[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]


                  COVID-19 SUPPLEMENTAL FUNDING: DID IT
                   PROTECT AND IMPROVE VETERAN CARE?

=======================================================================

                                HEARING

                               BEFORE THE

                     COMMITTEE ON VETERANS' AFFAIRS

                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             FIRST SESSION
                               __________

                         TUESDAY, MAY 23, 2023
                               __________

                           Serial No. 118-16
                               __________

       Printed for the use of the Committee on Veterans' Affairs
       
                  [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]       
       
                     Available via http://govinfo.gov

                               __________

                    U.S. GOVERNMENT PUBLISHING OFFICE
                    
52-731 PDF                 WASHINGTON : 2024                              


                     
                     COMMITTEE ON VETERANS' AFFAIRS

                     MIKE BOST, Illinois, Chairman

AUMUA AMATA COLEMAN RADEWAGEN,       MARK TAKANO, California, Ranking 
    American Samoa, Vice-Chairwoman      Member
JACK BERGMAN, Michigan               JULIA BROWNLEY, California
NANCY MACE, South Carolina           MIKE LEVIN, California
MATTHEW M. ROSENDALE, SR., Montana   CHRIS PAPPAS, New Hampshire
MARIANNETTE MILLER-MEEKS, Iowa       FRANK J. MRVAN, Indiana
GREGORY F. MURPHY, North Carolina    SHEILA CHERFILUS-MCCORMICK, 
C. SCOTT FRANKLIN, Florida               Florida
DERRICK VAN ORDEN, Wisconsin         CHRISTOPHER R. DELUZIO, 
MORGAN LUTTRELL, Texas                   Pennsylvania
JUAN CISCOMANI, Arizona              MORGAN MCGARVEY, Kentucky
ELIJAH CRANE, Arizona                DELIA C. RAMIREZ, Illinois
KEITH SELF, Texas                    GREG LANDSMAN, Ohio
JENNIFER A. KIGGANS, Virginia        NIKKI BUDZINSKI, Illinois

                       Jon Clark, Staff Director
                  Matt Reel, Democratic Staff Director

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public 
hearing records of the Committee on Veterans' Affairs are also 
published in electronic form. The printed hearing record remains the 
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both printed and electronic versions of the hearing record, the process 
of converting between various electronic formats may introduce 
unintentional errors or omissions. Such occurrences are inherent in the 
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further refined.
                         C  O  N  T  E  N  T  S

                              ----------                              

                         TUESDAY, MAY 23, 2023

                                                                   Page

                           OPENING STATEMENTS

The Honorable Mike Bost, Chairman................................     1
The Honorable Mark Takano, Ranking Member........................     3

                               WITNESSES

Mr. Jon Rychalski, Assistant Secretary for Management and Chief 
  Financial Officer, U.S. Department of Veterans Affairs.........     6

        Accompanied by:

    Ms. Laura Duke, Chief Financial Officer, Veterans Health 
        Administration, U.S. Department of Veterans Affairs

    Mr. Robert McDivitt, Network Director, VISN 23, Veterans 
        Health Administration, U.S. Department of Veterans 
        Affairs

Mr. Michael Missal, Inspector General, Office of Inspector 
  General, U.S. Department of Veterans Affairs...................     8

Ms. Whitney Bell, President, National Association of State 
  Veterans Homes.................................................     9

                                APPENDIX
                    Prepared Statements Of Witnesses

Mr. Jon Rychalski Prepared Statement.............................    49
Mr. Michael Missal Prepared Statement............................    54
Ms. Whitney Bell Prepared Statement..............................    64

                        Statement For The Record

National Coalition for Homeless Veterans.........................    69

 
                 COVID-19 SUPPLEMENTAL FUNDING: DID IT
                   PROTECT AND IMPROVE VETERAN CARE?

                         TUESDAY, MAY 23, 2023

                     Committee on Veterans' Affairs
                              U.S. House of Representatives
                                                   Washington, D.C.
    The committee met, pursuant to notice, at 10:01 a.m., in 
room 360, Cannon House Office Building, Hon. Mike Bost 
(chairman of the committee) presiding.
    Present: Representatives Bost, Bergman, Mace, Rosendale, 
Miller-Meeks, Murphy, Van Orden, Luttrell, Ciscomani, Crane, 
Self, Kiggans, Takano, Brownley, Levin, Pappas, Mrvan, 
Cherfilus-McCormick, Ramirez, Deluzio, McGarvey, Landsman, and 
Budzinski.

            OPENING STATEMENT OF MIKE BOST, CHAIRMAN

    The Chairman. Thank you. That is better. Thank you. Good 
morning. The Committee will come to order. Now, before we begin 
this oversight hearing today, I want to welcome back Army 
Master Sergeant Matt Reel, the majority's full committee staff 
director, from a lengthy deployment overseas. Thank you, Matt, 
for your continued service this to Nation and welcome back.
    I also want to announce that Mr. Parker Chapman, the Staff 
Director of the Subcommittee on Oversight and Investigations, 
is leaving the committee. I wish him well. I wish he was not 
leaving, but he is. He is moving on. Parker has been a valued 
member of this committee for nearly 6 years. He has worked for 
at least three different subcommittees, and I will miss his 
thoughtful and wise counsel. I wish him well in all of his 
endeavors as he moves on, as people do around here, and I wish 
him the best. Thank you for your service. Appreciate it.
    I also want to welcome our witnesses at today's hearing. I 
will have to leave the hearing at some point to mark up one of 
my bills in another committee, and I apologize for having to 
step away like that. I would like to start by again thanking 
the VA staff for the incredible work that they did during the 
pandemic. Today, we are here to review how the Department of 
Veterans Affairs used the nearly $37 billion that Congress 
provided in supplemental funding during the pandemic.
    Now that we are at the end of the pandemic emergency, it is 
time to look back at how well or poorly the VA handled the 
money. The funding spanned three bills. The Families First 
Coronavirus Response Act provided the first $60 million. Then 
the Coronavirus Aid, Relief, and Economic Security (CARES) Act 
provided $19.6 billion. Finally, the American Rescue Plan (ARP) 
Act provided another $17 billion. While Families First was 
bipartisan and the CARES Act was nearly unanimous, the ARP was 
jammed through on party lines.
    The rules placed on the VA for spending these funds got 
looser and looser and looser each time bills passed. By the 
time we got to the ARP, it looked a lot like a slush fund. From 
the beginning, I was concerned that VA would struggle to 
account for the money that they had spent and that they spent 
it correctly.
    I wrote more than a few letters about it. Ranking Member 
Takano and I also introduced the VA Transparency and Trust Act 
to require VA to report to Congress on how this money was being 
spent, which later became law. We were right in our concerns. 
The Inspector General released an audit of the CARES Act a few 
weeks ago. We all know that VA's outdated fiscal system barely 
functions under normal circumstances. The huge influx of COVID 
money only made things worse. More often than not, VA failed to 
document why they were transferring the dollars from one 
account to another. The problems cannot be blamed entirely on 
the old system.
    Despite only looking at a small number of medical centers, 
Office of Inspector General (OIG) estimates that the VA failed 
to follow its own internal controls in over 10,000 supply 
purchases and service contracts. Those transactions were worth 
$187 million and the Inspector General questioned the 
transactions for fraud and waste. The problems go well beyond 
this one report. I requested more information on the categories 
that the VA spent the COVID money on, and some of them make 
sense, but it is hard to see how others relate to COVID. Now, 
what I am talking about are things like garage maintenance, 
pest management, libraries, and Veterans Integrated Services 
Network (VISN) directors' offices. VA's regular budget should 
easily be paying for these things.
    We have not seen an audit of the ARP spending yet. Congress 
put even fewer guardrails on the ARP money than the CARES 
money, so that audit may be troubling. Even though these funds 
were specifically for COVID, there was very little rhyme or 
reason for how the VA spent the money. One office used it a 
certain way and the next office did it a different way. Most of 
the money went toward regular operations or projects that would 
have happened anyway.
    Particularly, no one could tell the difference between a 
COVID supplemental dollar or a regular dollar. VA saw them like 
these two dollars, identical. Identical dollars that could be 
spent whatever, however, whenever they wanted. Now, the problem 
with that is, when somebody ask for a ransom they ask for 
dollars and unmarked bills. Now unfortunately, that is kind of 
what we did. We gave you dollars in unmarked bills. Now we are 
trying to figure out what you did with those unmarked bills. I 
am concerned that the VA is getting dependent on these one-time 
supplementals from Congress. We need to provide veteran's care 
and benefits in regard to the budget and oversee that money to 
ensure that veteran services are going to the veterans, and 
they serve them well.
    That is exactly what the Republicans on the Appropriations 
Committee did last week. They advanced a bill that fully funds 
VA at exactly the level that President Biden requested. Let me 
say that again. They advanced a bill that fully funds VA at 
exactly the level that President Biden requested. The only 
difference is they put about $15 billion in VA's regular 
healthcare accounts rather than putting everything in the Toxic 
Exposure Fund.
    The scare tactics from the other side of the aisle over the 
last few weeks about a 22 percent cut have not stopped. We kept 
our word and the numbers do not lie. Now I want you to look at 
the chart we have behind us here. Here were the requests for 
each of the last 3 fiscal years. I want you to look where we 
were at, and where we funded, and tell me, does any of it look 
like a cut to you? Can anybody look at that and say we cut?
    Republicans are counting on fully funding VA in addition to 
the billions of dollars of COVID money. We have kept our word. 
Now it is time to put the partisan bickering and the partisan 
showboating to the side. It is not helping anyone and is not 
what we were sent here to do. Ranking member Takano, I now 
recognize you for your opening statement.

        OPENING STATEMENT OF MARK TAKANO, RANKING MEMBER

    Mr. Takano. Thank you, Mr. Chairman. I am glad you 
recognized me. Thank you.
    The Chairman. You look just like you did yesterday.
    Mr. Takano. I appreciate that you gave recognition of the 
fact that my Staff Director Matt Real is back from a long 
deployment. I am looking forward to one of my staffers, Chris 
Bennett, who has also been away on leave, who has been on a 
deployment, and ironically, Chris Bennett was Matt Real's 
commanding officer.
    The Chairman. They just can not get away.
    Mr. Takano. It just kind of brings to mind that we have 
taken the Uniformed Services Employment and Reemployment Rights 
Act (USERRA) law seriously, that we held open as per law their 
right to return to their jobs, back from their deployment. Mr. 
Chairman, I just wish that we could work together to make sure 
that USERRA works for every service member and every 
reservist----
    The Chairman. Yes.
    Mr. Takano [continuing]. and that we do away with the I am 
trying to think of the term that is used. Anyway, there is no 
private right of action if employers have forced arbitration if 
there is a forced arbitration clause in their employment 
contract, service members have returned and not being able to 
get those jobs because they have not been able to get their 
case into court because of these forced arbitration clauses. I 
would hope on a bipartisan basis that we can work together to 
make sure that no one who goes on a deployment, who is a 
reservist cannot come back to their job, as we have said in 
law, should be the case.
    Now, as for my opening statement during the great influenza 
epidemic more than 100 years ago, it is estimated that 50 
million people died worldwide due to the lack of pharmaceutical 
interventions. A century later, the world was in the grip of 
another global pandemic that caused significant fear and great 
uncertainty in the early days. Thankfully, in that time, 
science and medicine advanced considerably. In fact, within a 
year of identifying the SARS-CoV-2, scientists had developed 
several vaccines. The supplemental funds provided to VA during 
the COVID-19 pandemic supported the Department's ability to 
respond heroically to a global public health disaster.
    VA not only sustained its own capacity to provide care to 
veterans and prevent the spread of the virus among its 
workforce, but it also provided critical care to civilians as 
it served as the backdrop to the American healthcare system in 
more than one part of the country. More than 6,000 Veterans 
Health Administration (VHA) employees volunteered to deploy to 
assist civilian and Tribal health systems. During the course of 
the pandemic, these funds allowed VA to care for more than 
750,000 veterans, vaccinate, more than 4.5 million veterans, 
and another 130,000 veteran caregivers, family members, and 
dependents. Provide well over 1 million pieces of personal 
protective equipment and conduct over 900 research projects.
    While these actions were in response to the very real 
emergency this country faced, the silver lining in this work 
can also help us better prepare for the next global pandemic. 
Last December, I convened a full committee hearing on VA's 
pandemic response. We received testimony from Dr. Richard 
Stone, who was chiefly responsible for implementing the 
supplemental funds Congress provided to the Veterans Health 
Administration. In his book, Save Every Life You Can, he spoke 
at length about the importance of working relationships and how 
critical they were in VA receiving the resources and 
authorities it needed during the pandemic. I ask unanimous 
consent to add an excerpt from his book highlighting the 
importance of the emergency supplemental funding Congress 
provided.
    The Chairman. Without objection.
    Mr. Takano. Thank you, Mr. Chairman. With the funding and 
flexibilities Congress authorized during the pandemic, VA 
reduced veteran homelessness by 11 percent, the largest drop in 
the point in time count we have seen in years. VA used these 
supplemental funds to bring veterans indoors and provide them 
with basic needs like clothing and food. Funding was used to 
place veterans in hotels and motels to lessen the risk of 
COVID-19 transmission that vulnerable veterans would otherwise 
face in congregate shelters, the streets, or homeless camps, 
encampments.
    VA was also able to innovate and implement new programs 
that have proven successful in preventing housing insecurity 
like shallow subsidies. The pandemic served as a test case for 
what VA can do with more funding and more flexibility to 
address the homeless crisis. VA showed us that they can use 
that funding to get veterans the care and housing they need. VA 
showed us how to end veteran homelessness. I look forward to 
continuing to work with my colleagues to ensure that VA 
maintains this funding and tools in pursuit of our shared goal 
of a place to call home for every veteran who has served our 
country.
    Now, on the Veterans Benefits Administration (VBA) front, 
VA also seamlessly pivoted using the authorities granted by 
Congress to allow hundreds of thousands of student veterans to 
continue their educational pursuits in the face of an 
unprecedented health crisis. VA had also administered the 
Veteran Rapid Retraining Assistance Program using $386 million 
appropriated by Congress in a truly bipartisan effort to train 
over 13,000 veterans who lost their job due to COVID-19 for new 
employment. While the program had a rocky start, I look forward 
to hearing more from VA on the results.
    The appropriation of emergency funds to VA saved countless 
lives and supported care for veterans. At the same time, we 
must never forget that the COVID-19 pandemic took more than 1.1 
million lives in the United States, including 23,507 veterans 
and 259 VA employees. This unprecedented crisis called for a 
major infusion of funds and Congress delivered by providing 
$36.7 billion in emergency funding for VA.
    However, a recent report from the Inspector General 
revealed a number of administrative flaws in tracking those 
funds. VA's financial management system is 30 years old and is 
difficult to maintain and adapt to emergency requirements like 
those presented during the pandemic. The Inspector General 
found that because of the current system's inability to 
directly obligate supplemental funds, manual expenditure 
transfers were used to move funds across VA. The Inspector 
General found that the use of manual transfers limited 
transparency and accountability of employee payroll and other 
contractual services and medical supply purchases. Further, 
VA's Office of Finance did not follow established policy and 
develop guidance for documentation to create an audit trail.
    I realize that during the Pandemic, things were stressful 
for all employees at VA and that everyone was doing the best 
they could to procure supplies and contract for support. This 
does not, however, absolve VHA management from providing basic 
guidance to account for those funds. I am appalled to see the 
extent of the issue discovered by the Inspector General. The 
lack of accountability and transparency that can be provided to 
auditors and to Congress as a result of this failure damages 
VA's credibility and invites questions about the extent of 
potential waste, fraud, and abuse. I wish we could have used 
this hearing to focus on the good that VA has done for 
employees and veterans during the pandemic, but this does cast 
a shadow over those efforts.
    This once again highlights the desperate need for the 
modernization of IT systems at VA. The Financial Management 
Business Transformation (FMBT) Program is intended to provide 
that solution. The pace of the rollout and the issues with 
integration and adoption within VHA has not given our committee 
confidence. As a result, this Congress, I introduced H.R. 1659, 
the IT Modernization Improvement Act. My legislation will 
require independent verification and validation of large IT 
programs, including the Financial Management and Business 
Transformation Program. Because of how important this program 
is and the impact that delays are having on the ability to 
manage and audit finances at VA, this bill has been included in 
the recent Electronic Health Record (EHR) Reset Act that I have 
co-sponsored with Chairman Bost. He mentioned that in his 
opening comments. I appreciate that this is something that we 
can work on together in a bipartisan manner and help get this 
and other large IT projects on track.
    I look forward to the hearing. I look forward to hearing 
from the witnesses today to talk about both the good and the 
bad. We provide necessary funding and entrust VA to serve our 
veterans and ensure they are provided with care and benefits 
that they have earned. The administrative and financial 
management of this department must evolve and rise to this 
challenge, and it is time for VA to step up, admit mistakes, 
and make changes. With that, Mr. Chairman, I yield back.
    The Chairman. Thank you, Ranking Member Takano. We will now 
turn to our witnesses. Testifying before us today we have Mr. 
John Rychalski, the Assistant Secretary of Management and Chief 
Financial Officer of the Department of Veterans Affairs. He is 
accompanied by Ms. Laura Duke, Chief Financial Officer of the 
Veterans Health Administration, and Mr. Robert McDivitt, 
Director of VISN 23 of the Veterans Health Administration. We 
also have Hon. Mike Missal, Inspector General for the 
Department of Veterans Affairs, and Ms. Whitney Bell, President 
of the National Association of State Veterans Homes.
    If you would not mind, would the witnesses please stand and 
raise their right hand.
    [Witnesses sworn.]
    Thank you. Let the record reflect that the witnesses 
answered in the affirmative. Mr. Rychalski, I now recognize you 
for 5 minutes for your opening statement.

