1). OSDBU has established in its strategic plan  that its longer-term goals for the verification program are to transform the  verification process to make it more veteran-friendly and to expand the  program’s capacity to serve more veterans. VA Improved Processing Times, Quality Controls, and Communication with Veterans

In our May 2010 and January 2013 reports, we found that VA faced  challenges in establishing a program to verify firms on a timely and  consistent basis. VA Improved Processing Times

Based on CVE’s administrative data, application processing times have  decreased by more than 50 percent since October 2012—from an  average of approximately 85 days—to 42 days in fiscal year 2015 (see  fig. 2). Our review of randomly selected application files corroborated that CVE  generally met its processing goals, but the verification process can take  longer from a veteran’s perspective. CVE also has implemented  an internal audit process and a continuous improvement process. These allegations were made by a veteran-owned small business  advocate. All the counselors and representatives of veterans’ service organizations  with whom we spoke noted that VA has improved its verification process,  but most had suggestions for continued improvement. Officials said that they have been working with OSDBU to  redesign the website to make documents, such as verification assistance  briefs and the tool to identify required documents, easier to locate. Moreover, the officials noted that they encourage veterans to  obtain free assistance with their applications from VA certified verification  counselors. OSDBU developed a strategic plan for 2014–2018 that included longer- term goals for the program, such as making the verification process more  veteran-friendly. Restructuring the Verification Process

In August 2015, VA began to test (VA officials refer to it as a pilot) a  restructured verification process that gives veterans a case manager who  serves as a point of contact throughout the process and allows veterans  to communicate directly with the individual processing their application. CVE officials stated that they plan to fully transition to a new process by  September 2016. Specifically, CVE has had four  different directors since 2011, including two acting directors in 2015. VA Continues to Face Delays in Replacing the Program’s Outdated Case- Management System

We reported in January 2013 that VA moved from using a paper-based  verification application to an electronic application when it implemented a  new case-management system in 2011, consistent with our prior  recommendation. We  recommended that VA integrate its efforts to modify or replace the  program’s data system with a broader strategic planning effort to ensure  that the system addressed the program’s short- and long-term needs. VA’s Office of Information Technology hired a  contractor in September 2013 to develop the new system, but VA  cancelled the contract in October 2014 due to poor contractor  performance. We recommended that  VA develop and implement such a plan. But, VA’s operating plan is not comprehensive and does not include an  integrated schedule with specific actions and milestone dates for  achieving program changes or discuss how the efforts described in the  previous sections might be coordinated. But these  efforts began and have continued in the absence of a detailed operational  plan to guide and integrate them with VA’s strategic objectives. Moreover, having a detailed plan to  accomplish multiple ongoing efforts is critical given the repeated delays in  VA’s efforts to acquire a new case-management system and the lack of  continuity in CVE leadership. Without a  policy to review and update the operating plan to reflect current conditions  and priorities, VA would continue to be at risk for delays in implementing  its initiatives and achieving its long-term goals. Recommendations for Executive Action

To improve the management and oversight of VA’s SDVOSB and VOSB  verification program, we recommend that the Secretary of Veterans  Affairs direct OSDBU to complete its fiscal year 2016 operating plan and  include an integrated schedule that addresses key implementation goals  and the actions and milestone dates for achieving them, such as the  coordination of the redesign of the verification process and the design,  acquisition, and deployment of a new case-management system; and  establish a process to review and update the operating plan for the  verification program on a timely basis to address new VA initiatives, other  changing conditions, and long-term goals. VA also provided timeframes for completing its  planned actions. Appendix I: Scope and Methodology

This report assesses progress by the Department of Veterans Affairs (VA)  in (1) establishing a timely and consistent verification program and  improving communication with veterans, and (2) the steps VA has taken  to identify and address program challenges and longer-term goals. To assess VA’s progress in addressing communication challenges with  veterans, we reviewed VA’s work instructions for processes that involve  communicating with veterans. We interviewed VA officials to  determine what procedures they have in place to communicate with  applicants and verified businesses and obtain feedback from these  entities on VA’s verification process and communication efforts.
Why GAO Did This Study

