Small Business: The National Veterans Business Development Corporation's Progress in Providing Small Business Assistance to Veterans
Published: 2003-04-30T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Veterans Entrepreneurship and Small Business Development Act of 1999 (Act) created the National Veterans Business Development Corporation (The Veterans Corporation) to address perceived gaps in providing small business and entrepreneurship assistance to veterans. The Act requires GAO to review The Veterans Corporation. GAO described The Veterans Corporation's (1) efforts to provide small business assistance to veterans, including service-disabled veterans; (2) use of and controls over federal funds in providing these services; and (3) efforts to become financially self- sufficient.
section_title: What GAO Found
paragraphs: The Veterans Corporation is providing veterans with entrepreneurial training, on-line educational resources, micro loans, business insurance, and an on-line marketplace. The Veterans Corporation identified initial challenges that slowed program progress, including getting information on transitioning military personnel; and veteran-owned businesses; and delays in making management appointments. Because the programs are new, it is too early to determine their effectiveness. During its first 2 years of operation, The Veterans Corporation spent about $5 of $8 million in total federal appropriations; about $1 million in fiscal year 2001; and about $4 million in fiscal year 2002, with the largest part of the increase due to salaries and program costs. An external audit for fiscal year 2001 identified internal control issues, such as the lack of adequate supporting documentation for disbursements and untimely reconciliation of bank accounts. According to the external auditor, all but one of the deficiencies was addressed in 2002. The Veterans Corporation has developed a financial self-sufficiency plan based on four major revenue sources--an on-line marketplace, a credit card program, an insurance service program, and fund-raising. At the time of GAO's review, most of these efforts were just beginning to produce revenue. According to the plan, The Veterans Corporation is not expected to achieve self-sufficiency until the fourth quarter of fiscal year 2004. If outcomes do not meet projections, Veterans Corporation officials stated that they would explore alternatives.

section_title: Letter
paragraphs: A Congressional report released in January 1999, identified gaps in the  federal government’s delivery of entrepreneurial services to veterans.   Recognizing the need to assist the nation’s veterans who choose to start or  expand small businesses in their transition from military to civilian life,  Congress created the National Veterans Business Development  Corporation (The Veterans Corporation)—a chartered corporation—to  provide small business and entrepreneurship assistance. The Veterans  Entrepreneurship and Small Business Development Act of 1999 (Act), as  amended, created The Veterans Corporation and, among other things,  requires it to (1) improve access to technical assistance that promotes  entrepreneurship, and (2) use public and private resources to assist  veterans, including service-disabled veterans, with the formation and  expansion of small businesses. To carry out these activities, the Act  authorized the appropriation of $12 million in federal funds to The Veterans  Corporation over a 4-year period. It also required that The Veterans  Corporation implement a plan to raise private funds and become a self- sustaining corporation.
The Act also required GAO to evaluate the effectiveness of The Veterans  Corporation in providing services to veterans. Because The Veterans  Corporation’s programs are still in their early stages, we agreed with the  staffs of the House and Senate Committees on Small Business and  Veterans’ Affairs to describe (1) The Veterans Corporation’s efforts in  providing small business assistance to veterans, including service-disabled  veterans; (2) the use of and controls over federal funds to provide these  services; and (3) the efforts of The Veterans Corporation to become  financially self-sufficient.
To complete our work, we obtained and analyzed program information and  corporate documents provided by The Veterans Corporation. To meet our  objective to describe The Veterans Corporation’s use of federal funds, we  interviewed officials at The Veterans Corporation. We also obtained and  analyzed The Veterans Corporation’s fiscal years 2001 and 2002 financial  statements, obtained and reviewed minutes of board of directors meetings,  and interviewed The Veterans Corporation’s external auditors. We also  interviewed officials from the staff and board of The Veterans Corporation,  as well as officials from federal agencies, partnering organizations, and  veteran service organizations. Please see appendix I for a more complete  description of our scope and methodology.
We conducted our review from June 2002 through April 2003 in accordance  with generally accepted government auditing standards. Written comments  on a draft of this report from The Veterans Corporation appear in appendix  VI. We also obtained technical comments from the Small Business  Administration (SBA) and the Department of Veterans’ Affairs (VA) that  have been incorporated where appropriate.
subsections: section_title: Background
paragraphs: In the Veterans Entrepreneurship and Small Business Development Act of  1999, as amended, Congress established various programmatic  requirements for The Veterans Corporation to address perceived shortfalls  in federally provided services for veterans. The Veterans Corporation is  required to, among other things, (1) expand the provision of and improve  access to technical assistance regarding entrepreneurship; (2) assist  veterans with the formation and expansion of small businesses by working  with and organizing public and private resources; (3) establish and  maintain a network of information and assistance centers for use by  veterans; (4) establish a PCAB to create uniform guidelines and standards  for the professional certification of members of the armed services; and (5)  assume the duties, responsibilities, and authority of the Advisory  Committee on Veterans Business Affairs from the SBA by October 1, 2004.
To fund The Veterans Corporation, Congress authorized $12 million in  federal appropriations over 4 fiscal years—$4 million in the first year, $4  million in the second year, and $2 million in each of the following 2 years— with the expectation that The Veterans Corporation would become  financially self-sufficient. The Veterans Corporation received its first  appropriation in March 2001. The Veterans Corporation is a nonprofit  corporation chartered in the District of Columbia and has authority to,  among other things, manage the manner in which it conducts business,  enter into contracts, hire and dismiss officers and employees, and solicit,  disburse, and manage its funds and assets.
The Act requires The Veterans Corporation to raise funds in order to match  its federal appropriations. For the first fiscal year (fiscal year 2001), no  matching requirement applied. For the second fiscal year (fiscal year 2002),  The Veterans Corporation was required to raise $1 for every $2 of federal  appropriations. For the remaining 2 fiscal years, The Veterans Corporation  is required to raise matching funds on a dollar-for-dollar basis.
