¶ … Department of Veterans Affairs is a governmental organization. It has its roots in 1921, when veterans benefits were organized at the federal level, following the First World War. The brutal conditions of that war, where soldiers were exposed to mechanical weaponry, chemical weapons such as mustard gas, as well as disease-ridden trench warfare conditions, created substantial need for veterans hospitals, and the creation of a federal agency to accommodate this need formed the beginnings of the modern Department of Veterans Affairs (VA.gov, 2016). The Veterans Administration was created in 1930, and the 1944 GI Bill expanded benefits for veterans. Today, the Department of Veterans Affairs is a branch of the federal government. There are three separate administrations within the VA -- for benefits, health and cemeteries. The benefits programs for veterans include employment/vocational assistance, home loans, life insurance, disability compensation, pensions and the GI Bill. The health branch operates over 1000 health care facilities for veterans. The cemeteries branch operates 147 national cemeteries for veterans. These three branches collectively aim to provide service to veterans of America's military branches. The total budget for the VA is $183 billion, of which $116 billion is for the benefits administration and $64 billion for health (2015 VA Agency Financial Report).

Problems

There are several problems within the VA. The financial audit noted that the agency has problems with organizational structure at the highest levels of the CFO office, which was found to lack the necessary controls as mandated by law. There are improper payment rates, and the agency has been found to be not in compliance with federal laws in providing care to veterans in a 2015 IPERA performance review. What this means is that the agency is not meeting its stated objectives, the tasks to which it has been mandated by the federal government. There are insufficient controls with respect to compliance, and ultimately there may be a link between the two, where not all monies are accounted for, and not all tasks for which money has been allocated have been completed.

At issue, however, is that the true and exact nature of the problems are not fully known. The problems have been identified by various auditors in general terms, but there is a lack of specificity. Without such specificity, it is near impossible to derive viable action plans to address the problems. There needs to be identification of specific problems in order to determine what specific remedies are needed to bring the performance of the VA into alignment with its stated objectives, and within the expectations of Congress. Congress delivers at allotment of money to the VA for the performance of specific tasks, so ultimately the VA is accountable to Congress. To remedy its performance issues, the VA will need to identify how and why its performance is lagging, and then implement effective solutions to bring about the needed changes to its organization and therefore improve performance.

Proposed Solutions

When there is a lack of accountability and adequate controls in the CFO office, this points to a systemic issue within the organization. The culture of the organization is not conducive to accountability when the second-highest office within the organization is not performing according to their legal duties. It is no surprise, then, that there are shortfalls with respect to VA operations no meeting the objectives set out for the organization by Congress. A starting point might be to look at leadership of the VA, and question whether the right people are in place. But a closer inspection shows that the organizational structure might bear some of the blame for these issues.

The leadership of the VA consists of a Secretary, a COO equivalent (Deputy Secretary) and a Chief of Staff. There is no CFO equivalent at the highest levels of this organization. The office in charge of finance is the Interim Assistant Secretary for Management and Interim Chief Financial Officer. Ideally, the CFO would be a permanent person, somebody that is not pulling double duty, and somebody that is specifically a financial expert. This office should also be higher-ranking within the organizational structure of the VA. If financial accountability and the efficient use of funds is a problem at the VA, the fact that finance is not taken particularly seriously in the organizational design is doubtless a contributing factor. If money was unlimited, perhaps such a situation could be tolerated, but the VA budget was cut in 2015, necessitating a higher level of efficiency in operations to achieve the objectives with which the...

The organization did not meet its operational objectives, nor its financial ones, indicating that more attention needs to be paid to oversight.
The first recommendation, therefore, is to install a permanent CFO, and to elevate the status of that office. The new CFO should have experience in a similar role at a high-level government agency, and have enjoyed success in that position. The current situation where the role remains unfilled is not acceptable.

The second recommendation is to elevate the status of the financial office within the VA. At present, the different branches appear to handle much of their own finances, but greater leadership at a higher level is required in the VA to bring its back on target operationally and financially. The new CFO and his/her office will need to work closely with the Deputy Secretary in order to streamline spending, to innovate new means of achieving goals with less, and to ensure that there is greater transparency in spending, and greater alignment between spending programs and the organization's strategic and operational objectives.

Evaluation Plan

The evaluation plan will require some approval from Congress. Executives of the VA are appointed, but those appointments are subject to approval. Thus, a certain amount of political buy-in will be required in order to implement this plan. However, more important is building the consensus within the VA for new initiatives that will bring about higher levels of performance and greater levels of accountability. The new CFO and the existing Secretary will be among the most influential people in this change process, so they will be the ones to ask, and this request must be a combination of formal and informal dialogue to address specific issues and to negotiate specific terms of engagement for the organizational change process.

What will be asked is that a formal plan be put into place by the new CFO and his/her office to bring about greater accountability, so that there are no auditor findings of improper payments, and that clear links can be drawn between the money spent by the VA and the VA's strategic objectives. There are formal operating plans already in place for the VA, and these are submitted annually. Thus, the new plan will simply build onto that a section regarding implementation, controls and accountability.

There are a few different measures that will be required. These are going to be based mainly on the areas of deficiency that the organization's auditors have identified. Thus, there are both operational and financial measures. Operational measures where some services have not been provided that are supposed to have been provided will need to be remedied. The next IPERA performance review will need to see improvements in the areas that were weak last time, for example.

Financially, there are two ways to look at measurements. One is that the next auditor's report should not find any issues. Improper payments was a repeat issue, and this needs to be eliminated. More specific measures will need to be put into place, however. Each year, the VA receives a budget from Congress, and it is essential that this budget to adhered to. Moreover, all of the money spent should be accounted for, so a 100% success measure on that will be necessary.

One of the cultural elements will be a continual learning plan. This organization has suffered from a culture that is not sufficiently accountable -- there is a will to do better, but the results are not always there. The VA needs to become a more dynamic organization in terms of embracing innovation and challenge. A continual learning approach will help with this. Key to improving efficiency will be process improvements. In both benefits and health, there are private sector firms that can be used as benchmarks, too, providing an opportunity for fresh talent to join the VA and for the VA to implement a continual learning cycle.

There are several potential benefits to the VA of a continual learning approach to organizational development. First, it will allow the VA to modernize its operations and approaches. Further, it will allow the VA to remain modern, as continual improvement takes the organization through multiple cycles. Greater learning will also equate to greater accountability, as people within the organization are more equipped to deal with challenges. This is not to say that this approach is without challenge. The VA is not traditionally an organization prone to short learning cycles, so there can be expected to be significant resistance.

Thus, there needs to be buy-in from leadership for an organizational learning approach. The…