FOLLOW-UP HEARING ON EFFORTS TO IDENTIFY AND ELIMINATE FRAUD, WASTE, ABUSE, AND MISMANAGEMENT IN PROGRAMS ADMINIS- TERED BY THE DEPARTMENT OF VETERANS AFFAIRS HEARING BEFORE THE COMMITTEE ON VETERANS’ AFFAIRS HOUSE OF REPRESENTATIVES ONE HUNDRED EIGHTH CONGRESS SECOND SESSION JUNE 17, 2004 Printed for the use of the Committee on Veterans’ Affairs Serial No. 108–45 ( U.S. GOVERNMENT PRINTING OFFICE 99–986PDF WASHINGTON : 2005 For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2250 Mail: Stop SSOP, Washington, DC 20402–0001 COMMITTEE ON VETERANS’ AFFAIRS CHRISTOPHER H. SMITH, New Jersey, Chairman MICHAEL BILIRAKIS, Florida LANE EVANS, Illinois TERRY EVERETT, Alabama BOB FILNER, California STEVE BUYER, Indiana LUIS V. GUTIERREZ, Illinois JACK QUINN, New York CORRINE BROWN, Florida CLIFF STEARNS, Florida VIC SNYDER, Arkansas JERRY MORAN, Kansas CIRO D. RODRIGUEZ, Texas RICHARD H. BAKER, Louisiana MICHAEL H. MICHAUD, Maine ROB SIMMONS, Connecticut DARLENE HOOLEY, Oregon HENRY E. BROWN, JR., South Carolina TED STRICKLAND, Ohio JEFF MILLER, Florida SHELLEY BERKLEY, Nevada JOHN BOOZMAN, Arkansas TOM UDALL, New Mexico JEB BRADLEY, New Hampshire SUSAN A. DAVIS, California BOB BEAUPREZ, Colorado TIM RYAN, Ohio GINNY BROWN-WAITE, Florida STEPHANIE HERSETH, South Dakota RICK RENZI, Arizona TIM MURPHY, Pennsylvania PATRICK E. RYAN, Chief Counsel and Staff Director (II) C O N T E N T S June 17, 2004 Page Follow-up Hearing on Efforts to Identify and Eliminate Fraud, Waste, Abuse, and Mismanagement in Programs Administered by the Department of Vet- erans Affairs ......................................................................................................... 1 OPENING STATEMENTS Chairman Smith ...................................................................................................... 1 Hon. Lane Evans, ranking democratic member, full committee on Veterans’ Affairs .................................................................................................................... 3 Prepared statement of Congressman Evans .................................................. 33 Hon. Michael Bilirakis ............................................................................................ 3 Prepared statement of Congressman Bilirakis .............................................. 34 Hon. Steve Buyer, Chairman, Subcommittee on Oversight and Investigations . 4 Prepared statement of Congressman Buyer ................................................... 37 Hon. Rob Simmons, Chairman, Subcommittee on Health ................................... 5 Hon. Tom Udall, prepared statement of ................................................................ 81 WITNESSES Griffin, Richard J., Inspector General, Department of Veterans Affairs, accom- panied by John D. Daigh, Jr., Assistant Inspector General for Health Care Inspections ............................................................................................................ 11 Prepared statement of Mr. Griffin .................................................................. 112 Mansfield, Gordon, Deputy Secretary, Department of Veterans Affairs, accom- panied by Laura J. Miller, Deputy Under Secretary for Health ...................... 6 Prepared statement of Mr. Mansfield ............................................................. 84 Williams, McCoy, Director, Financial Management and Assurance Team, Gen- eral Accounting Office, accompanied by Carla J. Lewis, Senior Auditor ........ 8 Prepared statement of Mr. Williams .............................................................. 90 MATERIAL SUBMITTED FOR THE RECORD Letters: From Congressman Buyer to Veterans’ Services Organizations .................. 39–63 To Congressman Buyer from Military Officers Association of America ...... 64 To Congressman Buyer from AMVETS .......................................................... 69 To Congressman Buyer from The American Legion ...................................... 72 Written committee questions and their responses: Chairman Smith to Department of Veterans Affairs .................................... 144 Congressman Evans to Department of Veterans Affairs .............................. 163 Chairman Smith to General Accounting Office ............................................. 177 Congresswoman Brown-Waite to General Accounting Office ....................... 181 Chairman Smith to Office of the Inspector General ...................................... 184 Chairman Smith to Office of the Inspector General ...................................... 