VA Real Property: VA Should Improve Its Efforts to Align Facilities with Veterans' Needs
Published: 2017-04-05T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: VA operates one of the largest health care systems in the United States, with 168 VA medical centers and more than 1,000 outpatient facilities. Many of these facilities are underutilized and outdated. A previous effort aimed at modernizing and better aligning facilities was not fully implemented.
GAO was asked to review the current alignment of VA medical facilities with veterans' needs. This report examines: (1) the factors that affect VA facility alignment with veterans' needs, (2) the extent to which VA's capital-planning process facilitates the alignment of facilities with the veteran population, and (3) the extent to which VA has followed best practices by integrating stakeholders in facility alignment decisions. GAO reviewed VA's facility- planning documents and data, and interviewed VA officials in headquarters and at seven medical facilities selected for their geographic location, population, and past alignment efforts. GAO also evaluated VA's actions against federal standards for internal control and best practices for capital planning.
section_title: What GAO Found
paragraphs: Geographic shifts in the veteran population, changes in health care delivery, and an aging infrastructure affect the Department of Veterans Affairs' (VA) efforts to align its services and real property portfolio to meet the needs of veterans. For example, a shift over time from inpatient to outpatient care will likely result in underutilized space once used for inpatient care. In such instances, it is often difficult and costly for VA to modernize, renovate, and retrofit existing facilities given the challenges associated with these older facilities.
VA relies on the Strategic Capital Investment Planning (SCIP) process to plan and prioritize capital projects, but SCIP's limitations—including subjective narratives, long time frames, and restricted access to information—undermine VA's ability to achieve its goals. Although VA acknowledges many of these limitations, it has taken little action in response. Federal standards for internal control state that agencies should evaluate and determine appropriate corrective action for identified limitations on a timely basis. Without doing so, VA lacks reasonable assurance that its facility-alignment reflects veterans' needs.
A separate planning process—VA Integrated Planning (VAIP)—was designed to supplement SCIP and to provide planners with a more strategic vision for their medical facilities through the creation of facility master plans. However, GAO found limitations with this ongoing effort, which VA estimated to cost $108 million. Specifically, the facility master plans assume that all future growth in services will be provided directly through VA facilities without considering alternatives, such as purchasing care from the community. However, VA's use of care in the community has increased to an obligated $10.1 billion in fiscal year 2015. Federal capital-acquisition guidance identifies inefficient spending as a risk of not considering other options for delivering services. This consideration is particularly relevant as VA's data project that the number of enrolled veterans will begin to fall after 2024. Officials who oversee the VAIP process said that they were awaiting further analyses required by recently released VA guidance on the proportion of care and types of services to obtain from the community. As a result of this and other limitations, some local VA officials said that they make little use of the VAIP facility master plans and contract for their own facility master plans outside the VAIP process.
Although VA instructs local VA officials to communicate with stakeholders, its guidance is not detailed enough to conform to best practices. VA has not consistently followed best practices for effectively engaging stakeholders in facility consolidation efforts—such as in utilizing two-way communication early in the process and using data to demonstrate the rationale for facility alignment decisions. GAO found that when stakeholders were not always engaged consistently with best practices, VA's efforts to align facilities with veterans' needs were challenged. Also, VA officials said that they do not monitor or evaluate these communications efforts and, therefore, have little assurance that the methods used effectively disseminate information to stakeholders. This approach runs counter to federal standards for internal control, which instruct agencies to monitor and evaluate activities, such as communications methods.
section_title: What GAO Recommends
paragraphs: GAO made four recommendations, including that: VA improve SCIP's scoring and approval process among other limitations and discontinue or improve the utility of the VAIP facility master plans, and improve guidance to effectively communicate facility alignment decisions with stakeholders and to evaluate these efforts. VA partially concurred with the first recommendation and fully concurred with the other recommendations. GAO believes the recommendations are sound, as described in the report.

section_title: Letter
paragraphs: The Department of Veterans Affairs (VA) operates one of the largest  health care systems in the United States, encompassing 168 VA medical  centers and 1,053 outpatient medical facilities that provide care to more  than 8.9 million veterans each year. VA’s total health care budget in  fiscal year 2015 was nearly $51 billion. VA is also one of the largest  federal property-holding agencies. As of September 2014, VA reported  that its inventory included 6,091 owned buildings covering more than  151.5 million square feet and 1,586 leased buildings covering more than  16.6 million square feet and costing more than $340.6 million annually in  rent.
As the veteran population has shifted in recent decades and the demand  for the VA’s health care services has changed, VA has recognized the  need to improve planning and budgeting for modernizing its aging  infrastructure and aligning its real property assets to veterans’ needs and  to provide accessible, high-quality, and cost-effective access to VA’s  services. Specifically, VA initiated a process known as Capital Asset  Realignment for Enhanced Services (CARES) to determine the future  resources needed to provide health care to our nation’s veterans. In  February 2004, the CARES Commission released its report  recommending substantial changes to existing facilities but relatively few  facility closures. VA officials stated that as of June 2016, the CARES  recommendations were not fully implemented and that the process was  halted 8 years ago due to shifting priorities.
The need to align VA facilities in order to improve access to services is  related to two of GAO’s high risk areas. In 2015, GAO placed veterans’  health care on its High Risk List due to persistent weaknesses and  systemic problems with timeliness, cost-effectiveness, quality, and safety  of the care provided to veterans. In addition, federal real property  management—including management of VA real property—has also  been on GAO’s High Risk List since 2003 due to long-standing  challenges federal agencies face in several areas of real property  management, including effectively disposing of excess and underutilized  property.
You asked us to review issues related to the current alignment of VA’s  medical facilities as they related to veterans’ needs. In this report, we  examine:  1.  The factors that affect VA’s facility alignment efforts.  2.  The extent to which VA’s capital-planning process facilitates the  alignment of medical facilities with the veteran population.  3.  The extent to which VA has followed best practices by fully integrating  stakeholders in facility alignment decisions.
To address these objectives, we reviewed relevant laws, regulations,  policies, and other documents related to VA’s real property management  including, the 2004 CARES report and VA’s annual budget submissions  included in the President’s Budget of the United States Government for  Fiscal Year 2017. We also interviewed officials from VA and VA’s  Veterans Health Administration (VHA) including from:
VA’s Central Office—including personnel from the Office of Asset  Enterprise Management, Office of Construction & Facilities  Management, and Office of Policy and Planning—and
VHA’s Central Office, including staff from its Office of Policy and  Planning.
To obtain local perspectives on these objectives, we interviewed officials  from a nongeneralizable sample of seven VA medical facilities within five  different Veterans Integrated Service Networks (VISN) to learn more  about how VA tries to align facilities with the veteran population, or  “facility alignment.” VA medical facilities were chosen based on a review  of the CARES recommendations, VA’s veteran population data and  projections, and geographic and veteran population variability. We conducted interviews (either in-person or via telephone or video  conference) with officials at both the VISN and facility levels to discuss  facility alignment resources, tools, and policies. At the facility level, we  met with groups of individuals responsible for planning and making facility  alignment decisions at seven VA medical facilities. Results from our  sample cannot be generalizable to all VISNs or VA medical facilities.