In fiscal year 2014, the VA made contract awards totaling $4.0 billion to veteran-owned small businesses, including $3.6 billion to service-disabled veteran-owned small businesses. VA must verify the ownership, control, and status of firms seeking such preferences. GAO found in January 2013 ( GAO-13-95 ) that VA faced challenges verifying firms on a timely and consistent basis, communicating with veterans, enhancing information technology systems, and developing and implementing long-term strategic plans. GAO assessed (1) VA's progress in establishing a timely and consistent verification program and improving communication with veterans, and (2) the steps VA has taken to identify and address program challenges and longer-term goals. GAO reviewed VA's verification procedures and strategic plan, reviewed a generalizable random sample of 96 verification applications, and interviewed VA officials and representatives from two veterans' organizations selected from prior work and four verification assistance counselors selected to obtain geographic representation.

What GAO Found

Since GAO's 2013 report, the Department of Veterans Affairs (VA) took significant steps to improve how it verifies and communicates with veteran-owned small businesses, consistent with several of GAO's previous recommendations. VA reported that due to process improvements, it reduced average application processing times by more than 50 percent—from 85 days in 2012 to 41 in 2015. VA reported that it generally met its regulatory goals for application processing, and GAO's review of randomly selected application files generally corroborated this statement. VA refined the program's quality controls and implemented an internal audit process. Veterans' organizations and verification counselors with whom GAO spoke noted improvements in VA's communications and interactions with veterans, although three of the four verification counselors with whom GAO spoke suggested the program's website could be clearer and all four said the agency's letters to veterans could be clearer. In response, VA officials said they have been redesigning the website to make documents easier to locate. Officials also said the regulatory language in the letters was necessary and they encourage veterans to obtain free assistance with their applications from VA-certified counselors.
VA has been undertaking multiple efforts to address continuing verification program challenges (such as an outdated case-management system) and long-term goals (making processes more veteran-friendly). However, the agency has not had a comprehensive operational plan for managing these efforts to completion. GAO previously recommended that VA's Office of Small and Disadvantaged Business Utilization (OSDBU), which oversees the verification program, establish a strategic plan for the program and integrate efforts to replace an outdated case-management system with agency strategic planning. VA developed a strategic plan for 2014–2018 that included longer-term goals for the program, such as making the verification process more veteran-friendly. In August 2015, VA began piloting a restructured process that allows veterans to communicate directly with the individual processing their application. VA plans to fully transition to the new process by September 2016. VA recently hired a new director for the program, which has had four directors since 2011, including two acting directors in 2015. VA also has continued its efforts to replace the outdated case-management system for the program, but has faced delays due to contractor performance and funding issues. As a result, VA officials do not anticipate the replacement system will be in place until early 2017. While VA has developed a high-level operating plan for OSDBU, the plan does not integrate schedules or specify actions and milestone dates for achieving the multiple changes under way or discuss how to integrate the efforts. VA officials told GAO they were working on developing a detailed operating plan but were waiting to evaluate preliminary results of the verification pilot. GAO's work on organizational transformations states that organizations should set implementation goals and develop timelines to show progress. A detailed plan to guide multiple ongoing efforts is critical given repeated delays in VA's efforts to acquire a new case-management system and the lack of continuity in the program's leadership. Once such an operating plan is developed, it also will be important to update it on a timely basis. Otherwise, VA would continue to be at risk for delays in implementing its initiatives and achieving its long-term goals.

What GAO Recommends

GAO recommends that VA: (1) complete its fiscal year 2016 operating plan and include an integrated schedule addressing key actions for the verification program and milestone dates for achieving them, and (2) establish a process to review and update the operating plan to address changing conditions. VA agreed with these recommendations.