VA comprises three major components: the Veterans Benefits Administration (VBA), the Veterans Health Administration (VHA), and the National Cemetery System (NCS). VA’s mission is “to administer the laws providing benefits and other services to veterans and dependents. . . .” The department’s vision is to be a more customer-focused organization, functioning as “One VA.” This vision stemmed from the recognition that veterans think of VA as a single entity, but often encounter a confusing, bureaucratic maze of uncoordinated programs that put them through repetitive and frustrating administrative procedures and delays. The “One VA” vision is to create versatile new ways for veterans to obtain services and information by streamlining interactions with its customers and integrating information technology resources to enable VA employees to help customers more quickly and effectively. This will require modifying or replacing separate information systems with integrated systems using common standards to share information across VA programs and with external partner organizations, such as the Department of Defense. Information technology accounted for approximately $1 billion of VA’s fiscal year 1999 budget request of $43 billion. Of the $1 billion, about $847 million, $146 million, and $5 million were for VHA, VBA, and NCS, respectively. Over the past several years, we have identified weaknesses in VA’s efforts to modernize its operations and manage its information technology resources. As we reported in 1992, VBA’s procurement of hardware was not supported by a defined information architecture, thereby increasing the risk of developing systems that would not work as intended. In June 1996, we testified that VBA needed to develop a much improved investment strategy for selecting and managing information technology projects in a more disciplined, businesslike manner. In January 1998, we reported that while VA made significant progress in preparing a strategic plan, dated September 30, 1997, the plan needed improvement in four major areas: (1) development of results-oriented goals, (2) descriptions of how the goals are to be achieved, (3) discussion of external factors, and (4) discussion of coordination efforts with other agencies. Finally, in October 1997, we testified on the importance of having strong CIOs at major federal agencies, such as VA, to bring about much-needed reforms in the government’s management of information technology. In addition, a panel of the National Academy of Public Administration reported in August 1997, that VBA lacks strategic planning and management capabilities that are necessary for leadership to define where the organization wants to be, enable development of specific operational plans for getting there, and provide a set of coordinating and integrating capacities for implementing planned initiatives. Recognizing the need to better manage information technology, recent legislative reforms—the Clinger-Cohen Act of 1996, the Paperwork Reduction Act of 1995, and the Federal Acquisition Streamlining Act of 1994—provide guidance to federal agencies on how to plan, manage, and acquire information technology as part of their overall information resources management responsibilities. These legislative reforms highlight the need for business process reengineering, integrated architectures, investment processes, and CIOs to help with major information resource management responsibilities. In assessing VA’s implementation of the Clinger-Cohen Act and other legislative reforms, we reviewed and analyzed numerous documents pertaining to VA’s business process reengineering, integrated information technology architecture, information technology investment decision-making process, and appointment of an agency CIO. These documents include VA’s draft entitled One VA: Vision of Information Technology Enhanced Customer Service, dated January 22, 1998; OMB’s Memorandum on Information Technology Architectures, dated June 18, 1997; VA’s draft FY 1999 Department Capital Plan, dated October 1997; and VA’s April 1997 Progress Report on the Department of Veterans Affairs CIO Program. We discussed VA’s implementation of the Clinger-Cohen Act and other legislative reforms with Office of Management and Budget (OMB) officials and with various VA headquarters and component officials, including the Offices of the CIO, Information Resources Management, and Policy and Planning. We also interviewed a VA representative of the contractor responsible for developing VA’s information technology vision document. We used our investment guide to evaluate and assess VA’s information technology investment process. We performed our work from October 1997 through April 1998, in accordance with generally accepted government auditing standards. We requested comments on a draft of this report from the Secretary of Veterans Affairs and they are reprinted in appendix I. More details of our objectives, scope, and methodology are included as appendix II. The Clinger-Cohen Act requires agency heads to analyze the missions of the agency and, on the basis of this analysis, revise and improve the agency’s mission-related and administrative processes before making significant investments in supporting information technology. Specifically, agencies should maximize the potential of technology to improve performance, rather than simply automating inefficient processes. According to our business process reengineering guide, an agency should have an overall business process improvement strategy that provides a means to coordinate and integrate the various reengineering and improvement projects, set