For example, VA recognized that the shift  in veterans’ demand for services could be met at community based  outpatient clinics that are more geographically accessible to veterans than  its hospitals. The 5-year capital plan included in VA’s fiscal year 2011 budget  submission document includes the following: capital planning linked to  the agency mission, strategic goals, and objectives; baseline assessments  and identification of performance gaps—such as underutilized or vacant  property and the backlog of repairs needed at its facilities; an alternatives  evaluation and resulting risk management plan for these performance  gaps; a description of the agency’s planning and approvals process; and a  long-term capital plan. VA Has Taken Steps to Realign Its Real Property Portfolio, but a Substantial Number of Costly Projects and Other Long-standing Challenges Remain

		VA Has Taken Steps to Realign Its Real Property Portfolio

As a part of its shift from hospital based, inpatient care to outpatient care,  VA has made changes to its real property portfolio on the basis of its May  2004 CARES Decision document and subsequent capital planning. In addition, VA has identified several other  high-cost projects that have not yet been funded. For example, VA  reported in its 5-year capital plan for fiscal years 2010-2015 that  agencywide, it has a backlog of $9.4 billion of facility condition assessment  deficiencies (repairs). Furthermore, due to incremental funding of  projects, 24 of the 69 ongoing major construction projects listed in the  plan needed an additional $4.4 billion to complete. Like other agencies across the government, VA has faced underlying  obstacles that have exacerbated its real property management challenges  and caused them to persist over time. Specifically, we have previously  reported on such challenges, including competing stakeholder interests,  legal and budgetary limitations, and the need for improved capital  planning. These challenges can impact the agency’s ability to fully realign  its real property portfolio. VA’s Capital Planning Efforts Generally Reflect Leading Practices, but Its Capital Plan Lacks Transparency about the Cost of Future Priorities That Could Better Inform Decision Making

		Leading Practices in Capital Planning Have Been Established by OMB and GAO

Congress, OMB, and GAO have identified the need for effective capital  planning. Specifically, SCIP extends the horizon of its 5-year capital plan to 10  years, providing VA with a longer range picture of the agency’s future real  property priorities. VA’s 5-year Capital Plan Lacks Transparency about the Cost of Future Priorities That Could Better Inform Decision Making

Despite the positive aspects of VA’s capital planning efforts, VA’s resulting  5-year capital plan that it provides yearly to Congress lacks transparency  about the cost of future priorities beyond the current budget year. However, the  plan identifies other potential projects, not beginning in the current budget  year, for which it lists project name but contains no information on what  these projects might cost or the priority, as VA has not assigned one to  them. Further, during our  review, VA officials told us they are considering the release of future year  capital cost estimates to Congress. Additionally, transparency regarding future capital costs puts VA’s  priorities in context with the overall fiscal condition of the U.S.  government. Providing cost estimates for future projects to Congress for capital  programs is not without precedent in the federal government. Recommendation for Executive Action

To enhance transparency and allow for more informed decision making  related to VA’s real property priorities, we recommend that the Secretary  of Veterans Affairs provide the full results of VA’s SCIP process and any  subsequent capital planning efforts, including details on the estimated cost  of all future projects, to Congress on a yearly basis. and   (2) To what extent do VA’s capital planning efforts follow leading  practices and provide the information needed for informed decision  making? To determine the extent to which VA’s capital planning efforts, including  the Capital Asset Realignment for Enhanced Services (CARES), have  resulted in changes to its real property portfolio and to identify the  agency’s remaining priorities, we interviewed VA officials located in the  central office in Washington, D.C., and 6 Veterans Integrated Service  Networks (VISN) and observed VA facilities in 5 of these 6 VISNs. To compare VA’s efforts  with the efforts of other federal agencies that have provided estimates to  Congress regarding the magnitude of future real property priorities, we  reviewed our previous reports on capital planning across the federal  government, including the Department of Defense’s future years defense  program and efforts by the judiciary in March 1996 to communicate its  urgent housing needs to Congress.
Why GAO Did This Study

The Department of Veterans Affairs (VA) has undertaken various planning efforts to realign its real property portfolio, including the Capital Asset Realignment for Enhanced Services (CARES), creation of a 5-year capital plan, and its newest effort, the Strategic Capital Investment Planning process (SCIP). Through these efforts, VA has identified numerous real property priorities it believes should be completed if the agency's facilities are to meet veterans' needs for services now and in the future. This congressionally requested report addresses the extent to which VA's capital planning efforts (1) have resulted in changes to its real property portfolio and (2) follow leading practices and provide information for informed decision making. To perform this work, GAO reviewed leading capital planning practices and data on VA's real property portfolio and future priorities. GAO also interviewed VA officials and veterans service organizations, and visited sites in 5 of VA's 21 veterans integrated service networks.

What GAO Found

Through its capital planning efforts, VA has taken steps to realign its real property portfolio from hospital based, inpatient care to outpatient care, but a substantial number of costly projects and other long-standing challenges also remain. Several of VA's most recent capital projects--such as community based outpatient clinics, rehabilitation centers for blind veterans and spinal cord injury center--were based on its CARES efforts and subsequent capital planning. VA officials and veterans service organizations GAO contacted agreed that these facilities have had a positive effect on veterans' access to services. However, VA has identified several high-cost priorities such as facility repairs and projects that have not yet been funded. For example, VA reported in its 5-year capital plan for fiscal years 2010-2015 that it had a backlog of $9.4 billion of facility repairs. The 5-year plan further identified an additional $4.4 billion in funding to complete 24 of the 69 ongoing major construction projects. Besides substantial funding priorities, VA, like other agencies, has faced underlying obstacles that have exacerbated its real property management challenges and can also impact its ability to fully realign its real property portfolio. GAO has previously reported that such challenges include competing stakeholder interests, legal and budgetary limitations, and capital planning processes that did not always adequately address such issues as excess and underutilized property. VA's capital planning efforts generally reflect leading practices, but lack transparency about the cost of future priorities that could better inform decision making. For example, GAO found that VA's 5-year capital plan links its investments with its strategic goals, assesses the agency's capital priorities, and evaluates various alternatives. Also, SCIP strengthens VA's capital planning efforts by extending the horizon of its 5-year plan to 10 years, and providing VA with a longer range picture of the agency's future real property priorities. While these are positive steps, VA's planning efforts lack transparency regarding the magnitude of costs of the agency's future real property priorities, which may limit the ability of VA and Congress to make informed funding decisions among competing priorities. For instance, for potential future projects, VA's 5-year capital plan only lists project name and contains no information on what these projects are estimated to cost or the priority VA has assigned to them beyond the current budget year. VA officials said during the review that they are considering the release of future year capital cost estimates to Congress. Transparency about future requirements would benefit congressional decision makers by putting individual project decisions in a long-term, strategic context, and placing VA's fiscal situation within the context of the overall fiscal condition of the U.S. government. Providing future cost estimates to Congress for urgent, major capital programs is not without precedent in the federal government. Other federal agencies, such as the Department of Defense, have provided more transparent estimates to Congress regarding the magnitude of its future capital priorities beyond immediate budget priorities.

What GAO Recommends

GAO recommends that VA annually provide to Congress the full results of its SCIP process and any subsequent capital planning efforts, including details on estimated cost of future projects. VA concurred with this recommendation.