                   STATEMENT OF JON RYCHALSKI

    Mr. Rychalski. Good morning, Chairman, Bost, Ranking Member 
Takano, and members of the committee. Thank you for this 
opportunity to discuss how the Department of Veterans Affairs 
use of supplemental funds enabled us to meet the challenges of 
the COVID-19 pandemic by providing essential care and benefits 
to our Nation's veterans during this unprecedented public 
health crisis. I am John Rychalski, Assistant Secretary for 
Management and Chief Financial Officer of the VA. Joining me 
today are my colleagues Laura Duke, who is been introduced, and 
also Robert McDivitt from VISN 23.
    I want to thank Congress for their support of the VA and 
more importantly, for their support of the veterans we serve. 
An excellent example of this is the $36.7 billion Congress 
provided in supplemental funding outside of our annual 
appropriation. With the resources from three COVID-19 relief 
laws provided at a time when the pandemic's path, duration, and 
impact were unclear, VA responded with tremendous effort to 
maintain healthcare and benefit services while protecting the 
lives of veterans, their families, and VA personnel. Our staff 
worked heroically and at great personal risk throughout the 
pandemic to provide services and benefits to those whom we owe 
so much. We are grateful for the courageous dedication of VA 
personnel in providing care and benefits to veterans throughout 
this difficult time.
    The critical role played by the supplemental funds provided 
by Congress cannot be overstated. Between March 2020 and the 
end of the public health emergency, VA provided more than 332 
million healthcare appointments to all veterans via in person 
visits, community care visits, telehealth visits, and more. The 
most appointments for such a timeframe in VA history. This 
included caring for more than 870,000 veterans with COVID-19 
and admitting nearly 700 U.S. non-veteran citizens for care at 
VA medical centers. In addition, VHA accepted 196 mission 
assignments from the Federal Emergency Management Agency. VA 
vaccinated more than 4.5 million veterans, 320,000 employees, 
and 130,000 veteran caregivers, family members, and dependents. 
VA also gave booster shots to more than 2.3 million veterans.
    COVID-19 supplemental funds enabled VA to hire over 136,000 
new clinical and administrative staff between 2020 and 2022. 
This occurred during one of the most challenging labor markets 
in history, especially in the medical community. As a result of 
our financial flexibility during the pandemic, today the VA 
enjoys one of its strongest staffing levels in many years. With 
the supplemental funds, we provided emergency housing and 
supportive services for veterans who needed to be isolated for 
their safety or the safety of others. Supportive services for 
veteran families placed over 23,000 vulnerable veterans in 
hotels or motels to reduce their risk of exposure. There were 
also over 18,000 emergency housing placements. More than 77,000 
technology devices were made available for distribution to 
homeless or at-risk veterans to help them stay engaged with 
healthcare providers and support systems when face to face 
visits were not an option.
    The supplemental funds allowed the VA's geriatrics and 
extended care services to distribute 350 million in one-time 
payments to State extended care facilities for COVID-19 related 
expenditures and operational costs. Some used these funds for 
nurse retention grant requests from states, which increased 
1,250 percent during the pandemic. Five hundred million of 
supplemental funding was designated to provide grants through 
the current Capital Grant program for construction of state 
veteran homes. With that extra 500 million, we were able to 
fund a total of 34 additional projects. One hundred fifty 
million was designated for grants for capital needs to modify 
State veteran home buildings to respond to COVID-19. We also 
waived the required 35 percent of matching funds by the state.
    These funds enabled us to meet the pandemic's many 
challenges, and we have worked to manage the resources 
entrusted to us responsibly. The IG and GAO have each conducted 
extensive oversight of VA's execution of the COVID-19 relief 
funding. We appreciate their work, and VA has accepted all 
findings and has closed some recommendations and is working 
through action plans to address the remainder. The IG's 
findings identified longstanding issues that we have been aware 
of and have been well documented in our financial statement 
audit. We have been working for several years to address them 
by implementing a modern financial and acquisition system, 
consolidating accounting and payroll functions at our financial 
services center, and greatly improving training of our 
financial workforce.
    We are seeing positive results from these efforts. The VA 
has maintained 24 clean financial statement audit opinions that 
cover all funding sources, including these supplemental funds. 
As recognized by the Government Accountability Office in March 
2023, VA has reduced overall improper payments by 76 percent 
and reported its lowest rate of improper payments in 8 years. 
Let me say that again, there will be a report coming out this 
week in which we are reporting our lowest rate of improper 
payments in 8 years. The financial statement audit and the 
improper payment testing are both overseen by the IG.
    VA is proud of the role we played in the Federal response 
to the Pandemic, which touched every part of VA's operations. 
In particular, our response to COVID-19 demonstrated the 
strength and agility of an integrated healthcare system that 
was provided the resources needed to accomplish its mission. 
Again, I thank you for the opportunity to testify today and 
would be happy to answer any questions that you have. Thank 
you.

    [The Prepared Statement Of Jon Rychalski Appears In The 
Appendix]

    The Chairman. Thank you, Mr. Rychalski. I now recognize Mr. 
Missal for 5 minutes.

                  STATEMENT OF MICHAEL MISSAL

    Mr. Missal. Thank you. Chairman Bost, Ranking Member 
Takano, and members of the Committee, I appreciate the 
opportunity to discuss the OIG's oversight of VA's use of 
COVID-19 supplemental funds. The COVID-19 pandemic 
significantly altered the way VA provided services and benefits 
to veterans and their families. The OIG recognizes that VA 
staff worked tirelessly throughout the pandemic, often at 
significant risk and sacrifice. I would also like to thank the 
OIG staff who seamlessly continued our oversight work during 
these last three years. The additional funding that Congress 
provided us ensured that we could quickly adapt to these 
unprecedented times. We pivoted to not only pursue our 
customary oversight work, but also published over 40 pandemic 
related reports and investigated dozens of COVID related 
criminal matters.
    In response to the pandemic, Congress provided VA with more 
than $36 billion in supplemental funding. The OIG has published 
five reports in the last 2 years related to this funding. We 
found that VA generally complied with the Transparency and 
Trust Act of 2021, which requires VA to provide to Congress a 
detailed plan outlining its intent for obligating and expending 
funds covered by the act. However, we made two recommendations 
for VA to improve the quality and sufficiency of information 
reported to Congress.
    In our report published this month, we found that VHA 
lacked general controls over its medical facilities' use of 
CARES Act Funds. We also estimated that over 10,000 COVID-19 
related transactions that were directly obligated from the 
CARES Act fund were noncompliant with key fiscal controls, 
resulting in the OIG questioning costs totaling an estimated 
$187 million.
    These deficiencies were due in part to VA's outdated 
financial management system. VA is currently implementing a new 
financial management system, Integrated Family Application 
Management System (iFAMS), which may be able to resolve some of 
these issues. However, VA does not expect a fully automated 
solution in this decade.
    Another challenge VA faces is its decentralized financial 
management structure. The Chief Financial Officers (CFOs) of 
VHA, VBA, and National Cemetery Administration (NCA) do not 
report to Mr. Rychalski, the VA CFO. Also, the CFOs at VISNs 
and medical centers do not report to Miss Duke, the VHA CFO. 
This structure has been a material weakness or significant 
deficiency for many years in our audits of VA's consolidated 
financial statements.
    In addition to our oversight of pandemic related funding, 
we performed audits and inspections of numerous other programs 
and issues related to COVID-19. These include VHA's efforts to 
expand telehealth, the failure to adequately track and 
reschedule millions of canceled appointments, and inspections 
of medical facilities' pandemic readiness. Moreover, our 
criminal investigators brought numerous COVID-related criminal 
cases, including one in which an individual attempted to obtain 
orders from VA for over $800 million of nonexistent personal 
protective equipment.
    When I testified before this committee in February, I noted 
that a recurring theme about the deficiencies we identified in 
VA programs centered on accountability. Our COVID-19 related 
reports had similar deficiencies in several critical areas of 
accountability, such as the need for strong governance, 
adequate staffing, updated IT systems, quality assurance, and 
stable and effective leadership.
    COVID-19 posed considerable challenges to the operations of 
VA and its staff. We recognize that VA is working to address 
the issues we identified in all our pandemic related reports. 
The OIG is steadfastly committed to our mission of conducting 
meaningful, independent oversight that will help VA improve the 
services and benefits that it provides.
    Finally, as we approach the Memorial Day observances, on 
behalf of the OIG, I would like to express our deep gratitude 
to all who gave their lives in defense of our country. Chairman 
Bost, and members of the Committee, I look forward to answering 
any questions that you may have.

    [The Prepared Statement Of Michael Missal Appears In The 
Appendix]

    The Chairman. Thank you, Mr. Missal. Ms. Bell, you are now 
recognized for 5 minutes.

                   STATEMENT OF WHITNEY BELL

    Ms. Bell. Thank you, Chairman Bost, Ranking Member Takano, 
and members of the Committee. As President of the National 
Association of State Veterans Homes (NASVH), I am pleased to 
offer testimony on how COVID-19 impacted State homes and how VA 
supported us and the veterans we care for throughout the 
Pandemic.
    My full-time job as administrator of the State veterans 
home in Fayetteville, North Carolina. However, today I am 
pleased to share the combined experiences, observations, and 
recommendations of my NASVH colleagues. As you know, the 
State's Veterans Home Program is a partnership between the 
Federal Government and states that provide long term 
residential care to aging and disabled veterans through 163 
state homes located in all 50 states and Puerto Rico. With over 
30,000 authorized beds, the State homes provide half of all 
federally supported nursing home care to veterans, and we do so 
with less than 20 percent of VA's nursing home budget.
    Although states own and operate the homes, VA has wide 
ranging oversight authority, performing at least one 
comprehensive inspection annually to assure the quality of 
care. In addition, various state homes are also inspected and 
audited by VA's Inspector General, the Justice Department, 
Centers for Medicare and Medicaid Services (CMS), as well as 
State and local authorities.
    Mr. Chairman, when the pandemic began in 2020, State homes 
were among the first to implement significant precautions. 
However, the asymptomatic nature of COVID combined with the 
lack of testing, treatments, and vaccines, made it virtually 
impossible to prevent COVID from entering any facility or 
location in the country. It is important to note the veterans 
in state homes are significantly older than those in VA, 
Community Living Centers (CLCs), or community nursing homes, 
and they are more likely to be receiving end of life care in 
our homes.
    In addition to the devastating physical toll on veteran 
residents and staff, the pandemic also put tremendous financial 
strain on our homes. With new admissions suspended and veterans 
passing away from COVID and non-COVID causes, daily census 
levels declined and thus VA per diem support declined 
significantly, even though our fixed cost stayed the same. 
Fortunately, soon after the pandemic began, VA responded as 
part of its fourth mission. For example, in North Carolina, VA 
provided testing and training on infection control. In Illinois 
and Michigan, VA provided thousands of face masks and 
protective gowns. In California, VA provided testing of up to 
200 residents and employees weekly. In Iowa and Idaho, VA 
provided direct staffing support, particularly nurses. These 
are just a few of the ways the VA medical centers supported 
state homes during the pandemic.
    Congress also responded quickly, and NASVH was grateful to 
work with this committee and its Senate counterpart to enact 
legislation to help mitigate some of the pandemic's impacts. 
The CARES Act included waivers from occupancy rates and veteran 
percentage requirements, and VA was also able to waive bed hold 
requirements. NASVH would especially like to thank this 
committee for helping to secure emergency supplemental funding 
in the American Rescue Plan and CARES Acts, which allowed the 
VA to provide $1 billion in supplemental funding to state 
veterans homes, including $650 million for construction grants 
to rehabilitate and retrofit homes to increase safety for our 
veterans. $350 million in direct assistance to help State homes 
prevent and respond to the spread of COVID.
    Mr. Chairman, although the public health emergency has 
ended, state homes continue to face significant financial 
challenges. In response, bipartisan legislation was recently 
introduced in the Senate to continue the bed hold waiver, and 
we would welcome companion of similar legislation in the House. 
NASVH is also seeking congressional support to set the basic 
per diem rate at 50 percent of the daily cost of care, fully 
fund the construction grant program, at least 600 million in FY 
2024, and enact new legislation to help State homes fill 
critical staffing shortages, particularly nursing.
    Mr. Chairman, in conclusion, NASVH greatly values our 
Federal and state partnership, and we look forward to working 
with this committee to find new and innovative ways to 
strengthen state veterans homes for the men and women we serve. 
That concludes my testimony, and I will be pleased to answer 
any questions you or the members of the committee may have.

    [The Prepared Statement Of Whitney Bell Appears In The 
Appendix]