To determine the factors that affect the VA’s facility-alignment efforts, we  analyzed veteran population data from the Veteran Population Projection  Model 2014 (VetPop2014) and interviewed officials at VA’s Office of  Policy and Planning who oversee the model regarding veteran population  projections and trends. We also reviewed data in the Enrollee Health  Care Projection Model (EHCPM)—a VA model for estimating the amount  of resources VA needs to meet the expected demand for most of the  health care services it provides—and interviewed officials at VHA’s Office  of Policy and Planning who oversee the model regarding veteran  population projections and trends. We reviewed these models’  methodologies, interviewed relevant officials, and determined that the  data from both the VetPop2014 and EHCPM were sufficiently reliable for  our audit objectives. We also interviewed planning officials at each of the  five VISNs and seven VA medical facilities to obtain further information on  factors related to making facility alignment decisions. Additionally, we  reviewed specific sections within the Independent Assessment of the  Health Care Delivery Systems and Assessment Management Processes  of the Department of Veterans Affairs (hereafter referred to as the  Independent Assessment). Specifically, we reviewed its sections on  demographics, health care capabilities, authorities and mechanisms for  purchasing care, and facilities, and compared these assessments to our  findings to determine whether there were similarities. We reviewed the  methodology of each of these assessments and found them to be  sufficiently reliable for our audit objectives.
To determine the extent to which VA’s capital-planning process facilitates  the alignment of medical facilities with the veteran population, we  reviewed relevant documentation about two processes VA uses to  facilitate planning for medical facility needs, including construction  projects. For the Strategic Capital Investment Planning (SCIP) process,  we reviewed documentation and data on the SCIP process since fiscal  year 2012 and interviewed officials with the Office of Asset Enterprise  Management who oversee the process. For the Department of Veterans  Affairs Integrated Planning (VAIP) process, we reviewed relevant  documentation since the process’s inception in fiscal year 2011, including  the guiding principles and examples of plans that resulted from using the  process, and interviewed officials with the Office of Construction &  Facilities Management who oversee the process. To obtain further  information on the usefulness of both of these processes we spoke with  planning officials at each of the VISNs in our review. We also reviewed  the findings and recommendations from the Independent Assessment’s  section related to facilities, and compared them to our findings to  determine whether there were similarities. We also reviewed the  methodology for this assessment and found it sufficiently reliable for our  audit objectives. Further, we compared the two processes (SCIP and  VAIP) to guidance outlined in the Office of Management and Budget’s  (OMB) Circular No. A-11 and federal standards for internal control.
To determine the extent to which VA has followed best practices by fully  integrating stakeholders in facility alignment decisions, we compared VA  guidance and local stakeholder communication efforts to GAO-identified  best practices. We interviewed VA officials, VISN and facility officials,  national veterans’ service organizations (VSO), and local veterans’  organizations about their involvement in facility alignment decisions. To  select national VSOs to interview, we chose organizations based on their  participation in VA reform and planning efforts, and those that were  recommended by VA officials or other VSOs as being knowledgeable with  VA’s efforts to align its medical facilities with the veteran population. We  spoke with national representatives from the American Legion, Disabled  American Veterans, and Paralyzed Veterans of America. In addition, we  asked the national VSOs for state and local chapter contacts. We  reviewed each site’s Health Care Planning Model (HCPM) list of external  stakeholders and asked VA officials for local external stakeholder  contacts. We did not always meet with the same stakeholder groups at  each location. We spoke to local chapters of the American Legion,  Disabled American Veterans, Military Order of the Purple Heart, and Veterans of Foreign Wars, as well as some county veterans’ service  officers.
We conducted this performance audit from January 2016 to April 2017 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
subsections: section_title: Background
subsections: section_title: VA’s System of Health Care
paragraphs: The mission of VA is to serve America’s veterans and their dependents.  All VA programs are administered through three major administrations— VHA, Veterans Benefits Administration, and the National Cemetery  Administration. VA provides medical services to various veteran  populations—including an aging veteran population and a growing  number of younger veterans returning from the military operations in  Afghanistan and Iraq. In general, veterans must enroll in VA health care  to receive VA’s medical benefits package—a set of services that includes  a full range of hospital and outpatient services, prescription drugs, and  long-term care services provided in veterans’ own homes and in other  locations in the community. VHA is responsible for overseeing the  delivery of care to enrolled veterans, as well as the health care  professionals and support staff that deliver that care. VHA is also  responsible for managing all VA medical facilities.
VA organizes its system of care into regional networks called VISNs. In  September 2015, there were 21 VISNs nationwide, but VA is in the  process of merging VISNs that will result in 18 VISNs when completed.
Each VISN is responsible for coordination and oversight of all  administrative and clinical activities within its specified geographic region.  Medical services are provided in inpatient/residential medical facilities and  outpatient medical facilities, including:  Inpatient/residential care medical facilities as of January 2017:
VA medical centers: A medical facility that provides at least two types  of care, such as, inpatient, outpatient, residential, or institutional  extended care. There are 168 VA medical centers.
Extended care site (community living center): A medical facility that  provides institutional care, such as nursing home beds, for extended  periods of time. There are 135 community living centers.
Residential care site: A medical facility that provides residential care,  such as a domiciliary, for extended periods of time. There are 48  domiciliaries.
Outpatient care medical facilities as of October 1, 2016:
Community-based outpatient clinics (CBOC): A medical facility that  provides primary care and mental health services, and in some cases,  specialty services such as cardiology or neurology, in an outpatient  setting. There are 737 CBOCs.
Health care center: A medical facility that provides the same services  as CBOCs, but also ambulatory surgical procedures that may require  moderate sedation. There are 22 health care centers.
Other outpatient service: A medical facility that provides care to  veterans but is not classified as a CBOC or health care center, such  as a mobile treatment facility. There are 305 other outpatient services  sites.
In order to meet the needs of the veterans it serves, VA is authorized to  pay for veteran health care services from non-VA providers through both  the Non-VA Medical Care Program and clinical contracts. In fiscal year  2015, VA obligated about $10.1 billion to purchase care from non-VA  providers. The Non-VA Medical Care Program, including the Choice  Program and Patient-Centered Community Care, is referred to as “care in  the community” by VA, and allows VA to offer care to veterans in non-VA  facilities, such as physicians’ offices and hospitals in the community, and  pay for this care using a fee-for-service arrangement. Clinical contracts  are used by VA to bring non-VA providers—such as physicians,  pharmacists, and nurses—into VA facilities to provide services to  veterans.
section_title: Current Efforts to Align Facilities with Veterans’ Needs
subsections: section_title: SCIP Process
paragraphs: VA works with the VISNs, and medical facilities to manage its real  property assets through VA’s capital-planning process. The SCIP  process—established in 2010 to assess and identify long-term capital  needs—is VA’s main mechanism for planning and prioritizing capital- planning projects, but is affected by the VA’s budgetary resources, which  will determine how many projects will be funded. The goal of SCIP is to  identify the full capital need to address VA’s service and infrastructure  gaps, and to demonstrate that all project requests are centrally reviewed  in an equitable and consistent way throughout VA, including across  market areas within VA’s health care system given competing capital  needs.
