VETERANS’ HEALTH 

CARE BUDGET

Improvements Made, 

but Additional Actions 

Needed to Address 

Problems Related to 

Estimates Supporting 

President’s Request

Report to Congressional Committees

August 2013

GAO-13-715

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-13-715, a report to 

congressional committees

August 2013

VETERANS’ HEALTH CARE BUDGET

Improvements Made, but Additional Actions Needed 

to Address Problems Related to Estimates 

Supporting President’s Request

Why GAO Did This Study

The Veterans Health Care Budget 

Reform and Transparency Act of 2009 

requires GAO to report on the 

President’s annual budget request to 

Congress for VA health care services. 

GAO’s previous work has focused on 

issues related to the consistency, 

transparency, and reliability of 

information in VA’s congressional 

budget justifications.

Building on GAO’s past work and in 

light of the President’s most recent 

request for VA health care, this report 

examines (1) changes in how VA used 

the EHCPM to develop VA’s budget 

estimate supporting the President’s 

budget request for fiscal year 2014 and 

changes in how VA reported 

information related to this estimate in 

its budget justification; (2) key changes 

to the President’s fiscal year 2014 

budget request compared to the 

advance appropriations request for the 

same year; and (3) the extent to which 

VA has addressed problems previously 

identified by GAO related to 

information in VA’s congressional 

budget justifications. GAO reviewed 

the President’s fiscal year 2014 budget 

request, VA’s fiscal year 2014 budget 

justification, and VA data. GAO 

interviewed VA officials and staff from 

the Office of Management and Budget.

What GAO Recommends

GAO recommends that VA (1) use 

consistent terminology to label 

estimates for administrative personnel 

costs and (2) provide consistent and 

comprehensive information explaining 

the costs in each budget category for 

administrative costs. VA generally 

agreed with GAO’s conclusions and 

concurred with GAO’s 

recommendations. 

What GAO Found

The Department of Veterans Affairs (VA) expanded the use of the Enrollee 

Health Care Projection Model (EHCPM) in developing the agency’s health care 

budget estimate that supported the President’s fiscal year 2014 budget request. 

VA expanded the use of the EHCPM by using, for the first time, the model’s 

estimate for the amount of care provided—workload—to develop estimates of the 

resources needed for 14 long-term care services. However, VA continued to use 

the most current expenditure data rather than EHCPM estimates for projecting 

needed resources for these services due to concerns about the reliability of the 

EHCPM expenditure data. Using this new blended approach, VA used the 

EHCPM in whole or in part, to develop estimates for 74 health care services that 

accounted for more than 85 percent of VA’s health care budget estimate. 

Additionally, VA used a new budget category label for its estimate of certain 

administrative personnel costs, “Administrative Personnel,” and identified the 

types of positions this estimate included. However, VA did not consistently use 

the new label across its three health care appropriations accounts. Instead, VA 

used “Administration” and provided no information clarifying the costs included in 

the estimates. Further, VA did not disclose all the costs included under 

“Administrative Personnel,” nor did VA identify the costs included in one other 

category containing administrative costs, “Administrative Contract Services.” The 

lack of transparency regarding administrative costs and inconsistent labeling 

resulted in Congress and other users of VA’s budget justification not having clear 

and complete information regarding the agency’s estimates for such costs.

The President’s fiscal year 2014 budget request for VA health care services was 

about $158 million more than the earlier, advance appropriations request for the 

same year. The estimate for initiatives increased by $1.021 billion and the 

estimate for ongoing health care services decreased by $519 million. The 

increase in the initiatives estimate was further offset by $482 million in estimated 

savings from new acquisition savings and other initiatives, which resulted in a net 

increase of $20 million. This increase, along with a decrease of $138 million in 

anticipated resources from collections and reimbursements, resulted in the net 

increase of $158 million in the President’s fiscal year 2014 request.

VA has taken steps to address, in varying degrees, five of the six problems GAO 

previously identified related to information in VA’s budget justification. 

Specifically, VA has taken steps to improve (1) the transparency of its estimates 

for initiatives in support of the advance appropriations request, (2) the 

consistency of the language used to label health care services across its three 

health care appropriations accounts, (3) the reliability of its estimates for certain 

facility-related activities, (4) the reliability of its estimate for facility maintenance 

and improvement, and (5) the reliability of its estimates for proposed savings. 

However, VA did not address (6) the transparency of its estimates for initiatives 

and ongoing health care services. While VA improved aspects of the information 

in its fiscal year 2014 budget justification, it is important that VA ensure that the 

six recommendations from GAO’s prior work regarding such information are fully 

implemented. Until these recommendations are fully implemented, the problems 

GAO previously identified will continue to limit for Congress and others the 

usefulness of information related to the estimates that support the President’s 

budget request for VA health care.

View GAO-13-715. For more information, 

contact Randall Williamson at (202) 512-7114 

or williamsonr@gao.gov.
Page i GAO-13-715 Veterans’ Health Care Budget

Letter 1 

Background 5

VA Expanded the Use of the EHCPM to Develop Its Health Care 

Budget Estimate and Changed How It Reported Information on 

Certain Administrative Costs 9

Increase in the Request Compared to the Earlier, Advance 

Appropriations Request Reflected Changes VA Made to 

Supporting Estimates 13

Steps Taken to Improve the Transparency, Consistency, and 

Reliability of Information and Estimates in VA’s Budget 

Justification 16

Conclusions 21

Recommendations for Executive Action 22

Agency Comments 23

Appendix I Comments from the Department of Veterans Affairs 26

Appendix II GAO Contact and Staff Acknowledgments 28

Related GAO Products 29

Tables

Table 1: Comparison of Labels Used in VA’s Congressional Budget 

Justification for Administrative Personnel Costs, Fiscal 

Years 2013 and 2014 (Dollars in Millions) 12

Table 2: Comparison of the Estimates Supporting the President’s 

Advance Appropriations Request and the President’s 

Budget Request, Fiscal Year 2014 14

Table 3: Problems GAO Previously Identified Related to Estimates 

Supporting the President’s Budget Requests, Related GAO 

Recommendations, and Steps Taken to Address 17

Contents 
Page ii GAO-13-715 Veterans’ Health Care Budget

Figure

Figure 1: Percentage of VA’s Health Care Budget Estimate 

Developed Using the Enrollee Health Care Projection 

Model (EHCPM) and Other Methods, Fiscal Years 2012

through 2014 10

Abbreviations

DOD Department of Defense

EHCPM Enrollee Health Care Projection Model

NRM non-recurring maintenance

OMB Office of Management and Budget

VA Department of Veterans Affairs

This is a work of the U.S. government and is not subject to copyright protection in the 

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Page 1 GAO-13-715 Veterans’ Health Care Budget

441 G St. N.W.

Washington, DC 20548

August 8, 2013

Congressional Committees

The Department of Veterans Affairs (VA) operates one of the largest 

health care delivery systems in the nation, serving more than 6.3 million 

patients and spending nearly $54 billion in fiscal year 2012.1 The amount 

of funding VA receives for its health care services is determined by 

Congress in the annual appropriations process, which also provides funds 

for a wide range of other national programs, such as those supporting 

defense, education, and transportation. In preparation for the 

appropriations process VA develops an estimate of the resources needed 

to provide its health care services for 2 fiscal years.2

 

1

VA provides a range of health care services for eligible veterans, including primary care, 

inpatient and outpatient surgery, prosthetics, mental health services, prescription drugs, 

and nursing home care. Eligibility is determined on the basis of service-connected 

disability, income, and other special statuses, such as former prisoners of war, and is 

used to determine priority for VA services. VA is required to provide a specified set of 

health care services, including hospital care, to eligible veterans. 38 U.S.C. §§ 1710(a)(1), 

(2), 1701(5), (6). VA is authorized to provide these health care services to other veterans 

not identified in these groups. 38 U.S.C. § 1710(a)(3). The population of veterans to whom 

VA is required to provide nursing home care is more limited than the population to whom 

VA is required to provide other health care services, although VA also makes nursing 

home care available to other veterans on a discretionary basis as resources permit. See 

38 U.S.C. § 1710A. Requirements for VA health care services are effective in any fiscal 

year only to the extent and in the amount provided in advance in appropriations acts for 

such purposes. 38 U.S.C. § 1710(a)(4).

