| THE VA: TEAR IT
DOWN BRICK BY BRICK -- PART 5
Kurt Priessman's latest commentary
asks, "Why is Planning the Brick That's Missing?"
| Editor's
Note from Larry Scott, VA Watchdog dot Org ... It's time
for this series to be written. I do not agree with all
of Kurt's ideas about the VA, but, as a former government
employee with many years of service, Kurt knows the system
inside-out. The proposals in his commentaries should
be open to discussion. You may comment at the bottom
of the page. Kurt's
bio and archive of articles can be found here. |
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THE VA: TEAR IT DOWN BRICK BY
BRICK -- PART 5
Why is Planning the Brick That's
Missing?
by Kurt Priessman
Why, when Congress funds many Departments, Administrations,
Agencies, and projects using x-year funding (funding which remains
available for an indefinite period of time) have they not
suggested this to Veterans Service Organizations and veterans? Do
they, and the Veterans Service Organizations, not get it? Here are
some examples of how it could be used to our benefit.
Veterans Health Administration (VHA)
Contracts for additional medical staff, a specialist, medical or
laboratory reagents, etc. often take a long time to complete. It
requires a concise clear scope of work with measurable outcomes,
timely reviews, and appropriate mechanisms in place for cost
overruns and delays. Few people in government are adept at it.
Approval processes for contracts may be time consuming, especially
as they apply to the union, who continually argues against them.
The hiring process is just as time-consuming, generally adds
long-term costs (benefits, etc.), or runs into problems when
hiring unqualified union or non-union employees.
If a project manager begins on the first day of the fiscal year,
it may take six months to complete this process. With a single
fiscal year’s money, by law the contract funding cannot extend
past September 30 of that fiscal year. This particular problem is
due to the doctrine of severability.
 Government
contracts often have a severability clause. A contract is
essentially many different components, one of those being the
period of the contract. In lay terms, it allows for the terms of
the contract to be independent of one another so that the contract
might need ending, i.e. an invoice period. If there are certain
points in time for payment, the contract may end then.
Therefore, from a fiscal standpoint, most contracts cannot extend
into a new fiscal year with prior year funding, as the funding
when put against a severable contract must be spent for services
in that fiscal year, not just obligated. No such problem exists
with x-year funding. The VAOIG
cited the Department for breaking this principle in their report
on contracting, even though it is just as much a financial
function. Typically, financial managers know this and require a
new fund cite for the period of the contract beginning the new
fiscal year, but that assumes much in the Department of Veterans
Affairs (DVA).
There are many instances where x-year appropriations could be
used. However, nothing will stop problems from occurring because
of lack of managerial planning in the areas of projecting adequate
manpower, costs of travel and training, postage, contractual
requirements, medical and administrative supplies, and equipment.
In those cases, dismissal of managers who repeatedly fail to plan
is appropriate and necessary to enact change in the Department.
Veterans Benefit
Administration (VBA)
One of the most advantageous areas for the use of x-year funds is
disability compensation. There is a good reason for this. In
federal financial systems that use accrual accounting methods,
budget execution requires the “cost” of an obligation to be
entered in the financial system. This can be done at the time of
the payment (always a risky method) or at the time it is
established that a requirement may require payment (an
obligation).
An interesting aspect of the recent ruling of the Court of Appeals
for the Federal Circuit concerns the property rights of a claimant
(Cushman
v Shinseki) if they meet disability compensation
requirements. How will the DVA/VBA handle its financial
responsibility for the claim? In other words, if the claimant has
a property right, will GAO and Financial Accounting Standards
Board (FASB) require the VBA to establish that an obligation
exists; else they fail to meet standard accounting practices with
regard to all claims. If the claim is submitted, denied, appealed,
etc. and nothing is established to pay for it, it fails to account
properly for it and necessitates that the Department will have to
pay for it in the year the final decision is made. Here is an
example:
A claimant files on November 1, 2009, for a disease with several
secondary conditions. Under current conditions, it may not be
adjudicated for eighteen months. If the primary condition is
awarded but the secondary conditions are denied, another year is
added for the notice of disagreement plus whatever time it takes
to reevaluate the claim. If it is denied again and taken to the
Board of Veterans Appeals (BVA), and denied, and appealed to the
Court of Appeals for Veterans Claims (CAVC), several years may
pass. In the end, the Court awards the claim, but six years have
passed and it is 2017. How much is owed and where will payment
come from?
Currently, the claim is paid from the current fiscal year under
single year appropriations. What will the VBA do when the day of
reckoning comes and a court ruling finds the DVA has to pay for
huge numbers of claims and damages?
Under x-year appropriations an initial estimate could be
established based on the calculated total compensation that might
be awarded. Each year the calculated estimate is entered with
inflation. In 2017, the award is then paid from each of the fiscal
year obligations leaving current year funding to pay only the
portion required for that year. If the claim is ultimately denied
with conclusive finality, excess funds can be de-obligated and
used for other claims that may need paying, or more appropriately
used to pay interest that has been unlawfully denied to veterans
since time began. As long as remaining funds are not used to pay
for manufactured and backdated bonuses for those not deserving of
them, veterans will not object.
Please feel free to comment
below.
COMING FRIDAY 25 SEP 2009, PART
6 -- Looking for Solutions to the Delays and Denials
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This article is ©2009 by Kurt
Priessman and is provided exclusively to VA Watchdog dot Org.
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TOPICS:
veterans, veterans' benefits, VA, Department of Veterans' Affairs,
Kurt Priessman, THE VA: TEAR IT DOWN BRICK BY BRICK
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