During fiscal year  2011, USOC provided quarterly reports that included descriptions of  activities conducted by subgrantees, the number of veterans and  servicemembers served in the activities, and anecdotal information on  how participants benefited from activities. VA Grants and USOC Subgrants Were Awarded Primarily to Provide Adaptive Sports Opportunities, but Reporting on Expenditures Was Problematic

		VA Awarded the Majority of Program Funds to USOC, but VA’s Administrative and Personnel Expenditure Reporting Had Weaknesses

In the first 2 years of the Paralympics program, VA granted most of its  available funds for the program to USOC, but inconsistent with federal  internal controls standards for reporting relevant and reliable information,  we found weaknesses in VA’s administrative and personnel expenditure  reporting. VA officials told us that the Office of National Veterans Sports  Programs and Special Events did not have a full-time program director  and was not fully operational until about midway through fiscal year 2011,  and as a result, VA did not establish accounting codes for the  Paralympics program until that time. The remainder was spent on athletes’ monthly  assistance allowances as well as agency administrative and personnel  costs. USOC reported that it plans  to pay for administrative costs associated with the VA program through  other funding sources. All subgrantees’ grant agreements required them to report how VA funds  were used to cover program expenses. Inconsistent with federal internal control standards, we found that during  the first program year, USOC did not have reporting requirements or  electronic reporting systems in place for subgrantees to provide  information on how VA funds were used separate from other sources. VA Relied on Self- Reported, Unverified Information to Oversee the Grant Program, but Is Taking Steps to Improve Oversight

		VA Lacked Information on How USOC and Subgrantees Used Funds

VA lacked information on how USOC and subgrantees used funds due to  its reliance on self-reported, unverified quarterly reports from USOC. Our review of a sample of USOC’s files on subgrantees showed that  USOC officials were not holding subgrantees accountable for meeting the  terms of their subgrant agreements—a grant management problem about  which VA was not in the position to know about given its lack of oversight. However, in 12 of the 21 subgrant files we  reviewed, we did not find evidence that the subgrantees conducted all  agreed-upon activities. Counts of Activities and Participants Are Inconsistent, but VA Is Taking Steps to Improve Measurement of Program Benefits

While VA requires USOC and its subgrantees to count the number of  adaptive sports activities conducted and the number of participants  served, these measurements are not always accurate. In its fiscal year  2011 annual report to VA, USOC stated that over 10,000 veterans and  servicemembers participated in nearly 2,000 activities. While subgrantees and program participants reported program benefits,  VA has not yet systematically measured how adaptive sports activities  specifically benefitted the health and well-being of veterans and  servicemembers. VA  and USOC have, in turn, taken the initiative to hire a contractor to conduct  a study on the effects of adaptive sports on rehabilitation and  reintegration of veterans and servicemembers into the community,  including five life domains (self-care, mobility skills, communication with  family and friends, participation in society, and acceptance of disability)  and the psychosocial outcomes, including self-esteem and quality of life. Direct subgrantees to only include VA Paralympics program  funds in expenditure reports; and  b. VA indicated that USOC also plans to provide training to subgrantees on  how to appropriately report on grant funds during this quarter. Appendix I: Objectives, Scope and Methodology

The objectives of this report were to (1) review how VA and its grantee  and subgrantees used program funds to provide adaptive sports  opportunities to veterans and servicemembers; (2) assess how VA is  overseeing grantees’ and subgrantees’ use of funds; and (3) describe  how veterans and servicemembers have benefited from VA Paralympics  activities. We found issues with double-counting of activities  and participants, as well as issues of counting non- veteran/servicemember activities and participants.
Why GAO Did This Study

The Veterans Benefits Improvement Act of 2008 established VAs Paralympics Program to promote the lifelong health of disabled veterans and members of the Armed Forces through physical activity and sports. Additionally, the act authorized VA to provide a grant to USOCs Paralympics Division, and allowed USOC to enter into subgrant agreements to provide adaptive sports activities to veterans and service members. The act also mandated GAO to report on the VA Paralympics program.
GAO is required to (1) review how VA and its grantee and subgrantees used program funds to provide adaptive sports opportunities to veterans and service members; (2) assess how VA is overseeing its grantees and subgrantees use of funds; and (3) describe how veterans and service members have benefited from VA Paralympics activities. To do this, GAO reviewed relevant federal laws, regulations, guidance, agency reports, and a non-probability sample of 21 of 76 subgrant files, consisting of data on about 56 percent of funds subgranted. GAO also conducted site visits to two states and interviewed veterans as well as agency and grantee officials.

What GAO Found

The Department of Veterans Affairs (VA) and the U.S. Olympic Committee (USOC) primarily awarded program funds through subgrants to 65 national and community organizations that support adaptive sports opportunities. However, their respective program expenditure reporting was not consistent with federal internal control standards, making it difficult to know fully how program funds were spent. VAs reporting of first-year program funding was problematic because it did not closely track costs until midway through the fiscal year. During the second fiscal year2011VA granted $7.5 million to USOC, which, in turn, awarded $4.4 million to subgrantees and spent the remainder primarily on operations and personnel. Subgrantees reported using funds for activities such as training and camps. GAO found, however, that USOC did not have sufficient reporting requirements in place for subgrantees to provide information on how VA funds were used separate from other sources of funding.
VA relied upon self-reported, unverified information to oversee the grant program but is planning to make improvements. In fiscal year 2011, VA did not conduct any on-site or remote monitoring to verify how funds were used. Thus, VA lacked information on how well USOC and subgrantees managed grant funds, potentially exposing itself to paying for services not delivered. In 12 of 21 subgrant files selected, USOC was not holding subgrantees accountable for meeting the terms of their agreements. For example, one subgrantee agreed to conduct 10 activities, but the file indicated only 4 were conducted. VA reported that it has plans to improve to oversight, including conducting on-site monitoring of grantees and subgrantees use of funds and having USOC verify financial reports for at-risk subgrantees, such as those with large subgrants.
While program benefits were reported by subgrantees and participants, up until this point VA has not systematically measured how adaptive sports activities benefit the health and well-being of veterans and service members. Subgrantees primarily report anecdotal information on program benefits, such as individual success stories. VA collects information on the number of activities and participants from USOC. In 2011, over 10,000 participants were served through nearly 2,000 activities. However, these metrics are flawed due to double counting and other measurement issues. VA officials also recognize that the metrics do not comprehensively measure program benefits. Thus, VA and USOC have hired a contractor to conduct a study on the effects of adaptive sports on rehabilitation and reintegration of veterans and service members into the community.

What GAO Recommends

GAO recommends that VA take additional actions to improve grantee and subgrantee reporting of expenditures, activities, and participants, as well as USOCs monitoring of subgrantees. In commenting upon a draft of this report, VA agreed with these recommendations and reported that it was taking steps to implement them.