The SCIP process for that particular fiscal year’s projects begins  approximately 23 months before the start of the fiscal year with VA  providing a set of guidelines to the VISNs and medical facilities. SCIP  uses information from models to identify excesses and deficits in the  services at the local level—called “gaps” within VA—and justify capital  investments. For example, SCIP uses data from the EHCPM, a model for  projecting veteran enrollment, utilization of VA health care, and the  associated expenditures VA needs to meet the expected demand for  most of the health care services it provides.
VA officials at the VISNs and medical facilities play a major role in the  capital-planning process. Each VISN has a Capital Asset Manager and a  planner who are responsible for coordination and oversight of facility  alignment activities, and work with individual facility planners and  engineering staff. Annually, planners at the medical facilities develop a  10-year action plan for their respective facilities, which include capital or  non-capital improvement projects to address gaps in service identified by  the SCIP process. According to VA, these long-range plans allow the  department to adapt to changes in demographics, and health care and  benefits delivery, while at the same time incorporating infrastructure  enhancements. Medical facility officials then develop more detailed  business plans for the capital improvement projects that are expected to  take place in the first year of the 10-year action plan. These projects are  validated, scored, and ranked centrally based on the extent to which they  address the annual VA-approved SCIP criteria using the assigned  weights. (See fig. 1 for VA’s capital decision-making process for  evaluating and funding capital projects.)
Another tool available for use by some VISNs and medical facilities is the  VAIP Process, which was implemented in fiscal year 2011 as a pilot  project. The goal was to identify the best distribution of health care  services for veterans, where the services should be located based on the  veterans’ locations and referral patterns, and where VA should adapt  services, facilities, and health care delivery options to better meet these  needs as determined by locations and referral patterns. Data from the  VAIP Process are designed to drive the VISNs’ and VA medical facilities’  operational decisions including costs, challenges, and local preferences,  but the VAIP Process’s findings can also result in future SCIP projects.  The VAIP Process produces a market-level health services delivery plan  for the VISN and a facility master plan for each medical facility within the  VISN. (See fig. 2 for an overview of the VAIP Process.)
After completing a pilot of the program, VA officials began formally  implementing the VAIP Process across VISNs and their medical facilities,  utilizing multiple contractors. As of January 2017, VA officials told us they  had mostly completed the VAIP Process in 6 of the 18 VISNs and had  plans to start or complete the remaining VISNs by October 2018.  According to officials who oversee the program, the entire cost of the  VAIP process is expected to be about $108 million.
section_title: Prior Efforts to Align Facilities with Veterans’ Needs
paragraphs: Over time, VA has recognized the need to modernize its facilities and  align its real property portfolio to provide accessible, high-quality, and  cost-effective access to services. In addition, VA has been the subject of  several assessments focusing on facility alignment, and planning efforts  to modernize its facilities. In 1999, VA initiated the CARES process to  assess federally owned buildings and land ownership in response to  changing veterans’ inpatient and outpatient demand for care. CARES was  the first comprehensive, long-range assessment of VA’s health care  capital-asset priorities since 1981 and was designed to assess the  appropriate function, size, and location of VA facilities. In May 2004, VA  issued the CARES Decision report to Congress and other stakeholders.  The decision report listed projects and actions that VA planned to take  over the next 20 years, as well as the tools and principles that the agency  planned to use to align its infrastructure and upgrade its facilities. VA  officials told us that the implementation of CARES recommendations was  monitored through fiscal year 2010. In July 2011, VA released an  implementation and monitoring report on seven areas highlighted in the  CARES report. In this report, VA stated that excess space was reduced  through mechanisms such as the demolition of vacant buildings and the  realignment of underutilized space. VA also reported that since fiscal year  2009, 509,247 square feet of space was disposed. VA officials stated that  as of June 2016, some of the CARES recommendations were not fully  implemented, and the process was essentially replaced when the SCIP  process was implemented in fiscal year 2012.
In a more recent effort, the Choice Act required VA to contract with a  private entity to conduct an independent assessment of 12 areas of VA’s  health care delivery system and management processes, including its  facilities in 2014. Among the 12 areas, an assessment of facilities  examined VA’s processes for facility planning, funding, maintenance, and  construction. The Independent Assessment identified four systemic  findings:  1.  A disconnect in the alignment of demand, resources, and authorities.  2.  Varying bureaucratic operations and processes.  3.  Non-integrated variations in clinical and business data and tools.  4.  Leaders are not fully empowered due to a lack of clear authority,  priorities, and goals.
The Choice Act also established the Commission on Care to examine  veterans’ access to VA health care and to examine and report on how  best to organize VA, locate health resources, and deliver health care to  veterans during the next 20 years. The Commission on Care assessed  the results of the Independent Assessment as part of its work. The  Commission on Care’s report included 18 high-level recommendations,  and was submitted to the President on June 30, 2016. For example, the  one recommendation in the Commission on Care’s report related to  facility management was for the enactment of legislation, which would  authorize a process similar to the Base Realignment and Closure process  to facilitate facility realignment decisions. While VA did not fully agree  with the specifics of the recommendation, it did agree with the concept of  a realignment commission to focus solely on VA’s infrastructure needs  once the mission services were determined.
section_title: Facility Alignment Is Affected by Shifts in Veteran Population and Care Delivery, and an Aging Infrastructure
paragraphs: Long-standing factors, such as shifts in the veteran population and the  delivery of care, as well as an aging infrastructure affect VA’s efforts to  fully align its real property portfolio with the veteran population.
subsections: section_title: Shifts in Veteran Population
paragraphs: A decrease and a shift in the veteran population, impact the agency’s  ability to fully align its real property portfolio with veterans’ needs. For  example, VA’s VetPop2014 projected a 14 percent decrease in the  overall veteran population by 2024. It also projected a geographic shift  with veterans continuing to migrate from the Northeast and Midwest areas  of the United States to areas in the south and west. Figure 3 shows  projected percentage population changes through 2024, by county.
These shifts in the veteran population—which also mirror general  population trends—may result in a misalignment of services relative to  veterans’ needs and insufficient capacity in some locations and excess  capacity in other locations. As the population continues to shift, VA will  need to make decisions on how to best address these capacity issues.  For example, planning officials from three medical facilities said that  facilities located in areas with a declining veteran population—and thus,  most likely a general population decrease—may experience challenges  recruiting and retaining certain types of specialty providers. In addition,  a planning official at one medical facility told us that in order for a facility’s  providers to maintain clinical proficiency, there needs to be sufficient  patient volume. With such shifts, these areas could experience space that  is underutilized because of a lack of veteran demand and health care  providers.