    The Chairman. Thank you, Ms. Bell, and thank you to all the 
witnesses for their testimony. We are now going to questions, 
and I will recognize myself for 5 minutes.
    Mr. Missal, and I know you expanded on this in your 
testimony, but why did the VA struggle to account for CARES Act 
funds? Have any of the underlying problems been cured as of 
yet?
    Mr. Missal. There are a number of different reasons why 
they struggled. First, they have an antiquated Financial 
Management System, FMS, that has created challenges over the 
years. Second, the governance structure of the financial 
management organization makes it really difficult because of 
the gaps in terms of who reports to whom, which I talked about 
in my opening statement. Third, policies and procedures and 
guidance, it is really critical that they are clear; they are 
complete; and they are accurate. Fourth, they have to make sure 
that people know their roles and responsibilities. We 
identified a number of situations where people did not know who 
was responsible for certain things.
    Training is also critical. They have to be properly trained 
to be able to do their job. Finally, with all of that, you have 
to make sure you have internal controls to identify and to 
correct any deficiencies that you may find.
    The Chairman. Thank you. Mr. Rychalski, just how much of 
the American Rescue Plan money remains unobligated?
    Mr. Rychalski. Thank you for the question. You can call me 
John if you want, sir.
    The Chairman. Okay.
    Mr. Rychalski. Yes, I know that last name. I think as of 
yesterday, I think we are right around 500 million of ARP.
    The Chairman. Five hundred million?
    Mr. Rychalski. Yes.
    The Chairman. Okay. Have you changed your spending plan for 
the ARP funds since the end of the COVID emergency?
    Mr. Rychalski. Have not, no. You know, consistent with our 
2023 budget submission, I think we had communicated to Congress 
how we intended to use those funds. We execute every day, 
including with cost transfers and journal vouchers. I know it 
is just been business as usual. Keep in mind, we are heading to 
the end of the third fiscal quarter, you know, so it is waning, 
as we expected it would.
    The Chairman. Well, maybe now that the pandemic is over, 
the justification for supplemental funds is gone. Are you 
struggling to manage it all? Were you struggling to manage it 
all along?
    Mr. Rychalski. I want to ask Laura and Robert to answer 
that question because they really manage the funding.
    The Chairman. Okay.
    Mr. Rychalski. Thank you for the question.
    Ms. Duke. Good morning, sir. Speaking in terms of our 
management of the ARP, I will note that as you mentioned in 
your statement, the purpose of the ARP was a little bit broader 
than that provided by the CARES Act. To the extent that we were 
transparent in our congressional budget, justification of how 
we would use ARP and base funds collectively to deliver 
healthcare to veterans throughout the year and we have 
delivered healthcare throughout the year. As we noted, it was a 
higher level of care because we are still making up for the 
deferred care and the long-term consequences of the pandemic. 
We do expect that our costs will be higher in the short run and 
then will come back down as we have proceed in the post 
pandemic period.
    The Chairman. Okay. We have a president that said the 
pandemic is over. We gave you money to use for the pandemic. In 
the last 2 weeks, you have spent $1.5 billion of the ARP money. 
It is over. When does the plan change so that you go back to 
operating on your regular funds and we actually see what we can 
possibly save from those funds? I mean, that is what the 
American citizen is going to ask me, what my people in my 
district are going to ask me.
    Ms. Duke. Our 2024 president's budget indicates that we 
fully expected to expend the ARP. As we go forward, we are 
clear regarding our outstanding needs for the future. When we 
have funds that we do not expect to utilize in our budget, we 
identify that they are available for the purposes of Congress 
to determine.
    The Chairman. Okay. If we are done, and that is a real 
problem that the people will see, is if we are done with this, 
as I said, $1.5 billion in the last 2 weeks alone. That is 
concerning to the taxpayers of this United States.
    Let me also ask this. The Biden administration asked for 
$325 billion for VA and our Appropriations Committee gave them 
$325 billion. Now, the only difference is whether or not it 
would put the money in the regular account or in the Toxic 
Exposer Fund. Is there anything that a dollar in the regular 
budget can accomplish that a dollar in the Toxic Exposer Fund 
can not?
    Mr. Rychalski. Sir, I can answer that question. The short 
answer to your--the short answer is no, there is not. There is 
one consideration, and that is if we go back to the Choice Act. 
We have had situations where benefits have been expanded, 
funding was provided, but it turned out to be inadequate based 
upon the demand of the new benefit. We had to go back to 
Congress a couple of times mid cycle, which was problematic. 
Then, with the Mission Act, there was much more, I think, 
scrutiny or concern over adequacy of funding. There was not a 
separate fund for Mission Act. We worked with staff to sort of 
carve out the Mission Act costs to make sure they could track 
it.
    Come along to the The Sergeant First Class Heath Robinson 
Honoring our Promise to Address Comprehensive Toxics (PACT) act 
and the Toxic Exposure Fund (TEF) fund, It was my understanding 
that was supposed to be a solution for those previous 
situations where there was not enough visibility or maybe 
enough funding for those benefit enhancements. The short answer 
is no, there is not a difference. There is, I think, some 
rationale for how we have evolved to where we are. You know 
better than I do why Congress passed the TEF and all of that. 
but it made a lot of sense based upon my history at the VA and 
some of the challenges we have had in the past.
    When I first started, there was a lot of frustration with 
Choice and VA coming back time and time again for additional 
funding in the middle of the budget year.
    The Chairman. Thank you. My time has expired. I right now 
recognize Ranking Member Takano.
    Mr. Takano. Mr. Rychalski, I just want to verify with you 
that ARP funds were not connected to the pandemic. When they 
lifted the public health emergency, there was nothing in the 
ARP bill language that linked the two.
    Mr. Rychalski. That is correct. AFP funds came as sort of 
like general purpose funds, and we made it very clear that we 
were using those for healthcare, like we would use our baseline 
funds. It was one part of the funding equation for this year, 
correct.
    Mr. Takano. In fact, the pandemic changed significantly the 
spending patterns of VA and ARP money was very helpful in 
getting you through some difficult moments.
    Mr. Rychalski. More than helpful. It was critical. 
Absolutely critical.
    Mr. Takano. It was critical.
    Mr. Rychalski. Yes, it was.
    Mr. Takano. I want to turn my attention to Ms. Bell. Ms. 
Bell, based on your testimony, it is clear how critical the 
supplemental funds and authority flexibility were to operate 
state veterans homes across the country during the pandemic. Of 
course, the state veterans homes, as opposed to the CLCs, the 
community living centers that are run by the VA, were the locus 
of some really terrible tragedies. The lack of understanding of 
how to deal with infection control, the antiquated facilities 
that you had that made for congregate living situations where 
the virus was spread very easily among very vulnerable 
patients. With the end of the public health emergency, what 
challenges remain for state veterans homes?
    Ms. Bell. Thank you for that question. Challenges right now 
we are facing are not only staffing because you have to have 
people to go into these nursing programs to want to be in 
healthcare. We have to have people to take care of people. 
Without those people, we do not have a census of veterans to 
take care of. At the forefront is our staffing at this time.
    As you talk about congregate living, a lot of facilities 
who are semi-private rooms in facilities help to continue the 
spread of COVID, that being part of the Construction Grant 
program to allow us, the funds to be able to restructure and 
retrofit to prevent that spread in the future would help.
    Mr. Takano. Well, thank you. VA currently provides a per 
diem payment for each veteran that covers about 30 percent of 
the cost of care, and states make up the difference. As 
supplemental funds from the Federal Government disappear and 
state veterans homes return to reliance significantly on State 
budgets what if any concerns do you or your colleagues have?
    Ms. Bell. In concerns to the per diem?
    Mr. Takano. Yes.
    Ms. Bell. The cost of care?
    Mr. Takano. As it disappears, yes.
    Ms. Bell. We would definitely recommend the per diem to go 
up to 50 percent of the cost of care.
    Mr. Takano. You actually would like to see an ongoing
    Ms. Bell. Yes, please.
    Mr. Takano [continuing]. 50 percent of care be covered by 
the Federal Government? You do not want to see that 30 percent 
disappear?
    Ms. Bell. We cannot.
    Mr. Takano. As we start to look back at the lessons learned 
during the last few years, what kind of changes or reforms 
should Congress focus on to enable VA and the states to better 
focus resources on preventing and responding to future 
outbreaks in state veterans homes and other long term care 
settings that serve our most vulnerable populations?
    Ms. Bell. NASVH and my colleagues are requesting to fully 
fund the State veterans Home Construction Grant program, 
increasing the basic per diem rate, enacting the legislation to 
strengthen the State veterans home programs, and faithfully 
implement standardized sharing agreements under each site.
    Mr. Takano. Well, Ms. Bell, I am sympathetic to the notion 
that the veterans homes need more funding. We need to upgrade 
the facilities, but I am concerned about what the role of VA 
should be in terms of oversight. Would you be open to VA having 
more oversight authority to help ensure that homes are properly 
staffed, appropriately staffed, and adhering to infection 
control standards, among other things?
    Ms. Bell. We would embrace that partnership. Just as they 
done boots on the ground when COVID began, we did have that 
support from our VA Medical Center onsite in our facilities 
educating us. We would embrace that.
    Mr. Takano. That is very important for me to hear. I thank 
you for that, and I thank you for that concession because I am 
really scared that we are going to lose our memory over what 
happened during the pandemic. The numbers of people in homes 
across the country, not just state veterans homes, but the 
whole industry. That is where we saw a huge chunk of our loss 
of human life.
    Supplemental funding allowed state veterans homes to 
retrofit facilities to handle pandemic conditions like 
infection control better. What conversations have your 
organizations engaged in regarding the need to upgrade and 
review construction requirements for future homes and avoid 
unnecessary deaths?
    Ms. Bell. There has been much investigation, research done 
in explaining and showing how facilities can prevent the spread 
within the home. It could be making those semi-private rooms 
private rooms, as well as incorporating the smart air systems 
to help filter the air to help prevent the spread through the 
ventilation systems. There has been numerous conversations 
concerning the retrofit of facilities construction with 
engineers, with architects to talk about safety. Private room 
versus semi-private room is safe.
    Mr. Takano. My time is running out. I wish we could spend 
more. Mr. Chairman, I hope we can work together on this 
oversight piece. I really feel that we can not forget just the 
numbers of deaths we had in these state veterans homes. I am 
open to the idea that we fund you better, but we have got to 
have more oversight. I yield back.
    Mr. Bergman.
    [Presiding] Thank you. Dr. Miller-Meeks, you are recognized 
for 5 minutes.
    Ms. Miller-Meeks. Thank you, Mr. Chair. Mr. Missal, one 
example in your report on page 10 is a medical of $35. The 
supporting documents they gave you were actually submitted for 
a different transfer that was previously approved. Basically, 
they tried to submit the same receipts twice. Your office could 
not conclude what was purchased, why it was purchased, or 
whether anyone approved the purchase. First of all, Mr. Missal, 
did anyone ever determine what was purchased?
    Mr. Missal. We were never able to determine what was 
purchased.
    Ms. Miller-Meeks. How widespread do you think this is, and 
have you seen anything like this during your tenure?
    Mr. Missal. We found numerous examples where transactions 
were not properly documented. Unfortunately, we have seen that 
in a number of other projects that we have worked on. As I said 
before, there is a lot of different issues and challenges that 
VA has with respect to its financial management system, and 
this situation really highlighted those challenges.
    Ms. Miller-Meeks. Thank you. Mr. Rychalski, the IG 
estimated that 10,064 CARES Act purchases, these are purchases, 
not dollars, 10,064 purchases worth 187.2 million had problems. 
That was based on examining just eight medical centers 
purchases. Have you also audited both the CARES Act purchases 
and the ARP purchases? If not, do you intend to do so after 
reading the OIG's report?
    Mr. Rychalski. Thank you. Yes, so, the IG does great work. 
We are a close partner with them. The things they have 
identified are things that we have known for some time. I want 
to be clear that it is not the Wild West. This is somewhat 
alarmist. Let me give you some context. Things were exacerbated 
there is no question by the pandemic. I mean, I would rather be 
here explaining to you why we do not have a receipt than why we 
harmed a veteran. This is one way to look at it.
    The crux of the issue is, you know, the accounting system 
is old and it requires a lot of manual processes. I mean, it is 
very heavily, manually intensive. We have people of different 
skills, motivation levels that may or may not follow the 
policy. We do audit these funds in our annual financial 
statement audit with a public accounting firm. These funds have 
been audited. They also go through our improper payments 
testing.
    The difference here is, in the financial statement audit 
that lasts a year, you know, they will take the samples of 
transactions. They will find the same thing. In fact, if you 
look at our Financial Statement Audit Report, we have a 
material witness with the exact same findings. They frequently 
will go a little bit deeper to see if the core of the 
foundational accounting transaction is solid and----
    Ms. Miller-Meeks. Well, it does not sound like that is a 
new issue or a new problem. You have known about your financial 
system. As the chairman said, our duty is to make sure dollars 
when we are spending, appropriating record amount of dollars, 
so, not just in COVID money, not just in ARP money, in record 
increases in the VA's budget the past 2 years in a row. We need 
to be able to account for those and do proper oversight. Mr. 
Rychalski, when did the President end the COVID-19 national 
emergency?
    Mr. Rychalski. Recently, May 11. Is that correct?
    Ms. Miller-Meeks. May 11. From the time I have been in 
Congress, to me, COVID expenditures should be timely, targeted, 
and temporary, i.e., they are related to the COVID-19 pandemic, 
not other expenditures that may need to be done or nice to be 
done. Do you know how much unspent money allocated for COVID-19 
related, nonrecurring maintenance you have leftover, according 
to documents you sent this committee?
    Mr. Rychalski. Are you talking about a CARES act funds or 
ARP funds?
    Ms. Miller-Meeks. COVID related.
    Mr. Rychalski. I would have to get that for you. I think we 
have obligated CARES Act like 99.6 percent, and I think we have 
about 500 million of the ARP. Then I think for the Families 
First, it was 99.8 percent. I first, I----
    Ms. Miller-Meeks. 1.17 billion.
    Mr. Rychalski. Is left?
    Ms. Miller-Meeks. It is a lot of money. The VA issued 
41,000 iPads to veterans for virtual healthcare appointments 
seemed to be an appropriate expenditure. Unfortunately, only 
half of those were ever used for a healthcare appointment. The 
IG has also noted that the VA has not attempted to retrieve 
many of those unused iPads valued at $6.3 million. Does the VA 
plan on getting these back if they are not being used for a 
virtual appointment?
    Mr. Rychalski. I would have to take that--that is a little 
bit out of my lane. I have to take that for the record. I do 
not know if our other witnesses, Robert, if you have?
    Mr. McDivitt. Yes, Congressman. I am Rob McDivitt. I am the 
VISN director from VISN 23. I have the great State of Iowa in 
my network. We are endeavoring right now. We issued over 3,000 
cell phones to homeless veterans early in the pandemic so they 
could stay connected with healthcare and with the VA. We issued 
over 8,500 iPads to veterans in our very rural network and are 
tracking them. Not all of them have been used, and we have put 
a process in place to contact the veteran, make sure that they 
use their device or we retrieve it. We are endeavoring to do 
that. We did put them out as quickly as possible to make sure 
the veterans remain connected to VA.
    Ms. Miller-Meeks. Yes, I think retrieving the unused 
devices would be an appropriate utilization of your time. Thank 
you, and I yield back.
    Mr. Bergman. Thank you. Mr. Levin, you are recognized for 5 
minutes.
    Mr. Levin. Thank you, General. Thank you to our witnesses. 
I want to thank you for all your work during the pandemic.
    Eliminating veteran homelessness is a key objective of 
mine. I know it is not going to be easy, but I commend you for 
the work that was done. I saw the 11 percent decrease in 
veteran homelessness between 2020 and 2022. I know that is in 
part because of the increased funding and the flexibilities 
that Congress provided to you during the pandemic.
    I was glad to see in particular that Supportive Services 
for Veterans Families (SSVF) used some of the funds for the 
Shallow Subsidy. Representing San Diego in the Congress, I know 
that our region benefited greatly from the Shallow Subsidy 
Initiative to provide rental coverage for up to 2 years for 
very low income, extremely low-income veterans. Direct payments 
to landlords on behalf of the veteran to prevent homelessness 
in the first place.
    I was proud to host Chairman Van Orden of our subcommittee 
a few weeks ago in my district in Oceanside, California. We 
talked to a lot of the local nonprofits who used the Shallow 
Subsidy and talked about the positive impact it had. I am 
concerned that we are not going to continue the robust funding 
for the Shallow Subsidy or for SSVF generally, and that we are 
going to fail to build on the progress that we have made.
    Assistant Secretary, I will ask if you could discuss how 
the Shallow Subsidy program has helped to prevent veteran 
homelessness in the last few years.
    Mr. Rychalski. It might be a question best for Laura, but I 
know that they were able to help over 3,700. I know that those 
grants or those payments are critical. For those that are not 
familiar with the Shallow Subsidy, it is for a, you know, a 
person or a family that has housing, but that is at risk of 
losing their housing. You can just imagine that it is much more 
efficient to keep them in their house than it is to have them 
go homeless and have to start again. Laura, maybe you want to 
talk a little bit about that.
    Mr. Levin. Please do.
    Ms. Duke. Yes. As you correctly noted, the Shallow Subsidy 
program has been a success and has enabled us to reach veterans 
who are kind of in a cusp situation. The issue with the shallow 
subsidies is not so much a funding issue as it is an 
authorities issue, because with the expiration of the medical 
emergency, we now need additional authority from Congress to be 
able to continue to meet veterans in this unique situation. We 
have been in contact with you regarding that need and some of 
the other needs where we have learned from our pandemic 
experience ways that we can provide a higher quality of service 
to veterans even outside of a pandemic.
    Mr. Levin. How about some of the other initiatives that 
were funded during the pandemic? Some of the landlord 
incentives, the housing navigation, to the extent those are not 
going to be sustained, how do you see that impacting our 
ability to end veteran homelessness?
    Ms. Duke. Well, I think we have requested authority to 
continue some of those that are more promising. We continue our 
commitment to ending veteran homelessness in our 2024 and 2025 
budgets. We are continuing to grow the program, recognizing 
that particularly economic situations continue to put more 
veterans at risk. I think our commitment is sustained even 
beyond the end of the public health emergency.
    Mr. Levin. That is good to hear, and we will definitely 
keep our eyes on that. One of the things I was very proud of 
during the beginning of the pandemic with my friend Gus 
Bilirakis of Florida, we provided flexibilities to allow the 
funding to cover different things food, shelter, clothing, 
transportation, other essential personal needs.
    VA has used nearly $9 million to support over 39,000 
homeless or at-risk veterans with foundational needs in the 
last few years. It was very disappointing to see that Congress 
failed to act to extend the flexibilities on May 11. I am very 
proud to support my colleague Rep. Cherfilus-McCormick's bill 
to make those flexibilities permanent. Assistant Secretary, for 
you or for the panel, can you share how those funding 
flexibilities were used during the public health emergency and 
what effect they had on veteran homelessness?
    Mr. Rychalski. Sure, I can take that, Congressman. In our 
VISN, we use the flexibilities to do the things you talked 
about, to prepay rent for veterans who are moving from 
homelessness into permanent housing, but also for food 
subsidies. We found many veterans are food challenged and 
