Veterans Paralympics Program: Improved Reporting Needed to Ensure Grant Accountability
Published: 2012-07-26T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Veterans Benefits Improvement Act of 2008 established VAs Paralympics Program to promote the lifelong health of disabled veterans and members of the Armed Forces through physical activity and sports. Additionally, the act authorized VA to provide a grant to USOCs Paralympics Division, and allowed USOC to enter into subgrant agreements to provide adaptive sports activities to veterans and service members. The act also mandated GAO to report on the VA Paralympics program.
GAO is required to (1) review how VA and its grantee and subgrantees used program funds to provide adaptive sports opportunities to veterans and service members; (2) assess how VA is overseeing its grantees and subgrantees use of funds; and (3) describe how veterans and service members have benefited from VA Paralympics activities. To do this, GAO reviewed relevant federal laws, regulations, guidance, agency reports, and a non-probability sample of 21 of 76 subgrant files, consisting of data on about 56 percent of funds subgranted. GAO also conducted site visits to two states and interviewed veterans as well as agency and grantee officials.
section_title: What GAO Found
paragraphs: The Department of Veterans Affairs (VA) and the U.S. Olympic Committee (USOC) primarily awarded program funds through subgrants to 65 national and community organizations that support adaptive sports opportunities. However, their respective program expenditure reporting was not consistent with federal internal control standards, making it difficult to know fully how program funds were spent. VAs reporting of first-year program funding was problematic because it did not closely track costs until midway through the fiscal year. During the second fiscal year2011VA granted $7.5 million to USOC, which, in turn, awarded $4.4 million to subgrantees and spent the remainder primarily on operations and personnel. Subgrantees reported using funds for activities such as training and camps. GAO found, however, that USOC did not have sufficient reporting requirements in place for subgrantees to provide information on how VA funds were used separate from other sources of funding.
VA relied upon self-reported, unverified information to oversee the grant program but is planning to make improvements. In fiscal year 2011, VA did not conduct any on-site or remote monitoring to verify how funds were used. Thus, VA lacked information on how well USOC and subgrantees managed grant funds, potentially exposing itself to paying for services not delivered. In 12 of 21 subgrant files selected, USOC was not holding subgrantees accountable for meeting the terms of their agreements. For example, one subgrantee agreed to conduct 10 activities, but the file indicated only 4 were conducted. VA reported that it has plans to improve to oversight, including conducting on-site monitoring of grantees and subgrantees use of funds and having USOC verify financial reports for at-risk subgrantees, such as those with large subgrants.
While program benefits were reported by subgrantees and participants, up until this point VA has not systematically measured how adaptive sports activities benefit the health and well-being of veterans and service members. Subgrantees primarily report anecdotal information on program benefits, such as individual success stories. VA collects information on the number of activities and participants from USOC. In 2011, over 10,000 participants were served through nearly 2,000 activities. However, these metrics are flawed due to double counting and other measurement issues. VA officials also recognize that the metrics do not comprehensively measure program benefits. Thus, VA and USOC have hired a contractor to conduct a study on the effects of adaptive sports on rehabilitation and reintegration of veterans and service members into the community.
section_title: What GAO Recommends
paragraphs: GAO recommends that VA take additional actions to improve grantee and subgrantee reporting of expenditures, activities, and participants, as well as USOCs monitoring of subgrantees. In commenting upon a draft of this report, VA agreed with these recommendations and reported that it was taking steps to implement them.

section_title: Letter
paragraphs: In 2010, an estimated 3.4 million veterans had a disability due to service- related injuries and illnesses. Due to advances in battlefield medicine, a  larger proportion of military personnel are surviving their wounds than in  previous generations, though often with serious medical conditions  including amputations, traumatic brain injuries, and post traumatic stress  disorder. To promote the lifelong health of veterans and servicemembers  with disabilities through regular participation in physical activity and  sports, as well other related purposes, the Veterans Benefits  Improvement Act of 2008 established the Office of National Veterans  Sports Programs and Special Events within the Department of Veterans  Affairs (VA). The act also authorized VA to provide monthly assistance  allowances to veterans with disabilities participating in Paralympics  competitions or training operated by the United States Olympic  Committee (USOC). Additionally, the act authorized grants solely to  USOC to plan, develop, manage, and implement an integrated adaptive  sports program for veterans and servicemembers with disabilities,  including joint outreach with VA. The act also allows USOC to enter into  partnership agreements with other organizations, essentially subgranting  funds to conduct adaptive sports activities. VA conducts grant oversight to  help ensure that USOC is effectively and efficiently providing adaptive  sports opportunities, reliably managing its financial reporting, and is in  compliance with applicable laws and regulations. Moreover, the act  mandated GAO to submit a report of the VA Paralympics program by  September 30, 2012.
In response to our this mandate, our objectives are to (1) review how VA  and its grantee and subgrantees used program funds to provide adaptive  sports opportunities to veterans and servicemembers; (2) assess how VA  is overseeing grantee’s and subgrantees’ use of funds; and (3) describe  how veterans and servicemembers have benefited from VA Paralympics  activities.