This budget estimate 

is one step in a complex, multistep budget formulation process, which 

culminates in an appropriations request for VA health care that updates 

the earlier, advance appropriations request for the upcoming fiscal year 

and an advance appropriations request for the next fiscal year in the 

President’s annual budget request to Congress.

2

In 2009, the Veterans Health Care Budget Reform and Transparency Act was enacted 

and provided that VA’s annual appropriations for health care include advance 

appropriations that become available 1 fiscal year after the fiscal year for which the 

appropriations act was enacted. See Pub. L. No. 111-81, § 3, 123 Stat. 2137, 2137–38 

(2009), codified at 38 U.S.C. § 117. The act provided for advance appropriations for VA’s 

Medical Services, Medical Support and Compliance, and Medical Facilities appropriations 

accounts and directed VA to include with information it provides Congress in connection 

with the annual appropriations process detailed estimates of funds needed to provide its 

health care services for the fiscal year for which advance appropriations are to be 

provided.

 
 

Page 2 GAO-13-715 Veterans’ Health Care Budget

The development of VA’s health care budget estimate is inherently 

complex, as assumptions and imperfect information are used to project 

the likely quantity and cost of the health care services VA expects to 

provide. VA uses the Enrollee Health Care Projection Model (EHCPM) to 

develop most of the agency’s estimate of the resources needed to meet 

the expected demand for VA’s health care services.3 VA uses other 

methods to estimate the remaining resources needed. VA begins to 

develop its health care estimate approximately 16 months before the 

President submits the budget request to Congress and VA’s projections 

are made 3 to 4 years into the future using data from the most recently 

completed fiscal year.4 As such, VA’s budget estimate is prepared in the 

context of uncertainties about the future—not only about program needs, 

but also about future economic conditions, presidential policies, and 

congressional actions that may affect the funding needs in the year for 

which the request is made. Further, VA’s budget estimate is revised 

during the 16-month budget formulation process in part to account for 

more current data as well as in response to successively higher level of 

reviews in VA and the Office of Management and Budget (OMB).5

In support of the President’s request, VA prepares an annual budget 

justification for Congress. The budget justification provides Congress and 

other users with estimates and other information that support the policies 

and spending decisions represented in the President’s budget request, 

including information on what VA plans to achieve with the resources 

requested. In particular, VA’s budget justification includes detailed

information on estimates of funding needed for ongoing health care 

services and health-care-related initiatives proposed by the Secretary of 

Veterans Affairs and the President. As such, VA’s budget justification is 

used to provide Congress and other users with important information 

This 

occurs before the President’s budget request is submitted to Congress.

 

3

See GAO, VA Health Care: VA Uses a Projection Model to Develop Most of Its Health 

Care Budget Estimate to Inform the President’s Budget Request, GAO-11-205

(Washington, D.C.: Jan. 31, 2011).

4

For example, in 2012, VA used data from fiscal year 2011 to develop its health care 

budget estimate for the fiscal year 2014 request, including the advance appropriations 

request for fiscal year 2015.

5

The Secretary of Veterans Affairs considers the health care budget estimate when 

assessing resource requirements among the competing interests within VA, and OMB 

considers overall resource needs and competing priorities of other agencies when 

deciding the level of funding to request for VA health care services.
 

Page 3 GAO-13-715 Veterans’ Health Care Budget

about agency priorities, as well as the implications of the requested 

amounts for VA’s provision of health care services to veterans.

Our prior work has highlighted some of the challenges VA has faced 

regarding the reliability, transparency, and consistency of its estimates 

and information supporting the President’s budget request for VA health 

care. For example, in February 2012 we reported that VA’s estimated 

savings from some operational improvements—used to support the 

President’s budget request for fiscal year 2012 and advance 

appropriations request for fiscal year 2013—lacked analytical support or 

were flawed, which raised questions regarding the reliability of the 

estimated savings.6

The Veterans Health Care Budget Reform and Transparency Act of 2009 

required us to review the President’s budget request to Congress for VA 

health care services for fiscal year 2014 appropriations and advance 

appropriations for fiscal year 2015.

We made a recommendation that VA develop a 

sound methodology for estimating any new operational improvements, 

and VA concurred with our recommendation.

7

To examine changes in how VA used the EHCPM to develop its budget 

estimate in support of the President’s fiscal year 2014 budget request and 

changes in how VA reported information related to this estimate in its 

budget justification, we reviewed VA documents that described the 

This report examines: (1) changes in 

how VA used the EHCPM to develop VA’s budget estimate supporting the 

President’s budget request for fiscal year 2014 and reported information 

related to this estimate in its budget justification, (2) key changes in the 

President’s fiscal year 2014 budget request compared to the advance 

appropriations request for the same year, and (3) the extent to which VA 

has addressed problems we have identified related to information 

included in the agency’s congressional budget justification.

 

6

See GAO, VA Health Care: Methodology for Estimating and Process for Tracking 

Savings Need Improvement, GAO-12-305 (Washington, D.C.: Feb. 27, 2012). Proposed 

savings include savings from operational improvements and management initiatives that 

are included in VA’s budget justifications. For other reports on VA’s health care budget, 

see the Related GAO Products page at the end of this report.

7

The Veterans Health Care Budget Reform and Transparency Act of 2009 required us to 

review the President’s annual budget request for VA health care. The act required us to 

report on our review within 120 days after the President’s budget requests were submitted 

in 2011, 2012, and 2013. Pub. L. No. 111-81, § 3, 123 Stat. 2137, 2137–38 (2009), 

codified at 38 U.S.C. § 117.
 

Page 4 GAO-13-715 Veterans’ Health Care Budget

estimate projected by the EHCPM and estimates developed for services 

using other methodologies for fiscal years 2012, 2013, and 2014. We also 

interviewed VA officials to discuss how the methods, types of data, and 

assumptions were used to develop VA’s health care budget estimate. We 

also reviewed the President’s budget request for VA health care services 

for fiscal years 2012, 2013, and 2014, including VA’s congressional 

budget justification supporting the President’s request for these years.

