VA Uses Accounting Gimmicks to Formulate 2006 Budget

A report by the Government Accountability Office (GAO) has found that the Department of Veteran Affairs (VA) has used untested management efficiencies in their budget calculations for the VA health care system, according to the Molokai Island Times.

Senator Daniel Akaka (D-HI) is the ranking member of the Senate Veteran’s Affairs Committee. The Molokai Island Times reports that he and his House counterpart, Rep. Lane Evans (D-Ill.) initially requested the audit to confirm the VA funding process.

The report said, “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,” according to the Senate Committee on Veterans’ Affairs.

Akaka said in a prepared statement, “This report confirms the concern I have been raising regarding reliance on gimmicks and invisible savings to fund the VA health care system. 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,” according to the Molokai Island Times.

If these VA budget savings had been real, a $1.3 billion supplemental request would have been avoided in 2005, according to the Molokai Island Times. Increased pharmacy co-payments would have also been prevented since 2002, as well as allowing 260,000 veterans access to the VA’s health care system instead of denying them care.

Several accounting gimmicks have been employed by government agencies, according to the Heritage Foundation. Declaring routine spending as “emergency” spending for normally funded programs such as the U.S. contribution to the Global Fund to Fight AIDS and aid to Sudan is a good first example.

Emergency spending does not contribute to budget resolution caps, making this gimmick an easy target for use. Emergency spending is included in most Senate appropriation bills already, according to the Heritage Foundation. NASA has been known to use emergency spending to make their books balance, as well as the Treasury and Agriculture Departments.

In the same vein, “disaster relief” for military facilities, national wild life refuges, and even NASA is used to circumvent budget controls. This gimmick has been used in the name of hurricane relief lately and drought relief as well. Farming business ventures have risk that’s inherent to their success. Insurance should be used to counter overly high risks instead of the government. Government should not intervene in areas where the insurance industry should prevail, according to the Heritage Foundation.

Shifting the dates of disbursements, such as Supplemental Security income checks, has been a mechanism devised into Labor-Health and Human Services spending bills in the past. The Heritage Foundation reports this action serves to create false savings in order to increase spending. Where there should have been 12 monthly payments, there were only 11 payments in the fiscal year 2005 spending bill. This cut in mandatory spending created $3.2 billion in virtual, one-time savings, making room to add $3.2 billion is discretionary spending without exceeding any budget caps.

Fiscal restraint is not a hard and fast rule for those in Congress, as we have seen, although there are conservative spenders in the group, according to the Heritage Foundation. While others exceed their budget appropriations using accounting gimmicks, some conservative spenders have had some success moving disaster funding out of standard spending bills. Promoting the idea of seeking spending trade-offs to pay for this relief has helped.

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