VA’s Allocation of Initial PACT Act Funding for the Toxic Exposures Fund

The PACT Act authorizes VA to deliver veterans’ health care and benefits associated with exposure to environmental hazards during military service. VA may use the Cost of War Toxic Exposures Fund (TEF) to ensure proper claims processing by the Veterans Benefits Administration (VBA) and the administration of health care for eligible veterans. Congress authorized an initial appropriation of $500 million to set up the TEF for fiscal years 2023 and 2024 and required that VA produce a spending plan detailing funding allocation; it later appropriated an additional $5 billion in TEF support through fiscal year 2027, which was not part of this examination.As requested by the VA Secretary, the VA Office of Inspector General (OIG) examined the initial TEF appropriation. This memorandum focused on funds allocated to VBA, the Office of Information and Technology (OIT), and the Veterans Health Administration (VHA). Among its allowable uses, VBA, OIT, and VHA planned for 2,400 full-time employees. VA submitted a required spend plan to Congress. Estimation methodologies explaining specifically how funds will be used had been completed only for VHA, with the remaining methodologies anticipated in December 2023 and February 2024. This memorandum was issued to draw VA leaders’ attention to identified weaknesses. These included that VBA and OIT had not yet provided methodologies to explain their plan estimates; some spending plans had to be amended to avoid violations of the Purpose Statute; and monthly spending reports contained minor calculation inaccuracies.The OIG commends the Office of Management for proactively seeking legal guidance from the Office of General Counsel to ensure TEF allocations are used in accordance with their authorized purposes. No specific recommendations were made, but the OIG requested being informed of any additional actions taken to ensure proper use of the TEF once VBA and OIT finalize their estimation methodologies.