To examine key changes between the President’s fiscal year 2014 budget 

request and last year’s advance appropriations request for fiscal year 

2014, we reviewed and analyzed each request as well as VA documents 

and data related to the estimates that support them. We interviewed VA 

officials and OMB staff to discuss the key reasons for any differences 

between the estimates used to support the two requests. Finally, we 

reviewed the budget justification supporting the President’s fiscal year 

2014 request in the context of whether it provided Congress relevant 

information that could have a significant impact on VA achieving its 

objectives, including what VA plans to achieve with the resources 

requested.8

To examine the extent to which VA addressed issues we previously 

identified regarding information in VA’s congressional budget justification, 

we reviewed VA’s budget justification that supports the President’s fiscal 

year 2014 budget request. We also reviewed VA documents and data 

that described and supported the amounts VA estimated for initiatives, 

non-recurring maintenance (NRM), non-NRM facility-related activities, 

and proposed savings. We interviewed VA officials and OMB staff to 

discuss the methods VA used to develop these estimates. In addition, we 

assessed the amounts estimated for initiatives, NRM, non-NRM activities, 

and proposed savings in VA’s budget justification in the context of federal 

standards for internal control for information and communication.

Specifically, we evaluated whether VA informed Congress in 

its budget justification about key changes that occurred between the 

President’s fiscal year 2014 budget request and the earlier, advance 

appropriations request for that same year.

9

 

8

The federal standards for internal control for information and communication, in part, 

refer to an agency’s ability to provide relevant information to stakeholders. See GAO, 

Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1

(Washington, D.C.: November 1999).

9

See GAO/AIMD-00-21.3.1.
 

Page 5 GAO-13-715 Veterans’ Health Care Budget

Specifically, we evaluated whether VA provided Congress reliable 

information for making decisions based on VA’s fiscal year 2014 and 

2015 estimates for these activities.

To assess the reliability of VA’s estimates, we obtained documents 

supporting these data and verified the consistency of the information in 

these documents. We confirmed that the estimates were reflected in the 

President’s fiscal year 2014 budget request for VA health care services 

and VA’s related budget justification. We also relied on our prior work to 

compare data and check for internal consistency and discussed these 

data with VA officials. We found the data reliable for the purposes of 

comparing the fiscal year 2014 President’s budget request with the 

earlier, advance appropriations request for that year and for examining 

whether the issues we previously identified for NRM and operational 

improvements continued in the estimates that support the President’s 

fiscal year 2014 year budget request.

We conducted this performance audit from February 2013 through August

2013 in accordance with generally accepted government auditing 

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

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives.

VA provides health care services to various veteran populations—

including an aging veteran population and a growing number of younger 

veterans returning from the military operations in Afghanistan and Iraq. 

VA operates approximately 150 hospitals, 130 nursing homes, 850 

outpatient clinics, as well as other facilities to provide care to veterans. In 

general, veterans must enroll in VA health care to receive VA’s medical 

benefits package—a set of services that includes a full range of hospital 

and outpatient services, prescription drugs, and long-term care services 

Background 
 

Page 6 GAO-13-715 Veterans’ Health Care Budget

provided in veterans’ own homes and in other locations in the 

community.10

VA’s health care budget estimate includes both the total cost of providing 

VA health care services as well as estimates of anticipated funding from 

several sources. These sources include new appropriations, which refer 

to the appropriations to be provided for the upcoming fiscal year, and with 

respect to advance appropriations, the next fiscal year. For example, VA 

estimated it needed $54.6 billion in new appropriations for fiscal year 

2014 and $55.6 billion in advance appropriations for fiscal year 2015. In 

addition to new appropriations, sources of funding include resources 

expected to be available from unobligated balances and collections and 

reimbursements that VA anticipates it will receive in the fiscal year.11

In its budget justification, VA includes estimates related to the following:

VA’s 

collections include third-party payments from veterans’ private health care 

insurance for the treatment of nonservice-connected conditions and 

veterans’ copayments for outpatient medications. VA’s reimbursements 

include amounts VA receives for services provided under service 

agreements with the Department of Defense (DOD).

• Ongoing health care services, which include acute care, 

rehabilitative care, mental health, long-term care, and other health 

care programs.12

 

10VA provides adult day care, respite care, and other noninstitutional long-term care 

services as part of the medical benefits package it provides to all enrolled veterans. See 

38 U.S.C. §§ 1701(6)(E), 1710B; 38 C.F.R. § 17.38. VA also provides some services that 

are not part of its medical benefits package, such as long-term care provided in nursing 

homes.

11In addition to new appropriations that VA may receive from Congress as a result of the 

annual appropriations process, funding may also be available from unobligated balances 

of multiyear appropriations, which remain available for a fixed period of time in excess of 

1 fiscal year. For example, VA’s fiscal year 2013 appropriations provided that about 

$1.95 billion be available for 2 fiscal years. These funds may be carried over from fiscal 

year 2013 to fiscal year 2014 if they are not obligated by the end of fiscal year 2013. See 

Pub. L. No. 113-6, div. E, tit. II, § 226(b), 127 Stat. 198, 407 (2013).

12Based on fiscal year 2012 data, the largest of VA’s other services was the Civilian 

Health and Medical Program of the Department of Veterans Affairs, which provides health 

care coverage for the dependents and survivors of veterans who are, or were at the time 

of death, permanently and totally disabled from a service-connected disability, or who died 

in the line of duty or from a service-connected condition. See 38 U.S.C. § 1781.
 

Page 7 GAO-13-715 Veterans’ Health Care Budget

• Initiatives, which are proposals by the Secretary of VA, the President, 

or Congress to provide, expand, or create new health care services. 

Some of the proposed initiatives can be implemented within VA’s 

existing authority, while other initiatives would require a change in 

law.13

• Proposed savings, which are changes in the way VA manages its 

health care system to lower costs, such as changes to its purchasing 

and contracting strategies.

• Collections and reimbursements, which are resources VA expects 

to collect from health insurers of veterans who receive VA care for 

nonservice-connected conditions and other sources, such as 

veterans’ copayments, and resources VA expects to receive as 

reimbursement of services provided to other government agencies or 

private or nonprofit entities.

Each year, Congress provides funding for VA health care through three 

appropriations accounts:

• Medical Services, which funds health care services provided to 

eligible veterans and beneficiaries in VA’s medical centers, outpatient 

clinic facilities, contract hospitals, state homes, and outpatient 

programs on a fee basis.

• Medical Support and Compliance, which funds the management 

and administration of VA’s health care system—including financial 

management, human resources, and logistics.

• Medical Facilities, which funds the operation and maintenance of the 

VA health care system’s capital infrastructure, such as costs 

associated with NRM, utilities, facility repair, laundry services, and 

groundskeeping.

Advance appropriations for fiscal year 2014 for the three accounts were 

made in the following proportions: Medical Services at 80 percent, 

Medical Support and Compliance at 11 percent, and Medical Facilities at 

9 percent.

 

13Initiatives include estimates reported under “Congressional Actions,” “Initiatives,” and 

“Legislative Proposals” in VA’s fiscal year 2014 budget justification.
 