certainly were during the pandemic and used the temporary 
authority to support that. Also, for transportation, we set up 
rideshare programs across the country that were able to connect 
many veterans to VA health services or community resources that 
they needed during the pandemic, and that was tied to the 
temporary authorities.
    Mr. Levin. Well, I would just close by saying in 2020, 
there were 37,252 veterans experiencing homelessness. By 2022, 
33,136. I think that reduction is a direct result of some of 
what we did in Congress and a lot of what you all did and what 
folks on the ground level did. Let us continue that progress. 
Let us continue that momentum as we try to achieve functional 
zero veteran homelessness. With that, I will yield back.
    Mr. Bergman. Thank you. Dr. Murphy, you are recognized for 
5 minutes.
    Mr. Murphy. Thank you, Mr. Chairman. Thank you guys for 
putting this committee together. I think the overall theme 
really of this session in the Republican majority has been 
accountability. There is nothing wrong with accountability, 
nothing wrong whatsoever. In some of the other committees I 
have been on, we bring folks forward who have not appeared 
before the committee for many, many years--before Congress, 
rather, for many, many years. All of a sudden, there is 
accountability. Billions of dollars were spent, and billions of 
dollars were spent well.
    It was a tragedy. We were building a plane while we were 
flying it. Everybody knew that. There are also guardrails as to 
when you are given money, this is what you are supposed to use 
it for. I have had to apply for medical grants, for scientific 
grants. You put down there exactly what you are going to spend 
it on. If you do not spend it on that, it is a problem. I think 
that is what we are seeing here.
    Some of these issues, some of these things were not spent 
on, and there was no paper trail. There was no accountability. 
I think that is what the issue is here. If this were to occur 
in the private sector, I can guarantee you some people would be 
out of a job and they are protected in the Federal Government. 
This is why this committee, its work is so important.
    Mr. Rychalski, let me just ask you a few questions. You 
actually mentioned something a few moments ago that this was 
alarmist. I want to follow up. What did you mean by that?
    Mr. Rychalski. I said it sounds alarmist. What I meant was 
that all of these transactions go through our annual financial 
statement audit. We maintain a clean audit opinion. They all go 
through our improper payments testing. We have reduced improper 
payments by 76 percent. When we dig into these transactions, we 
find that they are, from an accounting standpoint, 
fundamentally sound. We have more time during the improper 
payments testing and the financial statement audit.
    Mr. Murphy. All right, well, let me follow up that I 
understand you do your own audits and you believe that OIG----
    Mr. Rychalski. The IG does our audit. The IG does the audit 
with a public accounting firm.
    Mr. Murphy. Okay. I believe you stated that----
    Mr. Rychalski. Same as a private company does.
    Mr. Murphy. I believe you have stated the OIG is mistaken 
in many of the errors that they have found.
    Mr. Rychalski. No, I never--no, I 100 percent agree with 
everything they found, 100 percent.
    Mr. Murphy. Okay, all right.
    Mr. Rychalski. Yes.
    Mr. Murphy. That is excellent. I am glad that we are on the 
same page with that, so. Let me go to Mr. Missal, back to Mr. 
Missal. Your written testimony cites your successful efforts in 
pretending into--trying to prevent attempts of fraud of the 
supplemental funds. Can you expand upon that a little bit? Tell 
us what was attempted to be fraud, what was going on?
    Mr. Missal. Yes. We obviously were very concerned, given 
all the money that was coming in, about potential fraud. We 
have a really great group of criminal investigators that follow 
up on all the leads that we get. We also put out fraud alerts 
to give people notices of where they could be subject to fraud.
    Mr. Murphy. Were these fraud from veterans or were they 
fraud from VA funds being spent fraudulently?
    Mr. Missal. It could be from all sorts of ways. The one I 
mentioned in my opening statement about the potential $800 
million fraud, that was caught because a senior VA official 
contacted me to say, ``Something does not sound right with this 
transaction.'' The Secretary had required all VA employees to 
take training on working with the OIG. I had just met with the 
senior official a few days before she contacted me and said, 
``I probably would not have known to contact you without 
getting this information.'' And it is----
    Mr. Murphy. Excellent.
    Mr. Missal. It is endeavors like that that really help us 
to identify fraud, but we really want to see a culture of 
accountability at VA. If people see something that does not 
seem right, contact us. That is where we are able to identify a 
lot of the issues.
    Mr. Murphy. I think that is a healthy environment. It 
should not be a watchdog state. It should be a healthy 
environment. It is not your money. It is not my money. It is 
the taxpayers' money. That is what it is. We are trying. What 
is the number one thing? I have cared for patients for years is 
what is best for the patient?
    I will just follow up with one other question. When I was 
young and if I had a date, which was not too often, but you 
never know. I asked my dad for $20 to go out for pizza and a 
movie, and it cost me 15, he expected the $5 back, right? Mr. 
Rychalski, what are we doing to do with the unspent funds?
    Mr. Rychalski. Well, consistent with our 2023 budget, we 
are going to spend them. We had planned for these resources. We 
communicated that to Congress. The appropriation took them into 
consideration.
    Mr. Murphy. For what things are now COVID? The emergency is 
over.
    Mr. Rychalski. No, we were very clear ARP was going to be 
used with baseline funding for all healthcare for this year. 
Some of it is COVID-related. You know, it is an extension of 
people being sick or are waiting. All of it was going to be 
used for healthcare for this year. That is consistent with what 
we told Congress and how they appropriated the funding.
    Mr. Murphy. See, this is where I think the last expenditure 
bill was way too lax in allowing too much freewheeling with 
what was sent. Anyway, with that, I will yield back. Thank you, 
Mr. Chairman.
    Mr. Bergman. Mr. Deluzio, you are recognized for 5 minutes.
    Mr. Deluzio. Thank you, Mr. Chairman. You know, I have 
heard plenty of concerns from my Republican colleagues say 
about growth in the VA's budget. I will be pretty frank, if you 
did not want to care for veterans and deal with the rising cost 
of that care, you should not have sent us off to 20 years of 
war. We are going to have more costs to care for veterans 
because we sent people to fight at war.
    I also want to respond to the chairman's claims about 
partisan showboating around budgets. I do not think it is 
partisan showboating to point out that House Republicans voted 
to pull back $2 billion from the VA. That their own 
appropriations bill underfunds the Toxic Exposure Fund by 
nearly $15 billion. Again, if you did not want to guarantee 
veterans care from burn pits and tox exposures, you should not 
have sent folks off to 20 years of war. I think it is a 
betrayal of the purpose of the PACT Act, the obligation this 
country has to all those who have served, many of whom are on 
this committee.
    To the topic of today and the OIG reports and Mr. Missal's 
testimony in particular, I agree the need for robust oversight. 
What I am not seeing is substantive reporting on the oversight 
of money used in the fee for service or community care side of 
the ledger. VA has received nearly 37 billion in emergency 
relief funding for COVID, approximately 30 billion or so spent 
on medical services, 1/5 of which was spent on fee for service 
or community care.
    Mr. Missal, my question for you, sir. Costs for this 
program, community care, are ballooning faster than VA medical 
care costs. Does OIG have any insight into how these fee for 
service providers used COVID-19 relief funds?
    Mr. Missal. We have not done any projects on that specific 
topic. We have looked at community care in a number of 
different projects. We have some ongoing work right now. Given 
the future--or given the increases going forward, we will 
continue to watch community care very closely.
    Mr. Deluzio. Is there some legislative need to provide 
additional authority to have more insight into that what 
spending is happening in community care?
    Mr. Missal. I do not think we need any legislative 
authority to do the kind of oversight that I think is 
appropriate.
    Mr. Deluzio. Okay. On April 18, the subcommittee here, Dr. 
Julie Kroviak from your office, voiced, ``our office has 
published reports related to community care detailing delays in 
diagnosis and treatment, lack of information sharing or 
miscommunication between providers, and significant quality of 
care concerns.'' Is there anything stopping your office from 
providing that same level of detail on how community care funds 
are spent, just as you are doing with the VA here?
    Mr. Missal. No. We have the ability to look at that to the 
extent we can get information from community care providers or 
other sources.
    Mr. Deluzio. I would urge you to do that, certainly, as 
this is a much faster growing part of medical care costs we are 
seeing across the VA.
    Switching topics briefly to VA Video Connect and the 
program. Mr. Missal, would you agree that VA adapted quickly in 
the pandemic and that telehealth increased use of mental health 
services, closing gaps in veterans care?
    Mr. Missal. We saw a significant increase in VA telehealth 
appointments, and I would agree that VA pivoted very quickly to 
meet the needs of veterans at the beginning of the pandemic.
    Mr. Deluzio. Okay. I think, and it sounds like you agree, 
that VA's demonstrated having access to VHA telehealth is a 
benefit to veterans and healthcare, helped reduce suicidal 
behavior, emergency department visits. Do you think it would 
make sense for telehealth to count as an access standard under 
the Mission Act?
    Mr. Missal. I have not looked into that specifically, but 
it is certainly something to consider.
    Mr. Deluzio. Very well. Ms. Bell, anything you wanted to 
add to that? I saw you nodding along.
    Ms. Bell. I just would like to echo the sentiment that the 
telehealth for our veterans in the facility and in the 
community on a personal level, is very beneficial to their 
care.
    Mr. Deluzio. Very well. Thank you, Mr. Chairman. I yield 
back.
    Mr. Bergman. Thank you. Just before I yield to Mr. Van 
Orden. You know, toxic funding is in the regular budget. 
Congress is funding the care needed. It is now up to the VA to 
appropriately use that money for all the veterans. Community 
care is veterans care, period. Over the time of the Choice Act, 
the Mission Act, we had to fight in this committee to make sure 
that the veterans received their care wherever they could get 
it and have it be quality first, accessible second.
    The VA is working with challenges, as it always has to 
take, if you will, some might call an urban model that applies 
to a suburban model to be transitioned to a rural model, and 
then some cases a remote Zoom model. That is the future. I 
would applaud the VA and the veterans for accepting new ways to 
get their healthcare, you know, over the course of the last few 
years.
    Having said that, Mr. Van Orden, you are recognized for 5 
minutes.
    Mr. Van Orden. Thank you, Mr. Chairman. Mr. Rychalski, how 
many veterans died of COVID?
    Mr. Rychalski. I would have to take that for the record, 
sir. I do not know.
    Mr. Van Orden. Okay. How many died with COVID?
    Mr. Rychalski. I do not know.
    Mr. Van Orden. Okay. How many vets got COVID in a VA 
facility?
    Mr. Rychalski. I would have to take that for the record.
    Mr. Van Orden. How many employees got COVID in a VA 
facility?
    Mr. Rychalski. Same.
    Mr. Van Orden. How many family members of veterans or 
employees got COVID in a VA facility?
    Mr. Rychalski. I would have to take that for the record.
    Mr. Van Orden. Okay, sir. These are the most basic metrics 
you should have showed up to this committee with. This is about 
whether or not your department has spent billions of dollars 
protecting our veterans. If you can not answer those off the 
top of your head, that means you are very ill prepared for this 
committee meeting, and that is bad. Your preparation is as 
shoddy as some of your accounting practices here.
    I read your testimony, and quite frankly, I was not 
impressed with it. I am going to read something to you. A 
painful emotion caused by the awareness of having done 
something wrong or foolish. Do you know what that is? That is 
the definition of the word shame. That is where you guys should 
be hanging your head right now. A lot of people in your 
leadership. You should be hanging your head in shame because 
you have politicized your department.
    On April 21, your department published a blatantly, 
political, misleading, and disingenuous release on your website 
saying the Republicans are going to gut veterans' health and 
slash the VA budget. I would like to enter this for the record. 
It says we are going to cut 81,000 jobs. We are going to have 
30 million fewer appointments. We are going to undermine 
telehealth, worsen the wait times for benefits, prevent 
construction of healthcare facilities, fail to honor all of our 
veterans, cut housing for veterans, increase food insecurity 
for veterans, deprive veterans of mental health, substance use, 
and other services, eliminate job training and other support to 
veterans.
    The Secretary graciously came to our office, my office. Mr. 
Luttrell and Ms. Kiggans, and Mr. Crane were all there. He was 
explicitly clear, the Secretary of Veterans Affairs, that the 
Veterans Affairs is not a political organization. Do you agree 
with this statement?
    Mr. Rychalski. I absolutely agree with that.
    Mr. Van Orden. Okay. Well, then on May 16, the Military 
MilCon-VA Appropriations bill was released. It proved, proved 
unequivocally that everything that your department has said 
politically is a lie. I ask you this. Have you issued a public 
statement retracting the blatant political lies that you have 
posted on your website as of this morning?
    Mr. Rychalski. Have I personally? No.
    Mr. Van Orden. Has your department?
    Mr. Rychalski. I am not aware of that.
    Mr. Van Orden. Okay. You are not aware of it, because you 
did not. Why would you not do that?
    Mr. Rychalski. Well, Mr. Van Orden, I prepare the analysis 
supporting that I do not control the message.
    Mr. Van Orden. I know, listen----
    Mr. Rychalski. but the analysis that I provided----
    Mr. Van Orden.--we can all stand around point fingers at 
each other.
    Mr. Rychalski. Mr. Van Orden, the analysis that I have done 
every year for a continuing resolution----
    Mr. Van Orden. Listen, unfortunately----
    Mr. Rychalski [continuing]. government shut down, lapse in 
appropriations----
    Mr. Van Orden. I got you. I got you. Unfortunately, your 
actions and the actions of your leadership have clearly 
demonstrated that you have blatantly politicized your 
department. You and your leadership have done a tremendous 
disservice to our veterans and should be ashamed of your 
conduct. Your department must remove this inflammatory and 
inaccurate statement from your website and start a public 
relations campaign explaining to our vets that the VA is fully 
funded, including the PACT Act. You must do that.
    If you do not do this, you are going to be proving to the 
American people that you are intentionally fear mongering with 
our veterans for political purposes. That is shameful. Let me 
tell you why. This weekend I was in Sparta, Wisconsin. I met 
Don. He is a 93-year-old World War--excuse me, Korean and 
Vietnam veteran, and he was scared. He was terrified because he 
thought he is losing all of his care because you guys decided 
to politicize this. You are terrifying Don on purpose, and that 
is inexcusable. Don does not know how to get on a computer and 
look this up and find the appropriations bill proving that what 
you said is a lie. He does not know how to do that. Do your 
job, sir.
    Mr. Rychalski. Mr. Van Orden, most of the requests I got 
for the 22 percent analysis came from veterans who are 
concerned about the cut.
    Mr. Van Orden. Yes? Well, it is a lie. Now you know it is 
wrong. You 100 percent know it is wrong. I know you can read, 
sir. Read the appropriations bill that counteracts everything 
in this. I am asking you to do that. With that, I yield back.
    Mr. Bergman. Mrs. Cherfilus-McCormick, you are recognized 
for 5 minutes.
    Ms. Cherfilus-McCormick. Thank you, Mr. Chair. My question 
is for Mr. Rychalski. The VA's Office of Information Technology 
was awarded 2.2 billion in CARES Act funding. Can you tell me 
if and how any of this funding was used to support and bolster 
the VA's electronic health record modernization program?
    Mr. Rychalski. Could I refer that to Laura? Do you know 
specifically for Electronic Health Record Modernization (EHRM)?
    Ms. Duke. I cannot speak to the IT portion of it. I can 
tell you that under the CARES Act that we did not support EHRM. 
Under the ARP, there was investment in the modifications of our 
infrastructure to accommodate the EHRM and details of that are 
in our budget.
    Mr. Rychalski. I would like to take that for the record. I 
do not believe any CARES Act funds were used for EHRM, but I 
would like to confirm that.
    Ms. Cherfilus-McCormick. The investments that were made, 
was there any positive results from those investments?
    Ms. Duke. Well, certainly the investments in our 
facilities, to the extent that a lot of our facilities are 
very, very old and never anticipated the need for server rooms 
and the type of infrastructure that is necessary to support a 
modern electronic health record, those modifications are an 
essential prerequisite for us to continue the electronic health 
modernization. Those modifications are necessary and needed to 
be funded. Certainly it makes a big difference. Beyond the 
electronic health record, I think just in general, the other 
investments that have been mentioned, and I would welcome my 
colleague, Mr. McDivitt, to speak for a veteran centric lens.
    Mr. McDivitt. From a field perspective, early in the 
pandemic, Congresswoman, the IT infrastructure money was 
essential. As you heard from Mr. Missal and others, we had to 
move to telehealth at a rate that ended up being 2,000 times 
faster than we thought we would. We needed laptops, we needed 
IT infrastructure to support that, and it came very quickly. 
Same with the move. When we had to move many of our employees 
to telework almost overnight, we were very unsure that would 
work and we were provided the resources to do that.
    In terms of ARP money that is allowed us to upgrade our IT 
infrastructure and to do many long overdue projects will 
benefit veterans for decades to come, we feel.
    Ms. Cherfilus-McCormick. Thank you. My next question is for 
Inspector General Missal. I serve as the ranking member of the 
Technology Modernization Subcommittee here on the Veteran 
Affairs Committee. Your testimony initially focused on 
deficiencies in IT systems and business processes. The VA's 
current financial management system is about 30 years old and 
represents a significant risk to the department's operations. 
What would it mean for the VA to have a modern financial 
management system and would modernization help the VA comply 
with audits and oversight?
    Mr. Missal. Absolutely. We have noted this in our audits of 
the financial statements, the deficiencies in the current 
financial management system, FMS. That is something that is 
desperately needed to improve. That is not the only thing. As I 
noted in my testimony, there is other issues that they have to 
comply with as well. Certainly, getting a new financial 
management system is a big step in the right direction.
    Ms. Cherfilus-McCormick. Thank you. My next question is for 
Ms. Bell. Your testimony mentioned staffing ratio flexibility 
offered to state veteran homes during public health 
emergencies. Since the public health emergency ended on May 11, 
how are state veteran homes working to increase workforce 
recruitment and retention to ensure patient safety standards 
for our veterans?
    Ms. Bell. Well, we are continuing to advertise. We are 
continuing to recruit. We have seen, as one of my colleagues 
stated earlier in New York, an increase in Certified Nursing 
Assistants (CNAs) applying for their CNA school. We are 
starting to see people applying to these programs. Now, you can 
not hire if you do not have people going through the education 
system to get trained. We are working with our local community 
colleges, universities that have those nursing programs and CNA 
programs, as well. As well as reaching out to the VA for the--
and utilizing the nurse retention grant program.
    Ms. Cherfilus-McCormick. Thank you. My next question is 
also for you, Miss Bell. Your testimony mentioned that 72 
percent of state veteran homes receive funding from both the VA 
and the Medicare program and are subject to similar week-long 
inspections from either agency. Can you tell me how these 
inspections differ from each other or if they feel redundant?
    Ms. Bell. I would say that the VA survey has always been 
the top-notch survey for state veterans homes. I have been in 
the state veterans home program for 23 years. It has always 
held the bar higher than CMS traditionally. It is also been an 
educational survey. To have that VA survey onsite leading into 
a CMS survey, we felt more prepared for the CMS survey. That 
cannot seem as an education tool for us like VA survey. We 
also, to add to that oversight, some of our facilities are 
Joint Commission accredited as well. We also have life safety 
coming in. The VA standards have always been more stringent 
than CMS, and we always embrace those surveys to teach us to do 
better for our veterans.
    Ms. Cherfilus-McCormick. Thank you so much for your 
testimony today. Mr. Chairman, I yield back.