A 12-member board of directors governs The Veterans Corporation. Nine  voting members are presidential appointees, with not more than five  members of the same political party. The three remaining members are  nonvoting, representing the Administrator of the SBA, the Secretary of  Defense, and the Secretary of Veterans Affairs. Voting members serve 6- year terms; however, the terms of the initial appointees are staggered: three  for a term of 2 years and three for a term of 4 years. The chairperson is one  of the nine voting members and is elected by these members for a 2-year  term.  The chairperson supervises and controls all affairs of The Veterans  Corporation in accordance with policies and directives approved by the  board of directors.  The board is organized into four committees: (1)  executive, (2) corporate governance, (3) audit, and (4) business  development. The corporate governance committee is responsible for,  among other things, overseeing the strategic and business plans. The  Veterans Corporation staff, of which there are 14, use these plans to help  define their overall strategy and assess how well they are achieving their  goals and objectives. Goals and objectives are then evaluated at the board  meetings. The board met for the first time in September 2000; the board  currently meets approximately on a quarterly basis.
section_title: The Veterans Corporation Initiates Entrepreneurial Services to Veterans
paragraphs: The Veterans Corporation has several initiatives under way to provide  small business education, training, and entrepreneurial services to  veterans. Officials additionally have identified some initial challenges that  have slowed the progress of these efforts, including (1) the inability to  collect data on the veteran population, (2) limited government  participation in The Veterans Corporation activities, (3) delays in  appointing management, and (4) unclear corporate legal status of The  Veterans Corporation. The Veterans Corporation has broad performance  measures in place to monitor its programs at this early stage and are  planning to develop more refined measures to assess effectiveness as the  programs mature. The Veterans Corporation has established a PCAB—a  body mandated by Congress to assist service members transition from the  military to private-sector employment—but the issues surrounding private- sector recognition of military experience and training are large and  complex, according to some officials.
subsections: section_title: Educational and Training Programs Under Way and The Veterans Corporation Is Developing Entrepreneurial Services
paragraphs: According to an official at The Veterans Corporation, their corporate  strategy has been to organize, coordinate, enhance, and expand existing  business programs and services to military veterans interested in  entrepreneurship. Additionally, their strategy is to provide programs not  otherwise available to veteran-owned businesses. Officials at The Veterans  Corporation said that they have been careful not to duplicate existing  services but rather to leverage existing services whenever possible. The  Managing Director of Operations and Government Relations at The  Veterans Corporation stated that their approach is to develop public and  private resources that may include coordinating with local business  services where appropriate.
subsections: section_title: Education and Training
paragraphs: In response to veteran needs for small business education and training, The  Veterans Corporation has offered classroom instruction, seminars, and on- line educational resources. The Veterans Corporation has hosted three  initial Veterans Entrepreneurial Training (VET) programs, which produced  64 graduates, for veterans interested in starting a business or seeking to  improve their current business. The initial locations included Riverside,  California; Portland, Maine; and Arlington, Virginia. The VET program  incorporates classroom instruction, mentoring, networking, and  technology training. An official at The Veterans Corporation stated that  program participants pay $350 of the program’s $1,850 cost for 45 hours of  classroom instruction and, as an added benefit, receive a voucher valued at  $675 to purchase a Gateway computer upon successfully completing the  program. The Veterans Corporation officials said that the program is a  partnership with the Ewing Marion Kauffman Foundation’s FastTrac  Program, a successful entrepreneurship-training program. Statistics from  The Veterans Corporation’s Web site makes reference to the Kauffman  Foundation’s overall success, which indicates that 60,000 people have  completed the FastTrac program since 1987. Additionally, of this number,  88 percent were still in business 2 years later, and 77 percent were still in  business and turning a profit 5 years later; overall, 64 percent have seen  their sales increase. An official at The Veterans Corporation said that for  fiscal year 2003, they are planning a total of 30 VET courses. The official  added that the program draws support from local Service Corps of Retired  Executives chapters and Small Business Development Centers, whose  members and staff serve as either mentors or classroom speakers.
The Veterans Corporation has also piloted two, 1-day Veterans Business  Success Seminars on the skills needed to start a business. The seminars  were held in Boise, Idaho, and Cleveland, Ohio, and included discussions  on business plans, marketing analysis, and financing. According to an  official at The Veterans Corporation, 30 veterans participated in the first  two seminars. The official explained that they are adopting a new strategy  to more consistently meet the mandate to establish and maintain a network  of information and assistance centers for use by veterans and the public.  Under this strategy, The Veterans Corporation will utilize community-based  organizations to provide veterans support with a combination of  workshops, seminars and courses tailored to local needs. The official  added that The Veterans Corporation is in discussions with the SBA on  funding four test sites to be launched by May 2003.
section_title: On-Line Educational Resources
paragraphs: In April 2002, The Veterans Corporation’s Web site became operational; it  contains information on training, capital, and other business resources. A  board member of The Veterans Corporation told us that The Veterans  Corporation views this Web site as helping to fulfill the requirement under  the Act to establish and maintain a network of information and assistance  centers for use by veterans and the public. The board member explained  that building brick and mortar development centers would be prohibitively  expensive and that the board’s initial goal was to focus on leveraging  existing services rather than duplicating private-sector services. For  example, the Web site has links to other small business resources,  including Entreworld, an on-line small business resource library.  Entreworld, which is sponsored by the Ewing Marion Kauffman  Foundation, was one of the first Web sites assisting small businesses since  1996, according to the Entreworld Web site. Additionally, The Veterans  Corporation’s Web site has links to other on-line resources for veterans,  such as those of the Department of Defense (DOD), SBA, and Department  of Veterans Affairs (VA).
section_title: Services to Entrepreneurs
paragraphs: The Veterans Corporation has launched or started to develop various  initiatives to provide entrepreneurial services, such as access to capital  through a micro loan program, business insurance, and on-line buying and  selling of veteran-owned goods and services. While these services are  intended to assist veterans with formulating or expanding businesses,  some of the services also provide revenue to The Veterans Corporation.  (We discuss The Veterans Corporation’s efforts to become self-sufficient  later in this report.)
Micro loan program. To help veterans gain access to capital, The  Veterans Corporation established a regional micro loan program for  start-up businesses. The Veterans Corporation is working with regional  banks to provide the loans. Participating banks in the micro loan  program may also use SBA loan guarantees to help veterans obtain  access to capital. An official told us that as of January 2003, the first  early stage loan of $25,000 was made to a start-up, veteran-owned  business and two other SBA lines of credit up to $150,000 were close to  being finalized. As of April 2003, The Veterans Corporation has an  agreement with Newtek Small Business Finance, Inc., to offer SBA loans  and other services. The Veterans Corporation will be able to provide  nationwide service in conjunction with its existing lenders.
Veterans Marketplace. The Veterans Marketplace is an on-line purchase  program for products and services produced by veteran-owned small  businesses. The Veterans Corporation is partnering with eScout, a  company that operates a similar electronic procurement business. The  Veterans Marketplace targets procurements of $2,500 or less using an  electronic purchase card system. Although the system is operational,  The Veterans Corporation is in the process of building their customer  lists of government and private companies. As of January 2003, there  were 16 veteran-owned business sellers and 150 veteran-owned  business buyers listed on The Veterans Marketplace. The Veterans  Corporation plans to earn income from this effort through a revenue- sharing agreement with eScout that is based on volume of transactions,  new member agreements, on-line purchases, and auction events hosted.
