Enron-style accounting comes to the Department of Veterans' Affairs (VA). The VA's politically-appointed officials gave in to pressure from President Bush and lowered VA healthcare budget requests to meet pre-determined White House figures. VA healthcare could be short $4 billion.

::::::::

For years veterans have claimed that the healthcare budgets at the Department of Veterans’ Affairs (VA) just didn’t make sense. How could the political appointees who run the VA claim, year after year, that their budget was adequate while hundreds of thousands of veterans were routinely denied access to the system or made to wait months or years for necessary healthcare?

Now, we have an answer. And, the veterans were right. The VA’s healthcare budget didn’t make sense because VA officials, for at least the last four years, have been cooking the books.

In simple form it worked like this:
1. VA officials knew they needed a certain amount of funding to provide adequate healthcare for veterans.
2. VA officials knew that the President had already set a dollar amount for VA healthcare that was much lower than the VA needed.
3. So, VA officials cooked the books to lower their budget requests while making it look like they had adequate funding.

After a lengthy audit of the VA’s books, the Government Accountability Office (GAO) has released a report showing that VA officials bowed to political pressure from the President and lowered their budget requests for fiscal years 2003 to 2006.

What’s interesting, and damning, about this GAO report is that VA officials knew in advance the amount of money the President was willing to put into the VA healthcare budget and lowered their request for funding to coincide with that amount.

VA officials did this by including projected “management efficiencies” in their healthcare budget requests. These were savings that the VA officials claimed they could possibly make at some point in the budget year. Except, the GAO report found that the “efficiencies” never happened because there were few, if any, programs in place to implement the “efficiencies.”

In other words, the political appointees who run the VA cooked the books. They faked it with Enron-style accounting practices. Although never directly-mentioned in the GAO report, VA officials knew their budget sham would deny necessary healthcare to veterans.

From the GAO report: "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." And: “…VA did not provide another explanation and was unable to provide us with any support for the methodology used to develop its management efficiency savings goals.”

The GAO report uses terms like “misleading,” “lacked a methodology,” “lacks adequate support” and “does not have a reliable basis” when describing the VA’s budget manipulations. Some veterans, realizing the seriousness of the report, are using the term “fraud.”

The GAO found that the VA’s budget sham cost veterans $1.3 billion in healthcare funding in 2003 and 2004. That number could be much higher because of the VA’s sloppy accounting practices. Rep. Lane Evans (D-IL), Ranking Democratic Member of the House Committee on Veterans’ Affairs, feels the number is closer to $4 billion. Evans said, “Veterans needing healthcare are being penalized because of an accounting deception promulgated by this Administration."

Why would VA officials risk the health, and even the lives, of countless veterans by faking their healthcare budget to meet the demands of the President? To avoid political embarrassment! If VA officials had asked for more than the President was willing to give then the White House would have looked like it was trying to cut veterans’ benefits. And, this is exactly what happened with the collusion of VA officials.

VA officials admitted they could make improvements in their budget processes but stated that they “disagree with the report’s characterization that management efficiencies savings were assumed simply to ‘fill the [budget] gap.’” VA Secretary Jim Nicholson, former Chairman of the Republican National Committee, has made no comment on the GAO report.

The first wave of angry protest is already coming from the veterans’ service organizations. Thomas L. Bock, National Commander of the American Legion, fired the first shots. In a press release Bock said The Legion “…members of Congress and individual veterans throughout the nation have for nearly five years publicly expressed outrage over VA's smoke-and-mirrors healthcare funding process.” Bock added, "The GAO report confirms what everyone has known all along. VA's healthcare budget has been built on false claims…[The VA’s budget] has turned our veterans into beggars, forced to beg for the medical care they earned and, by law, deserve.”

What will be the result of all this? The GAO report will fade away as Administration officials and VA political appointees promise everything will get better. We know that the President will not up the ante for VA healthcare because we have a five-year history of underfunding. VA officials will promise to finally institute the “efficiencies” they claim were already in place.

But, this doesn’t solve the problem. Every year VA healthcare funding must go through the discretionary budget boondoggle on Capitol Hill. Every year the VA gets less than it needs to take care of the nation’s veterans. VA healthcare will remain critically underfunded unless Congress acts to pass legislation requiring it become part of the mandatory budget process. Legislation has been written. Let’s get it passed!

The GAO report is available at: http://www.veterans.house.gov/democratic/press/109th/pdf/gao06-359r.pdf

Authors Website: www.vawatchdog.org/

Authors Bio:
Larry Scott served four years in the U.S. Army with overseas tours as a Broadcast Journalist in Korea and the Azores and a stateside tour as a Broadcast Journalism Instructor at the Defense Information School (DINFOS). He was awarded DOD's First Place Thomas Jefferson Award for Excellence in Journalism. After the Army, Larry was a news anchor on WNBC Radio in New York City. He receives VA compensation for a service-connected disability. Larry is a regular on the Thom Hartmann show on Air America Radio. Today, Larry resides in Southwest Washington and operates the website VA Watchdog dot Org.