GAO Audit Shows Accounting Gimmick Used to Formulate VA Budget

Washington, D.C. -- Senator Daniel K. Akaka (D-HI) today learned that a Government Accountability Office (GAO) report found that the Department of Veterans Affairs (VA) has been using unproven management efficiencies to budget for the VA health care system.

The report states: "VA officials told us that the management efficiency savings assumed in these requests were savings goals used to reduce requests for a higher level of annual appropriations in order to fill the gap between the cost associated with VA's projected demand for health care services and the amount the President was willing to request."

Senator Akaka said, "It is distressing that VA's health care budget over the past three years has been built like a house of cards. Budgets must be built on solid facts - without that - we will continue to have the shortfalls which jeopardize patient care."

Senator Akaka, Ranking Member of the Senate Veterans' Affairs Committee and his counterpart, Representative Lane Evans (D-IL), Ranking Member of the House Veterans' Affairs Committee, requested the GAO audit.

"This report confirms the concerns I have been raising regarding reliance on gimmicks and invisible savings to fund the VA health care system," remarked Senator Akaka. "As we embark on the appropriations process this year, GAO's findings are a clear reminder that we must base VA's budget on real numbers and needs, not theories and assumptions."

Senator Akaka and Representative Evans noted that replacing the Administration's unfounded savings claims in the VA budget would have averted the need for the $1.3 billion supplemental request in 2005; prevented the Administration's need to increase all pharmacy co-payments since 2002; and allowed 260,000 veterans access to VA's health care system instead of being denied.