Business Insurance Program. In December 2002, The Veterans  Corporation started offering insurance services through the Aon  Financial Institution Alliance to veteran-owned businesses. The services  include health insurance for employees, legal representation, and, for  small businesses, computer protection assistance against viruses and  hackers. The Veterans Corporation anticipates producing revenue from  this effort by collecting commissions from the Aon Financial Institution  Alliance. An official at The Veterans Corporation stated that as of April  2003, the first small group health insurance policy was sold as well as  over 100 quotes requested or applications completed.
Veterans Corporation Platinum BusinessCard. The Veterans  Corporation began offering a veterans business credit card in January  2003. The card includes features such as a business credit line and cash  back on purchases. According to an official at The Veterans  Corporation, 165 credit cards have been approved and issued, as of April  2003.
Veterans Capital Fund. The Veterans Corporation is also seeking to  establish a venture capital fund to invest in both veteran-owned and  other businesses. The fund will be structured as a Small Business  Investment Company (SBIC), which is licensed by SBA and features  opportunities to leverage private equity investments for government  guarantees. Once operational, The Veterans Corporation will own 10  percent of the limited partnership and 17.5 percent of the general  partnership. According to an official at Equisource, a management  investment firm that is acting as a placement agent for the Veterans  Corporation, the fund will seek to invest partly, but not only, in veteran- owned businesses. The official said that The Veterans Corporation  would use profits realized from the fund to provide for veteran  programs and services.
Figure 1 shows The Veterans Corporation’s status of  key initiatives.  Additionally, appendix II contains a chronology of The Veterans  Corporation’s key activities, and appendix III lists The Veterans  Corporation’s activities that address the statutory requirements of the Act.
Officials at The Veterans Corporation describe their outreach as targeting  all veterans, including service-disabled veterans. Generally, they do not  have separate efforts for the service-disabled population. The officials,  however, referenced efforts to make certain programs and services  available to the service-disabled population. For example, the VET program  reserves 10 spaces in each class for the service-disabled. In the first three  VET courses completed, 19 of 64 graduates, or 30 percent, registered as  service-disabled veterans. In another effort just recently launched, service- disabled veterans who purchase insurance products through The Veterans  Corporation will receive an additional discount. Officials further said that  in the future, they would like to offer distance learning in their  entrepreneurial training program to provide greater access to the  physically disabled veteran.
section_title: Initial Challenges Slow Progress of The Veterans Corporation’s Programs and Initiatives
paragraphs: The Veterans Corporation officials said that progress on programs has been  hampered by their inability to collect information from government  sources on military personnel transitioning to civilian life and existing  veteran-owned businesses. One of the officials explained that the success  of programs such as The Veterans Marketplace and VET program is largely  dependent on their ability to identify and reach transitioning service  members and veteran-owned businesses. The Veterans Corporation  officials said that if they were not successful in obtaining this data, they  would have to rely on developing data from attendance lists from their  training and education programs and other available sources. Officials  stressed that this would slow the development of a client database.
subsections: section_title: Privacy Issues Prevent Government Agencies from Sharing Information on Veterans; Publicly Available Data Are Limited
paragraphs: The Veterans Corporation has requested information from DOD and VA,  respectively, on (1) military service members nearing retirement or  separation and (2) veteran-owned and service-disabled, veteran-owned  businesses. Both DOD and VA officials said that privacy laws prohibit them  from providing personal information such as names and addresses of the  military and veteran population. A DOD official stated that their policy  prohibits them from releasing private information on enlisted military to  any public or private organization. The DOD official further cited a  November 9, 2001, memorandum for DOD Freedom of Information Act  Offices that supports the withholding of personally identifiable information  for security reasons in response to the events of September 11, 2001. VA’s  Office of the General Counsel (OGC) issued a legal opinion on December  12, 2002, which states that the Act does not direct the Secretary of VA to  construct a database for use by The Veterans Corporation. Furthermore,  VA’s OGC stated that there are no provisions within existing confidentiality  laws that would permit the sharing of information as proposed.  However,  in response to our draft report, VA concluded that it could disclose a list of  names and addresses of veterans and their small businesses to the public,  including The Veterans Corporation. Further, VA officials stated that  arrangements are under way to make this information available on their  Web site. However, it remains to be seen whether the information that will  be available on VA’s Web site will meet The Veterans Corporation’s needs.
The Veterans Corporation has obtained access to some government  databases as well as other publicly available information on veterans—for  example, SBA’s Procurement Marketing and Access Network (PRO-Net)  database, which contains information on veteran-owned business. The  Veterans Corporation has also gained access to DOD’s Central Contractor  Registration (CCR) database that contains information on prime and  subcontractors of the federal government. CCR contains over 200,000  business listings of which 30,000 were listed as veteran-owned. DOD has  required that The Veterans Corporation sign a standard nondisclosure  agreement. But, an official at The Veterans Corporation said that the  agreement contains language that they “shall not use such data for  commercial purposes;” the agreement is currently under legal review at  The Veterans Corporation. According to SBA officials, PRO-Net is currently  merging with CCR, and current registrants from both databases are being  asked to reregister into the combined database.
The Veterans Corporation has also utilized some publicly available  information on veterans, but the information is in aggregate form and does  not enable them to identify individuals seeking entrepreneurial assistance.  According to officials at The Veterans Corporation, they were not aware of  any public sources of data with names and addresses that could be used to  identify veterans who may be seeking entrepreneurial assistance. For  instance, The Veterans Corporation officials said they used public data  from the VA Web site for information on where veterans live, by state and  county and for age and gender. This information was used to help  determine locations for VET classes and Veterans Business Success  Seminars. Additionally, The Veterans Corporation identified a private data  source that lists about 190,000 veteran-owned businesses. An official said  that the private data source does not collect E-mail addresses and  questioned whether the records have current mailing addresses. Officials  said that this effort has been put on hold because it was not viewed as  worth the $90,000 acquisition cost.
section_title: Government Agencies Had Limited Participation in The Veterans Corporation Activities
paragraphs: The Veterans Corporation is required to work with and organize public and  private resources, including those of the federal government. An official at  The Veterans Corporation indicated that collaboration with other federal  agencies has been limited because of other priorities at these agencies and  because agencies are not required to carry out these multiagency  initiatives. As stated previously, due to privacy issues The Veterans  Corporation has had difficulty in obtaining data from DOD on military  personnel transitioning to civilian life and from VA on veteran-owned  businesses. The Veterans Corporation official suggested that a federal  directive, such as a presidential executive order or Office of Management  and Budget guidance, would help federal agencies understand The  Veterans Corporation’s mission and provide the agencies with instructions  for assisting in these efforts.