Although there is a projected decrease in the overall veteran population,  VA’s EHCPM projects that nationally the number of enrolled veterans will  increase through 2024, after which it will decline. However, this trend  varies by region, and generally mirrors the overall veteran population  trends with decreases in the northeast and increases in the south.
In addition to a projected enrollment increase in the short term, enrollee  demographics and acuity levels are also projected to change—which will  affect the amount and type of health care VA is projected to provide.  According to VA officials who oversee the EHCPM, the aging of enrolled  veterans and the increasing prevalence of service-connected disabilities  (either through these disabilities appearing later in life or through VA  changing its scope for eligibility) are driving significant increases in  projected utilization and financial expenditures. For example, Vietnam era  veterans are expected to account for an increased utilization of long-term  care services. In addition, these enrollees also tend to have increased  rates of transition into the higher acuity priority groups for benefits.  Overall, the number of veterans in these higher acuity priority groups is  projected to continue to increase and is a key driver of utilization for VA  health care services, including in-home and community- based services.  As a result of this projected short-term growth in demand, followed by an  eventual decline in veteran enrollment, VA must balance the expansion of  services to meet the near-term demand with the potential excess capacity  in the long-term.
section_title: Shifts in Care Delivery
paragraphs: Shifts in the type of care that VA provides and where its veterans obtain  that care affect VA’s efforts to align its facilities to meet the changing  veteran population.
subsections: section_title: A Shift from Inpatient Care to Outpatient Care
paragraphs: Similar to trends in the health care industry overall, VA’s model of care  has shifted away from providing care in an inpatient setting, to that of an  outpatient setting, which VA largely houses in converted inpatient space,  or in a growing number of CBOCs. This reflects, in part, the shift in  demand from inpatient to outpatient services. According to the  Independent Assessment, between 2007 and 2014, outpatient visits  increased 41 percent while inpatient bed days declined 9 percent.  Further, it reported that inpatient bed days have dropped as much as 21  percent in some VISNs and, over the next 20 years, are expected to  decline an additional 50 percent or more. This shift in the utilization of  inpatient to outpatient services will likely result in underutilized space  once used for inpatients, as a majority of VA medical facilities were  originally designed for the delivery of inpatient care. Officials who oversee  SCIP as well as some of the planners at medical facilities in our review  told us that they can close portions of facilities that are underutilized.  However, these planners also told us that the savings are small when  compared to closing an entire building. For example, a medical facility in  our review temporarily closed one of its inpatient wings due to decreased  utilization. Although the unused space was technically closed, the wing  still had beds and equipment, and used electricity and utilities, including  lights in the hallways and power to operate computers. (See fig. 4.)
In addition to shifts in the veteran population and the type of care  provided, changes to VA’s use of care in the community affect facility  alignment. Although VA has traditionally provided care primarily through  its own facilities, it has, and does also use its statutory authority to  purchase care from providers in the community. VA’s purchased care  accounted for a small but growing proportion of VA’s health care budget  in the past decade. For example, in fiscal year 2015, VA obligated about  $10.1 billion for care in the community for about 1.5 million veterans.  Three years earlier, in fiscal year 2012, VA spent about $4.5 billion on  care in the community for about 983,000 veterans. VA officials who  oversee the EHCPM told us that although under VA’s care in the  community programs, a portion of health care utilization may potentially  move from VA facilities to community care, the costs of VA facilities— costs such as staffing, utilities, transportation, and laundry—do not  decrease proportionally when this shift occurs. As a result, VA may be  expanding care in the community while simultaneously operating  underutilized and vacant space at its medical facilities. According to the  Independent Assessment, if purchased care continues to increase then  VA will need to realign resources by reducing its facilities.
As VA expands its care in the community programs, questions remain  regarding its impact on facility alignment. Planning officials at two of the  seven medical facilities in our review told us that there is uncertainty  surrounding the extent to which care in the community, as it currently  exists, will continue in the future. These officials added that the  uncertainty affects capital planning because capital projects are planned  years in advance. For example, a planning official from one medical  facility told us that in planning for future renovations to address SCIP  utilization gaps, officials are hesitant to send entire clinical service lines to  the community because if the Choice Act and its associated funds are not  re-authorized, the facility may be financially responsible for providing that  service through non-VA providers.
section_title: Aging Infrastructure
paragraphs: Aging infrastructure affects facility alignment because many VA facilities  are no longer well suited to providing care in the current VA system, and  VA will need to make decisions about how it can adapt to current needs.  For example, the average VHA building is approximately 60 years old— five times older than the average building of a not-for-profit hospital.  Planning officials at five of the seven medical facilities in our review told  us it is often difficult and costly to modernize, renovate, and retrofit older  facilities—including converting inpatient facilities into outpatient facilities.  These challenges have contributed to the presence of vacant and  underutilized buildings. VA reported in 2016 that its inventory includes  370 buildings that are vacant or less than 50 percent occupied, and 770  buildings that are underutilized, requiring it to expend funds designated  for patient care to maintain more than 11.5 million square feet of  unneeded or underutilized space costing $26 million annually to operate  and maintain.
As veterans continue to use more outpatient care and less inpatient care,  VA’s need to make decisions about its aging infrastructure and how it can  adapt it to current needs will continue to grow. Planning officials from two  VISNs and four medical facilities in our review told us that outdated  building configurations—such as low ceilings and small distances  between support columns—could prevent facilities from fully complying  with more recent VA health care delivery standards. A planning official  from one medical facility told us it is difficult to reconfigure a facility in  accordance with these new standards after it is already built, and instead,  these standards would have to be incorporated in the preliminary design  phase. We observed at various locations where despite renovations, VA  was unable to fully reconfigure existing spaces to meet newer care  standards. See figures 5 and 6 for examples of these challenges to  current health care delivery standards.
We previously reported that the historic status of certain VA property can  add to the complexity of converting or disposing of outdated facilities. In  2014, VA reported having 2,957 historic buildings, structures, or land  parcels—the third most in the federal government after the Department of  Defense and the Department of the Interior. In some instances it may be  more expensive to do renovations then it would be to demolish and  rebuild. However, the option to demolish may not always be an option  because of restrictions due to these buildings’ designation as historic.
For example, planning officials at four of the medical facilities told us that  state historic preservation efforts prevented them from demolishing  vacant buildings, even though these buildings require upkeep costs and  pose potential safety hazards. (See figs. 7-9.)