    Mr. Bergman. Thank you. Mr. Luttrell, you are recognized 
for 5 minutes.
    Mr. Luttrell. Thank you, Mr. Chairman. Good morning. Mr. 
Rychalski, how long have you been in your current position?
    Mr. Rychalski. Going on 6 years.
    Mr. Luttrell. Six years?
    Mr. Rychalski. Yes.
    Mr. Luttrell. Ms. Duke?
    Ms. Duke. Four years.
    Mr. Luttrell. Do not sharpen your pencil. Sir, how long 
have you been the IG?
    Mr. Missal. I have been the IG 7 years and 19 days I 
believe.
    Mr. Luttrell. I am assuming this is not the first report 
that you have received from the IG.
    Mr. Rychalski. No, it is not, no.
    Mr. Luttrell. Okay. Mr. Missal said, reoccurring issues, 
accountability, breakdown in leadership, poor communication. I 
am assuming that these issues have been in multiple reports 
that you have issued to the VA, correct, sir?
    Mr. Missal. That is correct.
    Mr. Luttrell. Mr. Rychalski and Ms. Duke, and 
unfortunately, since you have been there long enough, this 
falls on your shoulders.
    Mr. Rychalski. It does.
    Mr. Luttrell. Okay. I know the VA is a very cumbersome 
department and it is an ugly machine, if you will. The IG said 
that----
    Mr. Rychalski. We do not call it that around the office.
    Mr. Luttrell. Yes. The IG stated that the financial 
management system is not due to be integrated or updated 
correctly in this decade. My first question to the panel is, 
are we to assume, given the amount of money we have lost over 
the past few years for that to continue, because the blame has 
been put on the management system itself. sir.
    Mr. Rychalski. The blame is not just on the management 
system. I mean, it is on the people, the processes as well. We 
are not losing money and we have sound accounting, but we do 
not have all of that.
    Mr. Luttrell. It does not say sound accounting. It says 
weak accounting practices from the IG's report.
    Mr. Rychalski. Right, it does, but I counter that with our 
clean audit opinion----
    Mr. Luttrell. That is a large statement----
    Mr. Rychalski [continuing]. and are improper payments.
    Mr. Luttrell [continuing]. from your sound accounting to 
weak accounting. That is 180 out, sir.
    Mr. Rychalski. Our financial statement auditor says we have 
sound accounting and they are run by the IG.
    Mr. Luttrell. You guys are not talking to each other?
    Mr. Missal. No, I think we are talking to each other. We 
both agree, even with our financial statement audits, we have 
continually found material deficiencies and significant 
weaknesses, and a big part of that is the internal controls.
    Mr. Luttrell. What are we going to do for the next 6 years, 
7 years to course correct this ship so we do not continue to 
lose this money, because we up here on this panel have a very 
difficult job of moving money in proper places. If we can limit 
the amount of fraud, waste, and abuse, it makes our jobs easier 
and it is even better for the veterans, yes?
    Mr. Rychalski. We are going to continue to roll out our 
state-of-the-art accounting system. We are going to continue to 
consolidate accounting in our financial services center, and we 
are going to continue to train people. We will see improvement. 
For example, you may have read about Journal Vouchers. Journal 
Vouchers last year to this year are down 55 percent because of 
the work that we are doing.
    Mr. Luttrell. Let us do this. The IG also said, and Miss 
Duke, I think you said this too, that it is challenging in who 
we will report to, who has a certain role and responsibility, 
those breakdown in communications and silos, right? VA is very 
siloed department to department. Who is responsible for 
creating roles and responsibilities, and then who is 
responsible for communicating that down and into the 
organization so you are well-informed and that problem goes 
away? There has got to be a name.
    Mr. Rychalski. You are looking at them right here. I am 
ultimately responsible.
    Mr. Luttrell. Okay, sir. How long, again, have you been in 
this position?
    Mr. Rychalski. Six years.
    Mr. Luttrell. That seems to be a problem, sir.
    Mr. Rychalski. I am not sure I would be a problem.
    Mr. Luttrell. Well, we just had Ms. Duke and the IG say 
that there is a reoccurring issue on accountability, 
communication, and roles, and responsibilities. You say that 
lives on your shoulders and you have been in that position for 
six years.
    Mr. Rychalski. Correct. That is correct. He also mentioned 
that not--the organizational structure is they do not report to 
me. I mean, it is my job to work within the organizational 
structure that we have. They do not work directly for me, but, 
yes, I am ultimately responsible.
    Ms. Duke. If I may say, although I organizationally report 
to the Undersecretary of Health, I do not feel like there is a 
lot of daylight between myself and Mr. Rychalski regarding the 
expectations of financial controls, regarding our cooperation 
on the audit, regarding our coordination to roll FMBT out to my 
organization. I work very closely with my counterparts in the 
VISNs and in the medical centers so that we maintain frequent 
communication.
    Mr. Luttrell. Okay, well, at a leadership level, if you are 
saying that that is copacetic, it seems down and inside the 
organization is where we are misallocating $187 million is a 
breakdown.
    Ms. Duke. What I would say is that the IG correctly 
identified that in certain incidences during the evolving 
concerns of the pandemic which did demand a greater use and 
reliance on journal vouchers we were not as ready as we could 
have been at the outset to provide clarifying guidance to our 
field, in part because we were still learning what the 
expectations were on the medical centers during the pandemic. 
Now that we have learned from that, we are clearer in the 
guidance that we issue to convert the guidance that we get from 
CFO into something that is useful and material to our financial 
folks out in the medical centers to adopt those practices.
    Mr. Luttrell. I am out of time, sir. I yield back.
    Mr. Bergman. Thank you. Ms. Brownley, you are recognized 
for 5 minutes.
    Ms. Brownley. Thank you, Mr. Chairman. Mr. Missal, I wanted 
to ask you in your testimony this morning, you talked about the 
issue of oversight and transparency and the fact that medical 
centers are sort of independent, and that is somewhat 
problematic in terms of full implementation. I am curious for 
your opinion. Is the autonomous nature of medical centers sort 
of an ongoing issue when you look at oversight issues in 
relationship to a lot of different policies and regulations, is 
that something that sort of crops up frequently?
    Mr. Missal. Yes, that is a theme in a number of our 
reports, the decentralized nature of the governance structure. 
They do benefit because a lot of health care is local. There 
needs to be proper oversight of that, and that is where the 
decentralized nature sometimes fails in the oversight.
    Ms. Brownley. Yes, it is a frustrating point for me because 
I find that I understand the benefits of working independently 
and so forth, but when they are not complying to policies that 
we have passed and become law and following the regulations, it 
becomes a little bit frustrating. Not a little bit, a lot 
frustrating.
    Mr. Rychalski, in terms of the IT systems and certainly the 
issue about the FMS system. Is Mr. DelBene involved in the 
execution of completing that process at all?
    Mr. Rychalski. He is. Or his team is, yes. In fact, we have 
an IT component embedded with our iFAMS program office, mm-hmm.
    Ms. Brownley. Do you have a timeframe for when we, I mean, 
we have spent God knows how much money, billions of dollars 
when it comes to all of the IT systems. In terms of this one, 
do you have a sense of when you will be online?
    Mr. Rychalski. Well, we are online. This has been, in my 
estimation, a read success story. We have had five successful 
implementations. We have 3,000 users. We have 99.97 percent 
availability. We have processed 3.1 million transactions. We 
have dispersed 9.3 billion through Treasury. There is a 96.9 
percent iFAMS satisfaction. We are going to go live with our 
next major implementation, which includes the IG in 3 weeks, 
which is why I have my resume up to date. If you are hiring, I 
would be interested in, yes.
    Ms. Brownley. I guess if it is----
    Mr. Rychalski. So, it is----
    Ms. Brownley [continuing]. great, and that----
    Mr. Rychalski. It is on time. It is on budget. We are 
proceeding. The reason it is going to take so long is we have 
130 different instances of VHA we are going to have to go 
through. We may be able to speed it up, but it is been a real 
success. I mentioned that our journal vouchers are down by 55 
percent attributable to the iFAMS' implementation.
    Ms. Brownley. I see. It just was not working to get through 
the supplemental issues that we had with----
    Mr. Rychalski. VHA received the preponderance of the 
supplemental funding and they do not have iFAMS yet. That is 
correct.
    Ms. Brownley. Yes, Okay. I just want to make for the 
record----
    Mr. Rychalski. Thank you for the question. we are very 
proud of iFAMS. It is been a real success----
    Ms. Brownley. I understand and I, you know, I commend you 
for the success you have had so far. I am just asking, you 
know, when the entire system is going to be up to speed.
    Mr. Rychalski. That is----
    Ms. Brownley. I had to kind of dig for that answer a little 
bit.
    Mr. Rychalski. I am sorry. So about 6 years----
    Ms. Brownley. Okay, thanks.
    Mr. Rychalski [continuing]. it will be done.
    Ms. Brownley. Are you familiar at all with a bill that I 
have introduced, the Elizabeth Dole Community Based Services 
bill for veterans?
    Mr. Rychalski. I have heard of it, but I am not familiar on 
it.
    Ms. Brownley. Well, it is, I mean, simply enough, it is a 
bill to move away from institutionalized care into, you know, 
care for veterans who are aging, who have disabilities, et 
cetera, to be able to stay in their homes. I guess, you know, 
just understanding that and what its purpose is, do you believe 
that A, that is sound policy from a fiscal perspective, and B, 
do you think it is sound policy in anticipation of another 
pandemic or another disaster, weather related disaster, which 
we can only assume will happen?
    Mr. Rychalski. Based on what you described, it sounds like 
very sound policy, yes.
    Ms. Brownley. Okay, thank you. Ms. Bell, through the ARP 
funding, VA anticipates 12 new state veteran homes that will 
open in 2023 and 2024. It appears once again we may soon find 
ourselves with a backlog of State veteran home construction 
projects. VA's only requested 164 million for Fiscal Year 2024. 
As you noted in your testimony, once VA releases its new 
priority list, the actual need may be closer to 900 million. 
What does that mean for veterans across the country and the 
timelines?
    Ms. Bell. Even though you spoke about the Elizabeth Dole 
and taking care of them at home, what we see is not every 
veteran has family that is local. They do not have the capacity 
to do that. These homes are going to allow them to come into a 
State veterans home to be with, as they call it, their 
comrades. What we have learned is some veterans in the 
communities plan 10 years out to go into the nearest State 
veterans home by them when the time comes. They anticipate.
    I am in talks right now with a veteran and his daughter has 
me talking to him on a weekly basis that this is the 
anticipation. We are talking about his care, his life. What 
happens next in that next year chapter.
    Ms. Brownley. No, no, no, I understand. Are you developing 
waiting lists for these potentially 12 new state veteran homes?
    Ms. Bell. They are called applicant lists in each section, 
and we have one in North Carolina as well, yes.
    Ms. Brownley. Very good. Mr. Chairman, I yield back.
    Mr. Bergman. Thank you. Mr. Self, you are recognized for 5 
minutes.
    Mr. Self. Thank you, Mr. Chairman. I will start this out by 
Chairman Bost started this out with that chart, if you remember 
right. I just want to emphasize the fact that your secretary 
has damaged the relationship with Congress by the 22 percent. 
Let us just make no mistake about it. Of the 10K purchases or 
contracts that were reviewed, resulting in 187 million in 
mistakes, what percentage of the total purchases or contracts 
was that 10K? Just an order of magnitude.
    Mr. Rychalski. I have to take that for the record. I do not 
know how much of that funding was spent on payroll versus 
contracts. I do not have those numbers before me, so I would 
have to look at that.
    Mr. Self. I would assume it is many times more than 10K 
purchases and contracts. Many times more. The 187 million that 
we have thrown around here is probably a very small subset of 
what it actually is. Is that a fair statement?
    Mr. Rychalski. It is, yes.
    Mr. Self. Okay, so the 187 million is a small subset of 
what actually transpired. What accountability has been held 
because there are people behind every system. I have also heard 
a lot about a system that is being rolled out that will help. 
It does not matter whether you are using the old system or the 
new system. There are people behind every system. There is a 
person that is responsible. I am also concerned about the CFOs 
that do not have a formal chain of command relationship with 
other CFOs. Being a military guy, that seems to make sense to 
me, because money is one of the things that will get you in 
trouble every time.
    Who has been held accountable for these errors? Again, I 
want to point out the 187 million is probably a very small 
percentage of the dollars we are talking about that were 
mistakenly contracted. Who has been held accountable?
    Mr. Rychalski. I would say that we all have. We take the IG 
report, in addition to our financial statement, auditing our 
improper payments, and we use that to provide additional 
training. You know, obviously, if somebody has committed a 
crime, there is, you know, there is culpability for that. Most 
of this has to do with, you know, the individual's motivation, 
training, how they followed processes.
    We work with them to provide remedial training. In some 
cases, you know, there may be some disciplinary action if, you 
know, it is blatant, but, you know, I think we are all 
accountable for it. I am sorry, Rob.
    Mr. McDivitt. Just Congressman, early in the pandemic, we 
set up a process to track every dollar. It was largely a manual 
process, as Mr. Rychalski indicated. We put audits in place. We 
used our usual financial management processes. We had our 
compliance officer audit the process to make sure that we were 
doing what we needed to do.
    Mr. Self. Okay, that is process oriented. I am talking 
about accountability. Now, to me and let me go back and just 
make sure I understood, your $800 million in nonexistent 
Personal Protective Equipment (PPE). Did I hear that right?
    Mr. Missal. Yes, a gentleman tried to sell VA $800 million 
of PPE that did not exist. Fortunately, we were able to get to 
that person before VA contracted for that $800 million.
    Mr. Self. Very good. When I talk about accountability, I 
mean demoted, reassigned, disciplined, formally disciplined, 
and ultimately fired. When I talk about accountability, that is 
what I mean. Who has been held accountable for anything?
    Mr. Rychalski. Well, if there are any actions that 
warranted that, you know, that level of intervention, we would 
do so. I can not speak through the entire organization, I mean, 
but, I mean, we take actions as appropriate as we find things. 
If it is a matter of they were not trained properly, that is 
probably on us and we train them. They did not follow policies 
or procedures. There could be a letter of recommendation, 
things like that.
    Mr. Self. You prepared, obviously you prepared hard for a 
hearing before Congress about a very small percentage of 
transactions that were wrong at $187 million. You prepared. I 
know you did. Yet that is one of the things that I think you 
would have been prepared to tell this committee and Congress 
what you have done about it. Training and processes is all 
good, but eventually people are behind everything, and 
accountability means what have you taken in the personnel 
action area to correct it? Chairman, I yield back.
    Mr. Bergman. Thank you. Ms. Budzinski, you are recognized 
for 5 minutes.
    Ms. Budzinski. Thank you, Mr. Chairman. Thank you to the 
panelists for being here today. As we are all very well aware, 
the COVID-19 pandemic has devastated, has had devastating 
impacts across the country, and affected all Americans in some 
way. Unfortunately, our veterans, who tend to have higher 
chances of experiencing a disability or have mobilities, excuse 
me, due to their unique military experiences, were one of the 
communities most disproportionately impacted. As has been made 
clear by my colleagues in the OIG report, mistakes were made on 
how the VA handled supplemental funds and spending related to 
the pandemic. I do have a few questions on that, but I also 
want to take a moment to highlight the noteworthy and rapid 
response the VA took in the face of an unprecedented pandemic.
    The VA helped care for over 750,000 veterans with COVID, 
helped over 200,000 veteran families experiencing financial 
difficulties retain their homes during the pandemic. Vaccinated 
almost 5 million veterans, and reduced veterans homelessness by 
11 percent between 2020 and 2022. As made clear by Miss Bell's 
testimony, VA's efforts and supplemental funding was 
instrumental in helping State veterans home sustain operations, 
hire new staff, and build new infection control systems.
    That being said, I do want to touch on a few issues, a few 
of the issues identified by the IG report. Mr. Rychalski, as I 
mentioned before, there were several issues in how funds, 
specifically those from the CARES Act, were used. There was a 
lack of accountability and transparency in how the VA directed 
and used funds, mainly due to the VA's outdated financial 
management system, which I know we have been talking about. I 
will highlight, as does the IG report, that the controls 
developed to track these expenses were developed during the 
pandemic when decisions had to be made rapidly in order to 
prioritize and utilize funds for the most pressing needs. My 
question, Mr. Rychalski, given that there are still at least, I 
think, 500 million unspent supplemental funds, what specific 
steps has the VA taken to improve their financial control 
systems going forward and have more transparency in how these 
funds and other funds are used?
    Mr. Rychalski. I would say the number one thing is we will 
and have provided more explicit guidance for the use of 
supplemental funding.
    Ms. Budzinski. Okay. Okay, and then what lessons, Mr. 
Rychalski, has the VA taken from this experience to better 
prepare in case there is another public health emergency?
    Mr. Rychalski. I want to ask Robert to answer that. He is 
kind of at the tip of the spear and I think his experiences are 
probably the most relevant.
    Mr. McDivitt. Sure. Thank you, Congressman. The lessons 
from COVID are many. I think the main one is that we are able 
to respond as a system. I have eight states in my network, 
eight medical centers, 62 community-based outpatient clinics. 
All of them remained open and operating every day during the 
pandemic. We made sure that veterans were safe and well cared 
for. We made sure that employees were safe. We were able to 
support caregivers. We were able to reach out to community 
partners, including state veterans homes, as Ms. Bell noted, in 
the state of Iowa and in Minnesota where I live.
    We really focused on the system nature of the VA, that I 
operate a large integrated regional healthcare system. We moved 
resources where they needed to be, whether it be within my 
network or around the country. We functioned for the first time 
in my long VA career as a fully integrated national system. 
That is a lesson that we will take into the next challenge, 
whether it be a pandemic or something else.
    Ms. Budzinski. Okay, thank you. My next question to the 
panel, the Limit, Save, Grow Act, if passed in the Senate, 
would rescind critical supplemental funding. This is funding we 
have right now which is urgently needed by our veterans across 
the country, specifically veterans in my rural district that I 
represent in central and southern Illinois, where we can build 
upon our community care partnerships as well as on telehealth, 
two of my top priorities. Could you share some of your insights 
on what negative impacts do you anticipate in rural health care 
services if this 500 million were to be rescinded? On the other 
side, what are some ways that funding could be utilized to 
promote rural veteran care?
    Ms. Duke. Thank you for the question. I think that, as is 
clear in our budget, we are always focusing resources on the 
unique needs of our rural health population. Because we 
anticipated having the ARP funding in conjunction with our base 
funding, any interruption in that would interfere with our 
plans in terms of our investment for rural health care. As you 
know, we are continuing to make our significant investments in 
telehealth. We are continuing to expand our community 
partnerships for those to receive community care, and we are 
just continuing to utilize the best ways that we found to reach 
our rural veterans and respond to their unique needs.
    Ms. Bell. Might I add that from the State veterans home 
perspective, to take the time to get a veteran up out of bed 
and put him on a van and transport him, he or she for two and a 
half hours one way to an appointment and back to the facility, 
making it an 8-hour day, telehealth would be so much more 
convenient for their quality of life and the care that they 
receive.
    Ms. Budzinski. Thank you. I agree. I yield back, Mr. 
Chairman. Thank you.
    Mr. Bergman. Mr. Rosendale, you are recognized for 5 
minutes.
    Mr. Rosendale. Thank you very much, Mr. Chair. I really 
appreciate that. Mr. Rychalski, I had a whole line of 
questioning here regarding the blatant lies that you put out in 
your press release on the Veterans Affairs website. My 
colleague, Representative Van Orden, did such an excellent job 