192 (III) FOLLOW-UP HEARING ON EFFORTS TO IDEN- TIFY AND ELIMINATE FRAUD, WASTE, ABUSE, AND MISMANAGEMENT IN PRO- GRAMS ADMINISTERED BY THE DEPART- MENT OF VETERANS AFFAIRS THURSDAY, JUNE 17, 2004 U.S. HOUSE OF REPRESENTATIVES, COMMITTEE ON VETERANS’ AFFAIRS, Washington, DC The committee met, pursuant to notice, at 10 a.m., in room 334, Cannon House Office Building, Hon. Christopher H. Smith (chair- man of the committee) presiding. Present: Representatives Smith, Evans, Bilirakis, Buyer, Snyder, Moran, Baker, Hooley, Simmons, Miller, Boozman, Udall, Davis, Beauprez, Brown-Waite, Renzi, Murphy, and Herseth. OPENING STATEMENT OF CHAIRMAN SMITH The CHAIRMAN. Let me begin this hearing by referring to a state- ment that I made when I became Chairman of this Committee. In February of 2001, I said that holding VA officials accountable for carrying out the laws would be a constant in all of our Committee work. Although the vast majority of the Department’s more than 200,000 employees are doing an excellent job, our Committee’s oversight has found that many management improvements are needed, and some funds are being misspent. Despite the fact that Congress provided more than $62 billion in funds for the Depart- ment in this fiscal year, VA is unable to provide services to all the veterans who seek it. Caring for and assisting veterans is an essen- tial function of the Federal Government, and we must constantly ask whether there are ways to use available funds more effectively. I commend all of my fellow Committee members who have spent substantial time reviewing testimony and reports about how well the laws providing benefits to veterans are being executed. Even though the work of questioning witnesses and gathering accurate information about the effectiveness of programs serving veterans is a daunting task, it is an essential part of Congress’ role as the maker of laws. Veterans deserve our best efforts. Our witnesses today will address recent efforts to correct a vari- ety of problems affecting programs providing important benefits to veterans. Not all of the changes needed have been made, but there is clearly some progress on important issues. We want to learn about what is preventing VA managers from achieving the success (1) 2 they are striving for. This hearing also presents an opportunity to review VA’s progress on implementation of the Government Per- formance and Results Act of 1993. This Act is potentially one of the most important oversight tools we have available. One of the pur- poses of the Act is to ‘‘improve congressional decision-making by providing more objective information on achieving statutory objec- tives and on the relative effectiveness and efficiency of the federal programs in spending.’’ There is much that remains to be done, as my colleagues know, not only at the VA, but throughout the Fed- eral Government, to achieve this goal, and we continue that work today. Some fear that taking a hard look at the results of a program is a precursor of cutting funding or abolishing the program. I be- lieve that we need to take a hard look so that we can know wheth- er managers understand the law and have made wise choices to implement it. A hard look also helps us to learn whether funds are being well-spent, and what we might do to improve the results being achieved. Recently, the Deputy Director of OMB for Management sent the Committee a letter on the performance assessments completed by the VA and five of its major programs. These five programs author- ize disability compensation, medical care, educational assistance, burial benefits and research into diseases affecting veterans. Frankly, these are the programs that absorb the vast majority of funds that are appropriated for veterans benefits each year. The program assessments depict a wide range of performance and ac- countability, from programs that are achieving clear measurable objectives to programs that don’t have any measurable results. Although I disagree with one or two of the conclusions reached in these assessments, it is nevertheless important that an effort is being made to report objective findings so that Congress can better understand whether managers and programs are succeeding or fail- ing. I hope that when we have the next hearing on this subject, the VA will be able to report that substantial steps have been taken to address some of these shortcomings. In a report that was published in September of last year, this Committee documented a number of recent oversight findings. Among other matters, the Committee reported that health insurers are refusing to pay for care of insured veterans as required by law, leading to shortfalls in fundings for veterans care. The VA is losing millions of dollars each year because it has not adopted rigorous methods to insure that its bills for care are accurate and timely. VA and DOD have missed numerous