In addition, some VA medical facilities were built as large medical  campuses with multiple unattached buildings. This configuration no longer  meets modern health care delivery standards where services are more  concentrated in one building or a series of attached buildings. For  example, three facilities we visited had large campuses that included  portions of vacant land and buildings designated as historic. Figure 10  illustrates the historic Chillicothe, Ohio VA medical center campus, which  has numerous vacant buildings that the medical facility would like to  dispose of.
section_title: Limitations in the Capital-Planning Processes Impede VA’s Alignment of Facilities with Veterans’ Needs
subsections: section_title: VA’s SCIP Has Limitations
paragraphs: SCIP has several limitations in the scoring and approval process, time  frames, and access to information that can limit its utility to effectively  facilitate the alignment of facilities with veterans’ needs.
subsections: section_title: Limitations with SCIP’s Scoring and Approval Process
paragraphs: Planning officials at VA medical facilities submit projects annually to  SCIP, where they are centrally scored against a set of department- approved criteria and priority categories. To score high enough to be  approved for funding, a project’s narrative portion of the evaluation must  demonstrate how it addresses predetermined VA priorities—this narrative  portion represents about one-third of a project’s overall score. Planning  officials at two of the VISNs and three of the medical facilities in our  review told us that the narrative portion is a limitation of the SCIP’s  project-scoring and approval process because it relies on facility planning  officials’ ability to write an accompanying narrative that addresses more of  the priorities. This introduces subjectivity to the process, where the  writer’s ability to demonstrate how the project’s narrative addresses more  of the priorities can affect scoring independent of project merits. This can  undermine SCIP’s goal of ensuring all project requests are reviewed  equitably and consistently. The Independent Assessment also found that  some facilities have learned to place considerable emphasis on the ability  to write a project’s narrative tailored to perceived high value criteria— often using both in-house staff and consultants to try and maximize the  scores. For example, planning officials from one medical facility told us  that they needed a SCIP project to expand a women’s health center but  did not think that it would score highly. Therefore, they told us they wrote  the narrative carefully so that it linked back to more priority areas that  they would not have originally thought of, such as “increasing patient  privacy,” in order for it to score higher.
In addition, another limitation to SCIP is that it allows facility planners to  gain credit for closing service gaps by proposing capital projects that they  have no intention of implementing. Specifically, planners at VA medical  facilities must demonstrate within SCIP that they plan to address all  service gaps within the 10-year action plan. However, planners can show  that they are addressing a gap by including such a project in future or  ‘out’ years of their 10-year plan but then continue to delay the project into  future years without implementing the project or addressing the service  gap. Such actions can undermine the department’s goal of using SCIP to  strategically manage its health care facilities. Although the extent to which  this is occurring is unclear, facility planners at two of the facilities in our  review told us that they routinely enter projects for future years that they  have little or no intention of actually pursuing. For example, planning  officials from one medical facility told us that in instances where they did  not agree with the gaps that SCIP identified, they would include  construction or demolition projects in the later years of their SCIP  submission. They said they did this because (1) they could include a  general project description without having to be too specific, and (2)  demolition projects would most likely not score high enough to obtain  funding. Planning officials from another medical facility told us that they  continue to promote demolition projects to the out years of their SCIP  plan as a way of appearing to address an excess space gap in SCIP  plans without actually implementing the project.
Even though some facility-level planning officials told us they did not think  demolition projects would score high enough to get funding, officials who  oversee SCIP told us it is possible if the projects’ narratives linked back to  several different priority areas, such as “safety” or “reducing facility  condition assessment deficiencies.” As a result, they said facilities will  only submit a demolition project in SCIP if it is part of a demolition-and- rebuild type project that links back to more priority areas. Figure 11  shows an example of a non-clinical building on a medical facility campus  that the facility’s planning officials would like to demolish due to structural  issues.
In addition, the SCIP scoring and approval process is limited in that it  does not have a mechanism in place to correctly sequence projects.  Specifically, planning officials at three of the seven medical facilities in our  review told us that the SCIP approval process does not allow for, or  ensure that projects will be approved in the chronological order they  determined to be appropriate. For example, planning officials at one of  the medical facilities said that they have been submitting projects in SCIP  to try and collocate specialty outpatient clinics that were in separate areas  of the campus. On several occasions, a project that needed to start after  a predecessor project was finished was approved and funded first  because the project addressed a higher priority area. Out of fear that they  would lose the funding if they waited for the first project to get approved,  these planning officials told us they changed the planned location of one  clinic to a less desirable location instead of their initial goal of collocating  the clinics. According to OMB guidance, improper funding of segments of  a project can lead to poor planning or higher costs. VA officials told us  that this problem could be addressed through better training for facility  planners, but budget thresholds may also play a role. Specifically, VA  officials told us, and the Independent Assessment reported that VA facility  planners often divide a larger project into several smaller projects so that  they stay under the statutorily-defined threshold for major medical facility  projects ($10 million)—a threshold that the Independent Assessment  recommended eliminating.
section_title: Limitations with SCIP Time Frames
paragraphs: SCIP’s lengthy project-development and approval timeframes can hinder  capital project planning. Specifically, the time between when planning  officials at VA medical facilities begin developing the narratives for  projects that will be scored in SCIP and when they are notified that a  project is funded has taken between 17 and 23 months over the past 6  fiscal-year SCIP submissions. As such, facility planning officials  routinely submit their next year’s planned projects before knowing the  outcomes of those from the previous year. In one instance, for example,  facility planning officials were required to begin working on the narratives  for the projects planned for fiscal year 2015 before they learned which  projects for fiscal years 2013 or 2014 were approved for funding. In  another example, facility planning officials had to wait about 18 months to  officially learn that VA only funded 2 of the 1,403 projects submitted for  fiscal year 2017. Officials who oversee the program told us that while  they recognize that this is a concern, some information for unfunded  projects is automatically loaded into the next year’s SCIP submission,  reducing rework. Long time frames can also exacerbate SCIP’s inability to  correctly sequence projects in the desired order. For example, under  current time frames and SCIP guidelines, a facility planner may have to  delay submitting subsequent projects in a sequenced group of projects for  up to 2 years each while planners wait to ensure the predecessor project  was funded. Figure 12 shows the overlapping timelines of the last 6 fiscal- year SCIP submissions. An official from the office that oversees SCIP told  us that the timing of the budgeting process that is outside VA’s control  contributes to these delays.
While aspects of the process are outside VA’s control, over the last 6  fiscal-years’ SCIP submissions, VA has chosen to wait about 6 to 10  months to report the results of the SCIP scoring process to the medical  facilities. This situation makes it difficult for local officials to understand  the likelihood that their projects will receive funding. Federal standards for  internal control note that agencies should ensure that quality  information—such as information about approved projects—should be  provided on a timely basis. A VA official said that for future SCIP cycles,  VA plans to release the scoring results for minor construction and non- recurring maintenance projects to local officials earlier in the process. At  the time of our review, however, the official did not have a timeframe as to  when this would be done.
section_title: Limitations Accessing SCIP Information
paragraphs: SCIP has limitations in its ability to provide planners with important  information they need in the initial steps of planning capital needs. VA  subdivides each VISN into a number of smaller “market areas.” However,  SCIP limits facility planners’ access to the projects proposed by other  markets and VISNs. According to federal standards for internal control,  agencies should identify quality information and ensure that it is  accessible. Planning officials from four of the medical facilities told us  that these access limitations to SCIP information make it difficult to obtain  a comprehensive understanding of their needs for capital-planning  purposes. For example, planning officials at one of the medical facilities  told us that as a result of the lack of access to information about nearby  projects, a VA medical facility in a neighboring VISN had plans for a new  CBOC near its VISN boundary progress farther than it should have before  VA officials determined that it would have been too close to an existing  CBOC just over the VISN boarder.