Government officials with whom we spoke provided some examples of  early collaboration with The Veterans Corporation. For instance, an SBA  official stated that they have been active participants at board meetings,  helped develop initiatives such as The Veterans Capital Fund (see fig. 1),  and provided technical assistance. According to the official, SBA envisions  that there will be additional, mutually beneficial relationships with other  programs. A VA official stated that collaboration between VA and The  Veterans Corporation has included establishing links on the respective Web  sites, and invitations to speak at VA conferences. A DOD official also  mentioned that the DOD Web site has a link to The Veterans Corporation’s  Veterans Entrepreneurial Training Program.
section_title: Delays in Management Appointments Slowed The Veterans Corporation’s Activity
paragraphs: Officials at The Veterans Corporation said that progress on their programs  was initially hampered by delays in management appointments for  positions such as the Chief Executive Officer (CEO) and board members.  The officials explained that much time was spent searching for a  permanent CEO. The CEO was appointed in October 2001. Until August  2001, the staff at The Veterans Corporation were temporary employees,  operating as contractors. Subsequently, the entire management team was  hired in fiscal year 2002. Additionally, the Act called for the initial board  members to be appointed by the President of the United States no later  than 60 days after the legislation was enacted on August 17, 1999. The  initial presidential appointments, however, did not occur until a year after  enactment. Eight of the nine voting members were appointed between  August and December 2000, while the ninth member was appointed in  November 2001.
Although initial board members had diverse backgrounds such as banking,  engineering, and social services, Veterans Corporation and board officials  said they would like to have board members with specific qualifications  such as connections to corporations for fund-raising or political clout,  experience on other boards of successful businesses, or first-hand  entrepreneurial experience. Further, The Veterans Corporation staff  believes that once government funding ends, they may benefit from a board  whose voting members are not wholly presidentially appointed. They  explained that the discretion to recruit board members from the private  sector would allow The Veterans Corporation to augment the board’s  membership with the required business expertise necessary for The  Veterans Corporation’s long-term success. The Act does not include any  specific rules or guidance for how The Veterans Corporation is to make the  transition from a largely government-funded to a private, self-sufficient  corporation. As one step in this transition, The Veterans Corporation has  proposed that the Act creating the corporation be revised to give The  Veterans Corporation input into the selection of the board after  government funding ends. Specifically, the proposal calls for a board  structure similar to that of Fannie Mae, a government-sponsored enterprise  that engages in secondary loan market activity, in which only one-third of  the directors are presidentially appointed.
section_title: Status of The Veterans Corporation as a Public Agency or Private Corporation Is Open to Interpretation
paragraphs: Officials at The Veterans Corporation have indicated that differences in  interpretation regarding the legal status of The Veterans Corporation as  either a public agency or private corporation have, at times, complicated  organizational and program development efforts. The Veterans Corporation  has obtained various legal opinions on its corporate legal status with  respect to personnel and procurement requirements with differing results.  They referenced an opinion from the Office of Personnel Management on  whether the provisions of Title 5 of the U.S.C. applied to The Veterans  Corporation. In a letter dated November 13, 2001, the Office of Personnel  Management concluded that The Veterans Corporation was a government- controlled corporation and is subject to most provisions of Title 5,  including provisions related to premium pay, awards, leave, and health  benefits, among other things. In contrast, a law firm performing pro bono  legal assistance to The Veterans Corporation—Fried, Frank, Harris, Shriver  & Jacobson—issued a memorandum dated December 5, 2001, that stated  “considering all the relevant factors, we believe that a court would find the  NVBDC  is not a Government-controlled  corporation under 5 U.S.C. §103 to which the 5 U.S.C. §5373 pay cap  applies.”   In another instance, another law firm that also represents The  Veterans Corporation—Hale and Dorr LLP—issued a memorandum dated  April 2, 2002, that stated that The Veterans Corporation “does not meet the  definition of an executive agency [executive department, military  department, wholly-owned government corporation, or independent  establishments] triggering FAR  mandates  for procurement.”
section_title: The Veterans Corporation Plans to Put Evaluative Performance Measures in Place
paragraphs: It is too early to determine the effectiveness of The Veterans Corporation  programs to the veteran population because the programs are relatively  new and, in some cases, just under way. Officials indicated that they have  broad performance measures for programs such as participants’  satisfaction ratings of the VET program and quantitative measures, such as  the number of credit cards and insurance policies issued, and dollar  volume of transactions for the Veterans Marketplace, which are used to  determine whether they are meeting early program objectives. The  Veterans Corporation’s business plan has outlined some corporate  objectives for fiscal year 2003, including delivering VET programs to at  least 500 veterans and transitioning military personnel. Other objectives  identified in the business plan include constructing a database that  contains accurate information on at least 250,000 veteran business owners  and expanding the micro loan program nationwide.
According to The Veterans Corporation officials, corporate objectives will  be reviewed quarterly. As programs mature, The Veterans Corporation  intends to assess program effectiveness periodically. Officials indicated  that they do not yet have refined and tested measures to assess the extent  their programs impact Veterans who seek to develop or expand their own  businesses. The officials explained that at this early stage, there is a lack of  historical  information against which to measure progress.  Additionally, they plan to continue developing performance measures that  assess overall program effectiveness.
section_title: Professional Certification Advisory Board Established but Progress Is Limited Because of Complex Issues
paragraphs: As mandated by the Act, The Veterans Corporation formed a Professional  Certification Advisory Board (PCAB) to (1) create uniform guidelines and  standards for the professional certification of military personnel  transitioning to civilian occupations and (2) remove potential licensure and  certification barriers. Officials from another certification group told us that  veterans traditionally have a hard time transitioning into private-sector  employment because prospective employers have difficulty understanding  military experience and training. Private sector employers are increasingly  requiring proof or certification of certain skills. Licensing and certification  are the two primary types of credentialing for individuals seeking civilian  positions that are equivalent to enlisted military occupations. Occupations  within the military that require private-sector certification or licensing  include, among other things, automotive mechanic, dental assistant,  electrician, flight engineer, medical laboratory technician, plumber, police  officer, and truck driver. Licenses are granted by federal, state, and local  government agencies while certification is the process by which a  nongovernmental agency, association, or private sector company  recognizes certain qualifications. PCAB officials agreed that the task at  hand is quite large, involving multiple government entities.