To address these issues, we analyzed both planned and final program  budget expenditure data; reviewed program reports, guidance, and  relevant federal laws and regulations; and interviewed VA and USOC  officials and other program stakeholders about VA’s Paralympics program  activities funded with fiscal years 2010, 2011, and 2012 appropriations.  Because USOC is delayed by one fiscal year in its use of program funds,  we reported their annual budget information separately from VA’s annual  budget information. We assessed VA’s and USOC’s budget data and  found them sufficiently reliable for our reporting purposes. As part of this  analysis, we reviewed subgrantee plans for spending grant funds as  reported to USOC. We do not provide information on subgrantees’ final,  reported expenditures because we found that some subgrantees reported  spending more than what they were granted, making it unclear to us  which portion of their program costs were funded by VA. In addition, we  reviewed a non-probability sample of 21 out of the 76 subgrant files  maintained by USOC during a site visit to the organization’s headquarters  in Colorado Springs, Colorado. These subgrant files included information  on grant activities that occurred during fiscal year 2011 and were a mix of  some that were selected based on their larger size as well as others that  were randomly selected. In total, the sample files contained information  on 56 percent of funds USOC provided in subgrants using fiscal year  2010 dollars. We also interviewed subgrantees, regional stakeholders,  and veteran program participants at a site visit to a VA adaptive sports  program event in Chicago, Illinois in August 2011. (See appendix I for  more details.)
We conducted this performance audit from June 2011 through July 2012  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 we obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: VA’s Office of National Veterans Sports Programs and Special Events’  mission is to motivate, encourage, and sustain participation and  competition in adaptive sports among veterans and members of the  Armed Forces with disabilities. This is to be accomplished through  collaboration with VA clinical personnel as well as national and  community-based adaptive sports programs. This office is responsible for  the VA Paralympics program’s administration, including the grant award  process, grant oversight, distribution of any monthly assistance  allowances to eligible athletes, and program outreach. For fiscal years  2010 through 2012, the federal law authorizes appropriations of $2 million  for monthly assistance allowances for competitive athletes in training and  $8 million for grants to USOC. The grant program will need to be  reauthorized to continue in fiscal year 2014. VA officials stated that, in the  first years of the Paralympics program—fiscal years 2010 and 2011—$10  million in federal funds were made available for each year. Prior to  receiving this initial funding, the office had a troubled beginning. In  February 2010, VA’s Inspector General (IG) found that the office’s initial  director had abused agency resources and obstructed the IG  investigation.office director, restructured the office housing the program, and  addressed these issues of malfeasance.
Since then, VA officials reported that they hired a new  The USOC is a non-profit organization that serves as the National  Olympic and Paralympic Committees and, as such, is responsible for  training, entering, and funding U.S. teams for the Olympic and Paralympic  Games. Furthermore, the organization has a well-established history of  providing adaptive sports opportunities to people with disabilities. To  reach veterans and servicemembers throughout the United States, USOC  subgrants VA funding to national and community organizations that  provide adaptive sports opportunities. (See figure 1 for the VA  Paralympics program’s organizational chart, including external  organizations and individuals who receive program funds.)
The categories of subgrantees are:
National Partners: national organizations that offer camps, clinics and  on-going programs for veterans and servicemembers with disabilities  through local chapters. Individual annual subgrant amounts range  from $100,000 to $500,000.
Athlete Development subgrant recipients: organizations that conduct a  national network of camps and clinics to provide opportunities for  veterans and servicemembers with disabilities to receive sport- specific instruction and assessment. These opportunities help  participants meet U.S. Paralympics standards of performance for  emerging athletes. Individual annual subgrant amounts range from  $15,000 to $300,000.
Model Community Partners: community organizations that provide  leadership in various geographic regions for promoting adaptive  sports and to help increase regional capacity for Paralympic sports.  These organizations are allowed to further subgrant funds to other  local organizations to provide direct services. Individual annual  subgrant amounts range from $2,500 to $175,000.
Olympic Opportunity Fund recipients: community organizations that  aim to bring adaptive sports opportunities to their local communities.  Individual annual subgrant amounts range from $5,000 to $45,000.
As a condition of receiving these funds, USOC must permit VA to conduct  the oversight VA determines is appropriate. Furthermore, the federal law  requires USOC to submit to the Secretary of VA an annual report  detailing its use of grant funds.  The reports are to include the number of  veterans who participated in the adaptive sports program and the  administrative expenses. USOC provided this first annual report to VA in  November 2011. In turn, VA is required to report annually to Congress on  the use of program funds for each year the Secretary makes grants to  USOC.  Additionally, VA and USOC officials agreed that USOC would  submit quarterly progress reports throughout the year. During fiscal year  2011, USOC provided quarterly reports that included descriptions of  activities conducted by subgrantees, the number of veterans and  servicemembers served in the activities, and anecdotal information on  how participants benefited from activities.
Internal controls are defined as an integral component of an organization’s management  that provides reasonable assurance that the following objectives are being achieved:  effectiveness and efficiency of operations, reliability of financial reporting, and compliance  with applicable laws and regulations.  Internal control, which is synonymous with  management control, helps government program managers achieve desired results  through effective stewardship of public resources.  For more information about GAO and  OMB’s internal control frameworks, see Standards for Internal Control in the Federal  Government. GAO/AIMD-00-21.3.1 (Washington, D.C., November 1999) and OMB  Circular A-123 Revised.
