Veterans Affairs

VA misused $92.5 million on software, IG says

Shutterstock image (by haveseen): a puzzle of hundred dollar bills.

(Image: Haveseen / Shutterstock)

The Department of Veterans Affairs broke appropriations law when it billed an administrative account for an IT project designed to pay private sector providers for services provided to VA beneficiaries, according to the VA Office of Inspector General.

Officials charged with procuring a claims processing system for the Veterans Health Administration told IG investigators that they used funds from the Medical Support and Compliance (MS&C) appropriation in order to get a system built and delivered more quickly, per the report. By using MS&C funds, VHA "avoided competing with other VA projects for IT systems appropriations," the report found.

The system in question is the Health Care Claims Process System (HCPS). The VHA's Chief Business Office began spending money to develop a system to process purchased-care claims, even though IT spending at the VA is supposed to go through the Office of Information and Technology. VA has spent about $73.8 million MS&C funds on the system since 2010, with an additional $18.7 million obligated, for a total of $92.5 million in improperly used funds.

Development of the claims processing system has been included in the OI&T Project Management Accountability System since 2012, despite the irregularity in its funding stream. The PMAS dashboard tracks improvements and enhancements to VA systems that cost more than $250,000, and is part of an agency-wide push to centralize IT spending, management and security.

The IG report recommends reclaiming the $18.7 million in HCPS obligated funding that hasn't gone out the door, supporting the program with OI&T funds, and exploring whether administrative action should be taken against any senior officials who participated in the HCPS program. 

About the Author

Adam Mazmanian is executive editor of FCW.

Before joining the editing team, Mazmanian was an FCW staff writer covering Congress, government-wide technology policy and the Department of Veterans Affairs. Prior to joining FCW, Mazmanian was technology correspondent for National Journal and served in a variety of editorial roles at B2B news service SmartBrief. Mazmanian has contributed reviews and articles to the Washington Post, the Washington City Paper, Newsday, New York Press, Architect Magazine and other publications.

Click here for previous articles by Mazmanian. Connect with him on Twitter at @thisismaz.


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