The PCAB held its first meeting in October 2001. Subsequent, initial  meetings were spent identifying the scope of issues and key players. The  PCAB meets quarterly and has 26 members that serve voluntarily. The  board established three committees, including the (1) Barriers  Identification Committee, which is tasked with reviewing studies and  research to identify barriers that affect transitioning military personnel; (2)  Information Clearinghouse Committee, which is responsible for obtaining  and disseminating certification, licensure, and small business development  information; and (3) Research and Legislative Action Committee, which  will analyze barriers and develop recommendations. According to the  PCAB chairman, the committees are developing their goals and have not  yet produced deliverables. The chairman explained that the Research and  Legislation Action Committee would use information from the other two  committees to develop recommendations.
One PCAB member acknowledged that while progress has been slow, he  was uncertain whether the PCAB committees could work any faster. He  stressed that the task at hand is quite large and that the pace of work is  dependent on the collective efforts of 26 members who serve on a  voluntary basis. For instance, one of the PCAB’s committees established to  identify certification and licensing obstacles is looking at which of the 105  identified military occupations have barriers, and it is reviewing the  licensing procedures of 53 states and jurisdictions.
Some PCAB members also represent other certification groups, such as the  Council of Licensure, Enforcement, and Regulation and the Commission  for Certification in Geriatric Pharmacy. A few board members told us that  representation from other certification efforts helps to avoid duplication  and complements the efforts of other groups. For instance, one board  member who also oversees the Department of Labor’s “Use Your Military  Experience and Training” (UMET) Web site on certification and licensing  information stated that there is no overlap of effort. In fact, he said that the  PCAB is utilizing UMET as a resource to obtain information on certification  issues. Another board member, who also chairs VA’s Professional  Certification and Licensing Advisory Committee (PCLAC), agreed that the  groups did not duplicate each other’s efforts and explained that VA offers  financial assistance to service members to cover the cost of certification,  up to $2,000. PCLAC advises VA on the certification requirements that  entities must meet in order to qualify for payment.
A Veterans Corporation board member with whom we spoke identified  some concerns about communication between the PCAB and The Veterans  Corporation board of directors. For instance, the official commented that  there has been limited interaction between the PCAB and The Veterans  Corporation board of directors. Others, including an official at The  Veterans Corporation and a veterans group with whom we spoke, question  whether The Veterans Corporation was the appropriate organization to  carry out the PCAB’s mission. They stated that the PCAB might distract The  Veterans Corporation’s management and board of directors from their  principal activities. An official at The Veterans Corporation explained that  producing uniform standards and guidelines for certification was a large  and complicated task and inconsistent with the overall goals of The  Veterans Corporation, which are to provide entrepreneurial services.
section_title: The Veterans Corporation’s Use of and Controls over Federal Funds Received
paragraphs: In its first 2 years of operations, The Veterans Corporation received $8  million in federal appropriations and spent about $4.7 million of the federal  funds primarily on start-up costs. In fiscal year 2001, The Veterans  Corporation spent about $985,000 for salaries, professional services, and  other start-up costs.  In fiscal year 2002, The Veterans Corporation spent  approximately $3.7 million in appropriations for that year on expenditures  related to establishing its programs, as well as salaries, professional  services, and other start-up costs. The Veterans Corporation has  implemented various controls over its obligation and expenditure payment  processes, including limits on the ability of management officials to make  check disbursements without board of director approval. According to The  Veterans Corporation’s external auditor, The Veterans Corporation had  internal control issues in fiscal year 2001. However, the external auditor  determined that these deficiencies did not constitute material weaknesses  and that all but one of the deficiencies had been corrected in fiscal year  2002.
subsections: section_title: Most of The Veterans Corporation’s Expenditures to Date Have Been Start-up Costs
paragraphs: The Veteran Corporation’s management officials stated that their approach  was to spend conservatively on program and operating expenses in the  start-up period so that unused federal appropriations could be spent in  future periods. During fiscal year 2001, The Veterans Corporation’s sole  sources of funding were from federal appropriations and related interest  earnings. Of the $4 million in appropriations received during fiscal year  2001, it spent less than $1 million on start-up costs such as salaries,  professional services, and other administrative costs. In fiscal year 2002,  The Veterans Corporation spent approximately $3.7 million of its federal  funds to establish its Veterans Marketplace—an on-line service for selling  goods and services of veteran-owned businesses—as well as for other  program activities, salaries, professional services, and other start-up costs.   Beginning in fiscal year 2002, The Veterans Corporation also began to  receive other revenue, such as cash pledges, contributed services and in- kind contributions from nonfederal sources. As of September 30, 2002, The  Veterans Corporation had approximately $3.3 million in unexpended  federal appropriations—approximately 40 percent of its $8 million in total  appropriations. The Veterans Corporation’s federal appropriations are  provided on a “no year” basis; therefore, unused appropriations can be  carried forward and applied to expenses in future fiscal years.
Federal appropriations have been a major source of revenue to The  Veterans Corporation since its inception. In fiscal year 2001, The Veterans  Corporation’s sole sources of funding were from federal appropriations and  related interest earnings. Beginning in fiscal year 2002, The Veterans  Corporation recognized cash contributions and pledges of approximately  $1.3 million and contributed services and in-kind contributions of  approximately $1.5 million as revenue from other sources. Contributed  services included legal services, Web site design, and use of a proprietary  Web site. As a result, the federal appropriations used in fiscal year 2002  made up approximately 57 percent of The Veterans Corporation’s total  revenues. Appendix IV provides more detail on The Veterans Corporation’s  revenue and expenses for fiscal years 2001 and 2002.
As shown in table 1, the Corporation incurred various start-up costs for its  programs in 2001 and 2002. The Veterans Corporation’s expenses increased  significantly in 2002 primarily due to it hiring permanent employees and the  fees related to establishing The Veterans Marketplace. Since its inception,  The Veterans Corporation has spent about $4.7 million of the $8 million  total received to date in federal appropriations. In fiscal year 2001, The  Veterans Corporation spent approximately $985,000 for salaries,  professional services, and other start-up costs. In fiscal year 2002, The  Veterans Corporation used federal funds to pay for expenses related to an  on-line service for selling goods and services of veteran-owned businesses,  as well as its other program activities, salaries, professional services, and  other start-up costs. For further analysis of salaries, bonus, and payments  to staff for fiscal years 2001 and 2002, see appendix V.