section_title: VA Grants and USOC Subgrants Were Awarded Primarily to Provide Adaptive Sports Opportunities, but Reporting on Expenditures Was Problematic
subsections: section_title: VA Awarded the Majority of Program Funds to USOC, but VA’s Administrative and Personnel Expenditure Reporting Had Weaknesses
paragraphs: In the first 2 years of the Paralympics program, VA granted most of its  available funds for the program to USOC, but inconsistent with federal  internal controls standards for reporting relevant and reliable information,  we found weaknesses in VA’s administrative and personnel expenditure  reporting. In fiscal year 2010, VA allotted $10 million for the Paralympics  program. VA granted $7.5 million to USOC and obligated about  $400,000 to contract with a consulting firm to design an outreach strategy  for informing eligible participants about the program. It is not clear,  however, how much money VA spent, in total, on administrative and  personnel costs associated with this program in fiscal year 2010, primarily  because VA did not closely track these costs until midway through fiscal  year 2011. VA officials told us that the Office of National Veterans Sports  Programs and Special Events did not have a full-time program director  and was not fully operational until about midway through fiscal year 2011,  and as a result, VA did not establish accounting codes for the  Paralympics program until that time. VA officials also said that some  administrative and personnel costs were charged to other VA programs  as general expenses, and therefore cannot be traced back to the  Paralympics program. In addition, VA officials said they were unable to  obligate the full amount of fiscal year 2010 funds available to athletes’  monthly assistance allowances before the end of the fiscal year, due to  the delays in establishing the program.
In fiscal year 2011, VA once again allotted $10 million for the Paralympics  program. VA obligated a total of about $8.9 million, of which $7.5 million  was granted to USOC. The remainder was spent on athletes’ monthly  assistance allowances as well as agency administrative and personnel  costs. (See table 1.)
VA planned to spend about $1.1 million in 2011 on monthly assistance  allowances to assist competitive athletes with their training, but ultimately  spent about $675,900. According to VA officials, fewer athletes than  expected were able to apply for the allowance, so the Paralympics  program returned some portion of the remaining funds to VA’s Office of  Public and Intergovernmental Affairs general expense account. USOC  officials explained that the monthly information an athlete must submit to  obtain an allowance, such as a detailed training log, can be burdensome.  USOC is working with VA to develop a new online reporting tool to help  ease the burden of this monthly reporting requirement in an effort to  encourage greater participation.
VA also planned to spend about $334,500 on fiscal year 2011  administrative and personnel costs associated with the Paralympics  program, the majority of which was for contracted services. Specifically,  within its administrative costs, VA contracted with a consulting firm to  provide grants management services, including assistance with  developing grant agreements, providing technical assistance, and  developing performance measures for grantees. The contractor did not  use all of the funding it obligated for this contract, and returned to VA  approximately $98,500. According to VA, $11,753 in fiscal year 2011  funds was spent on personnel for the Paralympics program. However, the  salaries for the Director of the Paralympics program and other personnel  who contributed to establishing the program are not fully reflected in  these personnel costs; those salaries were funded through other VA  programs because separate accounting codes for the Paralympics  program were not established until midway through fiscal year 2011.  Indeed, the Director of the Paralympics program was paid out of funds  from the Office of National and Special Events. As a result, only those  expenses that were incurred after the codes were established were  reported on VA’s budget for the Paralympics program. In fiscal year 2012,  VA’s total personnel and administrative costs are projected to increase to  about $2.2 million as the fiscal year 2012 budget will now reflect activities  and personnel from the Office of National and Special Events, which has  been consolidated into the Office of National Veterans Sports Programs  and Special Events. Specifically, in addition to the Paralympics  activities, the Office of National Veterans Sports Programs and Special  Events now funds five additional staff who travel to and administer six  separate national events, as well develop related outreach literature for  these events.
section_title: USOC Used About Half of Its Grant to Provide Adaptive Sports Opportunities
paragraphs: USOC was awarded a 1-year grant of $7.5 million by VA in fiscal year  2010, to be used during fiscal year 2011. USOC was also awarded a 1- year grant of $7.5 million in fiscal year 2011 to be used during fiscal year  2012. In fiscal year 2011, USOC subgranted approximately $4.4 million to  organizations to provide adaptive sports opportunities and used the  remaining $3.1 million for its operations and personnel and administrative  costs. Some of USOC’s subgrantees did not use all of the funding they  received for their adaptive sports programs, so they collectively returned  about $50,000 to USOC. VA officials reported that USOC returned these  remaining funds to VA.
In fiscal year 2011, about half of the $1.5 million USOC spent on  operations went towards outreach and awareness efforts as well as  program support for the Paralympics sport programs, while the remaining  half was used to provide training and technical assistance. For example,  USOC works with VA medical centers and local organizations to help  them develop relationships and expand opportunities for veterans and  servicemembers with disabilities to engage in adaptive sports. USOC’s  program budget shows that operation costs are projected to decrease to  $1.1 million in fiscal year 2012. Fiscal year 2011 was the first year that  USOC implemented a VA grant program. USOC officials told us the  decrease in 2012 operations costs reflects the fact in fiscal year 2011,  there were significant upfront, one-time costs to build the foundation of  the program, such as designing outreach materials and regional training.  USOC officials also said “lessons learned” from their experiences during  that first year will allow them to plan more effectively going forward.
USOC reports personnel costs separately from administrative costs. In  fiscal year 2011, USOC spent about $1.3 million on personnel costs.  Specifically, this funding went toward salaries, Social Security taxes,  Medicare withholdings, and benefits for 17 program staff and additional  temporary staff. The salaries of program staff ranged from about $20,000  to $175,000 and covered positions including the administrative assistants,  coaches, grant managers, and program director, among others. Further,  in addition to having staff who are dedicated to administering the  program, USOC has staff dedicated to the outreach and technical  assistance efforts described above; they are responsible for designing  and implementing USOC’s outreach materials and facilitating  conferences, regional meetings/trainings, and other training and  education activities for veterans.
