To address its obsolete infrastructure, VA initiated its CARES process— the first comprehensive, long-range assessment of its health care system’s  capital asset requirements since 1981. The decisions that  emerged from the CARES process will result in an overall expansion of  VA’s capital assets. CARES Process and Modeling Tools Drive VHA’s Capital Planning Efforts

Through the CARES process, VA gained the tools and information needed  to plan capital investments. VA  continues to use the tools developed through CARES as part of its capital  planning process. The CARES process serves as the foundation for VHA’s capital planning  efforts. According to VA officials, all capital  projects must be based on the CARES planning model to advance through  VHA’s capital planning process. Some CARES Decisions Implemented, but Additional Information Needed to Fully Assess Status and Impact of Decisions

VA has begun implementing some CARES decisions. Specifically, VA is  currently in varying stages (e.g., planning or construction) of  implementing 34 of the major capital projects that were identified in the  CARES process. In 2007, we reported that VA does not use, or in some cases does not have,  performance measures to assess its progress in implementing CARES or  whether CARES is achieving the intended results. Although VA has over 100 performance measures  to monitor other agency programs and activities, these measures either do  not directly link to the CARES goals or VA does not use them to centrally  monitor the implementation and impact of CARES decisions. Such measures would  allow VA officials to monitor the implementation and impact of CARES  decisions as well as allow stakeholders to hold VA accountable for results. In responding to our recommendation, VA created the CARES  Implementation Monitoring Working Group. This working group has  identified performance measures for CARES and the group will monitor  the implementation and impact of CARES decisions. VA Has A Variety of Legal Authorities to Manage Real Property, But Does Not Track How Using Them Contributes to the Reduction in Underutilized Property

VA has a variety of legal authorities available to help it manage real  property. These authorities include enhanced-use leases (EUL), sharing  agreements, and outleases. However, legal restrictions associated with implementing some authorities  affect VA’s ability to dispose of and reuse property in some locations. For  example, legal restrictions limit VA’s ability to dispose of and reuse  property in West Los Angeles and North Hills (Sepulveda) California. In our  previous work, we reported several administrative and oversight  challenges with using capital asset funds. Despite these challenges, VA has used these legal authorities to help  reduce its inventory of unneeded space. In 2008, we reported that VA  reduced underutilized space ( i.e., space not used to full capacity) in its  buildings by approximately 64 percent from 15.4 million square feet in  fiscal year 2005 to 5.6 million square feet in fiscal year 2007. While VA’s use of various legal authorities, such as EULs and sharing  agreements, likely contributed to VA’s overall reduction of underutilized  space since fiscal year 2005, VA does not track the overall effect of using  these authorities on its space reductions. Without such information, VA  does not know what effect these authorities are having on its effort to  reduce underutilized or vacant space or which types of authorities have  the greatest effect. According to VA officials, VA  will institute a system in June 2009 that will track square footage  reductions at the building level, but the system will not track financial  benefits at this level.
Why GAO Did This Study

Through its Veterans Health Administration (VHA), the Department of Veterans Affairs (VA) operates one of the largest integrated health care systems in the country. In 1999, GAO reported that better management of VA's large inventory of aged capital assets could result in savings that could be used to enhance health care services for veterans. In response, VA initiated a process known as Capital Asset Realignment for Enhanced Services (CARES). Through CARES, VA sought to determine the future resources needed to provide health care to our nation's veterans. This testimony describes (1) how CARES contributes to VHA's capital planning process, (2) the extent to which VA has implemented CARES decisions, and (3) the types of legal authorities that VA has to manage its real property and the extent to which VA has used these authorities. The testimony is based on GAO's body of work on VA's management of its capital assets, including GAO's 2007 report on VA's implementation of CARES (GAO-07-408).

What GAO Found

The CARES process provides VA with a blueprint that drives VHA's capital planning efforts. As part of the CARES process, VA adapted a model to estimate demand for health care services and to determine the capacity of its current infrastructure to meet this demand. VA continues to use this model in its capital planning process. The CARES process resulted in capital alignment decisions intended to address gaps in services or infrastructure. These decisions serve as the foundation for VA's capital planning process. According to VA officials, all capital projects must be based on demand projections that use the planning model developed through CARES. VA has started implementing some CARES decisions, but does not centrally track their implementation or monitor the impact of their implementation on its mission. VA is in varying stages (e.g., planning or construction) of implementing 34 of the major capital projects that were identified in the CARES process and has completed 8 projects. Our past work found that, while VA had over 100 performance measures to monitor other agency programs and activities, these measures either did not directly link to the CARES goals or VA did not use them to centrally monitor the implementation and impact of CARES decisions. Without this information, VA could not readily assess the implementation status of CARES decisions, determine the impact of such decisions, or be held accountable for achieving the intended results of CARES. VA has recently created the CARES Implementation Working Group, which has identified performance measures for CARES and will monitor the implementation and impact of CARES decisions in the future. VA has a variety of legal authorities available, such as enhanced-use leases, sharing agreements, and others, to help it manage real property. However, legal restrictions and administrative- and budget-related disincentives associated with implementing some authorities affect VA's ability to dispose and reuse property in some locations. For example, legal restrictions limit VA's ability to dispose of and reuse property in West Los Angeles and Sepulveda. Despite these challenges, VA has used these legal authorities to help reduce underutilized space (i.e., space not used to full capacity). In 2008, we reported that VA reduced underutilized space in its buildings by approximately 64 percent from 15.4 million square feet in fiscal year 2005 to 5.6 million square feet in fiscal year 2007. While VA's use of various legal authorities likely contributed to VA's overall reduction of underutilized space since fiscal year 2005, VA does not track the overall effect of using these authorities on space reductions. Not having such information precludes VA from knowing what effect these authorities are having on reducing underutilized or vacant space or knowing which types of authorities have the greatest effect. According to VA officials, VA will institute a system in 2009 that will track square footage reductions at the building level.