at exposing it and his condemnation of the same. You are not 
going to need the button for a couple of minutes, so just 
relax.
    Mr. Rychalski. Okay.
    Mr. Rosendale. This is my turn.
    Mr. Rychalski. Okay.
    Mr. Rosendale. This is my turn. His condemnation of the way 
that you put that information out and the way that you have 
left it out there scaring veterans is an embarrassment, quite 
frankly. What I would like to make sure everybody is aware of, 
I have been doing a little bit of digging around while we had 
this additional time. The 2022 enacted funds for the Veterans 
Administration was $273.9 billion. The increase, not including 
ARP, to 2023 was $34.6 billion. A 12.6 percent increase is what 
the veterans were able to have utilized to provide them 
benefits.
    You, sir, did a poor job of making sure that that money was 
utilized to deliver benefits. Those are the realities. You had 
another $4.3 billion that was allocated through ARP, and you 
squandered $3.8 billion of that. Now you have got $500 million 
that is still not spent. We are still talking about a total of 
$38.4 billion that the Veterans Administration has spent more 
from 2022 during the fiscal 2023 year. There is $500 million 
that has not been used that you do not feel we should be 
redirecting and utilizing for other purposes, whether it is to 
deliver real benefits to the veterans or to help the Treasury 
pay the bills. That is what this room finds unacceptable. I 
will tell you that.
    As you sit there and you brag with your snide remarks about 
the improper payment rates that you have improved so 
dramatically by 76 percent, which is, oh, by the way, since 
2017, not since 2022, since 2017. That sounds like a big 
number, but percentages you can not put in the bank. What you 
can put in the bank is dollars. That was based upon, as 
Representative Self was talking about, you started with $12.74 
billion. We still have improper payments on $509 million.
    Most people in this room find that to be an extremely large 
number still. Please do not sit there and take credit for 
dramatic improvements. As we have already demonstrated, you 
have been there for 6-1/2 years, and you are cleaning up your 
resume. I would as well. I would as well. I would hope that 
there were not many people out in television land listening to 
your prior performance, because I do not think a line will be 
forming to pick up that resume.
    Let me ask you about an example from the OIG report on page 
eight. A medical facility did an expenditure transfer totaling 
$714,000 for nurses' salaries. That is a perfectly valid way to 
spend COVID supplemental funds. The problem is, when the OIG 
asked for the documentation showing how much money was actually 
paid out and who approved it, the VA had nothing. Their 
response was the person who processed it retired. They do not 
have any of the documents. This is no way to run a business or 
an agency. Polish up the resume, Mr. Rychalski. Were you able 
to establish whether $714,235, or a different amount, was paid 
out?
    Mr. Rychalski. I have not looked in that specific case yet, 
no.
    Mr. Rosendale. The COVID-19 pandemic has long been over. 
President Biden even recognized this reality by signing H.J. 
Res. 7, which terminates the national emergency declaration. 
Despite this, Montana VA is still enforcing an unscientific 
mask mandate. The Montana VA is still denying veterans care 
over their unwillingness to wear a mask. How many veterans have 
had their care delayed or denied as a result of this arbitrary 
mandate?
    Mr. Rychalski. I do not know, sir.
    Mr. Rosendale. How much has the VA spent implementing and 
enforcing this mask mandate?
    Mr. Rychalski. I take that for the record.
    Mr. Rosendale. The mandate is the exact opposite of what 
the supplemental funds were intended to support. Do you think 
it is better to use the funds to enforce a senseless mask 
mandate than it is to actually use those delivering healthcare 
to our Nation's heroes?
    Mr. Rychalski. That is out of my lane. That is a healthcare 
question, sir.
    Mr. Rosendale. Mr. Chair, thank you so much. I yield back.
    Mr. Bergman. Thank you. Congresswoman Ramirez, you are 
recognized for 5 minutes.
    Ms. Ramirez. Thank you, Chairman and Ranking Member Takano. 
I really appreciate that we are holding today's hearing. I 
additionally want to express many thanks to every one of the 
witnesses for joining us today and engaging in a very critical 
and lively discussion today.
    We have been talking about COVID-19 and the pandemic. 
During the public health emergency, the Department of Veteran 
Affairs homeless programs acted quickly to bring veterans 
indoors and to decongregate shelters to reduce the spread of 
COVID-19. The VA utilized funding to pay for hotel and motel 
stays for veterans experiencing homelessness, to enhance 
housing, navigation, resources. This question is for the 
gentleman of the hour here, Mr. Rychalski?
    Mr. Rychalski. Correct, yes.
    Ms. Ramirez. I got it correct? Okay.
    Mr. Rychalski. Call me Jon, yes.
    Ms. Ramirez. Oh, I am big on honoring people's names? Delia 
Ramirez and you are Mr. Rychalski. How did the use of COVID 
funding in this way streamline VA's ability to move veterans 
into permanent, stable housing during the Pandemic?
    Mr. Rychalski. I think, I wonder Robert, do you want to? 
You probably have more on the ground experience than I do?
    Mr. McDivitt. Yes. Thank you for your question, 
Congresswoman. In answer, it was very helpful. As I indicated 
across our VISN, we were able to quickly move veterans out of 
congregate housing into hotels, motels, other more secure 
places. We were able to utilize the funding for transportation 
of veterans to get them to appointments or to other things they 
needed. We were able to address food insecurity issues with 
some of that funding with homeless veterans. Clearly there was 
a benefit to veterans and to homeless veterans in particular 
from that.
    Ms. Ramirez. Thank you, Robert. I know Ms. Duke, in the 
conversation with Congressman Levin, we talked a lot about 
homelessness and the impact of some of these resources and 
helping drop that number. He mentioned we were at about 37,200 
and something people experiencing homelessness, and that number 
has dropped to 33,000, and I could not catch the last number of 
it. You had also indicated, as we talked about some of the 
funding that you have for this upcoming budget, a real 
commitment to continue to reduce that number in the 2024-2025 
budget. Tell me a little bit of the projected goals you have 
around the reduction of homelessness for our veterans.
    Ms. Duke. Thank you. I would say the core of our homeless 
is our coordination with Housing and Urban Development. We 
continue to provide support services for their Department of 
Housing and Urban Development-Veterans Affairs Supportive 
Housing (HUD-VASH) vouchers to ensure that those vouchers are 
utilized and that veterans are connected with them.
    We are continuing to make investments in providing 
telehealth to homeless veterans, whether through devices, but 
to make sure that they are able to meet their appointments. We 
are, as we have mentioned, working with you all on which of the 
authorities that were extended under the public health 
emergency that makes sense outside of a public health 
emergency, to continue to reach those veterans and enable us to 
utilize those dollars for investments that are what veterans 
really need.
    Ms. Ramirez. Great. Thank you, Ms. Duke. I know that 
throughout the hearing today, we have heard a lot about how the 
pandemic has ended and how we are no longer impacted in a real 
way around COVID-19. We also know, however, that long term 
effects of COVID, otherwise known as long-COVID, are still 
being studied. This question could be for Mr. Rychalski or any 
of you. Will you tell me how the VA would use COVID-19 
supplemental funding for research efforts on long-COVID? Before 
you answer, specifically, I am interested in knowing how it is 
affecting the underserved veteran populations and what 
mechanisms the VA has created to stay on top of changing 
variants.
    Ms. Duke. I would like to take for the record specific 
investment in underserved populations. I can say that we did 
utilize ARP resources to add on to our already robust base, 
medical and prosthetic research investment with a specific 
focus on what we could learn about the COVID pandemic. We are 
continuing to track veterans who were experienced COVID to 
learn better about long-COVID. We are utilizing the lessons 
that were learned in terms of preventing any contagion, not 
just COVID, from spreading throughout our facilities.
    Ms. Ramirez. Thank you. This is a final question to Mr. 
Rychalski. We have talked a lot about the budget and any cuts 
to the budget. Quick question, yes or no, any cuts to the VA 
budget, would it result cuts to veterans?
    Mr. Rychalski. Absolutely, yes.
    Ms. Ramirez. Any cuts to the budget, would it impact 
housing services, food insecurity for veterans?
    Mr. Rychalski. All that.
    Ms. Ramirez. That is what I figured. Thank you, and I yield 
back.
    Mr. Bergman. Thank you. Mr. Crane, you are recognized for 5 
minutes.
    Mr. Crane. Thank you, Mr. Chairman. I appreciate you guys 
being here today. I will start with Mr. Rychalski. Sir, do you 
know what percentage of the VA budget is spent on mental health 
care for our veterans?
    Mr. Rychalski. Percent wise, I have to do the math, I am 
sorry.
    Mr. Crane. Could you give me even a ballpark? Anybody up 
here? I mean, that is a pretty broad question.
    Ms. Duke. On the delivery of care, it is upwards of $10 
billion.
    Mr. Crane. Ten billion dollars?
    Ms. Duke. Yes.
    Mr. Crane. I asked for a percentage, do you have any idea?
    Ms. Duke. Of the overall VA budget?
    Mr. Crane. Yes.
    Mr. Rychalski. It depends on what the denominator is. I 
take it for the record to get you an exact percent.
    Mr. Crane. You what?
    Mr. Rychalski. I would take it for the record to get you an 
exact percent.
    Mr. Crane. Okay. Next question. Is anybody on the panel, 
does anyone believe that betrayal, humiliation can lead to 
depression and poor healthcare for our Nation's veterans? 
Anybody at all? I see you shaking your head, Mr. McDivitt. 
Betrayal, humiliation, can that lead to depression, poor 
healthcare for our Nation's veterans?
    Mr. McDivitt. I am not a clinician Congressman, so I can 
not comment on that definitive----
    Mr. Crane. Do you have common sense, Mr. McDivitt?
    Mr. McDivitt. I can say that a significant amount of our 
care is provided for mental health, and that is certainly the 
case in our VISN where between, depending on the facility, 15 
and 25 percent of veterans are receiving mental health 
services.
    Mr. Crane. Yes. Do you think that betrayal, humiliation 
might be a part of that mental health?
    Mr. McDivitt. Again, I can not comment on that.
    Mr. Crane. Anybody at all? What about you, Ms. Bell? Does 
that sound like something that might cause mental health issues 
in our veterans?
    Ms. Bell. Our veterans are very outspoken, and they have to 
be able to trust their caregivers, so we have to develop and 
cultivate that. When we do not, there are bad outcomes, yes.
    Mr. Crane. All right. That is not what I asked. Are any of 
you guys aware that 73 percent of our Afghanistan veterans feel 
betrayed right now? About 67 percent feel humiliated because of 
our withdrawal from Afghanistan. I mean, you guys are Veterans 
Affairs, right? Any of you guys aware of the Brookings 
Institute survey that came out November 2021 stating that 73 
percent of our Nation's veterans feel betrayed, 67 percent feel 
humiliated. No one is aware of that? It is kind of problematic.
    Well, I can guarantee you because of the findings of that 
survey and just common sense, that is costing the American 
taxpayer a lot of money knowing that because and since none of 
you guys even knew it, I am going to ask the follow up question 
anyway so I can look at more blank stares. Do you think this 
President, Commander in Chief should own any of the impact and 
cost on our veterans healthcare and the tax dollars that are 
going to have to be spent because of their decreasing 
healthcare, because they feel depressed, humiliated, and 
betrayed? Does anyone think that the Commander in Chief should 
take any ownership of that whatsoever? Great. More crickets.
    Mr. Rychalski, I am going to double tap on something that 
my colleague Mr. Van Orden and Mr. Self were pushing on. The 
Secretary of the VA has done tremendous amount of damage with 
the relationship with not only Congress, but also to our 
Nation's veterans by lying to them about our spending cuts and 
our spending package. I want to go through some stuff with you 
because I was in many of the conversations that were going over 
that, sir. The Republicans were actually trying to target our 
cuts toward, and go ahead, feel free to take notes since I do 
not think that you are aware of this based on some of your 
previous testimony. We are going after the Regulations From the 
Executive In Need of Scrutiny (REINS) Act. Are you familiar 
with what that is, sir?
    Mr. Rychalski. I am not.
    Mr. Crane. Okay. Internal Revenue Service (IRS) agents, the 
funding for the 87,000 IRS agents doubling that. Yes, we were 
going after that. We also went after student loan bailouts. We 
do not think that the American taxpayers should have to pay for 
everybody that, you know, applies for a student loan. Also, the 
Inflation Reduction Act, also known as the Green New deal 
light. We are going after that as well. We do not think that 
American taxpayers should have to be funding the disruption of 
our energy dependence in this country.
    The reason I say that is because our cuts are actually very 
targeted. Not once, not once did anybody in this conference, 
any Republican, in any phone call that I was on, in any meeting 
that I was ever at, say anything about cutting veteran 
healthcare. You all took it upon yourself to play political 
games, and you might have thought it was effective initially 
because you stirred veterans up. Congratulations. 
Congratulations, you did. I will tell you what you really did. 
You destroyed your integrity. You are going to see that come 
appropriations time where we do not cut anything, you guys will 
be proved once again to be dishonest and misleading. Thank you. 
I yield back my time.
    Mr. Bergman. Mr. Mrvan, you are recognized for 5 minutes.
    Mr. Mrvan. Mr. Missal, one of the recommendations your 
office made to the Undersecretary for Health is to establish 
guidance to support the amounts identified in the manual 
journal vouchers. Is the issue with the guidance and the 
standards for these manual journal vouchers limited to 
expenditure of the supplemental funds?
    Mr. Missal. They would be with respect to this report, but 
we have seen the lack of guidance in many other situations.
    Mr. Mrvan. Okay. Is there any reason to consider the age of 
the financial management system and why the VHA would not 
already have guidance and standards in place before the 
pandemic for these vouchers?
    Mr. Missal. Given the limitations of the financial 
management system, you would hope that there would be guidance, 
clear policies and procedures, and clear understandings of 
roles and responsibilities because of the limitations that the 
financial management system has.
    Mr. Mrvan. Okay. If you could, for my own knowledge, 
redefine limitations for me.
    Mr. Missal. Some of the transactions were not able to be 
put through the system. They had to be done manually. Anytime 
you have manual transactions, you have a greater risk that they 
are not going to be done correctly and that you open it up to 
potential fraud.
    Mr. Mrvan. Okay. Who is the accountable official 
responsible for issuing this guidance at the VA and the VHA 
specifically?
    Ms. Duke. It is my responsibility to communicate the 
guidance from Jon's office to the VHA.
    Mr. Mrvan. Okay. Is this issue enhanced by the fact that 
Veterans Administration Medical Centers (VAMCs) are well known 
to operate as unique entities?
    Ms. Duke. I would say that that is definitely part of the 
challenge. In this particular case, I think it was that the 
VAMCs were responding to the pandemic. Since our primary focus 
was keeping veterans and our staff members safe, we were 
sometimes operating under less than ideal staffing 
circumstances.
    Mr. Mrvan. Okay. Has your office provided any 
recommendations for addressing lack of guidance in the 
standardization being decimated from VA headquarters to the 
medical centers?
    Ms. Duke. We are in the process of improving our processes 
consistent with the recommendations that the IG made in the 
report. For my office, that is the responsibility of 
standardizing the guidance. Then we are working collectively 
with the Office of Integrity and Compliance within VHA that is 
responsible for going out into the field and ensuring that 
roles and responsibilities are followed appropriately. I do not 
know if Mr. McDivitt wants to add.
    Mr. McDivitt. That was certainly one of the lessons learned 
from the pandemic for us, Congressman. Working with Ms. Duke's 
office. My CFO is working with medical center CFOs to 
standardize processes. We endeavored to do that. I can say the 
things that we did as an integrated system throughout the 
pandemic were much easier to track and account for than the 
things where we did journal vouchers and things of that nature, 
although we endeavored to manually keep track of that as well. 
So, we have changed processes.
    Mr. Mrvan. Okay. Mr. Missal, your report recommends that 
the VHA staff segregate duties, make certain that a purchase 
card holder is not the requester and approver, and ensure that 
contracting officers, representatives, or cores know and 
understand their duties and responsibilities for these 
certifications and payments of invoices. These recommendations 
seem to me to be something that VA should have already been 
doing. This is pretty basic stuff. Are you surprised that your 
office is having to make these recommendations to VA?
    Mr. Missal. We agree that these are basic responsibilities 
or sort of fundamental to good internal controls, and those 
recommendations remain open.
    Mr. Mrvan. Okay. I am assuming that supplemental funds and 
the pandemic are not just highlighted issues that have been at 
VA for years. Why is there not a process in place to train and 
educate contracting and purchasing staff on these basic roles?
    Mr. Rychalski. There is. You are right, those are basic 
functions. We have to test it and provide remedial training, 
sometimes disciplinary action. You are 100 percent correct. 
Yes, it is variability across the system that we continually 
try to, you know, to fix.
    Ms. Duke. I would say during the Pandemic, the increased 
reliance on journal vouchers, because when we receive 
supplemental funding, what is automated is no longer able to be 
taken advantage of. It was highlighting a challenge that we 
were already aware of and making it more urgent.
    Mr. Rychalski. Keep in mind, during the pandemic, we had 
acquisition people working, you know, 24 hours a day trying to 
acquire supplies and equipment. We had financial management 
staff that were repurposed to take temperature at the front 
door of AMCEE. It was a very different situation with that.
    Mr. Mrvan. Yes. With that I yield back chairman.
    The Chairman. The gentlemen, yields back. Representative 
Mace, you are recognized for 5 minutes.
    Ms. Mace. Thank you, Mr. Chairman. I want to thank Ranking 
Member as well, and I want to thank General Bergman for letting 
me slide in here to ask a few questions before I have to leave 
today. I wanted to take a moment also and thank the VA 
Appropriations Committee for writing their bill which fully 
funds the Department of Veterans Affairs. Despite the continued 
comments from the administration and from the left that 
Republicans do not want to want to fund or want to cut funding 
from veterans. Nothing could be further from the truth.
    Some of you up here today have participated in a bed of 
lies, bullshit, and lies regarding the debt ceiling. Quite 
frankly, it is extremely disrespectful to our veterans to posit 
or even to accuse us of wanting to cut VA benefits. None of us 
up here on the left or the right, Democrats or Republicans want 
to do that.
    We are concerned about the lack of accountability, waste, 
fraud, and abuse within the VA. I am also concerned with that 
enormously and looking at the COVID supplemental funding, as we 
have been discussing today, the fraud and abuse, and that is 
appalling. The VA received roughly 40 billion in extra funding 
between 2020 and 2021 when the OIG audited 14.5 billion of the 
money. The OIG found the record keeping was usually incomplete. 
It was not signed. There were a lack of descriptions of 
purpose, no documentation. In some cases, none at all existed.
    I have a few questions this morning. Mr. Missal, my first 
one is for you. Did your report say the VA struggled to account 
for CARES funds, failing to maintain audit trails for majority 
of internal transfers, failed to adhere to internal controls, 
and 10,000-plus supply purchases or service contracts worth 
over 187 million, yes or no?
    Mr. Missal. Yes.
    Ms. Mace. Thank you. Mr. Rychalski, would you consider not 
being able to account for $187 million fraud, waste, and abuse?
    Mr. Rychalski. I would not.
    Ms. Mace. I am sorry. If I gave you $187 million and you 
did not know what to do with it, you would not call that waste?
    Mr. Rychalski. No. Unless it is proven as fraud, waste, and 
abuse. It could just be the fact you did not have a receipt. 
When you look farther, which we have, and we find the receipt.
    Ms. Mace. Okay. In Mr. Missal's report that they could not 
find, you know, they did not have information on $187 million. 
If you just spend that money and you do not have the receipts, 
you would not call it waste. I do not know how you have your 
job, quite frankly, if that is your position. Based on that 
example, do you think that the VA has any issues with waste, 
fraud, and abuse?
    Mr. Rychalski. We absolutely do. Yes, we do.
    Ms. Mace. Where would that be?
    Mr. Rychalski. It is across the system, and we work very 
diligently to root it out.
