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Hearing of the Senate Committee on Veterans - The Fiscal Year 2014 Budget for Veterans' Programs


Location: Washington, DC

Good afternoon, Mr. Chairman. Secretary Shinseki, good afternoon to you and your leadership team.

As the Chairman indicated, today we'll be discussing the President's budget request for the Department of Veterans Affairs for fiscal year 2014. As I've said at past budget hearings, it's important we provide adequate funding for VA, so that all veterans receive the benefits and care they have earned and deserve. Yet, along with that funding, we must conduct vigorous oversight to make sure programs which benefit veterans are working properly, and lead to better outcomes for veterans, their families and their survivors.

Yet, in looking over this budget request, the lack of consistent predictions and a lack of transparency lead me to question if VA's stewardship of the taxpayers' money is leading to better outcomes. First, VA has been consistently inconsistent with its workload projections. These changing projections masks whether they have the backlog situation under control. And, second, the unclear accounting practices in the IT budget make it difficult for us to conduct the necessary oversight into these programs.

Regarding claims processing, we all know that the backlog and delays have gotten worse over the past four years, even though VA has hired more staff, spent millions on IT solutions, and rolled out dozens of initiatives. Today, we'll again hear VA assure us that, despite those trends, this situation will be completely under control by 2015. But, in my view, this budget provides one more reason to seriously question those assurances.

For starters, the budget reflects that, in 2013 and 2014, VA will receive 2.6 million claims and decide 2.5 million. But, in VA's strategic plan for eliminating the backlog -- which was sent to Congress less than three months ago -- VA projected output of 2.8 million claims during those years. That means VA has already lowered its productivity expectations by 12 percent.

As for receipts, the backlog plan estimated that VA would take in 2.7 million claims this year and next year combined. But, VA acknowledged that it could receive as many as 774,000 additional claims as a result of recent laws. Despite that caution, the budget shows that VA will have even lower receipts in those years than the backlog plan estimated.

The budget also reflects that incoming claims will continue to exceed output during this year and next year, which means the number of pending claims will continue to grow. In fact, VA now projects it will have an inventory of 960,000 claims at the end of 2014 -- about 100,000 more than are pending today. Compare that with VA's backlog plan, which predicted that decisions would outpace claims receipts next year and, as a result, the level of claims would drop to less than 800,000.

Finally, the budget projects that no more than 40% of claims will be pending long enough this year and in 2014 to be considered backlogged, even though 70% of claims are currently backlogged. On the other hand, VA's strategic plan showed a backlog of 68% this year and 57% next year.

Even if VA has updated these estimates based on more recent data, it is difficult to understand how all of these projections could change so dramatically in less than 12 weeks. These fluctuating predictions, together with a history of missed milestones and deteriorating performance, make it extremely difficult to believe that VA has the backlog situation under control.

As I said earlier, another area of concern for me is the ambiguity of the IT projects that are becoming the backbone of operations at VA medical centers and VA regional offices. Currently, VA has several IT projects that are vital to providing benefits and services to our nation's veterans. In the President's request, the Office of Information Technology -- or OIT -- requested roughly $3.7 billion, a $360 million increase over last year. There are three areas of concern within the IT budget I believe are worth highlighting:

First, OIT requested $252 million for the IPO for development activities of the iEHR and VLER. How much of this money will be spent on the new strategy of "quick wins" versus the 2 initial operating capabilities at 2 sites in 2014?

Second, according to the budget justification, the FY2014 allocation for VBMS development is roughly $33 million which would be a $71 million decrease from FY2012. However, we are being told there is $155 million for VBMS in this budget. Is this additional funding coming from VBA's budget?

Finally, in my questions from last year's budget hearing, I asked about the cost of the new patient scheduling system. VA's response stated they planned to have a Life Cycle Cost Estimate completed by January 2013. As of today, this life cycle cost analysis has yet to be submitted to my office. Since the FY2014 budget request has a $30 million allocation for the development of a new scheduling package, I wonder if the life cycle cost analysis has now been completed.

This unclear nature of the IT budget stands in the way of Congress' ability to conduct effective oversight into these programs to make sure they are working properly and meeting their milestones.

Unfortunately, these inconsistent projections and the lack of transparency is becoming the standard operating procedure at VA, which is even more troubling when it's our nation's veterans that stand to lose the most.

Thank you, Mr. Chairman.

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