Page 8 GAO-13-715 Veterans’ Health Care Budget

In our prior work reviewing the President’s budget requests for VA health 

care services, we have reported on a variety of problems related to the 

reliability, transparency, and consistency of VA’s estimates and 

information included in its congressional budget justifications. In June 

2012 we reported that in its fiscal year 2013 budget justification VA was 

not transparent about the agency’s fiscal year 2013 estimates for 

initiatives and ongoing health care services as well as VA’s estimate for 

initiatives in support of the fiscal year 2014 advance appropriations 

request.14 We also raised concerns regarding the reliability of VA’s fiscal 

year 2013 estimate for NRM, which did not address the long-standing 

pattern in which VA’s NRM spending has exceeded the agency’s 

estimates.15 VA concurred with a recommendation we made to improve 

the transparency of its estimates for initiatives and ongoing health care 

services, but did not concur with a recommendation related to the 

transparency of the agency’s initiative estimate in support of the advance 

appropriations request. VA also concurred with a third recommendation 

we made to improve the reliability of the agency’s NRM estimates. In 

September 2012 we also found that VA did not label health care services 

consistently in its budget justifications so that it was clear what services 

were being referred to across appropriations accounts.16

 

14See GAO, Veterans’ Health Care Budget: Transparency and Reliability of Some 

Estimates Supporting President’s Request Could Be Improved, 

VA agreed with 

our recommendation to improve the consistency of the labels used for 

health care services. Most recently, in February 2013 we raised concerns 

about the reliability of VA’s estimates for non-NRM facility-related 

GAO-12-689 (Washington, 

D.C.: June 11, 2012).

15NRM funds are used for expansion, renovation, and infrastructure improvements of VA 

health care facilities that cost more than $25,000. Examples include upgrades to safety, 

security, and fire alarms; interior or exterior renovations; improving accessibility for 

patients with disabilities; improvements to the heating, ventilation, and air conditioning; 

and projects to improve the roads or grounds.

16See GAO, Veterans’ Health Care Budget: Better Labeling of Services and More Detailed 

Information Could Improve the Congressional Budget Justification, GAO-12-908

(Washington, D.C.: Sept. 18, 2012).
 

Page 9 GAO-13-715 Veterans’ Health Care Budget

activities.17 We made a recommendation to improve the reliability of these 

estimates, and VA concurred with our recommendation.

VA expanded the use of the EHCPM by using estimates of the amount of 

care provided—which is known as workload—from the EHCPM to 

estimate resources needed for 14 long-term care services for fiscal years 

2014 and 2015.18 VA included the 14 long-term care services in the 

EHCPM, but the agency did not use the estimates of needed resources 

developed for fiscal years 2014 and 2015 because, according to VA 

officials, the EHCPM expenditure estimates were determined to be too 

high to produce reliable estimates of needed resources in light of current 

expenditure data. As an alternative, the estimates for fiscal years 2014 

and 2015 were based on the most current expenditure data available, as 

VA has done in prior years, and workload estimates from the EHCPM.19

 

17See GAO, Veterans’ Health Care: Improvements Needed to Ensure That Budget 

Estimates Are Reliable and That Spending for Facility Maintenance Is Consistent with 

Priorities, GAO-13-220 (Washington, D.C.: Feb. 22, 2013). Non-NRM facility-related

activities are activities other than NRM funded from the Medical Facilities account, such as 

utilities and janitorial services.

18These long-term care services included institutional services provided at VA community 

living centers and community nursing homes and noninstitutional services, such as homebased primary care and home hospice care.

19In prior years, according to VA officials, workload estimates for long-term care services 

were developed by the Geriatrics and Extended Care program office by trending actual 

workload from recent years.

VA Expanded the Use 

of the EHCPM to 

Develop Its Health 

Care Budget Estimate 

and Changed How It 

Reported Information 

on Certain 

Administrative Costs

VA Expanded the Use of 

the EHCPM by Using a 

Blend of EHCPM 

Estimates of Care 

Provided and Current 

Spending Data for Most 

Long-Term Care Services
 

Page 10 GAO-13-715 Veterans’ Health Care Budget

As a result of this blended approach, VA used the EHCPM, in part or in 

whole, to develop estimates for 74 health care services that accounted for 

more than 85 percent of VA’s budget estimate supporting the President’s 

fiscal year 2014 budget request for VA health care. This represents an 

increase compared to last year when VA used the EHCPM to estimate 

needed resources for 59 health care services, or approximately 

78 percent of the agency’s fiscal year 2013 budget estimate. (See fig. 1.)

Figure 1: Percentage of VA’s Health Care Budget Estimate Developed Using the 

Enrollee Health Care Projection Model (EHCPM) and Other Methods, Fiscal Years 

2012 through 2014

Notes: The 88 percent for fiscal year 2014 includes the 14 long-term care services for which VA used 

the EHCPM workload estimate but used costs from outside the model rather than EHCPM 

expenditure estimates.

While the EHCPM accounted for a larger proportion of VA’s health care 

budget that supports the President’s budget request, revisions were made 

to the estimates developed by the EHCPM and other methods. As we 

have previously reported, these revisions resulted from the iterative and 

multilevel review process in VA and OMB and reflect the policy decisions 

and more current information, among other things.

Another change in VA’s fiscal year 2014 budget justification was how VA 

reported its estimate for certain administrative costs. In prior budget 

justifications, VA has reported its estimates for administrative personnel 

costs under “Administration” and estimates for administrative contracts 

under “Administrative Contract Services.” VA reported estimates for these 

administrative costs in each of the three appropriations accounts as well 

as for “Medical Care,” which reported the total costs for “Administration” 

VA Was Inconsistent in 

Reporting Certain 

Administrative Costs 

among Its Three 

Appropriations Accounts
 

Page 11 GAO-13-715 Veterans’ Health Care Budget

and “Administrative Contract Services” across all three accounts. In its 

fiscal year 2014 budget justification, VA used a new budget category 

label—“Administrative Personnel”—when reporting estimated costs 

related to administrative personnel. VA also identified some of the costs 

reported under the new label by providing examples of the types of 

positions the agency considers administrative personnel, such as filing 

clerks, receptionists, police staff, chaplains, and other staff that are 

necessary for the effective operations of VA medical facilities.

However, VA did not consistently use the new “Administrative Personnel” 

label in its fiscal year 2014 budget justification. VA used the new label 

when reporting its Medical Care estimate for administrative personnel 

costs, but not when reporting the agency’s estimates for each of the three 

appropriations accounts. Instead, VA used the label “Administration,” 

even though the estimates reported under this label—$2.0 billion for 

Medical Services, $3.5 billion for Medical Support and Compliance, and 

$366 million for Medical Facilities—represented the same personnel costs 

in the estimate of $5.9 billion reported for “Administrative Personnel.” 

(See table 1.) VA officials explained that the use of “Administrative 

Personnel” was incorrect and that the “Administration” label will be used 

in future budget justifications. The inconsistency for reporting estimates 

for these costs may imply that VA used different labels to report estimates 

for different administrative costs. As such, the costs reported under these 

labels are unclear to Congress and other users of VA’s budget 

justification.
 