section_title: VA Has Done Little to Address Known Limitations with the SCIP Process
paragraphs: VA is aware of many of the limitations of the SCIP process—as the  Independent Assessment found many of the same limitations and made  recommendations to address them—but has taken little action.  Specifically, in 2015, the Independent Assessment found that SCIP’s  scoring and approval processes and time frames, among other things,  undermined VA’s capital-planning and prioritization process. In addition,  the Independent Assessment made several recommendations to address  those limitations, including: (1) refining the SCIP processes to simplify scoring methods; (2) strengthening the business case submission  process; and (3) developing mechanisms to ensure projects met  promised objectives. Officials who oversee SCIP told us that they were  aware of, and mostly agreed with the Independent Assessment’s findings  in the facilities section. In order to address all of the Independent  Assessment’s recommendations, including most of the same SCIP  limitations we found, VA created a task force called the Integrated Project  Team, as we reported in September 2016. According to VA officials, the  task force identified several actions to enhance and restructure the  department’s infrastructure based on the facility section of the  Independent Assessment. However, after 6 months of work, the task  force disbanded before it developed an implementation plan for those  initiatives. VA officials said that they were instead focused on addressing  other priorities such as those in the Commission on Care’s report—which  built upon the Independent Assessment—and proposed legislation that  could affect VHA operations. However, the Commission on Care did not  address facility management issues on the level of the Independent  Assessment’s recommendations. Not addressing important, known  limitations runs counter to federal standards for internal control, which  note that agencies should evaluate and determine appropriate corrective  action for identified limitations and deficiencies on a timely basis. In  addition, managing federal real property is on GAO’s High Risk List, and  our High Risk report notes that agencies should have a corrective action  plan with steps to implement solutions to recommendations in order to be  removed from the list. Without ensuring that recommendations from  internal and external reviews are evaluated, decided upon, documented,  and promptly acted on, VA does not have reasonable assurance that  SCIP can be used to identify the full capital needs to address VA’s  service and infrastructure gaps.
section_title: VAIP Facility Master Plans Have Limited Usefulness Because They Do Not Adequately Consider Care in the Community, among Other Weaknesses
paragraphs: VA’s ongoing VAIP Process (estimated by VA officials to cost $108 million  upon completion) was designed to provide a more strategic vision for  aligning VA’s medical facilities and services with veterans’ needs.  However, the facility master-planning process has several limitations,  including that it assumes that all future growth in services will be provided  directly through VA facilities without considering alternatives, including the  status quo and purchasing care from the community. This assumption  runs counter to VA guidance from November 2016 that notes the need for  using taxpayer resources wisely by avoiding building facilities that create  100-year commitments if they could use community capacity.  Nonetheless, facility master plans produced by the VAIP Process make  construction recommendations that directly contradict this policy because  the plans do not adequately consider care in the community, for example:
To address one medical facility’s master plan would require about  $762 million to relocate and renovate spaces within a building, acquire  adjacent land, demolish inadequate buildings, construct a new  medical tower, and provide seven clinical services that are currently  provided elsewhere. No analysis was done to determine if these  services could be better or more cost effectively purchased through  care in the community.
Another medical facility’s master plan indicated a need to construct  five new structures estimated to cost about $100 million to provide  clinical services that veterans were already obtaining elsewhere.  Similarly, no cost-benefit analyses were done to consider care in the  community as an option. This construction was recommended in  addition to an unrelated major construction upgrade costing in excess  of $366 million.
Because these plans do not consider that care could be provided in the  community, if implemented, they increase the risk for spending more than  necessary to provide the services. OMB’s acquisition guidance notes that  investments in major capital assets should be made only if no alternative  private sector source can support the function at a lower cost. Long- term costs for capital assets are particularly relevant for VA as its data  project that the number of enrolled veterans will begin to fall after 2024.
VA officials told us that operations and maintenance represent 85 to 90  percent of the total life-cycle costs for VA health care facilities. Officials  who oversee the VAIP Process told us that the facility master plans’ lack  of analyses regarding care in the community was because they were  awaiting further guidance from VA on the proportion of care and types of  services to obtain from the community versus in VA facilities. VA released  this guidance in November 2016. That guidance requires individual  analyses at the local level in order to determine the mix of services  provided in VA facilities versus those in community care, a requirement  that is not in the facility master-planning process.
We also identified other limitations that limit the utility of the VAIP  Process:
Lack of standardization: According to VA officials, they have mostly  completed the VAIP Process for 6 of the 18 VISNs, but in part  because it is conducted by several contractors, VA has not fully  standardized the process across VISNs. As such, the results are also  not comparable across VISNs. Officials who oversee the program said  that they are proposing an enhancement to the Health Service  Delivery Plan portion of the process that would allow for standardized  analyses, planning, and reporting. But the proposal was still in its  early stages, and at the time of our review, there was no timeline for  completion.
Lack of accountability for implementing VAIP recommendations:  Officials who oversee the program told us that there is no requirement  that the facilities or VISNs implement recommendations based on the  VAIP Process’s Health Services Delivery Plans or the facility master  plans—although VA officials said there have been discussions about  requiring this accountability in the future. As a result, there is no  accountability for evaluating or responding to the VAIP  recommendations.
Incomplete cost estimates: The VAIP Process’s facility master plans  include estimates for construction and design, but do not include any  long-term estimates for operating costs. OMB’s Capital Programming  Guide notes that these life-cycle costs, such as operations and  maintenance, should be included in a credible life-cycle cost  estimate. As previously noted, VA officials said that operating and  maintenance cost for VA medical facilities can represent 85 to 90  percent of total facility costs. According to officials who oversee the  program, the intent was only to provide costs for completing the  identified projects.
The limitations of the VAIP Process’s facility master plans reduce its utility  for the VA’s planning officials to the point where some local officials said  that they do not use VAIP results and planning officials from five of the  seven medical facilities in our review told us that they already contract for  their own facility master plans, separate from VAIP. According to federal  standards for internal control, agencies should take steps to identify,  analyze, and respond to risks related to achieving the defined objectives,  an approach that in this case, could reduce risks to the VAIP facility  master plans’ success. Although officials who oversee the VAIP  Process told us that the VAIP-produced master plans uniquely  incorporate the Health Care Service Delivery Plan’s recommendations  from the first step of the process, and would therefore be different from  the facilities’ master-planning efforts, the potential for duplication exists as  separate entities could be undergoing strategic planning for the same  facility. The magnitude of these limitations and the potential for planning  duplication raise questions about the need for and utility of the VAIP  facility master plans as they are currently being developed.
section_title: Local Approaches to Stakeholder Involvement Vary due to a Lack of VA Guidance
subsections: section_title: VA Has Not Consistently Integrated Stakeholders into Facility Alignment Decisions
paragraphs: VA does not always include stakeholders in facility alignment decisions  that affect veterans’ health care. VA may align its facilities to meet  veterans’ needs by expanding or consolidating facilities or services.  Stakeholders—including, veterans, local, state, and federal officials,  VSOs, historic preservation groups, VA staff, and Congress—often view  changes as working against their interests or those of their constituents,  when services are eliminated or shifted from one location to another.
