Adaptive Sports Grant Program: VA Has Taken Steps toward Better Grantee Selection and Oversight, but Additional Actions Needed
Published: 2015-09-28T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: VA's adaptive sports grant program distributes $8 million annually to organizations that provide sports activities for veterans and service members with disabilities. The U.S. Olympic Committee (USOC) played an intermediary role from fiscal year 2010, when the program was implemented, through 2013. USOC received funds from VA and subgranted them to selected grantees. VA is now responsible for selecting grantees and program administration. Congress included a provision in statute for GAO to review VA's program management.
GAO reviewed (1) how VA selected grantees to provide activities for veterans and service members with disabilities; (2) how VA monitors grantees' use of funds; and (3) what programs and activities were supported with fiscal year 2014 funds, and what is known about its benefits. GAO reviewed a nongeneralizable sample of 16 of the 69 grant files accounting for about $3.7 million of the $8 million awarded in fiscal year 2014; and interviewed VA officials, as well as grantee officials and adaptive sports participants during site visits to adaptive sports events in three states, selected in part to ensure regional diversity.
section_title: What GAO Found
paragraphs: From December 2013 through September 2014, VA developed implementing regulations, announced availability of funding, and selected grantees—ultimately awarding 69 grants from a pool of 161 applications to receive funding under its adaptive sports grant program. VA selected grantees in three steps, including (1) eliminating non-qualifying applications, (2) scoring and ranking qualifying applications using nine criteria, such as strength of the proposed program concept, and (3) a final step that included, among other things, eliminating unnecessary costs from proposed budgets. VA officials said limited available time necessitated the use of a standard federal grant application form rather than one tailored for the program. Because the form did not include some information needed to assess applications—such as the roles of partner organizations—VA asked for narrative attachments. These attachments varied greatly in length and detail which VA officials said made their review quite labor intensive. In addition, some applications did not contain needed information. For example, 3 of the 16 grant files reviewed by GAO did not contain documentation of the grantee's financial management capabilities. VA customized its application form for fiscal year 2015, and VA officials said this led to a substantial improvement in the application process.
VA developed a grant monitoring approach for fiscal year 2014 grants that relied on quarterly and annual reports from grantees (containing information on financial and sports activities), site visits, and remote auditing of selected grantees. In the sample of 16 grant files reviewed, GAO found grantees generally complied with VA's quarterly reporting requirements. VA has improved the quarterly report template so that it requests information on time spent on direct personal interaction with participants. Through June 2015, VA provided GAO with reports of 8 visits covering 9 of its 69 grants. However, VA did not initiate a remote audit until August 2015. The agency developed a draft grant monitoring plan in the fourth quarter of fiscal year 2015, but the plan does not specify the number or frequency of site visits and remote audits. This omission risks the possibility that none will be performed in some years, or performed very late in the year, thus missing an opportunity for prompt detection of the misuse of funds.
The grants supported a variety of sports activities and afforded participant benefits such as socialization and improved personal independence, according to the participants, coaches, and grantee officials GAO interviewed. The 69 grantees in fiscal year 2014 planned activities that encompassed many different adaptive sports, with cycling, boating, and snow skiing among the most common. Overall, the allotment for administrative costs in grantees' budgets was about 5.7 percent of the total $8 million awarded in fiscal year 2014—below the statutory maximum of 7.5 percent. However, some grantee officials expressed concern about a significant no-show rate. VA officials confirmed that no-shows are a problem, and stated that they had shared information with some grantees about ways to reduce no-shows. However, they have not systematically gathered and disseminated such techniques to all grantees, which could promote higher attendance rates and maximum benefit of federal dollars.
section_title: What GAO Recommends
paragraphs: GAO recommends that VA (1) specify the number and frequency of annual site visits and remote audits, and (2) systematically identify and disseminate techniques for reducing no-shows. VA concurred with both recommendations.

section_title: Letter
paragraphs: In 2013, an estimated 3.6 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 injuries, though  often with serious medical challenges including amputations, traumatic  brain injuries, and post-traumatic stress disorder. In part to promote the  lifelong health of veterans and service members with disabilities through  regular participation in physical activity and sports, federal law authorized  an adaptive sports grant program in 2008. As reauthorized in 2013, the  law tasks the Department of Veterans Affairs (VA) with making grants to  eligible entities for planning, developing, managing, and implementing  programs to provide adaptive sports opportunities for veterans and  members of the armed services with disabilities. Initially authorized  through fiscal year 2013, the program was reauthorized and amended in  December 2013, with the reauthorization stating that VA can provide  funding for adaptive sports opportunities occurring though fiscal year  2016. The reauthorization also included a provision that GAO submit a  report on the use of grants under the program.
Our objectives in this review were to determine (1) how the VA adaptive  sports grant program selected grantees to provide adaptive sports  activities for veterans and service members with disabilities; (2) how the  program monitors grantees’ use of grant funds; and (3) what programs  and activities have been supported with fiscal year 2014 grant funds, and  what is known about how veterans and service members with disabilities  may have benefited from these programs and activities.
