Review of Alleged Continued Misuse of VA Funds To Develop the Health Care Claims Processing System

We evaluated the merits of two confidential Hotline allegations received after we published the Review of Alleged Misuse of VA Funds To Develop the Health Care Claims Processing System in March 2015. The complainants alleged that the Chief Business Office (CBO) continued to spend about $11 million of medical support and compliance (MS&C) appropriations on Health Care Claims Processing System (HCPS) development from August through September 2014, despite being told by OIG during an April 2014 meeting of OIG, CBO, and Financial Services Center that they should have used the Information Technology (IT) Systems appropriation. We confirmed that CBO spent MS&C funds to support HCPS during the OIG’s previous review, conducted from March through December 2014. This was prior to OIG’s official notification to VA in December 2014 that a potential Antideficiency Act violation had occurred. We confirmed that OIG personnel informed the former Deputy Chief Business Officer of the potential violation of appropriations law at an April 2014 meeting. However, CBO staff did not alter their spending patterns after learning of the potential violation. In addition, OIG did not formally notify the former Interim Under Secretary for Health of the potential violation until the draft report was issued in December 2014. The VA Secretary reported the violation of the Antideficiency Act as required by section 1351 of Title 31, United States Code. Therefore, we made no recommendations in the report.