We have previously identified best practices for stakeholder involvement  in facility consolidation actions and recommended agencies identify  relevant stakeholders and develop a two-way communication strategy  that begins well in advance of any facility changes and addresses  concerns and conveys through data the rationale and overarching  benefits behind decisions. Failure to effectively engage with  stakeholders in these ways can undermine or derail facility alignment.  These best practices suggest that VA leadership should engage both  external stakeholders, such as veterans groups and local politicians, and  internal stakeholders, such as VA employees. However, we found that  two-way communication did not always occur when VA engaged  stakeholders.
External stakeholders: VA often takes steps to involve external  stakeholders, but those efforts often fall short of the best practice of  developing a two-way communication strategy. VA requires VISN  leadership to hold quarterly town hall meetings with external stakeholders  to promote ongoing communications. Planning officials from each of the  five VISNs and seven medical facilities in our review told us that they  meet regularly with external stakeholder groups, usually through quarterly  town hall meetings or roundtables. However, in speaking with external  stakeholders, we found that, in large part, these meetings were for VA to  communicate information, not necessarily to involve stakeholders in the  decision-making process. For example, a local VA official said that the  monthly stakeholder meetings were primarily a mechanism for VA officials  to announce projects after decisions were made. Officials from two local  veterans’ organizations agreed with this characterization, and  representatives from one stopped attending the meetings as a result. In  one of these locations, the breakdown in two-way communication resulted  in picketing when veterans’ organizations opposed the closure of a  facility.
We also found that when stakeholders were not always engaged  consistently with best practices, VA’s facility alignment efforts were  challenged by external stakeholders. For example, one area that has a  declining number of veteran enrollees also has three medical facilities  within 25 miles of each other. According to the CARES report, the veteran  population and enrollment in this area did not justify multiple inpatient  facilities. Based on the CARES recommendation, VA considered a  consolidation of services. Officials from a local veterans group told us that  due to the one-way nature of communication with VA officials, they did  not fully trust that VA would follow through on plans to replace the  services following the consolidation and feared this VA property would be  sold or disposed of and not replaced with a new VA facility. This  alignment proposal prompted members of Congress and of the city  council and VSOs to conduct a campaign that resulted in all three  facilities remaining operational 13 years after the CARES report was  issued.
We found that local facility alignment efforts in which VA officials better  followed best practices—building transparency by providing data-driven  information and utilizing two-way communication strategies—with external  stakeholders were more successful. For example, planning officials from  one medical facility—which successfully implemented a CARES  recommendation to consolidate inpatient beds in a neighboring facility— told us that they communicated with external stakeholder groups as far in  advance as they could and presented data to support any proposed  change. Planning officials from another medical facility were able to close  an underutilized inpatient wing, a leased CBOC that had experienced  decreased utilization and increased costs, and relocate a domiciliary from  one campus to another. During this process, facility officials developed a  communication plan and held meetings with external stakeholders to  present their data and explain the reasoning behind the change.
Internal stakeholders: Best practices also include engaging internal  stakeholders to build consensus for facility alignment actions. Facility  alignment can mean job loss, relocation, or changes in the way  employees perform their duties. VA officials told us that employees have  sometimes challenged the facility alignment process and in some  instances, affected the outcomes where these best practices were not  incorporated. Specifically, effective communication with internal  stakeholders can foster trust and an understanding of the planned  changes, potentially defusing opposition while strengthening commitment  to the effort. For example, as part of a consolidation and closure at one  medical facility, planning officials addressed concerns, as well as  presented data-driven information that highlighted the benefits and  rationale to employees. Facility officials developed a communication plan  and held a meeting with employees to present their data and explain the  reasoning behind the change. In this meeting, they also addressed  employee concerns by reassuring them that no one was going to lose  their job.
section_title: VA Lacks Guidance That Incorporates the Best Practice of Fully Engaging Stakeholders and Does Not Evaluate Communication Efforts
paragraphs: VA does not provide officials at VISNs and medical facilities with  guidance that incorporates best practices on fully engaging both internal  and external stakeholders about facility alignment decisions, or evaluate  the effectiveness of local stakeholder engagement efforts. VA provides  guidance on communicating changes to stakeholders, but this guidance  does not conform to best practices in that it does not provide details about  how and when to communicate. Without official guidance VA cannot be  assured that the VISNs and medical facilities are consistently applying  best practices that integrate stakeholders into the decision-making  process in a way that better ensures the success of alignment efforts.
Further, existing VA guidance does not instruct VISNs and facilities to  involve stakeholders throughout the decision-making process. Some of  the guidance cites required notification procedures, but does not address  general best-practice strategies for engaging and building consensus with  stakeholders. For example, in April 2016, VA provided guidance to VISNs  regarding notification procedures for any changes in clinical services. This  memorandum includes direction to the VISN for a communication plan  that includes creating congressional notification, patient notification  letters, talking points, and a press release 30 days prior to opening a new  facility. However, VA’s guidance lacks specific directions on timelines,  data, and the extent to which external stakeholders should be a part of  the decision-making process. A VA official told us that they do not have  such guidance because it is implicitly understood that local officials  should engage stakeholders. However, this outcome is not always  occurring due, in part, to this lack of specificity in the guidance, we  described earlier in this report. We found variation both in the ways local  officials engaged external and internal stakeholders in facility alignment  efforts and in the results of those efforts.
In addition, VA officials stated that they do not monitor and evaluate their  communication methods for best practices or for the methods’  effectiveness in reaching their intended audiences. This runs counter to  federal standards for internal control, which note that agencies should  monitor and evaluate their activities. We observed variation in the  involvement of stakeholders and the impact on facility alignment  outcomes. As noted earlier, in some cases, we observed one-way  communication that resulted in adversarial relationships that reduced  VA’s ability to better align facilities to the needs of the veteran population.  In other areas, such as with the medical facility that was able to close an  underutilized inpatient wing, close a leased CBOC, and relocate a  domiciliary, two-way communication with stakeholders resulted in more  productive relationships and effective alignment efforts.