In fiscal year 2012, USOC projects spending about $1.9 million to pay for  the salaries of 12 program staff. As a percent of its budget, USOC’s  personnel costs are projected to increase from 18 percent in fiscal year  2011 to 26 percent in fiscal year 2012. USOC officials said that the  increase is due to its fiscal year 2011 grant with VA spanning a 17 month  period of performance. This differs from the first grant USOC received  which was for a 12 month period of performance.
In contrast, USOC’s allocated administrative costs are projected to  decrease from $253,000 in fiscal year 2011 to $0 in fiscal year 2012.   Specifically, in fiscal year 2011 these funds went toward indirect costs  such as rental expenses, supplies, event expenses, and utilities. A USOC  official told us that they chose not to allocate any administrative costs in  fiscal year 2012 because they want to allocate the most possible funding  to programming that directly serves veterans. USOC reported that it plans  to pay for administrative costs associated with the VA program through  other funding sources.
section_title: Subgrantees Provided a Range of Activities, but Determining Whether They Spent Funds As Planned Was Problematic
paragraphs: Subgrantees reported using funds to provide opportunities in a range of  activities—through camps, practice/trainings, and competitions—across  29 adaptive sports. Cycling/handcycling and skiing were the most  common activities. (See figure 2.)
Some subgrantees received more than one type of grant depending on the nature of the  adaptive sports programming they planned to offer. subgrantee reported using Olympic Opportunity funds to provide cycling  and sled hockey activities, such as weekly hand cycling clinics and  training sessions on adaptive equipment. Another subgrantee reported  using Olympic Opportunity funds to hold a weekly power-lifting group, an  indoor kayaking clinic, and a judo clinic.
The remaining 22 subgrants generally were larger, ranging from $15,000  to $500,000, and were provided to Athlete Development organizations  and National and Model Community Partners. These organizations  provided a wider range of activity types through national networks, local  chapters, or community organizations in various geographic regions. For  example, one Athlete Development subgrantee reported holding an  outreach clinic at a nearby VA hospital where they educated staff and  potential participants about adaptive sports options and hosted a ski  camp which included a sit-ski clinic, a race, and strength and conditioning  training for a cross-country skiing marathon. In addition, a National  Partner subgrantee reported using its funds to train and educate staff and  program leaders on adaptive and Paralympic sports, and to conduct  outreach and recruitment campaigns. This organization also awarded and  administered subgrants to some of its local chapters to hold archery,  cycling, fencing, wheelchair basketball, and swimming activities, among  others.
All subgrantees’ grant agreements required them to report how VA funds  were used to cover program expenses. As part of their agreements,  subgrantees provided a projected budget detailing plans to spend  program funds in six categories: personnel, operations, equipment,  supplies, travel, and administrative costs (see appendix II for USOC’s  cost definitions for subgrantees’ use of funds). Although subgrantees  could not spend more than 10 percent of the total amount granted on  administrative costs, no other category had spending limits. Of the  approximately $4.4 million USOC awarded for fiscal year 2011,  subgrantees projected using over half, or about $2.6 million, on  operations and personnel costs. Subgrantees projected that these costs  would remain about the same for fiscal year 2012. (See figure 3.)
Inconsistent with federal internal control standards, we found that during  the first program year, USOC did not have reporting requirements or  electronic reporting systems in place for subgrantees to provide  information on how VA funds were used separate from other sources. As  a result, there was a lack of reliable information on actual expenditures.  Our review of a sample of subgrantees’ files raised concerns with how  subgrantees reported their actual expenditures. In 7 of the 21  subgrantees’ files we reviewed, it was difficult to determine how the  subgrantees spent their grant funding, and 4 out of these 7 files reported  spending more than they were actually granted by VA to provide adaptive  sports activities. For example, in one case, a subgrantee received a grant  for $35,000 but reported expenditures to USOC in excess of $89,000. In  reviewing these files, we found that USOC had not determined what  portion of the subgrantees’ program costs were funded with VA dollars.  While USOC provided a template to each subgrantee to report quarterly  expenditures, the template did not explicitly request that a subgrantee  only provide information on how VA funds were spent. When asked if they  reconciled a subgrantee’s reported expenditures with planned  expenditures, USOC officials told us they generally did not have enough  time between the receipt of a subgrantee’s quarterly budget and the  deadline to submit a quarterly report to VA to ensure that the budget  information was accurate. This lack of follow-up is inconsistent with OMB  internal controls guidance, which provides that management should  regularly reconcile and compare data within the normal course of  business.
