Audit Slams Accounting Practices at VA | AccountingWEB

Audit Slams Accounting Practices at VA

The U.S. Department of Veterans Affairs used misleading accounting methods to wrongly state that it had saved more than $1.3 billion, according to the Government Accountability Office (GAO).

Those “savings” were used to justify smaller budget requests, which led to cuts in health care services to eligible veterans, according to GAO, the investigative arm of Congress.

"It's unconscionable," said Rep. Lane Evans, D-Ill., the ranking Democrat on the House Veterans' Affairs Committee, who requested the audit. "Veterans needing health care are being penalized because of an accounting deception promulgated by this administration," the Associated Press reported.

The VA said that its accounting practices should be improved, but Deputy Secretary Gordon Mansfield added, "I disagree with the report's characterization that management efficiencies savings were assumed simply to 'fill the budget gap,' " he wrote in response to the report.

"Proper stewardship of taxpayer resources requires that VA strive to become more effective and more efficient in delivering timely, high-quality health care for our veterans,” Mansfield wrote.

In the report, released Thursday, GAO said the VA did not adequately document its savings assumptions. It reported $1.3 billion as "management efficiency savings" in fiscal years 2003 and 2004. The VA cited savings of more than $3 million in “efficiencies” from reducing overtime and holding off on hiring, while also claiming there was no reduction in service quality, GAO said.

These efficiencies are “not consistent with VA's objective of providing the same or higher quality and quantity of service at a lower cost,” GAO said.

Diane Handley, assistant director of GAO's Office of Financial Management and Assurance, told Government Executive that inconsistent data tracking mixed together different categories of savings, and neither GAO nor VA officials, were able to determine the sources of data.

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