|Title:||Review of Alleged Misuse of VA Funds to Develop the Health Care Claims Processing System|
|VA Office:||Veterans Health Administration (VHA)
|Report Author:||Office of Audits and Evaluations
The VA Office of Inspector General (OIG) conducted this review in response to allegations received by our Hotline Division. We evaluated the merits of an allegation that Veterans Health Administration’s (VHA) Chief Business Office (CBO) violated appropriations law by improperly obligating over $96 million in medical support and compliance (MS&C) funds to pay for the development of the Health Care Claims Processing System (HCPS). We substantiated that the CBO knowingly violated appropriations law by improperly obligating a total of $92.5 million of MS&C appropriations to finance the development of HCPS. The difference between the alleged and substantiated amounts is due to an estimate cited by the complainant. Of the $92.5 million, the FSC spent approximately $73.8 million. However, $18.7 million still remains obligated. MS&C appropriations are only authorized for administering medical, construction, supply, and research activities. CBO’s misuse of MS&C appropriations occurred because the Deputy Chief Business Officer (DCBO) did not seek the required IT Systems appropriations to fund the development of HCPS. Though initiated by the former DCBO for Purchased Care, MS&C appropriations were used instead of requesting funding from the Office of Information and Technology (OI&T) in hopes of achieving a faster delivery of this new information system. The current DCBO allowed the expenditures to proceed unchecked. As a result, the CBO violated appropriations law when it improperly obligated about $92.5 million of MS&C appropriations to develop HCPS.