USOC officials said they were aware of reporting problems and, at the  beginning of fiscal year 2012, were developing and implementing an  electronic system that will allow subgrantees to report quarterly  expenditures online, among other things. USOC officials told us such a  system should help them process the reports more quickly. However,  they acknowledged the system will not include controls to ensure  subgrantees report only those costs specific to the VA grant. VA officials  told us that they are aware that this electronic system has limitations and  they have directed USOC to make the necessary improvements. In  addition, VA reported that it provided guidance on how USOC could  improve data processes, and USOC has agreed to send its grant  management staff to training, both in effort to enhance USOC’s data  reporting capabilities.
section_title: VA Relied on Self- Reported, Unverified Information to Oversee the Grant Program, but Is Taking Steps to Improve Oversight
subsections: section_title: VA Lacked Information on How USOC and Subgrantees Used Funds
paragraphs: VA lacked information on how USOC and subgrantees used funds due to  its reliance on self-reported, unverified quarterly reports from USOC.  Inconsistent with federal internal controls standards, VA officials stated  that they did not independently review or verify how grant funds were  used due to a lack of staff to oversee the program in fiscal year 2011. In  fact, VA did not hire staff dedicated to managing the Paralympics program  until it had already granted funds to USOC. Specifically, in September  2010, VA and USOC established a memorandum of agreement for the  grant, but a Paralympics program director was not hired until February  2011. The director, with the assistance of interns, reported spending the  rest of the fiscal year finalizing the office’s outreach campaign,  administering the monthly assistance allowance program, and processing  USOC’s fiscal year 2011 grant application. According to VA officials,  another VA Paralympics staff person was hired in September 2011.  Furthermore, with the establishment of the Paralympics program, agency  officials stated that grant management became a new administrative  responsibility for the VA Office of Public and Intergovernmental Affairs as  well as USOC and the subgrantees, and all of these program  stakeholders needed time to learn about appropriate oversight  mechanisms.
USOC officials told us their quarterly reports were primarily based on the  quarterly reports they obtained from subgrantees, and therefore, the  available information VA had for oversight may not have been accurate.  USOC officials managing the grant program did not conduct any separate  reviews to verify the information provided to them by subgrantees, and as  mentioned earlier, did not make efforts to reconcile expenditure data in  these quarterly reports as they were submitted. To gain additional  information about how subgrantees were managing funds in the first  program year, USOC’s Audit Division selected 2 of the 65 subgrantees,  based on risk-related criteria, for review in the fall and winter of 2012, and  the grant managing officials plan to use the information from those audits  to develop future plans for oversight.
Our review of a sample of USOC’s files on subgrantees showed that  USOC officials were not holding subgrantees accountable for meeting the  terms of their subgrant agreements—a grant management problem about  which VA was not in the position to know about given its lack of oversight.  We found that many subgrantee files lacked information on the status of  their grant expenditures and the activities the subgrantees agreed to  conduct. USOC reported using a process in which quarterly reports are  checked against subgrantees’ agreements to ensure completeness of  agreed-upon activities. However, in 12 of the 21 subgrant files we  reviewed, we did not find evidence that the subgrantees conducted all  agreed-upon activities. For example, one National Partner had agreed to  develop 27 programs related to handcycling, bowling, and trapshooting,  but the reports we found mentioned that only 18 programs had been  completed. Another National Partner agreed to conduct 10 activities  related to outreach, introducing adaptive sports at VA clinics, and  identifying athletes for higher level of competition, but the case file  indicated only 4 of these activities had been completed. Furthermore, in  11 of the 12 files, we did not find any documentation explaining why the  planned activities did not occur, nor did we find written permission from  USOC to change the scope of agreed-upon activities.
In 5 of the 21 files we reviewed, we found that subgrantees transferred  more than 20 percent of funds from one budget category to another  without the written permission of USOC, as required by their grant  agreements. For 2 of these files, we identified significant issues with the  subgrantees’ financial management and reporting. Specifically, 1 file  belonged to a subgrantee that received a $400,000 grant that was one of  the organizations subjected to an audit by USOC’s Audit Division. The  division officials found that, in addition to making unallowed transfers, the  subgrantee had instances of non-compliance with OMB Circular A-122’s  Cost Principles for Non-Profit Organizations (including unexplained  personnel and administrative charges by five employees), did not  consistently document and communicate requirements and responsibility  related to the VA funds it subgranted to its member chapters, and did not  clearly and formally document its methodology for determining and   Another subgrantee who  allocating administrative costs to the VA grant.made unallowed budget transfers also reported purchasing a van without  the written permission of USOC, which is required by the grant agreement  prior to making equipment purchases exceeding $5,000. This same  subgrantee also received another $35,000 VA-funded grant for which it  did not submit required expenditure reports.
section_title: VA Plans to Improve Its Grant Monitoring
paragraphs: VA officials recognized that their grant oversight has been limited and  report that improvements are under development. In December 2011, VA  established a monitoring plan that identifies the specific information  USOC should report and requires USOC to establish a similar plan to  oversee subgrantees. Specifically, VA’s plan requires USOC to submit  quarterly reports and an annual report that include summary data on the  activities provided, number of veterans served, levels of expended and  unexpended funds, and available assets, among other information. VA’s  plan does not, however, require on-site or remote evaluations of USOC  and the subgrantees, nor a review of USOC’s monitoring outcomes for  subgrantees. When asked why such monitoring was not included in the  plan, VA officials stated that they recognize that a lack of separate  evaluations is a gap in their oversight and are working to address this  limitation. For example, in fiscal year 2012, VA officials reported  conducting on-site visits of USOC to discuss various aspects of grant  management. VA plans to conduct additional on-site reviews of USOC  and selected subgrantees later in the year. Furthermore, officials are  expecting that information from USOC’s subgrantee reviews will  eventually be incorporated into subgrantee application packages, which  they will review before finalizing future grant agreements. Also, after  reviewing the first quarter reporting for fiscal year 2011 funds in January  2012, VA officials reported asking USOC officials to provide more  information about whether subgrantees were providing deliverables within  the agreed-upon timeframes.
