VA IT budget under scrutiny

Plagued by repeated questions about how it spends its $1.6 billion information technology budget, the Department of Veterans Affairs is likely to find itself under tougher controls with a single commander at the top.

Rep. Steve Buyer (R-Ind.), chairman of the House Veterans' Affairs Committee, said during a hearing last week that he intends to introduce legislation giving the VA's chief information officer authority over IT resources, budget and personnel.

"This lack of accountability in IT spending must stop," Buyer said. He said he is concerned that the current structure "is unable to provide services to the veteran."

Buyer said he hoped that other federal agencies would use the legislation, still in draft form, as a model for getting control of their IT spending.

"We want to create the model that can be leveraged," Buyer said.

His decision to legislate the power of the VA's CIO follows repeated problems at one of the largest civilian agencies.

Last year, the VA was forced to scuttle a $342 million financial modernization project at its largest medical center in Florida. More recently, the department came under fire because it had underestimated the number of veterans returning from Iraq. It was forced to ask Congress for supplemental funds to help pay for their medical care.

A study by Carnegie Mellon University criticizes the VA's My HealtheVet program, an electronic medical record system the department is modernizing. The study states that the multimillion-dollar project was poorly planned and faced a high risk of failure. The program is a model for the nationwide electronic health record system President Bush has endorsed.

The recent hearing was the first step in deciding how the VA's IT organization should operate. The outcome will affect all aspects of the department's IT spending, including My HealtheVet.

The VA's CIO, Robert McFarland, already has a significant amount of control over the VA's IT budget, although individual offices have become accustomed to
a decentralized and autonomous culture, which is difficult to change. Even so, the VA's IT needs keep growing. For fiscal 2006, the department is requesting $2.1 billion for IT, up from $1.6 billion in fiscal 2005.

In addition, lawmakers are taking a close look at a $5 million study by Gartner, which offers five options for reorganizing the IT operation and tightening controls for technology spending.

The Gartner report, released for the first time at the hearing, recommends centralizing the IT operation and giving McFarland's office control over all IT spending.

"Given the poor state of the VA's IT investment management process and the stated demand to drive benefits over a shorter horizon, we recommend the centralization option to maximize the opportunity to create value for our vets," the study states.

No accountability is built into the current decentralized format, according to Gartner.

"Success in the centralization option requires executive leadership to rapidly change the underlying processes and norms," the Gartner report states. "Bringing assets under the control of a single CIO both accelerates the maturing of the IT investment management process and improves the potential benefit realization from OneVA mission investments."