To address the objectives outlined above, we limited our review to  program grants made using fiscal year 2014 funds, which supported  grantee activities that were to take place in fiscal year 2015. Because our  audit work began and ended during VA’s first year of monitoring grantees,  our work on VA’s grantee monitoring generally covered the first two  quarters of fiscal year 2015—October 2014 through March 2015. We  reviewed relevant federal laws and regulations, government-wide and VA  grants management policies and other grants management criteria, VA’s  July 2014 Notice of Funding Availability, quarterly status reports  submitted by selected grantees for the first half of fiscal year 2015, and  VA site visit reports of the grantees completed through June 2015. We  also obtained VA data on grantee budgets and proposed activities. We  interviewed VA officials about this data and determined that it was  sufficiently reliable for the purposes of this report. We also reviewed  relevant grants management criteria, such as VA’s agency-wide grants  management policies. Further, we obtained VA data on grantee budgets  and proposed activities. To better understand VA’s approach to grantee  selection and oversight, we also reviewed a sample of VA’s grant files— 16 of the 69 grants awarded in fiscal year 2014. We selected these grants  to include all 10 grants of $250,000 or more, and 6 grants that were  randomly selected in a manner to ensure that we obtained at least one  grantee from each category of grantees—national, regional, and  community-based organizations. In addition, we ensured that selected  grantees included representation of different geographic regions. While  this sample is not generalizable to all 69 grants, it accounts for about $3.7  million, or 46 percent, of the $8 million in the grant funds awarded in fiscal  year 2014. We also conducted interviews with officials of VA and the U.S.  Olympic Committee (USOC), the latter of which had previously been  responsible for administering the program. Finally, we conducted site  visits to three events sponsored by selected grantees in Indiana, Illinois,  and North Carolina. We selected events that occurred during our review  while also considering regional diversity and travel considerations. During  the visits, we observed sports events, and interviewed sponsoring  organization officials, participant athletes, coaches, and instructors. In  addition, we reviewed relevant documents and interviewed VA officials  regarding changes to the grant application and review process in fiscal  year 2015.
We conducted this performance audit from November 2014 through  September 2015 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: Participation in adaptive sports—sports that have been specifically  adapted or created for persons with disabilities—has been recognized by  experts as an important means of rehabilitation for people with physical  and other disabilities, including veterans and members of the armed  services.
In 2008, federal law authorized VA to establish a grant program to fund  adaptive sports for veterans and members of the armed services with  disabilities. First operated using fiscal year 2010 funds, the program is  authorized to support activities that will facilitate, encourage, and sustain  participation in adaptive sports activities. Under the program, grants are  made to qualifying organizations, referred to in the law as eligible entities,  that will plan, develop, manage and implement programs to provide  adaptive sports opportunities. To be eligible for a grant, an organization  must be a non-federal entity with significant experience in managing a  large-scale adaptive sports program. Such experience must be with  programs that are either (1) affiliated with a National Paralympic  Committee or a National Governing Body authorized to provide  Paralympic sports, (2) an adaptive sports program of a National  Governing Body that meets certain other requirements, or (3) an adaptive  sports program in which at least 50 persons with disabilities participate or  in which the participants with disabilities reside in at least five different  congressional districts. Since fiscal year 2010, VA has allocated $8  million per year for the program.
During the program’s first four fiscal years—2010 through 2013—the  USOC served an intermediary role in program management, receiving  grant funds from VA and sub-granting them to organizations that provided  adaptive sports opportunities and events. In 2012, we reported on the  program’s actual or planned activities in fiscal years 2010 to 2012, when  USOC was involved. At that time, we found several shortcomings in  program reporting and oversight practices. For example, we found that  expenditure reporting practices for grantees were not consistent with  federal internal control standards, and that VA was not performing on-site  or remote monitoring to verify how funds were being used. In addition, we  reported that in fiscal year 2011 $3.1 million of the $7.5 million annually  provided by VA—about 40 percent—was absorbed by USOC for its  operations, personnel, and administrative costs. We made several  recommendations aimed at improving grantee reporting and encouraged  VA to review implementation of USOC’s monitoring plan. VA’s  implementation of the program substantially addresses these  recommendations. As appropriate, we refer to these recommendations  and related VA actions to address them later in this report.
In December 2013, the program was reauthorized with a number of  changes. The reauthorization eliminated USOC’s role and instead  provides that VA can award grants to eligible entities. In addition, the law  placed specific limits on grantees’ use of grant funds for administrative  and personnel costs. For grants supporting adaptive sports opportunities  taking place during fiscal year 2015, grantees can allocate no more than  7.5 percent to such costs; in fiscal year 2016 and thereafter, grantees will  be limited to 5 percent. Law and regulation include other requirements for  VA and grantees. For example, the adaptive sports program’s authorizing  statute and regulations outline a number of criteria that guide grant  application review and selection, including requirements that applicants  clearly state the sports activities to be provided, clearly define program  objectives, and describe the adequacy of their program management  structure. In addition, applications must include detailed descriptions of  any partnerships and the grant funds that will be provided to any partners;  the anticipated personnel, travel, and administrative costs paid for with  grant funding; and the performance metrics to be used to evaluate the  effectiveness of the activities carried out with grant funds. VA grant  programs are also subject to government-wide grants management  requirements.