Figure 2 shows The Veterans Corporation’s expenses for both fiscal years  2001 and 2002 by function (program, administrative, and fund-raising).  Financial reporting under U.S. generally accepted accounting principles  requires expenses by type and function.
The majority of The Veterans Corporation’s federally funded functional  expenses pertain to program activities—59 percent for fiscal year 2001 and  64 percent for fiscal year 2002. Fund-raising costs were less than 20 percent  for both fiscal years: 3 percent for fiscal year 2001 and 13 percent for fiscal  year 2002. Administrative costs were 39 percent for fiscal year 2001, which  primarily represented legal fees and recruitment costs, and were 23 percent  for fiscal year 2002, which primarily represented salaries and board  expenses. As The Veterans Corporation’s operations expand, we expect  that the amount of program activities relative to total expenses will grow  and the ratio of administrative and fund-raising to total expenditures will  decrease.
section_title: Board of Directors Vests Expense Approval Authority in Executive Staff
paragraphs: The board of directors is required to prescribe the manner in which the  obligations of The Veterans Corporation may be incurred and how its  expenses are allowed and paid. To fulfill this responsibility, the board  approved a financial policy in December 2000, before it received its first  appropriations; officials of The Veterans Corporation were unable to locate  the text of the policy. However, minutes from the March 2001 board  meeting show that the board established initial disbursement authority for  executive-level staff in March 2001, the same month in which they were  hired. The board authorized the acting CEO and the acting associate  director to sign checks, drafts, or orders (1) in amounts no greater than  $50,000 without further action of the board; (2) in amounts greater than  $50,000 but less than $100,000 with the additional signature of one member  of the executive committee; and (3) in amounts greater than $100,000 with  the additional signature of one member of the executive committee and to  notify all board members in writing of the disbursement, at least 7 days  prior to issuance for checks, drafts, or orders.
Minutes of an executive committee meeting in May 2001 show that the  executive committee reduced the limit on expense authority from $50,000  to $10,000. All amounts in excess of $10,000 would require the signature of  one executive committee member and also require notification to the chair  of the executive committee. In January 2002, the board again amended the  expense authority based upon a proposal of the Chief Financial Officer  (CFO). Since January 2002, the board has retained authority to approve  expenditures in excess of $25,000 and has delegated disbursement  authority to executive-level staff. For example, the board authorizes the  CEO to disburse up to $25,000 per transaction; single transactions in excess  of $25,000 and contracts with a total value greater than $25,000 require the  approval of either the executive committee or the full board of directors. In  addition, the board resolved that checks written in amounts of $5,000 or  less require one authorized signature; those in excess of $5,000 require two  authorized signatures. Both the CEO and the Managing Director of  Operations are authorized to sign checks.
section_title: Early Financial Management Practices Showed Weaknesses, but Were Addressed by New Leadership
paragraphs: According to The Veterans Corporation’s external auditor, The Veterans  Corporation had internal control issues that could have adversely affected  its ability to administer a major federal program in accordance with  applicable laws, regulations, contracts, and grants. However, the external  auditor determined that these conditions did not cause The Veterans  Corporation to misrepresent its financial condition or operating results for  fiscal year 2001. Specifically, the external auditor found in its fiscal year  2001 audit that The Veterans Corporation did not  reconcile bank accounts on a timely basis and segregate cash duties;   maintain adequate internal controls surrounding payroll processing;   provide supporting documentation marked with an indication of review,  approval, and payment for all cash disbursements; and  maintain a filing system for accounting records.
The external auditor classified these internal control matters as reportable  conditions, and did not identify any instances of material weaknesses,  which would indicate a potentially greater detrimental effect on an entity’s  internal controls. These reportable conditions were detailed in a letter to  management. The partner of The Veterans Corporation’s external auditor,  who oversaw the audit, stated that such accounting deficiencies are not  unusual for start-up small businesses.  According to The Veterans  Corporation’s external auditor, the reported deficiencies have been  addressed in fiscal year 2002, with one exception—reconciliation of bank  accounts on a timely basis.
section_title: Financial Self- Sufficiency Plan in Place but Too Early to Determine the Likelihood of Success
paragraphs: To address the requirement to become a self-sustaining entity, The Veterans  Corporation has developed a plan to become self-sufficient based on four  major sources of revenue—an electronic marketplace, a credit card  program, an insurance program, and fund-raising. According to an official  at The Veterans Corporation, the revenue assumptions were developed  based on discussions and input from their partners such as eScout,  Advanta, and Aon Financial Institution Alliance. Revenue assumptions  contained in the self-sufficiency plan cover fiscal years 2003 and 2004. At  the time of our review, three of the four efforts—the electronic  marketplace, credit card and insurance services—were just starting to  produce revenue. According to the CFO, fund-raising goals are targeted  toward supporting education and training efforts. In fiscal year 2002, The  Veterans Corporation earned approximately $2.8 million to satisfy federal  matching requirements. Additionally, the plan calls for quarterly reviews to  assess targeted projections. Officials said that if projections are not met,  unsuccessful programs may be discontinued and alternative revenue  sources will be developed.
subsections: section_title: The Veterans Corporation Implements Self-Sufficiency Plan
paragraphs: The Act requires that The Veterans Corporation raise private funds and  become a self-sustaining corporation. The Veterans Corporation has  implemented a plan to achieve financial self-sufficiency by September 30,  2004, that is based on four major sources of revenue:  Veterans Marketplace. According to the plan, The Veterans Marketplace  is expected to generate the greatest share of revenue—approximately 43  percent—to The Veterans Corporation in fiscal year 2004, the final fiscal  year of federal funding. The revenue sharing agreement between The  Veterans Corporation and eScout, which operates the on-line  marketplace, allows for The Veterans Corporation to collect 49 percent  of revenues received from on-line purchases and other transactional  services purchased by members of The Veterans Marketplace, as well as  20 percent of the fees paid by members who access products.
Veterans Platinum BusinessCard. About 19 percent of fiscal year 2004  revenue will come from the credit card program for each new activated  account as well as a share (0.2 percent) of eligible purchases made with  the card.
Veterans Affinity Insurance Program. Approximately 19 percent of  revenue will come from sales of business insurance and other products  to veteran-owned businesses. According to its agreement with Aon  Financial Institution Alliance, The Veterans Corporation receives  commissions or fees, which are structured differently for each  insurance product.
