STATEMENT BY
THE HONORABLE DENNIS DUFFY
ASSISTANT SECRETARY FOR POLICY AND PLANNING
DEPARTMENT OF VETERANS AFFAIRS
BEFORE THE
SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS
COMMITTEE VETERANS' AFFAIRS
U.S. HOUSE OF REPRESENTATIVES

September 18, 1997

Mr. Chairman and members of the Subcommittee, it is my pleasure to testify this morning on behalf of the Department of Veterans Affairs (VA) concerning the Department's Strategic Plan FY 1998-2003. I am accompanied by D. Mark Catlett, Acting Assistant Secretary for Management, and Nora E. Egan, Deputy Assistant Secretary for Planning. As you know, the Plan is due to the Congress on September 30 and remains in draft at this time. We are still in the process of revising and improving the Plan, giving consideration to comments and suggestions received.

The Department of Veterans Affairs has embraced the opportunity offered by the Government Performance and Results Act (GPRA) to meet the changing needs of veterans and ensure that we are able to honor, care, and compensate veterans in recognition of their sacrifices for America. GPRA promotes a new focus on results, service quality, and customer satisfaction that is needed and welcome, especially to agencies such as VA whose mission is to provide benefits and services. GPRA's purpose, and VA's intent, is to improve planning functions, program performance measurement, assessment of program outcomes, and program management in order to improve service to veterans.

GPRA has imposed statutory requirements upon the Federal government for integrating planning, budgeting, and performance accountability that previously relied upon various management approaches. We believe that GPRA intends planning to be an ongoing, ever-evolving process that forces us to ask the tough questions, identify appropriate data to support decision making, and adjust our programs, benefits, and services to meet the needs and expectations of veterans and their families. GPRA demands that we consider, in consultation with the Congress and other stakeholders, such questions as these:

Are veterans' programs achieving the purposes or results for which they were intended?

What are veterans and other taxpayers getting in return for the money devoted to veterans' programs?

VA has made a concerted effort over the past two years to change the way we do business and to evolve a Strategic Management Process that provides for a "One-VA" approach to the implementation of GPRA. While we are proud of this Strategic Plan and the efforts of many VA employees to produce this document, we believe that the Strategic Plan is a point of departure, not a final destination. We are enthused about the journey yet mindful that the road is a long one.

VA efforts began soon after the enactment of GPRA in 1993. Early on we sought and obtained GPRA pilot status for the National Cemetery System, the Loan Guaranty Program, and the New York VA Regional Benefits Office. These pilot programs gave us insights into GPRA that strengthened our efforts.

GPRA implementation accelerated in the Fall of 1995 when VA top managers participated in an intense two and a half-day planning conference led by then Deputy Secretary Gober. Valuable insights on GPRA were provided by then OMB Deputy Director John Koskinen, which helped us to design a pragmatic approach to an integrated process. A major outcome of that conference was the formation of VA's Strategic Management Process. I have enclosed a diagram of the process for your information. This process uses several internal groups to address strategic issues critical to VA's future. A Strategic Management Group identifies and manages strategic issues with a unified approach to problem solving. The Strategic Management Group is comprised of VA's top policy level appointees and is chaired by the Deputy Secretary. This group ensures that we plan as a department and coordinate strategies as one VA. In addition, the Strategic Management Steering Committee, composed of both political and career senior executives, is a standing committee that evaluates and develops strategic issues, provides options to the Strategic Management Group, and oversees senior staff-level working groups that work on specific issues or projects.

Using the Strategic Management Process over the past two years, we have reassessed and reaffirmed the Department's mission, vision, and goals; established the "One-VA" approach to achieving world-class customer service; and developed the Strategic Plan. We have also made every effort to set the stage for an effective planning process by conducting an environmental scan and an organizational assessment survey of all employees, developing customer service performance goals, and initiating strategic scans of business lines.

The environmental scan was conducted in 1996 and looked at events, trends, directions, and strategic issues through interviews with key individuals and stakeholders, questionnaires, and secondary research in order to provide information that can be used to address critical issues. Interviews were conducted with members of Congress, Congressional staff, the General Accounting Office, the Office of Management and Budget, Veterans Service Organizations, representatives of agency management, and non-federal stakeholders such as the American Medical Association. In addition, a written survey was conducted of State directors of veterans affairs. The organizational assessment was conducted through a survey of all VA employees in partnership with the Office of Personnel Management and our National Partnership Council. Approximately 125,000 employees responded to the survey and the results offer tremendous insight into the VA work environment and provide a baseline for evolving into a truly high-performing organization.