In its first two years of awarding grants, VA has awarded grants near the  end of the fiscal year for use by grantees to support activities to be  carried out in the following fiscal year. For example, organizations that  were awarded grants in fiscal year 2014 have used fiscal year 2014 funds  to support adaptive sports activities during fiscal year 2015. Similarly,  grantees will use grants awarded in fiscal year 2015 to support adaptive  sports activities that will occur primarily during fiscal year 2016. Except  where specifically noted, this report refers only to activities and events  pertaining to grants awarded in fiscal year 2014.
section_title: Grant Selection Process Had Limitations in Fiscal Year 2014, but VA Implemented an Improved Process in Fiscal Year 2015
subsections: section_title: VA Faced a Tight Timeframe in Selecting Fiscal Year 2014 Grantees
paragraphs: In fiscal year 2014, the first year VA was responsible for selecting eligible  entities to receive grants under the adaptive sports grant program, VA  officials reported challenges because of tight time frames to obtain and  review grant applications and the lack of a standard application form  tailored for the adaptive sports grant program. (See fig. 1 for a timeline of  events.)
Proposed program based in facts, good  reasoning, sound judgment (20 points)  Considerations: Likelihood of success in  aiding rehabilitation; appropriateness of  funding requested; measurability of  objectives; benefits for disabled veterans. low risk and high potential return. For example, it sought to ensure that  proposed activities were occurring in areas with a large population of  veterans with disabilities. In some cases, some aspects of a proposal  were accepted and others rejected to make the proposed grant amount  smaller. At the end of this process, VA selected 69 applications to which  the $8 million allocated for the program in fiscal year 2014 was awarded.
Sufficiency of management structure (20  points)  Considerations: Sufficient experience in  providing activity; certification of key  personnel; evidence of community outreach;  clear description of infrastructure to support  planned activities.
Geographic coverage (15 points)  Considerations: Cost-effective filling of  adaptive sports needs in area; appropriate for  region and potential participants.
Conformance with VA program goals and  objectives (15 points)  Considerations: Proposed activities advance  program goals, fall within spectrum of  adaptive sports, and have positive impacts.
Strength of program concept and  objectives (10 points)  Considerations: Concepts clearly linked to  objectives; likely to benefit health of disabled  veterans.
VA officials told us that completing all tasks necessary to award the  grants before the end of fiscal year 2014 was very challenging—in part  because of the limited time frame and because managing the solicitation  and selection of grant applicants was a new experience for the  responsible VA unit. However, VA officials explained that the alternative  would have been that no program activities would have been funded with  fiscal year 2014 dollars. Officials told us that developing and publishing  the interim final rule to govern the program within about 6 months  required considerable effort. VA officials also told us that development  and authorization of an application form tailored to the program was not  possible within the deadlines they faced in fiscal year 2014. Instead they  opted to use a standard federal grant applications form—SF-424— developed by OMB. Because law and regulation required the program’s  grant applications to include information that the SF-424 forms are not  designed to include—such as a description of the roles of any partner  organization—VA required narrative attachments to this standard  application form. These narratives varied greatly in length, detail, and  format. According to one VA official, they ranged from about 7 pages to  about 60 pages.
Financial capability and value for funding  (10 points)
As a result, according to VA officials, the review and approval process for  fiscal year 2014 was very labor-intensive, and VA officials said staff had  to engage in extensive communications and negotiations with applicants.  For example, VA officials told us they conducted extensive negotiations  with some applicants regarding the cost and scope of their proposals,  with the aim of controlling costs and maximizing the benefits that program  funds would provide to participants. In addition, VA officials said that,  despite repeated VA communication, some applicants did not understand  the limitation on administrative expenses. Under this limitation, for  activities taking place during fiscal year 2015, grantees could allocate no  more than 7.5 percent of the grant amount to administrative expenses,  including any costs associated with employees other than those who  directly provided coaching and training for participants. This  misunderstanding may have been unintentionally reinforced by the  budget categories used in the standard federal application form, which do  not distinguish between these two types of personnel costs. For example,  the standard form includes a line for personnel expenses, but does not  distinguish between costs attributable to coaching and instruction, and  other types of personnel costs.
section_title: Documentation of Important Aspects of Grantee Applications Was Missing or Limited
paragraphs: Federal law, VA regulation, and grant management principles dictate that  a number of requirements be followed during the application and  selection process. For example, the program statute and VA regulations  require that an applicant submit a detailed description of its financial  controls, including methods to track expenditure of grant funds, that a  grantee observe the applicable percent limit on administrative expenses,  and that any partnerships be described, including the amount of funds  that will be made available to each partner. Despite VA’s efforts to ensure  completeness of grant applications, our review of 16 fiscal year 2014  grant files and other VA documentation found that in some cases aspects  of grant applications were not well documented. For example, VA  developed a standard checklist—the VA Administrative and Financial  Review Questionnaire for Grantees— for applicants to attest to various  aspects of their administrative and financial policies and procedures.  While this checklist was not required, VA officials told us that they treated  the satisfactory completion of this form as sufficient evidence that the  grantee could adequately safeguard and account for grant funds.
