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GAO questions VA cost-saving methodology

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The Veterans Affairs Department is planning to fund healthcare programs in fiscal 2012 and 2013 in part through cost-savings estimates backed by faulty methodology, says the Government Accountability Office.

According to a Feb. 27 GAO report (.pdf), VA expects to realize savings through six agencywide operational improvements, resulting in more than $1.2 billion in funds in fiscal 2012 and approximately $1.3 billion in fiscal 2013. But GAO says two of those six initiatives lack analytical support for savings estimates and one uses flawed methodology.

How the VA will chart saved dollars in order to redirect them toward healthcare programs is also a concern. Report authors say one of the initiatives has no process for tracking savings and two initiatives have tracking methodologies that may overstate savings.

VA has used this program-funding technique in past budget requests as well, but has been unable to achieve anticipated savings, note report authors. In 2006, VA lacked a methodology for determining its estimated savings and did not accurately track the savings from efficiency initiatives.

"If the savings anticipated under VA operational improvements...do not materialize and VA receives appropriations in the amounts requested by the President, VA may have to make difficult trade-offs to provide healthcare services with the resources provided," write report authors.

Without clear analytics to support estimates and tracking methodology, VA runs the risk of coming up short, says the report. GAO was unable to estimate how close VA would come to its savings estimate in order to fund its planned budget.

The report commends VA for its efficiency strategies but says if they're incorporated into future budget requests they should be backed by sound, detailed estimates and tracking procedures.  

For more:
- download the report, GAO-12-305 (.pdf)

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