Fund-raising. The Veterans Corporation has implemented a multiyear,  multimillion-dollar, fund-raising campaign primarily to support The  Veterans Entrepreneurial Training program. The self-sufficiency plan  includes only a part of their fund-raising goals (15 percent of funds  raised that are retained for overhead costs) plus any interest income. In  fiscal year 2004, this is expected to account for 19 percent of revenue.
Although The Veterans Corporation has other initiatives under way that are  expected to generate revenue, such as The Veterans Capital Fund or micro  loan program, they were not considered to be primary revenue sources for  meeting self-sufficiency.
The CFO at The Veterans Corporation said that the revenue assumptions  were based on input from partners that operate similar programs. For  instance, revenue assumptions for The Veterans Marketplace were based  on a discussion with eScout personnel on (1) building similar private  exchanges and (2) customer and revenue projections. The process was  similar for the credit card and insurance programs, and included  discussions with Advanta and Aon Financial Institution Alliance,  respectively. The official indicated that both Advanta and Aon were  reluctant to offer revenue projections, but they provided enough  information to enable The Veterans Corporation to project revenue. The  self-sufficiency plan is based on revenue assumptions over fiscal years 2003  and 2004.
It is too early to determine if The Veterans Corporation will become  financially self-sufficient by September 30, 2004. At the time of our review,  three of its efforts were just beginning to produce revenue. For instance,  The Veterans Marketplace, while operational since June 2002, was in the  process of building a customer list. The other two efforts, the credit card  and insurance services, were just launched in January 2003 and December  2002, respectively. Further, according to the plan, total revenue from these  activities is not expected to exceed expenses until the fourth quarter of  fiscal year 2004.
Because The Veterans Corporation’s federal appropriations are provided on  a “no year” basis, unused appropriations can be carried over into future  fiscal years and, thus, are available to cover future years’ expenses.  An  official at The Veterans Corporation stated that they expect to have a  surplus of funds at the end of the fourth year of government support which,  if necessary, would cover their operating costs in the following year.
section_title: Funds Raised Will Be Used to Support the VET Program
paragraphs: The Veterans Corporation has a fund-raising goal of $2.5 million in fiscal  year 2003 and $3 million in fiscal year 2004 to support education and  training efforts, primarily the VET program. In fiscal year 2002, The  Veterans Corporation earned about $2.8 million, exceeding its goal of $2  million. To help raise funds, they contracted with Changing Our World, a  fund-raising organization, and are establishing a fund-raising advisory  board of approximately 12 to 15 individuals. A Veterans Corporation  official explained that it initially planned to rely on fund-raising to support  operations until other revenue sources were in place, but the corporation  refocused in light of current economic conditions and limited success in  raising funds for operations. The corporation’s revised fund-raising strategy  focuses on financing VET program costs.  The official further explained  that money raised would be used for direct program expenses and not for  The Veterans Corporation administrative expenses. VET course  administration and materials cost The Veterans Corporation about $1,850  per student, of which enrollees pay $350. As identified in its business plan,  the VET corporate objective for fiscal year 2003 is to deliver the program to  500 participants.
section_title: The Veterans Corporation Is Developing Other Sources of Income
paragraphs: While The Veterans Corporation only had two sources of income for fiscal  year 2001, which were federally appropriated funds and the interest earned  on them, sources of income for fiscal year 2002 included federal  appropriations and interest income plus cash donations, pledges for future  cash donations, contributed services, in-kind donations, contract revenue  from the federal government, and other sources. It is important to note  however, that approximately $1.2 million of The Veterans Corporation’s  fiscal year 2002 revenues were pledges for future payments to The Veterans  Corporation.  Figure 3 shows The Veterans Corporation’s income for  fiscal year 2002, exclusive of federally appropriated funds and interest  earned on those funds.
Contributed services and  in-kind contributions ($1,517)
Percentages may not total to 100 because of rounding.
Most of the other funds raised in fiscal year 2002 were in the form of  contributed services, such as legal services and ability to provide the  EntreWorld on-line library through The Veterans Corporation’s Web site at  no cost to The Veterans Corporation, as well as pledges for future  payments of cash. Ten pledges were made, two of which are collectible  over a period of 10 years. The Veterans Corporation raised approximately  $66,000 in cash, $5,100 in contract revenue from the federal government,  and $5,900 in other funds in fiscal year 2002.
section_title: The Veterans Corporation Will Measure Progress Toward Self-Sufficiency in Fiscal Year 2003
paragraphs: The Veterans Corporation intends to evaluate the self-sufficiency plan on a  quarterly basis to assess whether its strategies are sufficient to meet  targeted projections. The CFO of The Veterans Corporation said that  management would review the progress of the plan, including decisions to  discontinue unsuccessful programs. In the event that projections are not  met for 2003, a Veterans Corporation official stated that they would then  consider alternative revenue sources to allow them to meet their self- sufficiency goal. In addition, officials at The Veterans Corporation told us  that they continuously look for potential business opportunities to  complement their efforts and have had some early discussions on other  possible ventures.
section_title: Agency Comments and Our Evaluation
paragraphs: We received written comments on a draft of this report from The Veterans  Corporation. We also obtained technical comments from SBA and VA that  have been incorporated into this report where appropriate.
The Veterans Corporation commented that their programs have broad  measures, quantitative and/or qualitative, that are used to assess early  program objectives. In addition, corporation representatives pointed out  that they have not yet refined and tested measures to assess whether  their programs ultimately have a positive effect on veterans who own or  want to start their own businesses. We discussed this issue with The  Veterans Corporation and obtained additional documentation  supporting these broad measures and noted this in the report.
Representatives of The Veterans Corporation expressed their concern  with the inability to obtain information about transitioning service  members and Veterans from federal agencies. In response to our draft  report, VA concluded that they could disclose a list of names and  addresses of veterans and their small businesses to the public, including  The Veterans Corporation. Further, VA officials stated that  arrangements are under way to make this information available on their  Web site. However, it remains to be seen whether the information that  will be available on VA’s Web site will meet The Veterans Corporation’s  needs.
The Veterans Corporation reiterated that the Professional Certification  Advisory Board would be more appropriately led by an entity other than  The Veterans Corporation and that it has not been provided adequate  funding or appropriate authority to achieve the goal of creating uniform  standards for professional certification. However, The Veterans  Corporation stated their commitment to carrying out the Professional  Certification Advisory Board’s mission as mandated in the Act.
In reference to The Veterans Corporation’s reported accounting  deficiency for fiscal year 2002, it submitted a copy of management’s  response, which outlines the steps that it plans to take in response to  this issue.