However, 3 of 16 grant files we reviewed contained neither this form nor  any other documentation of the administrative and financial capabilities of  the grantee. The forms of 3 others indicated that these grantees lacked  certain administrative and financial policies and procedures. For example,  one grantee indicated on its form that it did not have a written accounting  manual or written policies and procedures for managing finances.
Other aspects of some grantee applications were also limited. For  example, 7 of the 16 grant applications we reviewed lacked clear  documentation that the 7.5 percent limit on administrative expenses had  been observed in proposed budgets. Similarly, we found that in 3 cases,  full documentation of intended grantee partnerships was not clear. For  example, one grantee’s application narrative referred to partners but did  not specify the role of the partner organizations. As discussed in the next  subsection, VA subsequently took action to keep instances of such  documentation issues from recurring in future grant application and award  processes.
section_title: VA’s New Application Form and Other Changes Address Earlier Limitations
paragraphs: The fiscal year 2015 application process differed in significant ways from  the fiscal year 2014 process. Importantly, VA developed a new  application form tailored to the adaptive sports grant program. As  summarized in table 1, our review indicates that this new form addresses  the review difficulties and documentation limitations the program  experienced in fiscal year 2014. For example, whereas the fiscal year  2014 application form did not require applicants to distinguish between  the two types of personnel costs so as to meet the limit on total  administrative costs, the new form does. Similarly, the new form requires  that applicants explicitly identify partner organizations, including their  locations and roles.
In addition to the new form, other aspects of the fiscal year 2015  application process increased the likelihood that VA would receive more  complete application packages and conduct a more efficient review.  While applicants had 5 weeks to prepare and submit grant applications  after publication of the Notice of Funding Availability in fiscal year 2014, in  fiscal year 2015 they had 9 weeks. In fiscal year 2015 VA also required  applicants to submit the Administrative and Financial Review  Questionnaire, which was optional in fiscal year 2014 and which inquires  about an applicant’s administrative and financial policies, procedures,  accounting, and management of grants.
Because VA was reviewing fiscal year 2015 grant applications at the time  we were completing our audit work, we did not review the applications or  accompanying documentation and cannot independently assess their  quality compared to those submitted in fiscal year 2014. However, VA  officials told us in July 2015 that the new application resulted in a much  improved and more efficient application and review process. Specifically,  the application form instructs applicants to provide required information or  leave a visible blank, and so VA officials noted that the fiscal year 2015  applications have been more consistently complete and the rate of  rejection of incomplete applications much lower. Also, they said VA’s  review has been much less laborious in fiscal year 2015. Finally,  according to VA, the new form facilitated a more comprehensive  approach to comparing proposed budgets among the grant applications.
section_title: VA Monitors Grantees in Several Ways, but its Approach for 2014 Grantees Had Limitations
subsections: section_title: The Design of VA’s Monitoring Approach is Consistent with Grants Management Criteria, but Further Improvements Could be Made
paragraphs: VA’s approach to monitoring grantees, as outlined in VA grants  management policy and an agency memorandum on monitoring  techniques, includes regular grantee reporting, supplemented with  monitoring through detailed site visits and desk audits of selected  grantees. This approach is consistent with the Uniform Guidance, and is  intended to help ensure that grantees are providing adaptive sports  opportunities to veterans and service members, according to the terms of  their grant agreements with VA. It is also intended to help ensure that VA  grant funds are being managed according to federal requirements, as  reflected in the grant agreements. In addition, grantee monitoring can  provide VA with useful information to measure the grant program’s  performance and for reporting to the Congress and the public.
VA requires that all grantees submit quarterly and annual reports. VA  reviews these reports to ensure that grantees are operating according to  the terms of their grant agreements. While only annual reports are  required under the program’s statute, VA requires grantees to report on  performance quarterly because, according to VA officials, this helps to  provide for more frequent monitoring of grantees.
To ensure that grantees’ quarterly reports include consistent information  in accordance with statutory and regulatory requirements, VA created a  standard quarterly report template, adapted from a USOC template. As  summarized in table 2, VA’s quarterly report template contains data  required from grantees under VA’s program regulations. For each grant,  VA customized the template to show the activities the grantee agreed to  provide; and a budget showing the amount awarded, broken out into  several categories. According to VA officials, they identified the activities  and budget amounts by reviewing each grantee’s application. Grantees  are expected to submit an updated report each quarter to VA. The  quarterly report format is consistent with GAO’s 2012 recommendations,  in that it (1) requires reporting of the expenditure of VA grant program  funds, excluding funds from other sources; and (2) is formatted to provide  consistent and non-duplicative reporting of activities and numbers of  participants. Table 2 summarizes how VA translated the information  required of grantees into the quarterly report format.
