validate the data before 

it is submitted to GSA. 

Inconsistent methods and capabilities for tracking mail volume and cost data exist 

because VA’s procurement of mailing equipment is fragmented. Different components of VHA and VBA make contracting decisions for mail room equipment independent of one another; for example, each of VBA’s 56 regional benefit offices negotiates and purchases its own contract with authorized vendors. VHA reported that 

the contracts for mailing equipment at its 170 medical centers are established at 

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Insert offset folio 1 here 30374.001
28 

14 Each of VHA’s VISNs is responsible for overseeing medical centers within a specified geographic area. 15We have found in the past that the agency has not consistently taken advantage of its large 

size in its purchases. See GAO, Veterans Affairs Contracting: Improvements in Policies and 

Processes Could Yield Cost Savings and Efficiency, GAO 16 810 (Washington, D.C.: Sept. 16, 

2016). In this report, we recommended that VA conduct a review of VISN-level strategic 

sourcing efforts, identify best practices, and, if needed, issue guidance to facilitate consolidation 

of similar requirements and leverage buying power across medical centers within VISNs. VA 

agreed with this recommendation, but has not yet implemented it. 16 41 C.F.R. § 102–192.110. 17GAO, Federal Protective Service: Preliminary Results on Efforts to Assess Facility Risks 

and Oversee Contract Guards, GAO 12 943T (Washington, D.C.: July 24, 2002). 18GAO 14 704G. 

various levels-in some cases, medical centers may establish their own contracts, 

while in others, a Veterans Integrated Service Network (VISN) establishes a contract for all the medical centers within a region. 14 VA facilities or other units individually negotiating contracts is likely not cost effective because this practice would 

not benefit from price discounts that might be available under procurement contracts covering much larger segments of the agency. 15 In fact, representatives from 

one of VA’s two primary mailing equipment providers estimated that it has about 

3,000 contracts with VA facilities and said that VA would almost certainly reap cost 

savings if it negotiated fewer contracts at higher levels of the department. 

VBA has taken preliminary steps to source its mailing equipment strategically, 

but VA lacks an overall plan to guide mail equipment procurement. In July 2016, 

VBA officials told us that its administration and field operations offices were collaborating to establish a blanket purchase agreement for mailing equipment in 56 

regional benefit offices, targeting the end of fiscal year 2017 to finalize the contract. 

According to VBA, the contract is intended to provide opportunities to negotiate improved discounts and leverage buying power through volume purchasing, among 

other things. Officials stated that they intend to include software in the contract 

that would consolidate data across the regional benefit offices and allow centralized 

reporting to SMART. However, in February 2017, officials told us that it will take 

several years to establish the blanket purchase agreement because of current contracts in place at regional benefit offices. VBA officials stated that they were interested in including VHA in the contract in order to obtain better prices, but have 

not had any detailed discussions with VHA about the contract. 

We recommended that VA develop and document a plan to source contracts for 

mailing equipment in a more strategic manner. Such strategic contract sourcing 

should enable facilities to obtain equipment to track mail volume and expenditure 

data more consistently and to maximize cost savings. VA agreed with this recommendation. 

VA’s Mail Policy Does Not Include Agency-Wide Goals and Performance 

Measures 

VA’s mail policy does not include agency-wide goals and performance measures for 

mail operations; as a result, VA is unable to determine the extent to which its mail 

operations are efficient and effective. The FMR requires that federal facilities have 

performance measures for mail operations at the agency level and in all mail facilities and program levels, 16 and we have previously found that measuring performance allows organizations to track progress toward goals and provides managers 

with performance data to make management decisions. 17 While VA lacks agencywide goals and performance measures for mail operations, we found that the 10 facilities we reviewed had developed performance measures. However, these measures 

were not consistent across facilities. For example, the facilities reported using inconsistent measures of customer service, efficiency, volume, cost, accuracy, and staff 

performance. Officials from two regional benefit offices indicated that they have implemented timeliness standards for their mail. In addition, VHA’s CMOP program 

has established performance measures for delivery of prescription medications but 

these metrics apply to the program’s offsite vendor, rather than a VA facility mail 

operation. 

VA’s mail management policy-Directive 6340-does not address the performance 

measurement requirement that is in regulation because it predates the current 

FMR and has not been updated. Internal control standards call for agencies to update their policies to be consistent with changes in federal law and regulation. 18 VA 

officials told us that efforts involving GSA, the Centers for Medicare & Medicaid 

Services, and USPS were underway to update the policy, but did not provide documentation of these efforts. 

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19 41 C.F.R. § 102–192.130. 

We recommended that VA update VA Directive 6340 to incorporate agency-wide 

goals and performance measures for mail operations, and VA agreed with this recommendation. 

VA Has Not Provided Mail Managers with Appropriate Authority and Responsibilities 

The mail managers VA has designated at the agency and administration levels 

have limited ability to oversee mail operations across the agency because VA has 

not provided them with appropriate authority and responsibilities. The FMR requires agencies to have an agency mail manager and outlines the individual’s recommended responsibilities, which include, among others, establishing written policies and procedures to provide timely and cost-effective dispatch and delivery of 

mail and materials, and ensuring that all facility and program-level mail personnel 

receive appropriate training and certifications to successfully perform their assigned 

duties. According to VA officials, the responsibilities of the agency mail manager are 

limited to oversight of Directive 6340, and do not include operational mail management responsibilities. 

Additionally, according to the agency mail manager, mail operations in VHA and 

VBA facilities are the responsibility of the administration-level mail managers. 

However, the VHA and VBA mail managers told us that although they may advise 

individual facilities on mail management, they lack authority to direct mail operations at facilities. Further, while the FMR recommends that the agency mail manager ensure that all facility and mail program-level personnel receive appropriate 

training and certifications, 19 VHA’s mail manager said he has never been encouraged to attend any training, and both the VHA and VBA mail managers said that 

they do not have the authority to require mail management employees to attend 

training. Individual facilities are generally responsible for their own mail operations 

with limited direction or guidance. Officials from the 10 facilities we reviewed stated 

that they have personnel who are responsible for their respective mail operations, 

but most of them had other responsibilities, such as logistics, warehouse operations, 

and mailroom machine maintenance. 

We recommended that VA determine and document the authority and responsibilities of the agency and administration-level mail managers to enable them to improve management and oversight of mail operations. VA agreed with this recommendation. 

Chairman Bergman, Ranking Member Kuster, and Members of the Subcommittee, 

this concludes my prepared statement. I would be pleased to respond to any questions that you may have at this time. 

GAO Contact and Staff Acknowledgments 

For questions about this statement, please contact Lori Rectanus at (202) 512– 

2834 or rectanusl@gao.gov. Contact points for our Offices of Congressional Relations 

and Public Affairs may be found on the last page of this statement. GAO staff who 

made key contributions to this testimony are Samer Abbas and Faye Morrison (Assistant Directors), Justin Reed (Analyst in Charge), Amy Abramowitz, Bonnie 

Pignatiello Leer, Malika Rice, Amy Rosewarne, Crystal Wesco, and Elizabeth Wood. 

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