What the Review Found
VHA’s FY 2025 original budget request (the advance appropriations) was included in the FY 2024 President’s Budget that was published in March 2023; it relied on data and assumptions from 2021. VHA did not include a revised estimate (second bite) for medical care in its final FY 2025 budget request in March 2024. Despite a legislative budget cap for FY 2025, VHA and VA officials believed the previously approved amount in the advance appropriations of $112.6 billion plus other funding and anticipated carryover would be sufficient to fund medical care in FY 2025.
Even after developing options and goals in January 2024 to stay within the budget—which included reducing both hiring and the reliance on community care—VHA failed to achieve these goals. In July 2024, VA briefed Congress on a potential shortfall of almost $12 billion to provide medical care for the remainder of FY 2024 and FY 2025.
The drivers of the shortfall faced by VHA included managing higher-than-anticipated personnel costs after experiencing significant growth during FY 2023 and early FY 2024, higher costs for community care that were not offset by greater investments in direct VA care, and substantial surges in costs and demands for pharmacy and prosthetics services.
When VA briefed Congress in July 2024 about VHA’s potential shortfall to provide medical care for the remaining three months of FY 2024 and for all of FY 2025, the estimate was calculated by comparing anticipated available resources ($288.2 billion) to revised estimated obligations ($300.2 billion) for FYs 2024 and 2025 using FY 2024 obligations to date.8 It included about $10.2 billion for staffing, community care, and pharmacy and prosthetics services.9 VHA moved forward with the supplemental funding request in August 2024 and OMB submitted the request to the presidential administration at the time to be included in the FY 2025 budget or a continuing resolution.10 No funding was approved in September 2024 for VHA. In November 2024 (about two months into FY 2025), VHA had revised this supplemental funding request down to $6.6 billion for only the remainder of FY 2025, based on updated actual obligations data from FY 2024. Just weeks before publishing this report, Congress passed a continuing resolution on March 14, 2025, to provide $6 billion in mandatory funding to VHA’s Toxic Exposures Fund to address the remaining funding requirements for FY 2025…
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