As indicated in table 2, VA’s quarterly report template did not require  grantees to provide all of the information required by program regulations.  For example, VA program regulations require grantees to include in their  reports detailed records of the time involved in providing adaptive sports  activities through direct personal interaction with adaptive sports  participants, such as coaching or instruction, versus time spent on other  adaptive sports activities. However, during fiscal year 2015, VA did not  require grantees to add this information to the quarterly reports. We  pointed out this omission to VA staff, and in August 2015, they provided a  draft revised quarterly report format, where grantees are to provide  information on time spent providing direct instruction to participants. A VA  official indicated that they intended to further revise the template so that it  also required grantees to report staff time spent on matters other than  direct personal interaction with participants, as required by regulations.  They expected to complete the template revision before the start of fiscal  year 2016.
VA’s program regulations also require grantees to identify the locations of  their adaptive sports activities. However, VA did not provide a specific  place for grantees to report the locations of their activities. VA has  revised its quarterly report format to have grantees identify locations of  their activities. Improved information from grantees could help VA assess  the extent of geographic coverage of adaptive sports opportunities.
In addition to quarterly reporting by all grantees, VA’s grantee monitoring  approach calls for monitoring of selected grantees through conducting  site visits and desk audits, although the reporting format for the latter has  not been established. A site visit involves a visit to a grantee’s offices to  review financial and other records, a visit to a grantee’s adaptive sports  event, or both. The reviewing official is to assess the extent to which the  grantee is providing activities according to the grant agreement. Also, the  reviewer is to assess the soundness of the grantee’s financial  management of VA grant funds, as well as the grantee’s financial  controls. To record the results of the assessments for use by VA program  officials, the reviewer prepares a site visit report using a standard VA  format. A desk audit (also known as a remote audit), according to VA  officials, involves asking the grantee to provide documentation to support  an assessment of grantee financial management issues that might be of  concern. VA may, for example, ask to see receipts for equipment or  transportation ticket purchases or ask for documentation of how the  calculation of staff days spent on providing services is made. A VA official  stated that desk audits will likely be tailored to the circumstances as  appropriate.
For both site visits and desk audits, VA employs a selective monitoring  approach—based on risk—to help focus its limited resources on grantees  at highest risk of failing to perform or mismanaging funds. Such an  approach is consistent with our prior work, which found that risk-based  monitoring can help agencies identify grantees that need additional  attention; for example, using limited resources to visit higher-risk  grantees.
According to VA officials, one criterion for assessing risk is the awarded  amount. Officials said that they tend to select grantees receiving less  funding for desk audits, and grantees receiving more funding for site  visits, because those receiving larger grants are at risk of losing more  dollars in case of financial mismanagement. VA also said that they use  information from application reviews, such as assessments of financial  controls, and grantees’ previous experience providing adaptive sports  programs, in deciding whether a desk audit or site visit is warranted.  Another consideration is the scope of a grantee’s event. A VA official said  that a site visit may be scheduled to a multi-sport event, such as one of  the regional Valor Games, where a grantee may be collaborating with  other adaptive sports providers, including other VA grantees. To  economize on monitoring costs, VA uses geographic considerations as  well. For example, VA officials said that a site visit may be planned if it  would cover several grantees headquartered in the same area.
Although VA officials provided us their policy on monitoring of grant  funded activities, for most of fiscal year 2015 they did not have a written  monitoring plan. Best practices in grants management suggest that risk- based monitoring helps agencies ensure adequate grantee financial  management and performance. Also, planning is part of an agency’s  internal control system, which helps program managers achieve desired  results through effective stewardship of public resources, such as grant  funds. For example, by documenting and using written criteria for  determining which grantees need closer monitoring, VA could be better  positioned to help prevent mismanagement of funds and poor program  performance. We discussed this issue with VA staff earlier in our review,  and in August 2015, they provided us with their draft monitoring plan.  According to a VA official, VA expects to complete this plan early in fiscal  year 2016. VA’s draft plan describes a monitoring approach consistent  with VA grants management policy. However, the draft plan lacks certain  elements, such as information on the number and frequency of site visits  and desk audits. Promising practices in ensuring adequate grantee  financial systems and proper use of grant funds include an agency  reviewing a target number of grantees each year. For example, one  agency requires reviews of 10 percent of all of its grantees each year as a  mechanism to enhance grantee accountability. A grantee monitoring  plan that addresses the number and frequency of reviews throughout the  year can help VA ensure that it is monitoring grantees on an ongoing  basis, to prevent, and promptly detect, misuse of grant funds.
section_title: The Implementation of VA’s Monitoring Strategy Has Identified a Number of Issues
paragraphs: At the time of our review, VA was implementing two main methods of its  monitoring approach—quarterly grantee reporting and VA site visits.  Almost all of the grantees whose files we reviewed submitted their  quarterly reports on time. For 13 of the 16 grants, the grantees submitted  their first quarter fiscal year 2015 reports on time, and all submitted their  second quarter reports on time. We found that, in general, the grantees  provided the information VA requested. Also, in our review of the selected  grantee files, we found evidence that VA reviewed the quarterly reports to  ensure that grantees were operating according to the terms of their grant  agreements with VA.