Page 12 GAO-13-715 Veterans’ Health Care Budget

Table 1: Comparison of Labels Used in VA’s Congressional Budget Justification for Administrative Personnel Costs, Fiscal 

Years 2013 and 2014 (Dollars in Millions) 

Excerpt from VA’s fiscal year 2013 congressional budget justification

Health Care Appropriations Accounts

Medical Care Medical Services

Medical Support and 

Compliance Medical Facilities

Description

Fiscal year 

2013 estimate Description

Fiscal year 

2013 estimate Description

Fiscal year 

2013 estimate Description

Fiscal year 

2013 estimate

Administration $5,506 Administration $1,856 Administration $3,169 Administration $481

Excerpt from VA’s fiscal year 2014 congressional budget justification

Health Care Appropriations Accounts

Medical Care Medical Services

Medical Support and 

Compliance Medical Facilities

Description

Fiscal year 

2014 estimate Description

Fiscal year 

2014 estimate Description

Fiscal year 

2014 estimate Description

Fiscal year 

2014 estimate

Administrative 

personnel

$5,873 a Administration $2,026 Administration $3,481 Administration $366

Source: GAO presentation of VA data from its fiscal year congressional budget justification.

a

In addition to inconsistent labeling, VA also was not consistent in its 

reporting of information on the types of personnel positions included in 

the agency’s estimates for administrative personnel costs reported. VA 

provided information on the types of personnel positions included in the 

total estimate for administrative personnel costs under the budget 

category label “Administrative Personnel,” but did not provide similar 

information for the estimates for each appropriations account labeled 

under “Administration.” By not providing information on the types of 

positions included in these estimates, VA was not transparent about how 

the information that was provided applied to the estimates of 

administrative personnel costs in each of the appropriations accounts. For 

example, it is unclear to what extent police staff and chaplains will be 

funded across the three appropriations accounts.

VA included a table note for Administrative Personnel identifying examples of the types of positions 

the agency considers administrative personnel—“The Administrative Personnel category includes 

filing clerks, HR specialists, finance, billing and collection staff, secretaries and receptionists, 

telephone operators, general managers, police staff, chaplains and other staff that are necessary for 

the effective operations of VA medical facilities.” 

Further, VA did not provide complete information on the costs included in 

its estimates for “Administrative Personnel” and “Administrative Contract 

Services.” Regarding its estimate for “Administrative Personnel” VA did 

not disclose that this estimate reflected other costs in addition to those 
 

Page 13 GAO-13-715 Veterans’ Health Care Budget

costs associated with administrative personnel. According to VA officials, 

these other costs include those associated with administrative training 

programs and summer employment programs and are relatively small 

compared to the total estimate for “Administrative Personnel.” Regarding 

its estimates for “Administrative Contract Services” VA provided no 

information in its budget justification on the types of costs—which include 

contracts for maintenance of information technology and 

videoconferencing systems, management and professional services, 

laundry and dry-cleaning services, and janitorial services—reflected in the 

estimates. By not providing complete information on the costs included in 

its estimates for “Administrative Personnel” and “Administrative Contract 

Services,” VA was not transparent about all the costs reflected in these 

estimates. The lack of transparency regarding the costs included in its 

estimate of $5.9 billion for administrative personnel and its estimate of 

$2.3 billion for administrative contracts is inconsistent with the House 

Appropriations Committee’s recent request that more information on 

administrative costs be included in VA’s congressional budget justification 

and results in incomplete information for congressional deliberation.20

The President’s fiscal year 2014 budget request for VA health care 

services was $54.6 billion, about $158 million more than the earlier, 

advance appropriations request for the same year. This increase came as 

a result of changes made to the estimate supporting the fiscal year 2014 

request compared to the estimate for the advance appropriations request. 

Specifically, the President’s fiscal year 2014 request reflected an estimate 

of funding needed for initiatives that increased by $1.021 billion and an 

estimate for ongoing health care services that decreased by $519 million. 

This increase in the initiatives estimate was further offset by an estimate 

of $482 million in proposed savings from operational improvements and 

management initiatives, which resulted in a net increase in expected total 

obligations of $20 million. A decrease of $138 million in anticipated 

resources from collections and reimbursements with the increase in 

expected total obligations resulted in the net increase in the President’s 

request of $158 million. (See table 2.)

 

20See H.R. Rep No. 112-491, at 47 (2012) and H.R. Rep. No. 113-90, at 48 (2013).

Increase in the 

Request Compared to 

the Earlier, Advance 

Appropriations 

Request Reflected 

Changes VA Made to 

Supporting Estimates
 

Page 14 GAO-13-715 Veterans’ Health Care Budget

Table 2: Comparison of the Estimates Supporting the President’s Advance Appropriations Request and the President’s 

Budget Request, Fiscal Year 2014

Dollars in millions

Description

President’s fiscal year

2014 advance 

appropriations request

President’s fiscal year 

2014 budget request

Effect of the difference

in estimates on 

President’s fiscal year 

2014 budget request

Initiatives $2,050 a $3,071 $1,021

Ongoing health care services $55,879 b $55,360 ($519)

Proposed savings $0 c ($482) ($482)

Total obligations $57,929 d $57,949 $20

Collections and reimbursements ($3,467) e ($3,329) $138

Total requested appropriations $54,462 $54,620 $158

Source: GAO analysis of VA’s congressional budget justification for fiscal year 2014 and VA’s congressional budget justification for 

fiscal year 2013—which supported the President’s advance appropriations request for fiscal year 2014.

a

Initiatives are proposals by the Secretary of VA, the President, or Congress to provide, expand, or 

create new health care services. Some of the proposed initiatives can be implemented within VA’s 

existing authority, while other initiatives would require a change in law. Initiatives include estimates 

reported under “Congressional Action,” “Initiatives,” and “Legislative Proposals” in VA’s fiscal year 

2014 budget justifications.

b

Ongoing health care services include VA’s total estimated spending for health care services such as 

acute care, rehabilitative care, and mental health, as well as its total estimated spending for long-term 

care, and other health care programs. It also includes other amounts that are incorporated into VA’s 

estimate for its health care services, such as past savings VA realized from operational improvements 

and a $15 million transfer from VA to the Department of Defense (DOD)-VA Health Care Sharing 

Incentive Fund. The DOD-VA Health Care Sharing Incentive Fund was created to encourage 

development of sharing initiatives at the facility, intra-regional, and nationwide levels. The Secretary 

of Veterans Affairs and Secretary of Defense are each required to contribute a minimum of $15 

million, annually, from the funds appropriated to VA and DOD, respectively. See 38 U.S.C. § 8111(d).

c

Proposed savings include savings from new acquisition savings and other initiatives that would 

reduce total obligations. As proposed savings reduce total obligations, an increase in proposed 

savings between the advance appropriation and budget request estimate has the effect of decreasing 

VA’s expected obligations.

d

Total obligations refers to the amount of funding VA expected to be obligated to provide health care 

services.

e

The following summarizes the changes in VA’s estimates resulting in the 

net change of $158 million:

Collections and reimbursements include amounts VA expects to collect for certain costs of providing 

health care services from third parties, such as private health insurers, and veterans’ copayments. 

These amounts reduce the total amount VA requests in appropriations. As such, a reduction in the 

amount VA estimates for collections and reimbursements increases its total requested appropriations.

• Increase in the estimated funding needed for initiatives.

According to VA officials, as a result of the reduced estimate for 

ongoing health care services and the estimated savings from 

management initiatives and operational improvements, VA increased 

the estimate of funding needed for its initiatives to end homelessness 
 

Page 15 GAO-13-715 Veterans’ Health Care Budget

among veterans, create new models of patient-centered care, and 

improve veteran mental health, among others. This estimate reflected 

funding needed for initiatives for which funding was not requested in 

the fiscal year 2014 advance appropriations request. 

