What the Review Found
The OIG review team’s analysis showed that VBA was not consistently spending over the planned amount during FY 2024 for either the compensation and pension account or the readjustment benefits account.10 A contributing cause for the projected shortfall in funding was that realized prior-year recoveries—unspent deobligated funds that are available to be used for other purposes—were not included in the VBA status of funds calculations.11 Had the realized prior-year recoveries been included in the calculations throughout the year, the monthly funding status reports would have shown a reduced risk of a shortfall by the end of the fiscal year.12 The OIG’s review confirmed that VBA requested supplemental funding to safeguard the timely delivery of benefits to veterans and other eligible recipients for FY 2024. According to the under secretary’s congressional testimony on September 18, 2024, “any funding shortfall of just $1 would prevent VA from processing its September pay file,” and VBA staff would not be able to process payments for any of its beneficiaries on time.13 However, the OIG found that improved financial management practices would have reduced the risk of a reported shortfall and the need for a supplemental funding request.14 The finding is supported by the following determinations:
- VBA officials communicated their funding status to VA leaders and Congress, but the OIG’s analysis confirmed that it was still unclear whether the supplemental funding would be needed.
- Monthly tracking reports prepared by VBA for Congress did not include realized prior-year recoveries in the calculation of available funds.
- Lack of projected carryover funding available for use in FY 2024 raised concerns about VBA depleting budgetary resources by the end of the fiscal year.
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