    Ms. Mace. But just----
    Mr. Rychalski. There is a difference between fraud, waste, 
and abuse and not having a receipt or an accounting anomaly or 
a journal voucher. There is a big difference between those.
    Ms. Mace. Yes, I would say if you spent $187 million and 
you do not know where it went, that was definitely waste, 
fraud, and abuse, and so would the American taxpayer and so 
would our veterans. Do you think $187 million could have helped 
veterans if you knew what it was actually spent on?
    Mr. Rychalski. I know it was spent on veterans, so I think 
it did help them.
    Ms. Mace. Yes, I would disagree with your position on that. 
This hearing's findings reveal a troubling lack of oversight. I 
have heard my colleagues on our side of the aisle talk about 
that lack of internal controls within the VA and inability to 
adequately document transfers of funds. You say you have the 
receipts. Mr. Missal's report says otherwise.
    A lack of adherence to fiscal controls are clear indicators 
of a system that is in disarray. These shortcomings can not be 
ignored as they have been a result of the inability for the VA 
to account for significant sums of money. We have many veterans 
on our committee today, and I concur and agree with the 
frustration that they have. Almost every one of my family 
members has either been through the VA or will be in their 
future because almost all of them have served, and they deserve 
so much better than what they are getting today, particularly 
with the chip that you have on your shoulder and your testimony 
before this committee. Maybe leave it at the door next time. 
Thank you, Mr. Chairman. Any extra time I have, I will yield to 
General Bergman. Thank you and I yield back.
    The Chairman. General Bergman, you recognize for 5 minutes.
    Mr. Bergman. Thank you for the lady for yielding, because 
then I will consume as much time as the chairman will allow. 
You know, bad news does not get better with time. That is a 
fact. Let us start with a little trivia question here. Anybody 
here in this room know who the Army Corps of Engineers reports 
to? No one? When you think about why would I start at a 
Veterans Affairs Committee hearing with that statement? When 
you are an entity that may be good folks working hard in that 
entity who is not accountable to any entity or person above 
you, you have a natural tendency to make life about you and 
your priorities. I chose to speak last here today, if you will. 
Chairman accepted here for closing remarks.
    Having had the gavel on the Oversight Subcommittee during 
the 115th Congress, I have heard a different level of BS today 
that was more convincing than I have heard in a long time from 
some of you. Now, do not you think, according to one of the 
questions where who responded, Mr. Rychalski, as far as the 
veterans reaching out about, you know, they were reaching out 
to you all about the cuts. Do not you think maybe we would have 
cut down or maybe eliminated that outreach if we had not lied 
to them on the front end about the 22 percent cuts in the 
Limit, Save, Grow Act, which we know is not true. Never has 
been, never will be.
    You have got a lot of members of this committee, both sides 
of the aisle, who have put their country first before anything 
else. That is not a core competency of any bureaucracy, any 
bureaucracy. We need not only accountability, we need you to 
just flat out be truthful with us, okay? That is all we are 
asking for. While you may not report to us, in the end, we all 
report to the veterans, us as elected Members of Congress. You 
as people work within a system that has the arguably second 
largest bureaucracy in the Federal Government, second only to 
Department of Defense (DoD). Guess what? Where do those 
veterans come from? They come from being fed a line of bologna, 
sometimes within the DoD during their service.
    They get a little tired of being, I am not going to say 
lied to, but just being pushed sideways for the wrong reasons. 
You know, let me ask you a question, Mr. Missal, I would rather 
ask questions than talk, but I felt compelled to speak after 
hearing this. Going back to who reports to who, could you 
repeat your statement regarding who does not report to who 
within the VA? Did I get right that you made a couple of 
comments about lack of reporting?
    Mr. Missal. Yes, I did. Within the VA financial management 
structure, Mr. Rychalski is the CFO of VA. However, the line 
CFOs from VHA, which is Ms. Duke, VBA, and NCA do not report to 
Mr. Rychalski. Similarly, under Ms. Duke within VHA, while she 
is the CFO of VHA, the CFOs of the VISNs, the CFOs of the 
medical centers do not report up to her.
    Mr. Bergman. You know, when I first started looking at, and 
this was before being elected to Congress, the VISN system, I 
wondered how it would, you know, work being VISNs, having a lot 
of independent ability to do their business. At first I was a 
little concerned that that may be a bad thing. I would suggest 
to you that what I have seen over the last 6-plus years is that 
a healthy VISN competition to see which VISN can do things 
better so that the other VISNs can advance the end product for 
the veteran. I am not proposing at all changing the VISN 
system, but I also believe that under the leadership of the VA, 
and I do not know if any Secretary of the VA can do that, 
whether it was Secretary Wilkie, now Secretary McDonough, their 
biggest concern in knowing both of them is the veterans. They 
are also concerned is they understand the lack of responsive 
nature of the bureaucracy.
    I will just close by saying stop, stop trying to feed us a 
lineup here. We are eventually going to find out and it is not 
going to be pretty for you, but it is going to be good for the 
veterans. Mr. Chairman, I yield back.
    The Chairman. Thank you, Mr. Bergman. Representative 
Ciscomani, you are recognized for 5 minutes.
    Mr. Ciscomani. Thank you, Mr. Chair. Mr. Rychalski, the 
Department of Veteran Affairs has continually received record 
high annual appropriations. I sit on the Appropriations 
Committee and in fact, House Republicans just published their 
MilCon-VA Appropriations bill, which not only meets the 
administration's request, but it provided an $18 billion 
increase from the previous year. Let me repeat that it includes 
an $18 billion increase from Fiscal Year 2023 numbers which 
shows Republicans commitment to veterans in spite of the 
misleading and irresponsible statements from Secretary 
McDonough which impacted our veterans more than anyone. I think 
we can all agree that our veterans deserve access to all the 
resources and benefits that they have earned.
    Now, in my community of Tucson, we are home to the Tucson 
VA Medical center. I consistently hear from my constituents 
about the high-quality care they received. I am all for 
maintaining our medical centers well-funded. Now, in light of 
the continual high levels of regular appropriations, could you 
please explain to me why the VA needs to spend the remaining 
supplemental funding set aside for COVID-19 related purposes 
when the COVID-19 public health emergency is now over, 
especially nonrecurring maintenance projects that you are not 
able to execute by the end of the year?
    Mr. Rychalski. I can, because it was never set aside for 
COVID. ARP was general purpose funds. We explained that with 
the budget for 2023. It was part of the total funding package 
to provide care to veterans. You might as well just take the 
base funding. I mean, there is no difference. It is the same 
funding for this year.
    Mr. Ciscomani. What amount are you looking at----
    Mr. Rychalski. It is on budget for this year.
    Mr. Ciscomani [continuing]. right now?
    Mr. Rychalski. Pardon me?
    Mr. Ciscomani. What is the amount that we are talking 
about?
    Mr. Rychalski. Five hundred million left in ARP. It is the 
same as base funding. That is what we had. We communicated to 
Congress, they appropriated the funds knowing that we had that 
money, that we were going to use that money for veterans this 
year. There is no difference between the two. It is not set 
aside for COVID.
    Mr. Ciscomani. You are telling me that that money was not 
set aside for COVID.
    Mr. Rychalski. I said it was not appropriated specifically 
for COVID. It was not set aside for COVID, and we made it very 
clear, and Congress knew that and they appropriated the funds 
this year.
    Mr. Ciscomani. Then can you tell me where the 
misunderstanding comes from? Why is this the common notion and 
knowledge about these funds?
    Mr. Rychalski. Well, it is in the appropriation law, sir.
    Mr. Ciscomani. Expand on that.
    Mr. Rychalski. I will send you the appropriation law. You 
can read that it does not say it is specifically for COVID. It 
is based on statute for healthcare.
    Mr. Ciscomani. Now, in the OIG report stated by Veterans 
Health Administration, ``needed to establish a method of 
tracking and accounting for COVID-19 related costs.'' It is a 
quote.
    Mr. Rychalski. Correct.
    Mr. Ciscomani. The agency developed multiple memos, alerts, 
and questions and answer documents, but none of these documents 
addressed oversight of transaction processing. Also in the 
report, it states that, ``the OIG estimated that in 93 percent 
of the transactions, documentation of medical facility staff's 
authority to make COVID-19 related purchases was missing.'' I 
understand you have your own audits, and I see that Under 
Secretary of Health concurred with one of the recommendations 
in the OIG report to require medical facility staff have 
documented authority through proper delegation to make 
purchases. Can you explain how you will implement this and make 
sure all transactions are documented? Can we expect these 
recommendations to be implemented with the remaining American 
Rescue Plan funds?
    Mr. Rychalski. Yes, I think I am going to refer to Ms. 
Duke. I think eight of those recommendations were for VHA and 
for their implementation at the field.
    Ms. Duke. Yes. What I would say is we are in the process of 
creating clarified guidance, not just for the ARP, but for all 
of our journal voucher transactions, to ensure that the field 
is well aware of the expectations of clarifying the purpose. 
Then we are, in conjunction with our Office of Integrity and 
Compliance, working on the oversight procedures that they will 
utilize to go out and ensure that those procedures are being 
followed throughout our enterprise.
    Mr. Ciscomani. Thank you for that chair. Mr. Chair, I yield 
back.
    The Chairman. Thank you. Mr. Takano, you will be recognized 
for closing remarks.
    Mr. Takano. Thank you, Mr. Chairman. I am glad that 
Representative Bergman raised the issue of how different 
leaders within the VA report to the CFO. You know, I just want 
to point out that our bill, I think, proposes a solution to the 
reporting issue by creating an undersecretary level position on 
management. I certainly am frustrated by the elements within 
the IG's report related to the transparency or the lack of 
transparency due to the continued intensive use on the manual 
nature of our transactions. I hope that VA and I want to send a 
message that VA does need to implement the new financial 
management system faster than they have announced. It is very 
important.
    Mr. Chairman, I also want to respond, I think, to the 
charge that the VA has been politicized by so called falsehoods 
and lies surrounding the Limit, Save, and Grow Act of 2023, 
which every Republican on this committee voted for, which is in 
reality, the Default on America Act. During its passage, the 
majority created a nexus between raising the debt limit, which 
is about paying America's already incurred bills, and the 
appropriations process. They should be completely separate 
things. The debt limit should be the debt limit. We should not 
question our ability or question whether or not we are going to 
pay those bills. It should not be used as leverage in order to 
determine the spending priorities or policies of this Congress. 
That has always been negotiated. There should be a compromise. 
Each side should be able to weigh into that process, but it 
should not be an all or nothing proposal or proposition that we 
get everything we want because we are going to threaten not to 
pay America's bills. That is just simply wrong. It is 
unreasonable, and it is extreme.
    At the time of the passage, the majority laid out the 
principle of 22 percent cuts across the discretionary spending 
in our country. That amounts to about $142 billion, $142 
billion is one estimate. What that means. The majority is 
saying we are going to cut $142 billion. At the time that the 
bill was moving through the House, nowhere in that bill, 
nowhere in the Default on America Act was there any protection 
for VA spending. That, at the time we provided the analysis, VA 
helped us with the analysis. They had analysis. We had analysis 
coming out of our appropriators, the Democratic appropriators, 
that would mean a $30 billion cut. That is where we get the 30 
million outpatient appointments that would disappear and be cut 
at a time when we are trying to meet 3.5 million newly eligible 
veterans for health care and the PACT Act, 3.5 newly eligible. 
The president said, we are not going to phase in these 
eligibilities. We Are going to do it all at once.
    What was mentioned is that well, let me just finish my 
train of thought here. Also, at the time of the majority, they 
laid out at the time of passage of the bill, the majority laid 
out the principle of a 22 percent cut to discretionary 
spending, which amounts to about $142 billion making no 
protections for VA spending.
    Even as in order to get the votes to pass the bill, there 
was language written into the bill to protect ethanol 
subsidies. Ethanol subsidies were important enough to protect 
in language, but no language in this bill was written in to 
protect the VA budget, which is the second largest Federal 
department. Only after attention was called to the logic of the 
22 percent cuts to the discretionary budget and the impact on 
VA's budget did Republican appropriators produce a MilCon-VA 
mark to fund the TEF at 5.5 billion. As was said, the overall 
VA budget was about $80 million more. Let us remember that the 
3.5 million veterans, the VA says in order to be able to 
actually take care of the spending necessary to take care of 
toxic exposed veterans, that they need $15 billion. 5.5 billion 
versus 15. That seems like a big hole in terms of underfunding 
the VA.
    The majority now believes that the MilCon-VA mark is a 
successful jujitsu move that proves that they have protected 
veterans from, you know, from their share of the $142 billion 
cut. What has not been laid out is how much is going to be cut 
from defense or is defense going to be held harmless? There is, 
I think, a very difficult situation, as evidenced today by the 
fact that four subcommittees on appropriations have canceled 
their markups today because they can not figure out, well, if 
you are going to give VA this much money, how much is going to 
be allocated to labor, Health and Human Services (HHS), and 
transportation, and also defense.
    If you are going to hold defense and VA harmless, let us 
think about what those cuts are going to mean to these other 
categories of spending. Mark my word, veterans are going to be 
harmed if we cut Medicaid to the tune that the logic of their 
cuts would mean. Veterans are going to be hurt when HUD-VASH 
vouchers are not available so we can house homeless veterans.
    By the way, all this talk about unspent Inflation Reduction 
Act money or unspent American Rescue Plan money, the 500 
million of unspent American rescue plan money. I want to just 
remind the committee again that there was never a link to the 
public health emergency and the American Rescue Plan, funding. 
Indeed, this notion that these two things be tied together is 
being reinforced by an extreme logic. That extreme logic is 
being played out in the fact that this committee could not find 
the will in the majority to renew or extend authorities that 
reduced veteran homelessness by 11 percent. Why? Because it has 
got to fit into this ideology that all this unspent money is 
going to be clawed back and is part of this Limit, Save, Grow 
logic.
    Meanwhile, who is paying the price for that? Who is paying 
the price for that are the homeless veterans that we can still 
take off the streets. Who is paying the price for that is our 
Americans all across the country who do not want to see 
veterans homeless. We are talking about $6 million, $6 million 
that we could have together worked on to find a solution for.
    Look, the MilCon-VA mark, is not a settled matter. It is 
not as if that is the truth because we have no visibility into 
what the other 11 subcommittees and appropriations have got to 
do in order to meet this $142 billion cut. With that, Mr. 
Chairman, I yield back.
    The Chairman. I thank the gentleman for yielding. Let me go 
through a few things and correct a few things. One, the 
situation as far as when the floor debated the Limit, Save, 
Grow Act. We already had in record a letter from the 
appropriators, the chairwoman of the Appropriations Committee, 
that VA would not be cut. To say that you did not know at that 
time, apparently either staff or someone did not pay attention 
because then also I spoke on the floor, as the chairman of this 
committee, saying it would not be cut.
    Now, to say that VA has not been used as a political tool, 
you need to talk to all the veterans who were scared to death 
by the piece of paper they put out saying what a 22 percent cut 
would do, even though we knew that there was not going to be a 
22 percent cut. You have been used as a political tool whether 
you want to admit that or not. We are in support of trying to 
take care of our homeless veterans. We are in support of the 
PACT Act. We are in support of those things. The budget that 
came out yesterday proves that.
    Now, in response to why there are not budget meetings going 
on now, it is because there is negotiation between the 
President of this United States and the Speaker of the House of 
this United States. When we come together to work on a budget, 
we need a bottom line. We do not have a bottom line. That is 
the normal process. When the three get together, the Senate, 
the House and the President, this is the process. Acting like 
that process is not part of it is why they are not meeting 
right now. Until we get that bottom line, we do not know where 
we are negotiating from.
    You are right in the fact that the debt limit is a separate 
thing. The thing is, I think it explains it best whenever we 
say that a debt limit is similar to whenever you have sent your 
child off to college and they have maxed out the credit card. 
When they max out the credit card, you got two choices. One, 
you got to pay it. That is not an option. You got to pay it. Or 
you just look at your child and go, hey, just keep spending 
like that, it will be fine. Or you can finally get somebody to 
the table with your child and go, hey, you are going to stop 
the spending. That is what we are in the middle of negotiating 
and doing.
    I have got another concern with the VA, and I am not even 
going to ask for an answer, but I am going to tell you how this 
sounds when you explain that you do not think that the COVID 
money was specifically directed toward COVID and that you could 
spend it anywhere you want. Well, let me tell you the problem 
that exists with that. If you can remember, the first COVID 
bill was $60 million that was the quick response. Then we came 
back with the CARES Act, and that was $19.6 billion. Now, let 
us put this in perspective and discuss what exactly happened 
before this Committee in November 2020. In November 2020, we 
had lost the majority on the Republican side, and the 
presidency was switching over to President Biden. We asked in 
November or early December for the VA to come before this 
committee. They did. We said, how much of the CARES Act money 
is still available? Are you okay? The answer was, $10 billion. 
Yes, we are fine. We do not need any more. We do not need any 
more. That is exactly what was said before this Committee. We 
did not need the extra $17 billion, but by golly, we pumped $17 
billion more into a program that did not have the controls that 
were necessary and should have had controls that were 
necessary. Now you tell us, no, we can really spend that money 
any way we want.
    Well, let me tell you, this bothered me when you said that, 
because the Secretary came before us a few months ago, and both 
myself and the ranking member asked, why in the world would you 
use the TEF money for construction? The answer was, ``because 
you gave us the authority to.'' People, you need to understand, 
we have got to be responsible, both sides of the aisle. This is 
why people are so frustrated with bureaucracy, because you can 
not see the common sense of saving and being sensible. A lot of 
those things that you are talking about providing for do not 
provide squat for the veterans. They provide a lot for the 
agency, but they do not provide squat for the veteran. To have 
you come before us and then all of a sudden say, oh, we are 
doing exactly what we are supposed to be doing. No, you have 
got to be accountable. Our job is to make you accountable.
    Now, I appreciate you guys coming in here today, but I am 
going to tell you this. This is all demonstrated that we should 
continue to closely examine everything you do. We need to make 
sure that the money is being spent wisely. You can say that it 
is a paperwork error. You can say whatever, but that is why we 
have oversight, and the taxpayers require us to do that. No 
offense to the sailors, but the last 3 years during COVID we 
have spent money like drunken sailors. The oversight has not 
occurred. It is going to occur. We need to make sure that that 
oversight is there, and we are going to continue to do that.
    With that, I want to thank everyone for being here. We will 
continue with these hearings, and we will watch closely on how 
the money is spent. Also put down very, very clearly, we will 
not cut benefits to our veterans, but we will make sure that 
you are very, very wise in how you are spending that money. The 
Committee is adjourned.
    [Whereupon, at 12:32 p.m., the committee was adjourned.]