• Decrease in the estimate for ongoing health care services. VA 

used updated assumptions and data in the EHCPM, which lowered its 

estimate for ongoing health care services.21 For example, VA updated 

its assumption for civilian employees’ pay in fiscal years 2013 and 

2014 to account for the pay freeze which reduced the projected base 

salary of VA employees for these fiscal years and into the future. VA 

also used updated data from the most recently completed fiscal year 

to help ensure that its estimates better reflect current experience.22

• Increase in estimates of proposed savings from new acquisition 

savings and other initiatives. VA identified $482 million in estimated 

savings as a result of new initiatives, such as capping travel for VA 

employees at 2013 budgeted levels, and other operational 

improvements.23 These savings further reduced expected total 

obligations compared to the earlier advance appropriations request for 

fiscal year 2014.24

• Reduction in estimate for collections and reimbursements. The 

reduction in collections and reimbursements primarily reflected a 

decrease in the amount VA anticipated receiving from 

reimbursements, which include fees for services provided under 

 

21As previously discussed, VA used workload estimates from the EHCPM and 2012 actual 

data to determine its estimates of resources needed for long-term care services. 

Therefore, the decrease in estimated spending on long-term care services may also be 

attributed, in part, to the 2012 actual data.

22VA’s fiscal year 2014 advance appropriations request used 2010 data, while the 2014 

budget request used 2011 data.

23According to officials, VA has established “Employee Travel Targets” and is monitoring 

execution to ensure the targeted reduction is achieved in fiscal year 2013. These targets 

will serve as the cap for spending on employee travel in fiscal year 2014.

24Proposed savings reduce VA’s expected total obligations. Likewise, an increase in the 

estimates of proposed savings between the advance appropriations request and budget 

request has the effect of decreasing VA’s total obligations estimate.
 

Page 16 GAO-13-715 Veterans’ Health Care Budget

service agreements with DOD.25 According to VA officials, the change 

to VA’s estimates for reimbursements was based on the use of more 

current data and the fact that VA no longer assumes it will be able to 

achieve reimbursement “recoveries” from prior fiscal years.26

VA took steps to address, in varying degrees, five of the six problems we 

previously identified related to the reliability, transparency, and 

consistency of information in VA’s congressional budget justification. (See 

table 3.)

 

25VA reduced its estimated reimbursements by $151 million for fiscal year 2014 from the 

estimate reflected in the advance appropriations request for that year. However, 

$13 million of this decrease was offset by an estimated increase in collections in fiscal 

year 2014 compared to the estimate reflected in the advance appropriations request.

26VA did not achieve estimated prior year recoveries of unobligated balances of “no year” 

funds in fiscal year 2012 and, according to VA officials, does not anticipate being able to 

do so in future years.

Steps Taken to 

Improve the 

Transparency, 

Consistency, and 

Reliability of 

Information and 

Estimates in VA’s 

Budget Justification
 

Page 17 GAO-13-715 Veterans’ Health Care Budget

Table 3: Problems GAO Previously Identified Related to Estimates Supporting the President’s Budget Requests, Related GAO 

Recommendations, and Steps Taken to Address

Problem previously identified

Related recommendation / VA 

concurrence with recommendation Steps taken to address recommendation

Transparency for VA’s estimates 

for initiatives in support of the 

advance appropriations request

State in future budget justifications whether the 

estimates for initiatives in support of the 

advance appropriations request reflect all the 

funding that may be required if all initiatives are 

to be continued.

a

VA did not concur with this recommendation.

VA included a statement in its fiscal year 2014 

budget justification that indicated the estimate for 

initiatives did not reflect all the funding that may 

be required if the initiatives are to be continued.

Consistency of language used to 

label health care services

Label health care services consistently so it is 

clear what services, such as mental health, are 

being referred to across appropriations 

accounts.

b

VA concurred with this recommendation.

VA used to consistent labels for mental health 

and other services throughout its fiscal year 2014 

budget justification.

Reliability of estimates for nonNRM facility-related activitiesDetermine why recent justifications have 

overestimated spending for non-NRM activities 

and incorporate the results to improve future 

budget estimates for such activities.

c

VA concurred with this recommendation.

VA updated assumptions used to predict growth 

for non-NRM facility-related activities to better 

reflect recent spending for such activities.

Reliability of estimates for nonrecurring maintenance (NRM)Reflect in future budget justifications estimates 

of annual resource needs for NRM that fully 

account for resources that VA medical facilities 

have consistently spent for this purpose.

a

VA concurred with this recommendation.

According to VA officials, the agency revised its 

method for estimating NRM and reduced its 

overall estimate for the Medical Facilities 

account, which includes NRM. Doing so could 

potentially decrease the availability of additional 

resources for VA medical facilities to spend on 

NRM beyond VA’s fiscal year 2014 estimate. 

Additional spending for NRM in the past has 

come from other available funds from the 

Medical Facilities account, so a decrease in VA’s 

overall estimate for the account could potentially 

reduce availability of additional resources for 

NRM in fiscal years 2014 and 2015, according to 

VA officials.

Reliability of estimates for 

proposed savings

Develop a sound methodology for estimating 

saving from new operational improvements. d

VA concurred with this recommendation.

The information reviewed on VA’s methodology 

for proposed savings for fiscal year 2014 

indicated some steps have been taken to 

address some of our prior concerns regarding 

the reliability of the proposed savings estimate. 

Transparency of estimates for 

initiatives and ongoing health 

care services

State in future budget justifications whether the 

estimates for initiatives include funding for 

ongoing health care services. a

VA concurred with this recommendation.

None.

VA did not disclose in its fiscal year 2014 budget 

justification that VA’s estimate for initiatives 

included funding for certain ongoing health care 

services.

Source: GAO analysis of VA data.

a

GAO, Veterans’ Health Care Budget: Transparency and Reliability of Some Estimates Supporting 

President’s Request Could Be Improved, GAO-12-689 (Washington, D.C.: June 11, 2012).
 

Page 18 GAO-13-715 Veterans’ Health Care Budget

b

GAO, Veterans’ Health Care Budget: Better Labeling of Services and More Detailed Information 

Could Improve the Congressional Budget Justification, GAO-12-908 (Washington, D.C.: Sept. 18, 

2012).

c

GAO, Veterans’ Health Care: Improvements Needed to Ensure That Budget Estimates Are Reliable 

and That Spending for Facility Maintenance Is Consistent with Priorities, GAO-13-220 (Washington, 

D.C.: Feb. 22, 2013).

d

GAO, VA Health Care: Methodology for Estimating and Process for Tracking Savings Need 

Improvement, GAO-12-305 (Washington, D.C.: Feb. 27, 2012).

Specifically, VA took steps to address five of our six prior 

recommendations to improve estimates and information supporting the 

President’s fiscal year 2014 budget request:

• Transparency for VA’s estimates for initiatives in support of the 

advance appropriations request. VA improved the transparency of 

its estimate for initiatives in support of the advance appropriations 

request by including a statement in the agency’s budget justification 

that indicated the estimate for initiatives did not reflect all the funding 

that may be required if the initiatives are to be continued. In June 

2012, we reported that VA did not make it clear that part of the 

increase in its fiscal year 2013 initiatives estimate occurred because 

VA’s earlier estimate in support of the advance appropriations request 

did not include funding for all the initiatives the agency intended to 

continue.27 We recommended that VA improve the transparency of its 

estimate for initiatives in support of the advance appropriations 

request by stating whether these estimates reflect all the funding that 

may be required if all initiatives are to be continued. Even though the 

agency did not concur with our recommendation, VA in its fiscal year 

2014 budget justification stated that the final estimate for initiatives 

would be determined during the fiscal year 2015 budget process when 

updated data on initiatives were available. By clearly stating that its 

estimates for initiatives in support of the advance appropriations 

request will be addressed in the subsequent year’s budget process, 

VA provided new information relevant to understanding the estimates.