With input from VA, USOC finalized a monitoring plan of subgrantees in  early 2012 that, in addition to reviewing subgrantee reports, will require  USOC officials to audit financial data for subgrantees selected on risk- based criteria. USOC’s plan includes a checklist for reviewing and  verifying information in these quarterly reports; the checklist mentions  comparing the reports to the agreed-upon activities and conducting  remote and on-site reviews. USOC aims to conduct enough site visits to  review the use of half of all fiscal year 2011 funds. Furthermore, USOC  plans to use risk-based criteria to select subgrantees for remote audits of  financial data; these criteria will include the size of the subgrant award,  additional granting of VA funds to other entities by the subgrantee, and  the absence of a current audit report. The remote audits will include  reviewing the subgrantees’ ledgers and comparing them to what was  submitted in the quarterly reports and reviewing documentation that  supports selected transactions to ensure that they are compliant with  OMB guidance. However, given that we found that USOC was not holding  subgrantees accountable—despite having an oversight process in  place—VA will need to ensure its monitoring efforts include overseeing  the implementation of USOC’s plans.
section_title: Program Benefits Have Been Reported but VA Does Not Systematically Measure Them
subsections: section_title: Some Participants Have Reported Improvements to Their Health and Well- Being
paragraphs: We found that many subgrantees and participants reported benefits from  VA’s Paralympics program. Subgrantees primarily reported anecdotal  information on program benefits in their quarterly reports to USOC, and  USOC then provided some of these examples in their quarterly reports to  VA. This anecdotal information included participant success stories,  testimonials, and related news articles, and was consistently positive with  regards to the program’s value in the first year. (See figure 4 for  examples.)
During our site visit to an adaptive sports event in Chicago, veterans we  spoke with also told us how adaptive sports programs have improved  their mental and physical health. All six veterans in one group interview  agreed that the greatest benefit was to their mental health; they believe  that adaptive sports are a tool that helps them deal with depression. They  also said that participating in group activities with other veterans with  disabilities made them feel less isolated in their challenges. Other  veterans said that they had experienced social benefits, including a boost  to their self-esteem; one veteran described how he developed long-term  friendships during the competitions, and another described how these  events show veterans that they can be physically active despite their  disabilities. Veterans also told us that competitions motivated them to stay  active on an on-going basis and improved their overall physical health.  For example, some veterans said regular participation in athletic activities  made them physically stronger in their remaining limbs and had improved  their balance and dexterity. One veteran in particular told us that he had  lost 68 pounds in 4 months due to his regular participation in Paralympic  program activities.
section_title: Counts of Activities and Participants Are Inconsistent, but VA Is Taking Steps to Improve Measurement of Program Benefits
paragraphs: While VA requires USOC and its subgrantees to count the number of  adaptive sports activities conducted and the number of participants  served, these measurements are not always accurate. In its fiscal year  2011 annual report to VA, USOC stated that over 10,000 veterans and  servicemembers participated in nearly 2,000 activities. However, VA  officials acknowledged that the participation and activity data are flawed.  Indeed, in USOC’s quarterly reports to VA, USOC stated there is some  double counting of unique veterans/servicemembers and activities due to  partnerships and collaboration among the Paralympic community. For  example, a veteran might attend activities sponsored by different  subgrantees, and each subgrantee might then include that same veteran  in their separate count. The extent of this double counting is unknown due  to a lack of a systematic review of the activity and participant counts.  Although VA is required by law to report annually to Congress on the  number of veterans who participated in adaptive sports activities and the  administrative expenses, it has yet to do so.
Additionally, in our review of a sample of 21 subgrantee reports, we found  some inconsistencies with how subgrantees count program participants  and activities, further diminishing the reliability of these data. It was  difficult to determine, in fact, how 16 out of the 21 were counting their  participants or activities as many organizations had different  interpretations of what qualified as a participant or activity. For example, 8  out of the 21 subgrantee reports counted activities that did not have  veteran or military participants—some of them even counted purchases of  equipment as activities. Also, 6 out of the 21 subgrantees administered  more than one type of a VA Paralympics grant and submitted reports  where it was difficult to determine which grant corresponded with which  counts of activities and participants.
While subgrantees and program participants reported program benefits,  VA has not yet systematically measured how adaptive sports activities  specifically benefitted the health and well-being of veterans and  servicemembers. A couple of USOC’s subgrantees conducted surveys  asking for feedback on specific events or activities, but VA has not  conducted a program-wide survey or study to collect information about  the various events and their benefits. Absent this measurement, VA  largely relies on the anecdotal information supplied by subgrantees and  program participants. Moreover, VA officials recognize that participant  and activity counts do not comprehensively measure how participation in  adaptive sports can improve a person with disabilities’ quality of life,  including improved physical health, enhanced confidence and self- esteem, reduction in depression and improved relationships with family  members and other members of the community.