For 6 of the first-quarter and 12 of the second-quarter reports we  reviewed, we found that VA identified issues for follow up, and requested  additional information from grantees. Table 3 describes examples of the  types of issues VA identified in the quarterly reports we reviewed.
We reviewed reports on the results of 8 VA site visits, covering 9 of its 69  grants, conducted from November 2014 through June 2015. Six of the 8  site visits occurred at grantees’ adaptive sports events; the remaining 2  visits occurred at grantees’ headquarters. As summarized in table 4, the  reports identified several types of issues, although none of the issues  reflected grantee noncompliance. In each of the 8 reports we reviewed,  VA officials provided notes on how grantees operated their events and  the financial management of VA grant funds. Several of the reports also  made suggestions for improvements in these areas.
Through July 2015, VA officials told us that the agency had not conducted  any desk audits of fiscal year 2014 grantees. VA officials explained that at  the start of fiscal year 2015, desk audits were intended to form a portion  of the monitoring strategy, but they have been deferred due primarily to a  large workload. In August 2015, a VA official stated that they had initiated  a desk audit of one grantee.
section_title: VA Grants Funded a Range of Adaptive Sports Activities, but Some Grantees Expressed Concern with No-Shows
subsections: section_title: Fiscal Year 2014 Grants Funded Many Distinct Sport Activities
paragraphs: The 69 adaptive sports grants awarded by VA in fiscal year 2014  supported a wide range of activities, with cycling, boating, snow skiing,  and archery among the most frequent (see fig. 2). Some grants were  focused on activities in a single location and/or sport, while others  planned to support a variety of sports events. For example, one grant  targeted recreational rowing for veterans with disabilities in five locations  across the country, while another grant aimed to provide a variety of  physical fitness activities in one state. Another grantee committed to  provide more than seven different sports for paralyzed veterans in more  than 30 locations across the country.
The activities supported by these 69 grants also targeted athletes with a  range of disabilities (see table 5). A sport or an adaptation may be aimed  at participants with a specific type of disability, or may be suitable for  participants with a range of disabilities.
To support these activities, grantees planned to spend grant funds in  various budget categories. The largest categories for the 69 fiscal year  2014 grants were travel, including transportation, lodging, and  subsistence for athletes, coaches, and other officials involved in meeting  program objectives; operations, including such expenses as facility  rentals and ski lift tickets; and supplies, including purchase of adaptive  bicycles, watercraft, and bows and arrows (see fig. 3). Importantly, a total  of about $459,000—about 5.7 percent of the total $8 million awarded— was budgeted as administrative costs. This included both normal  administrative costs as well as personnel costs associated with grant  activities but not attributable to time spent coaching or training  participants. The amount was below the 7.5 percent statutory limit for  activities carried out in fiscal year 2015.
section_title: Participants and Others Report Enhanced Physical, Emotional, and Social Well-Being from Adaptive Sports Activities
paragraphs: Participants, grantee officials, and coaches we interviewed generally said  that adaptive sports activities are beneficial to veterans and service  members in multiple ways (see table 6.) These benefits include  improved family and social relationships, emotional health, levels of  independence and life skills, and physical well-being. Several  interviewees—including participants and grantee officials—said adaptive  sports can have a transformative effect on a veteran with disabilities. One  official said he sees disabled veterans who have been inactive for many  years participate in adaptive sports, resulting in a significant life change.  Another official said some veterans with disabilities get accustomed to  being taken care of, which can amplify their disabilities. He recalled that  at one sports clinic funded by the grant program, a blind veteran asked to  be guided to another part of the sports facility and, after some good- natured ribbing by his teammates, was convinced he could navigate on  his own.
Several experts we spoke with stressed the importance of sustained  involvement in adaptive sports as the key to long-term benefits. According  to one adaptive sports expert familiar with the grant program, the  important thing is whether or not the event helps fuel a persistent  participation in the sport and thereby contributes to a balanced and active  life. One of the grantees we visited considered the opportunity that  applicants would have to continue their participation in a sport when  selecting participants. A grantee official said that in reviewing  applications from veterans and service members wishing to join an event,  they consider the proximity of the applicant to ongoing programs offering  the same adaptive sport. The aim is to ensure that veterans participating  in the grant-funded event also stay involved in the sport for their ongoing  well-being and health. VA officials agreed with this aim and said in the  future they may consider grant applications, for example, that propose  purchasing adaptive sports supplies and equipment to help benefit  veterans over a number of years.