• Consistency of language used to label health care services. VA 

improved the consistency of the language used to label health care 

services throughout its budget justification. In a September 2012 

report, we found that VA used inconsistent labels when referring to 

the same health care services at different places in its fiscal year 2013 

 

27See GAO-12-689. 
 

Page 19 GAO-13-715 Veterans’ Health Care Budget

budget justification.

28 For example, VA referred to mental health 

services as “psychiatric care” in the detailed presentation of the 

Medical Support and Compliance and Medical Facilities accounts and 

referred to the same services as “mental health” in the detailed 

presentation for the Medical Services account. We recommended that 

VA label health care services consistently so it would be clear which 

services were being referred to across appropriations accounts. VA 

concurred with our recommendation. In its fiscal year 2014 budget 

justification, VA used the same label for mental health, inpatient, and 

other services across all three appropriations accounts, which it had 

not previously done. In doing so, VA improved both the clarity and 

usefulness of the information included in its budget justification.

• Reliability of estimates for non-NRM facility-related activities. VA 

improved the reliability of its estimates for non-NRM facility-related 

activities. In a February 2013 report, we found that lower than

estimated spending for non-NRM facility-related activities, such as 

utilities and janitorial services, allowed VA to spend significantly more 

on NRM than it originally estimated in recent years. We recommended 

that VA determine why it has overestimated spending for non-NRM 

and use the results to improve future, non-NRM budget estimates. VA 

concurred with this recommendation. According to VA officials, the 

agency updated assumptions it used to predict growth for non-NRM 

facility-related activities in order to better reflect VA’s experience 

during the last 3 to 5 fiscal years. For example, in prior years, VA has 

estimated spending between $700 and $900 million on “Administrative 

Contract Services,” which was at least $360 million more than VA’s 

actual spending for this category. VA’s fiscal year 2014 estimate of 

$395 million for “Administrative Contract Services” appears to be a 

more reliable estimate of spending based on recent experience. By 

improving the reliability of information presented in its congressional 

budget justification regarding non-NRM facility-related activities, as we 

previously recommended, VA improved the usefulness of such 

information.29

• Reliability of estimates for NRM. According to VA officials, the 

agency also has taken steps to improve the reliability of its fiscal year 

2014 NRM estimate. In June 2012, we reported that VA’s NRM 

 

28See GAO-12-908. 

29See GAO-13-220. 
 

Page 20 GAO-13-715 Veterans’ Health Care Budget

spending has historically exceeded NRM estimates because these 

estimates have not consistently accounted for additional NRM 

spending by VA medical facilities.30 According to officials, VA’s 

estimate for NRM was based on a policy decision. We recommended 

that VA improve the reliability of its estimates for NRM by accounting 

for resources that VA medical facilities have consistently spent for this 

purpose. VA concurred with our recommendation. According to VA 

officials, the agency revised its method for estimating NRM and 

reduced its overall estimate of spending for the Medical Facilities 

account, which includes NRM. Specifically, VA officials indicated that 

the agency revised its method for estimating NRM to better account 

for expected spending. The resulting NRM estimate, combined with 

the previously discussed reduction in its non-NRM estimate, resulted 

in a decrease in estimated spending for VA’s Medical Facilities 

account. In prior years, additional NRM spending was the result of VA 

medical facilities using funds from the Medical Facilities account on 

NRM that were originally expected to be spent on other activities—

such as utilities, grounds maintenance, and janitorial services. 

Reductions in the overall amount available from the Medical Facilities 

account would reduce the amount available for additional spending for 

NRM, so a decrease in VA’s overall estimate for its Medical Facilities 

account could potentially reduce the availability of additional 

resources for NRM beyond its fiscal year 2014 estimate.

• Reliability of estimates for proposed savings. VA has taken steps 

to address some, but not all, of our prior concerns regarding the 

reliability of its estimates for proposed savings, which included 

savings from operational improvements and management initiatives. 

In a February 2012 report, we determined that some of the estimates 

for operational improvements included in VA’s fiscal year 2012 budget 

justification may not have been reliable estimates of future savings. 

We concluded that without a sound methodology VA ran the risk of 

falling short of its estimated savings, which may ultimately require VA 

to make difficult trade-offs to provide health care services with the 

available resources.31

 

30In fiscal years 2011 and 2012, VA spent about $2.0 billion and $1.5 billion respectively 

on NRM—significantly exceeding its estimated spending for these years.

We recommended that VA develop a sound 

methodology for estimating proposed savings from its operational 

improvements. VA concurred with the recommendation and officials 

31See GAO-12-305. 
 

Page 21 GAO-13-715 Veterans’ Health Care Budget

told us during our prior review that the agency was working to address 

deficiencies in its methodology for estimating these savings. The 

information that we reviewed on VA’s methodology for estimating 

proposed savings for fiscal year 2014 to date confirmed that VA has 

taken some steps to address our prior concerns. For example, VA 

provided a basis for the assumptions used to calculate some of its 

proposed savings from acquisitions and employee travel. However, 

the information did not indicate that VA had fully implemented our 

recommendation for all operational improvements and management 

initiatives included in the estimates for proposed savings.

In regard to the sixth problem we identified, VA did not address a lack of 

transparency we previously found regarding its estimates for initiatives 

and ongoing health care services. In June 2012, we reported that VA did 

not disclose that it used a new reporting approach that combined both 

funding for initiatives and funding for certain ongoing health care services 

in its initiatives estimate.32 We recommended that VA improve the

transparency of its estimates for initiatives and ongoing health care 

services by stating whether the estimates for initiatives included funding 

for ongoing health care services. VA concurred with our recommendation. 

According to officials, VA used the same reporting approach for initiatives 

in its fiscal year 2014 budget justification as the agency used in its fiscal 

year 2013 budget justification. However, we found no statement in the 

budget justification indicating this or more specifically whether the 

estimates for initiatives included funding for ongoing health care services. 

By not stating in its budget justification whether the estimates for 

initiatives included funding for ongoing health care services, VA was not 

transparent about the total amount of funding the agency may need in 

fiscal year 2014 for ongoing health care services that would require 

funding regardless of whether funding for certain initiatives continued.

In its congressional budget justification, VA provides Congress and other 

users with information on the agency’s health care budget estimate and 

other information that supports the policies and spending decisions 

represented in the President’s budget request. In response to our prior 

work, VA has taken steps to improve the consistency, reliability, and 

transparency of its estimates and information supporting the President’s 

 

32See GAO-12-689. 

Conclusions 
 

Page 22 GAO-13-715 Veterans’ Health Care Budget

budget request for VA health care. In particular, VA has taken steps to 

improve (1) the transparency of its estimates for initiatives in support of 

the advance appropriations request, (2) the consistency of its language 

used to label health care services, (3) the reliability of the estimates for 

other facility-related activities funded through the Medical Facilities 

account, (4) the reliability of its estimates for NRM, and (5) the reliability 

of proposed savings from operational improvements and management 

initiatives. However, VA did not indicate whether the estimates it reports 

for initiatives included funding needed for ongoing health care services, 

as we previously recommended. While VA has addressed to varying 

degrees the problems we previously identified, it is important that VA 

ensure that the recommendations from our prior work regarding the 

information and estimates in VA’s budget justification are fully 

implemented. Until these recommendations are fully implemented, the 

problems we previously identified will continue to limit the usefulness of 

related information to Congress and other users of VA’s budget 

justification.

