Why It Matters

The Department of Veterans Affairs is asking Congress for billions of dollars more than it budgeted, raising urgent questions about how the agency forecasts its spending needs. A recent Government Accountability Office (GAO) report, published June 4, found significant gaps in how the VA develops its medical care budget estimates, the financial blueprints that guide how the agency allocates resources to serve roughly 9.1 million veterans annually.

The VA estimated its medical care costs would reach $149.5 billion in fiscal year 2025, then returned to Congress requesting an additional $6 billion beyond what the President's budget included. That gap reflects a pattern: Congress has raised questions about how the VA develops its budget estimates, and the agency has underestimated its funding needs for health care services in prior years.

The GAO investigation exposes a budget forecasting system. VHA's Office of Enrollment and Forecasting does not have a formalized process requiring the actuarial consultant to incorporate newly emerging data into the model after initial model delivery.

The Big Picture

The VHA's Office of Enrollment and Forecasting does not have a formalized process requiring the actuarial consultant to incorporate newly emerging data into the model after initial model delivery.

VHA's processes for developing the model's estimates align with most, but not all relevant professional standards. The agency conducts a monthly review of the actuarial consultant's invoices to ensure it is producing the deliverables laid out in the contract. However, since invoices only indicate when the work was done, the monthly review does not allow VHA to assess the quality of the consultant's work. The agency uses performance measures to assess its actuarial consultant, yet VHA's standard operating procedure does not specify what staff should be doing to ensure that the consultant adequately performs the tasks outlined in the performance work statement.

The Government Accountability Office made five recommendations on the VA's development and oversight of its budget estimate. All five recommendations are currently Open, meaning actions to satisfy the intent of the recommendations have not been taken or are being planned.

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