VA wants to improve its measurement of Paralympics activity benefits. VA  and USOC have, in turn, taken the initiative to hire a contractor to conduct  a study on the effects of adaptive sports on rehabilitation and  reintegration of veterans and servicemembers into the community,  including five life domains (self-care, mobility skills, communication with  family and friends, participation in society, and acceptance of disability)  and the psychosocial outcomes, including self-esteem and quality of life.  The study will include a survey of participants in VA adaptive sports  activities, with questions focusing on uncovering key life and goal-setting  concerns of participants as well as employment and educational goals  and opportunities. VA and USOC are expecting the contractor to provide  a preliminary report to Model Community Partners by the end of  September 2012. They have also planned for the final results of this study  to be shared with internal and external audiences, including government  agencies, the research community, and the general public. In addition, VA  and USOC have tasked the contractor to conduct an assessment of the  VA Paralympics program that will include identification of issues, trends,  obstacles, and barriers, which will assist USOC and subgrantees with  managing expectations and program performance. VA and USOC have  required the contractor to provide an annual report on this assessment by  November 2012. VA officials told us they have also been assisting the  Paralympic Research and Sport Science Consortium with facilitating  research in Paralympic and adaptive sports. VA officials stated that this  research is focused on activities that would both enhance Paralympic  sports and capabilities to provide rehabilitative opportunities to Veterans  and members of the Armed Forces with disabilities. In addition, VA  officials stated that they are seeking feedback from Paralympic and  adaptive sport communities, academia, research institutions, and other  entities to try to develop metrics to measure effectiveness.
VA officials stated that the goals of its adaptive sports programming have  changed in the past few years with the establishment of the Paralympics  program. Prior to the Paralympics program and its current leadership, the  Office of Public and Intergovernmental Affairs focused on engaging  veterans and servicemembers with disabilities in a few Paralympic sport  competitions it sponsored once a year. However, with the Paralympics  program and the Office of National Veterans Sports Programs and  Special Events in place, VA has expanded its goals to include veteran  participation in local and community adaptive sports programs throughout  the year and for on-going sports participation to have an impact on the  veterans’ overall physical and emotional well-being. Further, VA is  working with other VA entities to incorporate Paralympic and adaptive  sports into rehabilitative whole-life programs for Veterans and members  of the Armed Forces with disabilities. For example, VA officials stated that  they worked with some of their subgrantees to develop adaptive sports  program-related training webinars and other support materials for VA  entities such as recreation therapists, centers for blind and visually  impaired, and Community Living Centers.
section_title: Conclusions
paragraphs: After veterans and servicemembers face life altering disabilities resulting  from their service in the Armed Forces, the VA Paralympics program  works to empower them to move forward in their next phase of life. In  partnership with USOC and its subgrantees, VA has been able to  introduce numerous participants to a variety of sports adapted for their  physical conditions. Beyond providing access to recreational  opportunities, veteran participants told us that adaptive sports have  changed the way they think about their disabilities and provided them with  opportunities to improve their physical health. As this program matures, it  has the potential to provide greater access to adaptive sports and garner  a wider range of benefits for participants. VA must, however, improve the  program’s oversight and reporting to help ensure program funds are  efficiently and effectively used. Although USOC is planning various  oversight initiatives and is implementing an electronic reporting system for  subgrantees, we found that USOC’s past efforts at financial accounting,  subgrantee oversight, and reporting on participation and activities were  weak, resulting in gaps in program knowledge about how program funds  were actually spent, whether or not all promised activities occurred, and  how many people benefitted from the activities. Moving forward, without  this information, VA and policymakers will struggle to make informed  decisions about the program’s future. VA officials report that they are  building a stronger oversight structure, but to the extent USOC’s  weaknesses remain, VA may miss opportunities to better use program  resources to motivate, encourage, and sustain participation and  competition in adaptive sports among veterans and servicemembers with  disabilities.
section_title: Recommendations
paragraphs: To improve oversight within the VA Paralympics grant program, we  recommend the Secretary of VA direct the National Director of the Office  of National Veterans Sports Programs and Special Events to take the  following three actions:  1.  Require USOC to modify reporting requirements that will: a.  Direct subgrantees to only include VA Paralympics program  funds in expenditure reports; and  b.  Provide a consistent methodology for how subgrantees should  count their program activities and participants, including  explicit instruction on what should and should not be counted  as an activity or participant.  2.  Ensure USOC adds controls to its electronic reporting system that  will require subgrantees to identify how VA grant funds were used  separate from other funding sources subgrantees use to support  adaptive sports activities.  3.  Review the implementation of USOC’s monitoring plan after a  reasonable period to ensure planned efforts were conducted.
section_title: Agency Comments and Our Evaluation
paragraphs: VA provided us with comments on a draft of this report, which we have  reprinted in appendix III.  In its comments, VA agreed with our  recommendations and reported that efforts were underway to address  each of them.  Specifically, VA reported that USOC has already agreed to  direct subgrantees to only include information on VA Paralympics  program funds in expenditure reports.  Furthermore, USOC has agreed to  send its grant management staff to training in an effort to improve its data  reporting.  Regarding USOC’s electronic reporting system, VA reported  that USOC has included the requirement that subgrantees identify how  VA funds were used separately from other funding sources, and VA will  review the system before it goes on-line during the fourth quarter of 2012.   VA indicated that USOC also plans to provide training to subgrantees on  how to appropriately report on grant funds during this quarter.  In  response to our recommendation on following up on USOC’s monitoring  plan, VA reported that, in April 2012, it began meeting with USOC to  improve USOC’s subgrant monitoring program, which now includes  weekly conference calls with VA.  VA also provided technical comments,  which were incorporated into the report as appropriate.
We are sending copies of this report to relevant congressional  committees, the Secretary of the Department of Veterans Affairs, the  Chief of Paralympics, USOC, and other interested parties. The report will  also be available at no charge on the GAO Web site at  http://www.gao.gov.