In addition, our work shows that VA made key changes to its budget 

methodology—namely, VA used the EHCPM, in part, to develop 

estimates for most long-term care services. VA also changed how the 

agency reported its estimates for administrative costs, although VA did 

not do so consistently and comprehensively throughout its fiscal year 

2014 budget justification. VA introduced a new budget category label 

“Administrative Personnel” for reporting its total estimate for 

administrative personnel costs, but used the old “Administration” label 

when reporting estimates for the same costs in each of VA’s three health 

care appropriations accounts. Additionally, VA defined some of the costs 

included in the “Administrative Personnel” label, but did not do so for 

“Administration” or “Administrative Contract Services” in its budget 

justification. This lack of transparency as well as the inconsistent labeling 

of administrative personnel costs results in unclear and incomplete 

information that limits its usefulness to Congress and other users of VA’s 

budget justification.

To improve the clarity and transparency of information in VA’s 

congressional budget justifications that support the President’s budget 

request for VA health care, we recommend the Secretary of Veterans 

Affairs take the following two actions:

• use consistent terminology to label estimates of administrative 

personnel costs and

Recommendations for 

Executive Action
 

Page 23 GAO-13-715 Veterans’ Health Care Budget

• provide consistent and comprehensive information explaining the 

costs included in each budget category for administrative costs. 

We provided a draft of this report to VA and OMB for comment. In its 

written comments—reproduced in appendix I—VA generally agreed with 

our conclusions and concurred with our recommendations. In concurring 

with our first recommendation regarding terminology to label estimates of 

administrative personnel costs, VA stated that it will incorporate 

consistent terminology to label estimates for administrative and personnel 

costs in the fiscal year 2015 President’s budget request. In concurring 

with our second recommendation regarding information explaining the 

costs included in administrative costs, VA stated that it will provide 

consistent and comprehensive information explaining the costs included 

in each budget category for administrative costs in the fiscal year 2015 

President’s budget request. OMB had no comments.

We are sending copies of this report to the Secretary of Veterans Affairs 

and the Director of the Office of Management and Budget, and 

appropriate congressional committees. In addition, the report will be 

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

If you or your staff have any questions about this report, please contact 

Randall B. Williamson at (202) 512-7114 or williamsonr@gao.gov. 

Contact points for our Offices of Congressional Relations and Public 

Affairs are on the last page of this report. GAO staff who made major 

contributions to this report are listed in appendix II.

Randall B. Williamson

Director, Health Care

Agency Comments
Page 24 GAO-13-715 Veterans’ Health Care Budget

List of Committees

The Honorable Patty Murray

Chairman

The Honorable Jeff Sessions

Ranking Member

Committee on the Budget

United States Senate

The Honorable Bernie Sanders

Chairman

The Honorable Richard Burr

Ranking Member

Committee on Veterans’ Affairs

United States Senate

The Honorable Tim Johnson

Chairman

The Honorable Mark Kirk

Ranking Member

Subcommittee on Military Construction,

Veterans’ Affairs, and Related Agencies

Committee on Appropriations

United States Senate

The Honorable Paul Ryan

Chairman

The Honorable Chris Van Hollen

Ranking Member

Committee on the Budget

House of Representatives

The Honorable Jeff Miller

Chairman

The Honorable Michael Michaud

Ranking Member

Committee on Veterans’ Affairs

House of Representatives
Page 25 GAO-13-715 Veterans’ Health Care Budget

The Honorable John Culberson

Chairman

The Honorable Sanford Bishop, Jr.

Ranking Member

Subcommittee on Military Construction,

Veterans’ Affairs and Related Agencies

Committee on Appropriations

House of Representatives
Appendix I: Comments from the Department of

Veterans Affairs

Page 26 GAO-13-715 Veterans’ Health Care Budget

Appendix I: Comments from the Department 

of Veterans Affairs
Appendix I: Comments from the Department of 

Veterans Affairs

Page 27 GAO-13-715 Veterans’ Health Care Budget
Appendix II: GAO Contact and Staff 

Acknowledgments

Page 28 GAO-13-715 Veterans’ Health Care Budget

Randall B. Williamson, Director, Health Care, (202) 512-7114, 

williamsonr@gao.gov

In addition to the contact named above, James C. Musselwhite 

and Melissa Wolf, Assistant Directors; Kye Briesath, Krister Friday, 

Aaron Holling, Felicia Lopez, Lisa Motley, and Brienne Tierney made 

key contributions to this report.

Appendix II: GAO Contact and Staff 

Acknowledgments 

GAO Contact

Staff 

Acknowledgments 
Related GAO Products

Page 29 GAO-13-715 Veterans’ Health Care Budget

Veterans’ Health Care: Improvements Needed to Ensure That Budget 

Estimates Are Reliable and That Spending for Facility Maintenance Is 

Consistent with Priorities. GAO-13-220. Washington, D.C.: February 22, 

2013.

Veterans’ Health Care Budget: Better Labeling of Services and More 

Detailed Information Could Improve the Congressional Budget 

Justification. GAO-12-908. Washington, D.C.: September 18, 2012.

Veterans’ Health Care Budget: Transparency and Reliability of Some 

Estimates Supporting President’s Request Could Be Improved. 

GAO-12-689. Washington, D.C.: June 11, 2012.

VA Health Care: Estimates of Available Budget Resources Compared 

with Actual Amounts. GAO-12-383R. Washington, D.C.: March 30, 2012.

VA Health Care: Methodology for Estimating and Process for Tracking 

Savings Need Improvement. GAO-12-305. Washington, D.C.: 

February 27, 2012.

Veterans Affairs: Issues Related to Real Property Realignment 

and Future Health Care Costs. GAO-11-877T. Washington, D.C.: 

July 27, 2011.

Veterans’ Health Care Budget Estimate: Changes Were Made in 

Developing the President’s Budget Request for Fiscal Years 2012 and 

2013. GAO-11-622. Washington, D.C.: June 14, 2011.

Veterans’ Health Care: VA Uses a Projection Model to Develop Most of 

Its Health Care Budget Estimate to Inform the President’s Budget 

Request. GAO-11-205. Washington, D.C.: January 31, 2011.

VA Health Care: Spending for and Provision of Prosthetic Items. 

GAO-10-935. Washington, D.C.: September 30, 2010.

VA Health Care: Reporting of Spending and Workload for Mental 

Health Services Could Be Improved. GAO-10-570. Washington, D.C.: 

May 28, 2010.

Continuing Resolutions: Uncertainty Limited Management Options and 

Increased Workload in Selected Agencies. GAO-09-879. Washington, 

D.C.: September 24, 2009.

Related GAO Products
Related GAO Products

Page 30 GAO-13-715 Veterans’ Health Care Budget

VA Health Care: Challenges in Budget Formulation and Issues 

Surrounding the Proposal for Advance Appropriations. GAO-09-664T. 

Washington, D.C.: April 29, 2009.

VA Health Care: Challenges in Budget Formulation and Execution. 

GAO-09-459T. Washington, D.C.: March 12, 2009.

VA Health Care: Long-Term Care Strategic Planning and Budgeting Need 

Improvement. GAO-09-145. Washington, D.C.: January 23, 2009.

(291099)
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