section_title: Some Grantees Said that No-Shows by Veterans Registered for an Activity Is Problematic
paragraphs: Some grantee officials who we interviewed spoke of a high incidence of  veteran no-shows at adaptive sports activities and events as an  impediment to program success. At one of our site visits—a sports clinic  in which 7 of 10 registered participants attended—an official said some  veterans may cancel on short notice, which deprives other interested  veterans from participating. In addition, the official was concerned that  excessive no-shows may mean there are not enough athletes to form  teams or hold an effective practice session. Another official said  considerable time and money has been lost when veterans register but  do not participate. The official said some no-shows are understandable,  such as when a veteran’s plans are affected by a medical condition.  Nonetheless, adaptive sports are about more than athletics and are  aimed at strengthening “mind and heart” of participants as well, the official  said. Some veterans can be victims of learned helplessness after they  return from service, the official said, and goal-setting and an insistence on  accountability can counter this. Another official said that while non- attendance of registered athletes at their high-profile summer sports  camp is not a problem, it can be an issue at less prominent events, such  as weeknight archery training sessions.
Some grantees noted that asking participants to have a financial stake in  an event could encourage attendance. For example, one official  suggested that registrants pay a refundable deposit of perhaps $250 so  that they have some “skin in the game” and event sponsors have greater  assurance of their attendance. Another grantee official explained that in  her organization’s experience, requiring an up-front financial commitment  is effective. At a 2013 multi-sport event, about 35 of the registered  athletes did not attend, resulting in a huge waste of federal funds and  missed opportunities for other veterans, she said. To combat this, the  organization required a credit card number from registrants for the 2014  event, and informed them they would be charged the cost of one-night’s  lodging if they failed to attend without prior notice. Under this policy, she  said, 82 of the 84 registrants—98 percent—took part. Another grantee  official said that while requesting a deposit of some kind might have merit,  it could also cause cash flow difficulties for some veterans. He said some  participants in weeknight training sessions have a hard time paying public  transit fare, so the additional cost of a refundable deposit might be a  barrier to participation.
VA officials confirmed that no-shows are a problem. They explained that  while its regulations require that adaptive sports events supported by the  grants be free of charge for eligible veterans, having strategies to  incentivize attendance for those who register—such as charging for a first  night’s hotel expenses—are permissible. They also said that they have  provided informal guidance to some fiscal year 2014 grant recipients on  ways to reduce no-show rates—typically this information has been shared  with grantees sponsoring large scale events that involve travel.  However, VA has not systematically gathered and disseminated  permissible techniques for reducing no-show rates to all of its grantees.  According to federal internal control standards, program management is  responsible for identifying, analyzing, and responding to risks it faces in  achieving program objectives. A systematic effort to gather and  disseminate techniques to address the no-show issue would be  consistent with this requirement.
section_title: Conclusions
paragraphs: In fiscal year 2014, VA assumed responsibility for selecting and  overseeing grantees under the adaptive sports grant program and,  despite challenges, awarded 69 grants supporting a wide variety of  adaptive sports opportunities for veterans and members of the armed  services with disabilities. Our review indicates that through the first half of  fiscal year 2015, grantees were substantially complying with reporting  requirements and that site visits to selected grantees have identified  opportunities for improvement. Further, VA is amending its quarterly  reporting template so that it will require a report of staff time spent on  direct personal interaction with participants, and time spent on other  matters, as required by program regulations. However, VA’s draft  monitoring plan does not include a regular schedule for site visits or desk  audits, which risks the possibility that none will be performed in some  years, or that they will be performed very late in the year. Promising  practices in ensuring adequate grantee financial systems and proper use  of grant funds include review of a certain number of grantees each year,  and irregular scheduling risks the possibility that mismanagement or  misuse of grant funds will not be promptly detected.
Finally, a significant no-show factor means that program dollars may not  be used to their fullest potential. VA officials are aware of this issue, and  have taken some steps to address it. However, they have not  systematically gathered or disseminated techniques to reduce the no- show rate. Further attention to this matter could better enable VA and  grantees to serve as many eligible veterans as there are slots available in  funded activities.
section_title: Recommendations for Executive Action
paragraphs: To help ensure the best use of the VA Adaptive Sports Grant program  funds, we recommend the Secretary of Veterans Affairs direct the  Undersecretary for Public and Intergovernmental Affairs to take the  following two actions:  Revise the draft monitoring plan to include guidance on the number and  frequency of annual site visits and desk audits.
Systematically gather and disseminate, to all its grantees, techniques that  can reduce the no-show rate at funded events.
section_title: Agency Comments
paragraphs: We provided a draft of this report to the Department of Veterans Affairs  for review. We received formal written comments, which are reproduced  in appendix II.  VA concurred with our conclusions and both of our  recommendations. With regard to the first recommendation, VA indicated  that it had established a requirement that a minimum of 10 percent of  grantees would be subject to site visits and/or desk audits each fiscal  year.  Regarding the second recommendation, VA stated that the agency  plans to systematically gather and disseminate techniques from a variety  of sources to reduce no-show rates. VA also provided several technical  comments which we incorporated as appropriate.