We will send copies of this report to interested congressional committees  and the President and CEO of The Veterans Corporation. We will make  copies available to others on request. In addition, this report will also be  available at no charge on our homepage at  http://www.gao.gov If you or your staff have any questions on this report, please contact me at  (202) 512-8678, jenkinswo@gao.gov or Harry Medina at (415) 904-2000,  medinah@gao.gov. Key contributors are listed in appendix VII.
section_title: Scope and Methodology
paragraphs: To describe The Veterans Corporation’s efforts in providing small business  assistance to veterans, we collected and analyzed program information  such as planning documents, contracts, legal opinions, and program  literature.  Additionally, we interviewed staff and board officials from The  Veterans Corporation, as well as partnering organizations including  officials from eScout, Changing Our World, Equisource, and Southern  Financial Bank.  We also interviewed officials from federal agencies,  including the Small Business Administration, Department of Defense,  Department of Veterans Affairs, and Department of Labor, and officials  from a veteran service organization, the Vietnam Veterans of America, as  well as a consultant—Halsey, Rains, and Associates.
To meet our objective to describe The Veterans Corporation’s use of and  controls over federal funds, we   Obtained and analyzed The Veterans Corporation’s fiscal year 2001 and  2002 financial statements and audit reports, and management letter for  2001.  We did not evaluate the quality of the other auditor’s work on the  financial statement or conduct our own tests of the financial statement  balances;    Reviewed The Veterans Corporation’s contract with the external auditor  for the 2002 financial statement audit to understand the nature of the  audit services to be provided and the extent of the auditor’s proposed  work on internal control;  Obtained and reviewed minutes of meetings of the board of directors  and the board’s executive committee to determine the board’s policies  as they related to the disbursement and use of federal funds;  Communicated with The Veterans Corporation’s external auditor to,  among other things, determine the extent of financial management  deficiencies in The Veterans Corporation; and  Interviewed the Chief Financial Officer (CFO) of The Veterans  Corporation.
To determine what efforts The Veterans Corporation made to become  financially self-sufficient, we reviewed their self-sufficiency plan and  discussed it with The Veterans Corporation’s CFO.  We did not  independently assess the financial assumptions presented in the plan.
section_title: Timeline of The Veterans Corporation’s Key Efforts and Activities
paragraphs: Report of the Small Business Administration Veterans Affairs Task Force for Entrepreneurship,  “Leading the Way: What Veterans Need From the SBA,” presented to Congress Veterans Entrepreneurship and Small Business Development Act (Public Law 106-50) enacted National Veterans Business Development Corporation is incorporated in the District of  Columbia President appoints eight board members First Board of Directors meeting in September 2000 The Veterans Corporation receives initial federal funding ($4 million)
The Veterans Corporation receives second installment of federal funding ($4 million)
Charles R. Henry hired as CEO and president First meeting of the Professional Certification Advisory Board (PCAB)
section_title: The Veterans Corporation’s Initiatives in Response to Statutory Requirements
subsections: section_title: Expand provision of and improve access to technical assistance regarding entrepreneurship for veterans.
paragraphs: Assist veterans, including service-disabled veterans, with the  formation and expansion of small businesses.
Organize public and private resources, including those of federal  agencies.
Establish and maintain a network of information and assistance  centers for use by veterans and the public.
Establish Professional Certification Advisory Board.
Assume duties, responsibility, and authority of the Advisory  Committee on Veterans Affairs on October 1, 2004.
Institute and implement a fund-raising and self-sufficiency plan.
Raise matching funds to fulfill conditions for receipt of federal funds.  Changing Our World Transmit an annual report to the President and to Congress.
Board of Directors oversight of Corporation’s obligations and  expenses.
section_title: The Veterans Corporation’s Revenue and Expenses for Fiscal Years 2001 and 2002
paragraphs: As noted in table 2, The Veterans Corporation received federal  appropriations of $4 million in each of fiscal years 2001 and 2002 and used  approximately $1 million and $3.7 million in fiscal years 2001 and 2002,  respectively.  At the end of fiscal years 2001 and 2002, The Veterans  Corporation had approximately $3 million and $3.3 million, respectively, in  unexpended appropriations.
As shown in table 3, federal appropriations were the major source of  revenue to The Veterans Corporation in fiscal years 2001 and 2002.   Beginning in fiscal year 2002, The Veterans Corporation began to realize  revenue from cash contributions and pledges, as well as contributed  services and in-kind contributions.
The Veterans Corporation reported approximately $1.3 million in cash  contributions and pledges in 2002 as revenue.  The majority of the revenue,  $1.2 million, pertained to unconditional pledges that The Veterans  Corporation recognized as temporarily restricted revenue when the  corporation was notified of the pledges.  The Veterans Corporation  recorded the pledges it expects to receive in future years as contributions  receivable at their present value in accordance with U.S. generally  accepted accounting principles for not-for-profit organizations.  See table 4  for a schedule of The Veterans Corporation’s contributions receivable as of  September 30, 2002.
Table 5 presents The Veterans Corporation’s federally funded expenses by  functional area for fiscal years 2001 and 2002.  Expenses related to program  activities represent the majority of the Corporation’s expenses and we  expect them to grow, as the percentage of fund-raising and administrative  expenses would decrease over time relative to total expenditures.
section_title: The Veterans Corporation’s Salary, Bonus, and Payments to Staff for Fiscal Years 2001 and 2002
paragraphs: Table 6 shows The Veterans Corporation’s aggregate compensation  amounts for executive management and all other staff for fiscal years 2001  and 2002.  Six employees comprised executive management and all other  staff consisted of 13 employees, however not all staff were employed  concurrently.  For fiscal year 2001, the data are disaggregated by salary and  payments to contract workers for the provision of services.  Prior to August  2001, the board of The Veterans Corporation did not hire permanent  employees.  Instead, they executed contracts with individuals to provide  services.  These payments are represented as payments to contract  workers, as shown in table 6 below.  For fiscal year 2002, the salary data is  disaggregated by wage and bonus payments.
section_title: Comments from The Veterans Corporation
section_title: GAO Contacts and Staff Acknowledgments
subsections: section_title: GAO Contacts
section_title: Acknowledgments
paragraphs: In addition to the persons named above, Janet Fong, Jeanette M. Franzel,  Marc W. Molino, Charles E. Norfleet, Julie T. Phillips, Barbara M.  Roesmann, Kathryn M. Supinski, and Paul G. Thompson made key  contributions to this report.
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subsections: section_title: Order by Mail or Phone
section_title: To Report Fraud, Waste, and Abuse in Federal Programs
section_title: Public Affairs