VA Health Care: Preliminary Findings on the Department of Veterans Affairs Health Care Budget Formulation for Fiscal Years 2005 and 2006 Page: 2 of 36
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During fiscal year 2005, the President requested a $975 million supplemental request
for that fiscal year and a $1.977 billion amendment to the President's budget request
for fiscal year 2006. In congressional testimonies in the summer of 2005, VA stated
that its actuarial model understated growth in patient workload and services and the
resources required to provide these services.2
In response to your request for information on VA's internal budget formulation
process, this report provides the following for fiscal years 2005 and 2006:
* A description of VA's process for developing its budget submission to OMB for
its medical programs, and the role of VA's actuarial model.
* A description of the medical program activities cited by VA as needing
additional funding, and how VA identified these activities.
* Key factors in VA's budget formulation process that contributed to the
requests for additional funding.
To conduct our work, we interviewed VA officials, including those in the Veterans
Health Administration's Office of the Chief Financial Officer and Office of the
Assistant Deputy Under Secretary for Health for Policy and Planning. We also
interviewed officials in VA's Office of the Deputy Assistant Secretary for Budget. We
also analyzed documents concerning VA's actuarial model, budgetary data, and
workload and expenditure data and reviewed our past work. We tested the reliability
of the data and determined they were adequate for our purposes. We have not yet met
with OMB officials to discuss the budget formulation process for fiscal years 2005
and 2006 and the President's subsequent request for additional appropriations. We
conducted our review from October 2005 through January 2006 in accordance with
generally accepted government auditing standards.
Results in Brief
VA's internal process for formulating the medical programs funding requests was
informed by, but not driven by, projected demand. VA projected costs based on
projected demand for medical care under current policy. Throughout the process, VA
compared projected costs to its anticipated request level for the OMB submission and
made adjustments to address the difference. VA officials stated that this was done in
two ways: through cost-saving policy proposals, such as assessing an annual health
care enrollment fee, and management efficiencies.3 After making adjustments to
2Senate Committee on Veterans' Affairs, Statement of the Secretary, Department of Veterans Affairs,
Emergency Hearing to Examine the Shortfall in VA's Medical Care Budget, 109th Congress, June 28,
2005; House Committee on Veterans' Affairs, Statement of the Secretary, Department of Veterans
Affairs, Full Committee Hearing on the Department of Veterans Affairs Health Care Budget, 109th
Congress, June 30, 2005; and House Committee on Veterans' Affairs, Statement of the Under Secretary
for Health, Department of Veterans Affairs, Full Committee Hearing on the Department of Veterans
Affairs Proposed Health Care Budget Amendment for Fiscal Year 2006, 109t Congress, July 21, 2005.
3See GAO, Veterans Affairs: Limited Support for Reported Health Care Management Efficiency
Savings, GAO-06-359R (Washington, D.C.: Feb. 1, 2006).GAO-06-430R VA Health Care Budget Formulation
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United States. Government Accountability Office. VA Health Care: Preliminary Findings on the Department of Veterans Affairs Health Care Budget Formulation for Fiscal Years 2005 and 2006, text, February 6, 2006; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc297007/m1/2/: accessed April 25, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.