Evaluating the effectiveness of stakeholder outreach efforts would help  VA officials identify and internalize lessons for future activities. However,  VA lacks a process for evaluating its stakeholder outreach efforts. Without  guidance that adheres to best practices about fully integrating  stakeholders and the lack of monitoring and evaluation about this  process, VA increases its risk that stakeholders are not appropriately  involved in its facility alignment efforts nor can it determine the  effectiveness of its efforts, or learn lessons from previous efforts.
section_title: Conclusions
paragraphs: The shifts in veteran demographics and demand for health services  combined with antiquated facilities create an imperative for VA to better  align its medical facilities and services. However, some of the  recommendations from VA’s last major alignment effort—CARES—were  not fully implemented and its current efforts to facilitate realignment—the  SCIP and VAIP processes—are hindered by key limitations. For example,  SCIP is unable to ensure that medical facilities are not adding projects in  out years to address gaps that they do not intend to implement. In  addition, relying on project narratives for one-third of the project score can  introduce subjectivity into the process, a process that was intended to  ensure that all projects are reviewed equitably and consistently. If these  deficiencies remain, VA’s SCIP process for prioritizing capital projects will  continue to limit the agency’s ability to effectively facilitate decisions to  correctly align its medical facilities with veterans’ needs and thereby  deliver the best and most cost-effective health care to the veteran  population.
The VAIP facility master plans also have significant limitations as a  planning aid. If their trend toward not analyzing the benefits of utilizing  medical capacity in the community is continued, the VAIP facility master  plans’ recommendations could result in spending more than necessary to  provide the services. The level of potential overspending on VA medical  centers will become an even more significant issue if the number of  enrolled veterans begins to decline after the year 2024 as predicted.
Finally, because VA has not consistently followed best practices for  effectively engaging stakeholders, stakeholders may not fully support  alignment efforts—a situation that poses a risk to success. Also, VA does  not have a process for monitoring and evaluating its communication  methods, which runs counter to federal standards for internal control.  Without this, VA does not know if the local officials are meaningfully or  effectively engaging internal and external stakeholders in the capital  alignment decisions that affect them.
section_title: Recommendations for Executive Action and Our Evaluation
paragraphs: To improve VA’s ability to plan for and facilitate the alignment of its  facilities with veteran needs, we recommend that the Secretary of  Veterans Affairs direct the appropriate offices and administrations to take  the following four actions:  1.  Address identified limitations to the SCIP process, including limitations  to scoring and approval, and access to information.  2.  Assess the value of VAIP’s facility master plans as a facility-planning  tool. Based on conclusions from the review, either 1) discontinue the  development of VAIP’s facility master plans or 2) address the  limitations of VAIP’s facility master plans.  3.  Develop and distribute guidance for VISNs and facilities using best  practices on how to effectively communicate with stakeholders about  alignment change.  4.  Develop and implement a mechanism to evaluate VISN and facility  communication efforts with stakeholders to ensure that these  communication efforts are working as intended and align with  guidance and best practices.
section_title: Agency Comments
paragraphs: We provided a draft of this report to VA for comment. Its written  comments are reproduced in appendix II. VA partially concurred with  our first recommendation. Specifically, VA said that it generally concurred  with the recommendation to address limitations in SCIP process, but  limited its concurrence to addressing the limitations that are within VA’s  control.  We edited our report to indicate that some parts of the process  are outside VA’s control and focused our findings on those elements for  which VA does have control.  VA fully concurred with the other three  recommendations and outlined a plan to implement them. VA also  provided technical comments, which we incorporated as appropriate.
As agreed with your offices, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from the  report date.  At that time, we will send copies of this report to the  appropriate congressional committees and the Secretary of Veterans  Affairs. In addition, the report will be available at no charge on the GAO  website at http://www.gao.gov.
If you or your staff have any questions regarding this report, please  contact David J. Wise at (202) 512-2834 or wised@gao.gov, or Debra A.  Draper at (202) 512-7114 or draperd@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 III.
section_title: Appendix I: Buildings Operated by the Veterans Health Administration (VHA) and Designated for Disposal, by State
paragraphs: Table 1 lists the 168 VHA-operated buildings over 10,000 square feet in  size that, according to VA, had been designated for potential disposal at  the end of fiscal year 2014, organized by state and medical center.
section_title: Appendix II: Comments from the Department of Veterans Affairs
subsections: section_title: GAO’s Comments
paragraphs: 1.  VA stated that many of the items noted in the draft report  mischaracterized the intended outcomes of the SCIP process, such  as the fact that SCIP was not designed as a mechanism to force  realignment. We did not intend to characterize the SCIP process’s  intention as a mechanism to force realignment of VA facilities and  clarified our report to reflect this approach.  2.  VA stated that many of the items we found that needed to be  addressed through the SCIP process were outside of the SCIP  program and that VA had limited ability to influence. We agree and  have edited the report: to reflect that some elements of the process  are outside VA’s control and to re-focus on the aspects that VA does  control. Please see comments 3, 4, and 5 below for our responses.  Regarding how we characterized the intention of the SCIP process,  see comment 1. 3.  In regard to our finding that the SCIP process does not have a  mechanism in place for ensuring that future-year projects are  implemented, VA stated that this was not an intentional limitation  resulting from the SCIP process, but was instead an outcome  stemming from VA not having enough capital to meet all of the needs  identified in the SCIP plan. We agree and clarified the report.   However, in our review, planners at two medical facilities told us that  they enter projects for future years that they have little or no intention  of actually pursuing—which is different than not having enough capital  to pursue the project. As such, we continue to believe that SCIP has a  limitation in that it does not have a mechanism in place to prevent  facility planners from gaining credit for closing service gaps by  proposing capital projects that they have no intention of ever  implementing.   4.  In regard to our finding that SCIP’s development and approval  timeframes can hinder capital planning, VA stated that it agrees that  the planning process is lengthy, but added that the timeliness of the  SCIP process is driven by the government-wide budget process,  which is outside of VA’s control. We agree that there are elements of  the timeframes that are outside of VA’s control and clarified our report  to address this situation and focus on what is within VA’s control.  Specifically, over the last 6 fiscal-year SCIP submissions, VA has  chosen to wait about 6 to 10 months to report the results of the SCIP  scoring process to the medical facilities.  5.  In regard to our finding that the SCIP process’s scoring and approval  process relies on facility planning officials’ ability to write an  accompanying narrative that addresses more of the priorities, VA  stated that it disagreed that the scoring was highly based on narrative  and/or subjective information. We clarified our report to note that the  narrative portion represents about one-third of a project’s overall  score, but as VA states, it relies on the planners’ ability to articulate  the business need for the project. GAO continues to believe that that  relying on planners’ abilities to articulate the business need for a  project introduces subjectivity to the scoring process.
section_title: Appendix III: GAO Contacts and Staff Acknowledgments
subsections: section_title: GAO Contacts
paragraphs: David J. Wise at (202) 512-2834 or wised@gao.gov, or Debra A. Draper  at (202) 512-7114 or draperd@gao.gov.
section_title: Staff Acknowledgments
paragraphs: In addition to the contacts named above, Keith Cunningham, Assistant  Director; Jeff Mayhew, Analyst-in-Charge; Colleen Taylor; Laurie F.  Thurber; and Michelle Weathers made key contributions to this report.  Also contributing were Jacquelyn Hamilton, John Mingus, Sara Ann  Moessbauer, Malika Rice, and Crystal Wesco.