If you or your staffs have any questions about this report, please contact  me at (202) 512-7215 or bertonid@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made key contributions to this  report are listed in appendix IV.
section_title: Appendix I: Objectives, Scope and Methodology
paragraphs: The objectives of this report were to (1) review how VA and its grantee  and subgrantees used program funds to provide adaptive sports  opportunities to veterans and servicemembers; (2) assess how VA is  overseeing grantees’ and subgrantees’ use of funds; and (3) describe  how veterans and servicemembers have benefited from VA Paralympics  activities. The mandated requirement to include a description of how the  United States Paralympics, Inc. (which was superseded by the  Paralympic Division of the United States Olympic Committee (USOC))  used grant funds from the Department of Veterans Affairs (VA) is  provided under the first research objective. The other mandated  requirements to include the number of veterans with disabilities who  benefitted from such grants and how such veterans benefitted were  addressed under the third research objective. To address the three  objectives, we analyzed both planned and final program budget  expenditure data; reviewed program reports, guidance, and relevant  federal laws and regulations; and interviewed VA and USOC officials and  other program stakeholders about VA’s Paralympics program activities  funded with fiscal years 2010, 2011, and 2012 appropriations.
Specifically, to determine how VA and its grantees used program funds,  we reviewed information on planned and actual program expenditures  provided by VA and USOC and interviewed VA and USOC officials to  better understand the purposes for which funds were used. VA started  spending Paralympic program funds in fiscal year 2010, but did not have  complete final expenditure information for that first program year. As a  result, we discuss this incomplete expenditure data in our report findings.  We obtained VA’s complete planned and final expenditure budget  information on fiscal year 2011 funds, but could only report planned  expenditures for fiscal year 2012, as their actual expenditures for that  year had not yet been finalized at the writing of this report. USOC  provided data to us on subgrantees’ planned and final expenditures.  Subgrantees’ planned expenditures were based on subgrant agreements  made by USOC and the subgrantee, and final expenditures were based  on data from quarterly reports submitted by each subgrantee to USOC.  To determine the reliability of VA and USOC data on planned and actual  program expenditures for that year, we interviewed VA and USOC  officials about their procedures for collecting and maintaining these data.  In addition, we reviewed a nonprobability sample of 21 subgrant files to  verify the accuracy of data reported to USOC and to better understand  how USOC maintains these data. The sample included all types of USOC  subgrants mentioned in the background of this report. Specifically, all of  USOC’s National Partner subgrants were included, and if these National  Partners were also awarded Olympic Opportunity Fund subgrants, those  subgrants were also included. The sample also included Model  Community Partners and other Olympic Opportunity Fund subgrantees  which were selected randomly after being stratified according to their  subgrant type and USOC-designated geographic region. Due to errors in  the original list of subgrantees by subgrant type provided by USOC, our  sample also included two Athlete Development subgrants. In total, the  sample files contained information on 56 percent of funds USOC provided  in subgrants using fiscal year 2010 dollars. Due to problems we found  with subgrantee reporting, we did not report information on subgrantees’  actual expenditures. (See the body of the report for more information.)  We reported only those expenditure data we believe were sufficiently  reliable for the purposes of our study.
To determine how VA oversaw grantees’ use of funds, we interviewed VA  and USOC officials and obtained and reviewed quarterly progress reports  from USOC, examples of progress reports from subgrantees, and VA’s  and USOC’s monitoring plans. Furthermore, we reviewed the same non- probability sample of 21 subgrant files to obtain information on whether  their activities were documented as required under USOC policies— mentioned in subgrant agreements, subgrant applications, and interviews  with the organization’s officials—and as promoted by GAO’s guidelines  for internal controls and the Domestic Working Group’s Grant  Accountability Project’s promising practices.
To determine how veterans and servicemembers have benefited from VA  Paralympics program activities, we reviewed participant and activity  counts in the same non-probability sample of 21 subgrantee files  maintained by USOC. We found issues with double-counting of activities  and participants, as well as issues of counting non- veteran/servicemember activities and participants. However, to be  responsive to our mandate, we provided USOC’s total counts of activities  and participants in the report along with a discussion of why these  numbers are not reliable. We reviewed USOC quarterly and annual  program reports to VA. We also interviewed VA and USOC officials as  well as subgrantees, regional stakeholders, and veteran program  participants at a site visit to a VA adaptive sports program event in  Chicago, Illinois in August 2011.
section_title: Appendix II: United States Olympic Committee’s Cost Definitions for Subgrantees’ Use of Funds
section_title: Appendix III: Comments from the Department of Veterans Affairs
section_title: Appendix IV: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, the following staff members  made important contributions to this report: Brett Fallavollita, Assistant  Director; Danielle Giese, Analyst-in-Charge; Kristy Kennedy; Nisha  Hazra; and Juliann Gorse. Also, Shana Wallace provided guidance on the  study’s methodology; Craig Winslow provided legal advice; James  Bennett assisted with report graphics; and Susannah Compton provided  writing assistance.
section_title: Related GAO Products
paragraphs: VA Mental Health: Number of Veterans Receiving Care, Barriers Faced,  and Efforts to Increase Access. GAO-12-12. Washington, D.C.: October  14, 2011.
VA Education Benefits: Actions Taken, but Outreach and Oversight Could  Be Improved. GAO-11-256. Washington, D.C.: February 28, 2011.
VA Health Care: Spending for and Provision of Prosthetic Items.  GAO-10-935. Washington, D.C.: September 30, 2010.
Standards for Internal Control in the Federal Government.  GAO/AIMD-00-21.3.1 Washington, D.C.: November 1, 1999.