Customer service performance goals were developed with the focus on operating as a unified organization, without stovepipes, to provide seamless service to veterans. The goals cover six dimensions of customer service: access, satisfaction, courtesy, quality, timeliness, and outreach. Achievement of these goals, benchmarked against the best in business, will lead to the provision of world-class service.

Strategic scans of our business lines are intended to identify data gaps, assess the extent to which appropriate program performance measures are in place, and identify issues that must be addressed in order to evaluate the effectiveness of programs. Scans have been completed on the burial benefits, health care, loan guaranty and education business lines. Similar scans will be completed for compensation, pension, and the remaining major programs in the coming months. In the context of program evaluation, these scans address the major issues: the extent to which program intent is clearly established in statute and whether appropriate program performance measures are in place.

The Strategic Plan is the culmination of efforts undertaken over the past two years and yet the Plan represents only a snapshot in time considering the continued evolution we anticipate over the coming months and even years.

I am proud of what we have accomplished to date but also acknowledge that we are not completely satisfied with our Plan. We have been forthright throughout the consultation process in clearly identifying the weaknesses in our planning process and in our Plan. We know that we have work to do and improvements to make before we can be confident that the planning process and the Plan are fully effective. I will identify some of these weaknesses this morning and welcome a candid discussion of these during the hearing and afterward.

Before I describe the VA Strategic Plan, let me take a moment to acknowledge the fruitful consultations that we have had with the staff of this Committee, as well as the staff of the Senate Veterans' Affairs Committee, the General Accounting Office and the Congressional Research Service. The discussions were frank and professional and have contributed immensely to the development of our Strategic Plan. Similar valuable consultation occurred with our other stakeholders and partners: the Veterans Service Organizations, the Office of Management and Budget, our National Partnership Council, and, to a lesser degree, other Federal departments and agencies. We anticipate that consultation and cooperation will continue and be strengthened in the coming months and years as we strive to implement the goals, objectives, strategies, and performance goals contained in the Plan.

Now I would like to describe specific aspects of the Strategic Plan itself. It is constructed around the requirements of GPRA while also reflecting the unique nature of the Department's mission. First, the Department's mission and vision are identified along with some of our major planning assumptions. We also describe the characteristics of the veteran population and the trends that we anticipate in the coming years.

Part I of the Plan addresses VA's programs and describes our plans to improve the programs and there benefits and services for veterans. General goals, objectives, strategies, performance goals, and external factors are identified for each of VA's ten business lines as well as the many special emphasis programs. The level of detail presented is intended to provide enough information so that it is clear what we intend to accomplish without being overly detailed. We also discuss our plans to institute a process of substantive program evaluation. VA is deeply committed to ensuring that benefit and service programs meet the changing needs of our veteran clients in the 21st century.

Part II of the Plan identifies management strategies that reflect our strong belief that effective program results can be achieved only if we also provide outstanding customer service; if we create and maintain a high-performing workforce; and if we operate efficiently and carefully exercise our fiduciary responsibility to the taxpayers. Earlier I discussed the six dimensions of customer service and the employee survey that will be used to improve workforce performance. Other workforce goals include enhancing performance accountability, recognition, and innovative practices. Return on investment goals include improving cost accounting and productivity, and establishing an effective capital investment program.

Throughout our consultations, two areas of concern were expressed: program evaluations and outcome-based performance measures. These areas are closely related and interdependent.

In constructing our Plan, the results of the environmental scan and numerous customer surveys conducted by the Veterans Health Administration and the Veterans Benefits Administration were considered and are reflected in our goals and objectives. However, we did not conduct formal program evaluations. The intent of program evaluations under GPRA is to ensure that VA programs are meeting their statutory intent. This intent should not be viewed in isolation. GPRA assumes that agencies will look beyond isolated program lines to evaluate program effectiveness. Defining statutory intent often is not as easy as it appears. The statutes governing veterans' benefit programs generally do not describe intended program results. Rather, they establish specific benefits with criteria as to whom and under what conditions the benefits are available. Historically, Congressional oversight has focused on program delivery rather than program outcomes. Until our recent GPRA consultations, neither the Congress nor VA has, for the most part, focused on outcome or results. Additionally, these benefits need to be assessed as an integrated part of a comprehensive package of military and other federal entitlement benefits to veterans.

Given this background, VA is embarking upon an approach to program evaluation that we believe is both professional and practical. This approach begins with strategic scans of each business line and then identifies all pertinent programs and revalidates program intent. Recognizing the sensitive nature of certain aspects of both program evaluation and the establishment of outcome-based program performance goals, we will closely involve both internal and external stakeholders, including the Congress, in identifying statutory intent and the needs and expectations of veterans. There may be instances in which the statutory intent is either not clear or, when clear, the language may not match everyone's understanding of the programs as they have evolved over time.

