• VA’s Right Hand Doesn’t Know How Much Its Left Hand Is Spending

    Accounting is so inept at the Department of Veterans Affairs that officials there may be giving other federal agencies nearly $1 billion more than shows up on the spending ledgers. Worse still, the books are so poorly kept that it’s all but impossible to sort out the full extent of the problem.

    Auditors “reviewed data from VA’s contract management system and found that VA obligated about $1.7 billion to other government agencies via such agreements,” according to a report made public Thursday by the Government Accounting Office.

    The analysis “of data from VA’s accounting system found that the total amount transferred to other agencies over this period was between $2.3 billion and $2.6 billion, a difference of $600 million to $900 million for the same period,” the report said.

    The veterans department has an annual budget of more than $168 billion and has the largest civilian workforce in the federal government. It has been plagued in recent years by repeated scandals involving incompetent managers, fraudulent reporting of medical services and resistance to congressional efforts to reform the department.

    The auditors discovered the problem while reviewing 21 inter-agency agreements in which VA transferred funds for projects elsewhere in the federal government.

    At the heart of situation is the fact VA’s contract management system isn’t linked to the department’s accounting system., so “actions can be initiated directly in the accounting system without being recorded in the contract management system,” the report said.

    As a result, bureaucrats in one part of VA don’t always know that bureaucrats elsewhere in the department are giving hundreds of millions of tax dollars to bureaucrats in other agencies.

    The lack of a link between the contract management and accounting systems isn’t accidental because, according to GAO, “VA recently revised its policy to exclude inter-agency transactions—also a form of inter-agency agreements in which VA funds are obligated for services provided by another agency—from being entered into the contract management system, further limiting its visibility into the full extent of its use of inter-agency agreements.”

    Linking the two systems won’t resolve the problem entirely because, GAO noted, “nearly half of the 21 inter-agency agreements GAO reviewed were missing items such as documentation of VA’s reasons for using an interagency agreement instead of another procurement approach, for example.”

    Go here to read the full report.


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