priorities, and make appropriate budget decisions. VA has not analyzed its business processes in terms of implementing its “One VA” vision. In addition, it does not have a departmentwide business process improvement strategy specifying what reengineering and improvement projects are needed, how they are related, and how they are prioritized. VA’s Directive 6000 instructs administration heads, assistant secretaries, and other key officials to apply sound business process improvement or business reengineering methods to enhance the benefits of information technology, but the directive does not provide the guidance needed to accomplish this departmentwide effort. Specifically, VA’s strategy does not identify needed reengineering and improvement projects, describe how they are interrelated, determine the order in which they will be pursued, and define specific goals, time frames, resource requirements, and key participants for each. In the absence of a departmentwide strategy, VA components are proceeding with separate, uncoordinated efforts, which undermines the department’s “One VA” vision. For example, both VBA and VHA are building information centers which enable callers, through the use of an 800 number, to obtain information on general benefits and basic services. However, these efforts are not currently coordinated. As a result, both projects are unnecessarily providing the same functionality. A senior VA official acknowledged that VA should not be building two separate information center systems, and that doing so is not consistent with the “One VA” vision. Similarly, VA and its components have not adequately coordinated and integrated their business process improvement efforts for the development of a master veteran record (MVR). This departmentwide project is intended to electronically link VHA, VBA, NCS, and Board of Veterans’ Appeals information systems and databases to share vital information, such as death notification, change of address, representation and family status about veterans. However, according to the project manager, this project is experiencing difficulties because VBA will not fund a segment of the project necessary to establish a link between VBA’s compensation and pension program—VBA’s largest program—and other VA components. As a result, VBA is not in a position to obtain timely information, such as death notifications, which can result in overpayments to veterans. VA has acknowledged the need to develop a strategy to achieve the “One VA” vision and has hired a contractor to analyze the department’s business plans and information technology projects to determine how well they fit within the vision. However, to date, VA has not committed to when it will have an overall business process improvement strategy to accomplish reengineering. The Clinger-Cohen Act and recent OMB guidelines require agency CIOs to implement an architecture to provide a framework for evolving or maintaining existing information technology, and for acquiring new information technology to achieve the agency’s strategic and information technology goals. Leading organizations both in the private sector and in government use systems architectures to guide mission-critical systems development and to ensure the appropriate integration of information systems through common standards. Despite the importance of doing so, VA and its components have yet to define a departmentwide integrated architecture. For example, as we reported in May 1997, VBA did not have a complete, integrated systems architecture to help guide its new systems development activities. We therefore recommended that VBA develop such an architecture, including a security architecture and performance characteristics and standards. VA concurred with our recommendation. To formulate an approach for developing an integrated architecture, VA in March 1997 established an architecture team consisting of representatives from VA’s Office of Information Resources Management, VBA and VHA. This team issued a report to the VA CIO Council in May 1997 adopting the National Institute of Standards and Technology (NIST) five-layer model for its departmentwide information technology architecture. The five layers—business processes, information flows and relationships, applications processing, data descriptions, and technology—provide a framework for defining an information technology architecture. VA can use this model to help it document the baseline architecture, identify a target architecture, and develop a migration plan showing how the department will make the necessary transition from its existing architecture to the target architecture. Despite the VA architecture team’s efforts, VA does not yet have a departmentwide target architecture and migration plan. While a baseline architecture has been established, VA has not addressed key aspects of the target architecture, such as information flows, data descriptions, and common technical standards that would apply to VBA, VHA, and NCS. According to VA’s CIO, the department has not addressed these aspects because it is waiting for the Strategic Management Steering Committeeto take a position on the proposal to develop a departmentwide target architecture and establish a program office to implement the architecture and related efforts, including business process reengineering and customer service improvements. While information technology represents $625 million or 80 percent of VA’s proposed $786 million capital investment budget for fiscal year 1999, the department lacks an effective process for selecting, controlling, and evaluating its information technology projects as investments.