Program outcome measures will be established so as to ensure that the results of the programs can be evaluated. Strategic data needs will be identified and approaches developed to meet these needs.

We will then establish a priority list of evaluations to be conducted and a schedule for completion, with input from the Congress and other stakeholders. The schedule will be dependent on several factors including the complexity of the evaluation, the degree to which original data must be collected, and the resources available to conduct the evaluations.

The results of program evaluations address the second area of concern expressed during consultations, that of establishing true outcome-based performance measures. We will assess the extent to which the programs are meeting the needs and expectations of veterans, determine how efficiently the programs are operated and their effect on other related programs, and recommend program changes to include revisions to existing statutes, where appropriate.

Chairman Stump expressed his desire that VA use interim results-oriented goals, particularly in the Veterans Benefits Administration, while true outcome measures are being developed. VBA is committed to developing and including as many such interim goals as possible. Examples already included in the 1998 performance plan are Montgomery GI Bill usage rates and employment effectiveness rates for our Vocational Rehabilitation and Counseling program. Additional short-term measures for the 1999 performance plans will be developed.

At this point, I would like to shift focus to broader GPRA considerations and another concern of the Congress -- improving the coordination, cooperation, and collaboration among agencies on crosscutting functions and programs. Our planning efforts to date have been largely focused on the VA Strategic Management Process and developing VA's Strategic Plan. We have not coordinated our mission, planning and design efforts with other agencies to the extent we would have liked. However, VA has long engaged in efforts at the operational level to improve the interaction and coordination with those who have related programs. For example:

With the Department of Defense, VA has many ongoing initiatives in both the health care and benefits areas that are intended to improve the operations of both departments and improve service to veterans and active duty members. A pilot project with the U.S. Army is exploring different ways to conduct separation examinations so that claims for service connection are well grounded and their processing expedited. An evaluation report is expected shortly, but based on preliminary findings, this effort to improve separation exams and pre-discharge rating activities will be expanded to other branches of the service. In addition, Joint use facilities with the Air Force are in operation at Albuquerque, Nellis AFB, and Elmendorf AFB. In addition, we are exploring, with OMB, the feasibility of using DoD's DEERS/RAPIDS enrollment system for VA enrollment. If this use proves successful, we would gain by using proven information technology as well as data transfer.

With the Department of Labor, we have expanded our mutual efforts to provide job placement assistance for veterans, especially disabled veterans. VA's Vocational Rehabilitation & Counseling Service and the Department of Labor's Veteran's Employment and Training Service (VETS) have renewed their long standing commitment to working together through the re-issuance of a Memorandum of Understanding. As a result, a number of joint training conferences will be held in FY 1998 to enhance opportunities for job placement. Of course, Labor and VA both continue to participate in the Transitional Assistance Program and the Disabled Transitional Assistance Program, which help all veterans, including women and minorities.

Finally, VA and the Department of Health and Human Services continue to work together on a wide range of research and epidemiological initiatives concerning Agent Orange, Persian Gulf, HIV, and other areas of concern for veterans. Most importantly, VA and HHS' Health Care Financing Administration have now signed an agreement to conduct a pilot test of Medicare reimbursement to VA for health care for higher income nonservice-connected veterans. We are eager to work with Congress to authorize the pilot project.

Many other examples could be cited.

We have participated in numerous government-wide seminars and training sessions on GPRA to exchange best practices and we exchanged draft Strategic Plans with many agencies. Comments received on our draft plan were helpful and generally included pledges of continued support and cooperation. Our Plan includes a specific goal to identify and address overlaps or duplicate efforts and to improve the continuity and coordination of delivery of veteran services and benefits among multiple Federal agencies and we fully intend to do so. We are acutely aware of the need to enhance cooperation and coordination among Federal agencies.

In summary, our VA Strategic Plan FY 1998 - 2003 represents the efforts of VA senior management staff, and consultations with numerous stakeholders. We believe this is a good start and the Plan provides a road map for the future. We are committed to improving our Strategic Management Process and fully intend to implement the goals, objectives and performance goals contained in the Strategic Plan. Our annual performance plan and budget will implement the Strategic Plan and we will track and report accomplishments in the annual performance report. We will adjust the Plan in the coming years to reflect changes in the environment in which we operate, the results of program evaluations, and the extent to which our accomplishments match our intents.

I thank you for the opportunity to appear before this subcommittee to present our views. Mr. Catlett, Ms. Egan, and I would be pleased to answer any questions you may have.