We are sending copies of this report to appropriate congressional  committees, the Secretary of Veterans Affairs, the Assistant Secretary for  Public and Intergovernmental Affairs, and other interested parties. In  addition, this report will be available at no charge on the GAO website at  http://www.gao.gov.
If you or your staff 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. Key contributors to this report are found in  appendix III.
section_title: Appendix I: Objectives, Scope and Methodology
paragraphs: The objectives of this engagement were to determine (1) how the VA  adaptive sports grant program selected grantees to provide adaptive  sports programs and activities for veterans and service members with  disabilities; (2) how VA monitors grantees’ use of funds; and (3) what  programs and activities have been supported with fiscal year 2014 funds,  and what is known about how veterans and service members with  disabilities have benefited from these programs and activities. Our work  was limited to program grants using fiscal year 2014 funds, which  supported grantee activities that were to take place in fiscal year 2015.  Because our audit work began and ended during VA’s first year of  monitoring grantees, our work on VA’s grantee monitoring generally  covered the first two quarters of fiscal year 2015—October 2014 through  March 2015.
We addressed the first objective in several steps. To determine how VA  reviewed and selected fiscal year 2014 adaptive sports grant applications,  we reviewed key VA documents—including relevant federal laws,  program regulations, VA’s fiscal year 2014 Notice of Funding Availability,  and application instructions—and interviewed VA officials. We also  reviewed relevant grants management criteria, including VA’s agency- wide grants management policies, and best grants management  practices that had been identified by members of the Domestic Working  Group. Second, to determine how VA staff followed program policies and  key criteria, we reviewed the files of 16 fiscal year 2014 grants and  examined available documents such as the grant applications and  proposals, proposed budgets, evidence of grantees’ financial and  administrative capability, VA’s scoring of grantee proposals, and the grant  agreement. We selected grants based on type of organization, amount of  grant funding and geography. We selected grants to ensure that we  obtained eight from national, four from regional and four from community- based organizations. We selected all grants valued at $250,000 or  more—seven from national organizations, three from regional  organizations. We then selected the remaining six sample grants  randomly—one from a national organization, one from a regional  organization, and all four from community-based organizations. Also, we  ensured that selected grantees included representation of different  geographic regions. Although this sample size does not allow us to  project to the universe of the 69 fiscal year 2014 grants, it is nonetheless  a substantial sample, representing $3.7 million, or 46 percent, of the $8  million granted in fiscal year 2014. In addition to our review of the 2014  application process, we reviewed relevant documents and interviewed VA  officials regarding changes to the grant application and review process in  fiscal year 2015.
To address the second objective, we interviewed VA officials, reviewed  relevant VA policy documents and relevant grant oversight criteria, and  reviewed selected VA oversight documentation. Specifically, we reviewed  VA’s standard quarterly report template to ensure it conformed to the  reporting requirements contained in program regulations. We also  reviewed the quarterly reports for the 16 grants selected as described in  the preceding paragraph for the first two quarters of fiscal year 2015—the  3-month periods ending December 31, 2014 and March 31, 2015. We  also identified issues that VA had raised with the quarterly reports and, in  selected instances, followed up with VA on how its review comments  were addressed. We also obtained and reviewed reports of 8 VA site  visits that had been conducted by the end of June 2015.
To address the third objective, we obtained data from VA on the types of  sports events to be provided by each fiscal year 2014 grantee and  interviewed VA program officials; USOC officials who had been involved  in administering sub-grants prior to December 2013; and representatives  of three veterans service organizations—Disabled American Veterans,  The American Legion, and Veterans of Foreign Wars. We also obtained  VA data on grantee budgets and proposed activities. We interviewed VA  officials about this data and determined that it was sufficiently reliable for  our purposes. To obtain further perspectives on the value of adaptive  sports for veterans and service members, we attended three adaptive  sports events funded through VA grants. We selected them in  consultation with VA program officials. Specifically, we selected events  that were occurring during our review and also considered regional  diversity and travel considerations. The events selected, listed below, did  not provide a representative sample of all VA-funded adaptive sports  activities.
February 2015 goalball camp conducted by the U.S. Association of  Blind Athletes in Fort Wayne, Indiana;
March 2015 archery camp conducted by the Rehabilitation Institute of  Chicago, in Chicago, Illinois; and
May 2015 multi-sport event conducted by Bridge II Sports in Chapel  Hill and Durham, North Carolina.
At each event, we interviewed event organizers, coaches and trainers  and event participants; and observed the events. We also interviewed  event organizers prior to or during their events.
section_title: Appendix II: Comments from the Department of Veterans Affairs
section_title: Appendix III: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Brett Fallavollita (Assistant  Director), Michael Hartnett (Analyst-in-Charge), Greg Whitney, and Nyree  Ryder Tee made key contributions to this report. In addition, key support  was provided by Susan Aschoff, James Bennett, Sheila McCoy, Walter  Vance, and Craig Winslow.