   
      
      
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                         A  P  P  E  N  D  I  X

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                     Prepared Statement of Witness

                              ----------                              


                  Prepared Statement of Jon Rychalski

    Good morning, Chairman Bost, Ranking Member Takano and members of 
the Committee. Joining me today are my colleagues, Laura Duke, Chief 
Financial Officer, Veterans Health Administration (VHA); and Robert 
McDivitt, Network Director, Veterans Integrated Service Network (VISN) 
23.
    VA, alongside our Federal partners, is proud of our role in the 
Federal response to the Coronavirus Disease 2019 (COVID-19) pandemic 
beginning in 2020. The COVID-19 pandemic touched every part of VA's 
operations, as it has other Federal agency operations, State, local and 
Tribal governments, and private industry. The pandemic's path, 
duration, and impact were unclear when COVID-19 first emerged in the 
United States. VHA's response to COVID-19 demonstrated the strength and 
agility of an integrated health care system geographically distributed 
across the U.S. and operating as a single enterprise. The Veterans 
Benefits Administration (VBA) ensured the health and safety of Veterans 
by pausing all Compensation and Pension (C&P) examinations for Veterans 
and working with VHA on local risk assessments prior to resuming 
examinations. Because of VBA's swift and effective response to the 
COVID-19 pandemic, VBA's Medical Disability Examination Office was able 
to increase the number of examinations for every year of the pandemic, 
even with the 2-month pause in 2020.
    VA appreciates Congress' supplemental appropriations, which 
provided approximately $36.7 billion in supplemental funding outside 
our annual appropriation from three COVID-19 relief laws between 2020 
and 2021. The Coronavirus Aid, Relief, and Economic Security (CARES) 
Act (P.L. 116-136) provided $19.6 billion to VA in 2020. The CARES Act 
resources provided for Veterans' COVID-19 related health care in VA 
facilities and in the community. The funding supported all levels of 
our COVID-19 response, from procurement of test kits and specialized 
equipment to the overtime and travel costs for staff rotating into hot 
zones. It allowed VA to grow telehealth capabilities, provide financial 
support to State Veteran Homes (SVHs) and support the unique economic 
and health care needs of Veterans who were experiencing homelessness or 
at risk of becoming homeless. VA obligated 99.6 percent of the CARES 
Act funding within the period of availability. VA also received $60 
million in the Families First Coronavirus Response Act (FFCRA) (P.L. 
116-127), which prohibited VA from charging any copayment or other 
cost-sharing payments under Chapter 17 of title 38 for COVID-19 testing 
or medical visits that resulted in COVID-19 testing.
    In 2021, approximately a year into the pandemic, Congress passed 
the American Rescue Plan Act of 2021 (ARP, P.L. 117-2) to continue 
providing comprehensive support to the American people. The ARP 
included $17.1 billion to ensure that Veterans had continued access to 
quality health care and protections against COVID-19, as well as needed 
economic relief. It provided funding for health care, debt relief and 
additional support for SVHs. As of April 25, 2023, VA has $2.1 billion 
remaining in ARP funding, targeted for obligation by their expiration 
at the end of FY 2023.
    The VA Office of Inspector General (OIG) and the Government 
Accountability Office have each conducted extensive oversight of VA's 
execution of the COVID-19 relief funding provided in the CARES Act and 
ARP. OIG produced three reports as required by the VA Transparency & 
Trust Act of 2021 (Transparency Act; P.L. 117-63).\1\ In the inaugural 
report, OIG focused on whether VA's spend plans provided to Congress on 
December 22, 2021, satisfied the requirements of the Transparency Act. 
OIG made two recommendations to me as the Assistant Secretary for 
Management/Chief Financial Officer, and both of these recommendations 
are now closed. In the two subsequent reports, OIG found VA generally 
complied with the Transparency Act and made no recommendations. VA also 
acknowledges the OIG report VHA Can Improve Controls Over Its Use of 
Supplemental Funds (OIG Report #21-03101-73), published earlier this 
month. We have concurred with the nine recommendations and are working 
through the action plan to address them.
---------------------------------------------------------------------------
    \1\ VA's Compliance with the VA Transparency & Trust Act of 2021 
Semiannual Report: March 2023, VAOIG-22-00878-79, March 21, 2023; VA's 
Compliance with the VA Transparency & Trust Act of 2021 Semiannual 
Report: Sept 2022, VAOIG-22-00879-236, September 22, 2022; VA's 
Compliance with the VA Trust & Transparency Act of 2021; VAOIG-22-
00879-118, March 22, 2022
---------------------------------------------------------------------------
    The dedication and commitment of VA employees at all levels of the 
organization are evident in our response to this pandemic. Again, I 
want to thank Congress for the $36.7 billion in supplemental funding to 
fight this battle and keep Veterans and their communities safer. 
Without this support, we would not have successfully put into action 
all the necessary work to assist Veterans, their families, and their 
caregivers.

Utilization of CARES Act and ARP

    The CARES Act and ARP funding, combined with resources in the base 
budget, supported Veterans' health care needs in VA facilities and the 
community. VA estimates that Veterans' care needs in FY 2023 will face 
increased costs attributable to COVID-19-related delays in care, more 
complex care, and greater reliance on VA due to economic impacts from 
the pandemic.

Staffing

    The resources and hiring flexibility Congress provided enabled VHA 
to hire over 136,000 new clinical and administrative staff across the 
health care system in FY 2020 to 2022 to optimize continued delivery of 
care. This included a record 5,000 hiring increase over the average 
43,000 from FY 2018-FY 2021 to 48,665 new external hires for VHA in FY 
2022. Many hiring flexibilities were utilized to support emergency 
hiring during the COVID-19 pandemic. The Office of Personnel Management 
(OPM) granted VA Direct-Hire Authority (DHA) for several critical 
occupations. DHA enabled VHA to hire, after public notice, any 
qualified applicant without regard to competitive rating and ranking, 
or application of Veterans' preference. VHA also utilized the COVID-19 
Schedule A Hiring Authority for Temporary Appointments authorized by 
OPM. Under this authority, VHA could temporarily appoint qualified 
individuals nationwide, at all grade levels, to any positions needed in 
direct response to the effects of COVID-19.
    With additional support for our emergency management response, VA 
added over 2,500 medical/surgical and Intensive Care Unit beds. VHA 
supported 76 additional travel nurse positions to support COVID-19 
deployments. The Office of Nursing Services' (ONS) Registered Nurse 
Transition to Practice (RNTTP) Program was awarded CARES Act funding to 
support various nurse staffing initiatives as well as the salaries for 
RNTTP and Veterans Affairs Learning Opportunities Residency (VALOR) 
Residents. This funding enabled ONS to support the recruitment of 
nearly 1,700 Graduate and Student Nurse Technicians as well as VALOR 
Residents. This effort greatly assisted in bridging the clinical 
practice gap for Registered Nurses and ensured a seamless transition 
from the academic to a clinical practice setting. Likewise, ONS 
sponsored an RNTTP Recruitment and Marketing Campaign as well as the 
national Nurse Manager Institute in collaboration with the American 
Organization of Nursing Leaders. As a result, roughly 600 new Nurse 
Managers developed critical management skills necessary to be an 
effective nurse leader, and to build a culture of engagement, problem-
solving and conflict management.
    VBA utilized available funding during the pandemic to focus on the 
disability compensation and pension (C&P) claims and appeals backlog. 
We were able to utilize ARP funds to hire and train 2,000 employees and 
for overtime to ensure timely claims processing. The COVID-19 pandemic 
temporarily halted the supply of critical medical evidence and Federal 
records necessary to render decisions on Veterans' disability claims. 
The backlog peaked in October 2021 at 264,000 claims due to these 
supply chain issues, but we were able to recover and achieve a backlog 
of fewer than 165,000 claims in August 2022, immediately prior to the 
passage of the Honoring our Promise to Address Comprehensive Toxics 
(PACT).

Homelessness

    The CARES Act and ARP funding also proved essential to addressing 
the unique economic and health care needs of Veterans who are homeless 
or at risk of becoming homeless. This funding provided emergency 
housing, including placing Veterans in hotels and providing 
homelessness prevention assistance to mitigate the expected wave of 
evictions and potential homelessness resulting from extensive 
unemployment. Between January 2022 and March 2023, there were 18,447 
emergency housing placements. From March 2020 through January 2021, 
VA's Supportive Services for Veteran Families (SSVF) program placed 
over 23,000 vulnerable Veterans in hotels or motels. Prior to the 
pandemic, placement rates annually were less than 10,000. The 
placements helped to reduce the vulnerable Veterans' risk of exposure 
to COVID-19 in congregant and unsheltered settings while permanent 
housing placements were explored.
    Additionally, CARES Act and ARP provided authority and funding that 
enabled VA to waive per diem rate limits in the Grant and Per-Diem 
(GPD) program during the public health emergency. This allowed grantees 
to provide needed emergency housing and supportive services for 
Veterans who needed to be isolated for their safety or the safety of 
others. Between April 2020 and May 11, 2023, GPD grantees requested 
nearly 1,200 per diem rate modifications, and many submitted multiple 
requests as their needs fluctuated during the pandemic (for example, 
utilization of motels). The additional funding and flexibility with our 
authority allowed existing grantees to develop individualized housing 
settings to serve homeless Veterans more safely in transitional 
housing. The Health Care for Homeless Veterans (HCHV) Program used ARP 
funds for temporary rate increases aimed at establishing safety 
protocols in residential contracted services. The rate increases were 
used to purchase essential personal protective equipment (PPE), and 
establish additional sanitation, testing, and isolation protocols.
    In addition, the Homeless Programs Smartphone Initiative was 
implemented at the onset of the COVID-19 public health emergency to 
help homeless or at-risk of homeless Veterans remain engaged with their 
health care providers and support systems when face to face visits were 
not an option. These devices allowed Veterans to attend virtual groups 
and recovery programs, assist with virtual housing and job searches and 
help VA staff monitor their well-being during this unprecedented time. 
From March 2020 through April 2023, VA disseminated more than 77,000 
technology devices to VA Medical Centers (VAMC) and SSVF grantees for 
distribution to Veterans at-risk of or experiencing homelessness.
    ARP funding was also utilized to support the statutory authority, 
under section 4201 of the Johnny Isakson and David P. Roe, M.D. 
Veterans Health Care and Benefits Improvement Act of 2020 (P.L. 116 -
315), which authorized VA, during a covered public health emergency, to 
use amounts appropriated to provide certain supportive services and 
goods to eligible Veterans that would otherwise be prohibited. Through 
March 2023, over 62,740 Veterans experiencing homelessness benefited 
from such support services and goods as rental deposits, utility 
payments, move-in kits, furniture, bus passes, groceries, hygiene 
items, hotel/motel vouchers, and landlord incentives. In addition, VA 
was able to support Veterans with transportation to medical 
appointments, job interviews, housing searches, and other mental health 
and homeless services through its Rideshare program. From August 2021 
through March 2023, the VA Rideshare program served over 42,000 
individual Veterans and provided over 451,000 combined rides.
    These resources have been essential to the 11 percent decrease in 
the number of Veterans experiencing homelessness from 2020 to 2022 
(i.e., 37,252 Veterans as reported in the 2020 Point-in-Time Count to 
33,129 Veterans in 2022). This decline follows several years in which 
the number of Veterans experiencing homelessness remained virtually 
unchanged, despite having decreased significantly from 2010 to 2016. 
Overall, Veteran homelessness has decreased by 55.3 percent since 2010. 
Additionally, these resources were instrumental in over 40,000 Veterans 
becoming permanently housed in calendar year 2022, exceeding VA's goal 
to house at least 38,000 Veterans experiencing homelessness by more 
than 6 percent.

Regional Readiness Centers (RRCs)

    The COVID-19 pandemic prompted a sudden surge in demand for PPE and 
other COVID-19 related supplies as unparalleled PPE requirements 
stressed the supply chain. VHA was charged with building resiliency 
into the supply chain while distributing urgently needed PPE to VAMCs 
nationwide. VA's existing warehouse and distribution capabilities at 
the beginning of the COVID-19 response complicated this challenge 
because there was no centralized infrastructure to store, manage, and 
distribute PPE to VAMCs. RRCs enabled VA to maintain Veteran care by 
ensuring that PPE and other critical medical supplies remained 
available to VAMCs even during supply chain disruptions. As COVID-19 
incidences varied by jurisdiction, and despite global shortages of PPE, 
critical equipment, and consumable items, VHA was able to sustain 
operations in locations experiencing high demand by cross-leveling 
staff, PPE, and equipment such as ventilators from areas with low 
levels of disease. The RRC network distributed over 212 million items 
to VAMCs and Fourth Mission entities from March 2020 through May 2023.

IT Infrastructure and Equipment

    In response to the COVID-19 pandemic, VA's Office of Information 
Technology (OIT) received two sources of COVID supplemental funding 
through the CARES Act for FY 2020 and 2021 and ARP for FY 2022 and 
2023. With the conclusion of the pandemic emergency response, OIT 
remains focused on continuing to meet legal, fiscal, and performance 
requirements for covered funds. OIT was allocated $2.2 billion in CARES 
Act funds, and obligated 100 percent of the amount, with 99 percent 
paid expenditures as of May 11, 2023. ARP provided OIT with a $1.4 
billion allocation with 73 percent obligated and 49 percent paid 
expenditures as of May 11, 2023.
    The demand from the pandemic further stressed the IT tools and 
needs to support care. OIT supported the growth or development of over 
20 programs to include activations, telehealth, and VA Health Connect. 
Activations allowed VA to quickly provide clinicians, frontline health 
workers, and medical staff the necessary equipment to move remotely and 
safely provide care to Veterans during the pandemic. CARES Act funding 
paid for new IT equipment, increased temporary staffing, significantly 
enhanced telehealth and clinical contact center services, and expanded 
telework/bandwidth remote work capabilities. ARP funding supported the 
continuation of pandemic medical care activities and enterprise-level 
IT investments initiated under CARES Act and provided funding for 
supply chain modernization.
    This supplemental funding was crucial in advancing and modernizing 
VA's IT infrastructure and capabilities so that Veterans received 
uninterrupted care and services during the pandemic. The reliance on 
telehealth in VA continues to grow, consistent with changes in the 
health care industry in general, as the care delivery system 
transitions from a mostly in-person model to one providing options for 
digital care. VA has been and continues to be a leader in this 
transformation, as demonstrated through the evolution of the COVID-19 
pandemic. Throughout the pandemic, OIT doubled the remote end-user 
connectivity capacity at VA's communications gateways and increased the 
Department's Telehealth VA Video Connect capacity by a factor of five. 
In fact, from March 2020 to April 29, 2023, OIT supported over 27.8 
million telehealth visits during the pandemic. The number of video 
visits to offsite locations in FY 2022 represents a more than 3,000 
percent increase compared to FY 2019.
    Additionally, OIT created several significant Veteran-facing 
applications that improved direct Veteran communication for vaccination 
and appointment support. These investments supported a surge in usage 
of VA's digital health tools during the pandemic, an increase that 
shows no sign of abating. For example, from January - March 2023, 
Veterans and their VA health care providers exchanged over 8.9 million 
secure messages, a 10 percent increase over the same period in 2022 and 
a 61 percent increase compared to the 5.5 million messages exchanged in 
the period of January - March 2020, immediately before the pandemic.

    OIT also supported behind-the-scenes upgrades and improvements that 
ultimately led to improving Veteran care, including:

      New clinical applications and data management reporting 
systems managing pandemic support and national tracking and reporting;

      Acquiring nearly 200,000 laptop end points in support of 
additional staff, multiple vaccination centers, test centers, and 
facilitating new workflows for infection control;

      Cybersecurity enhancements protecting VA's data and 
networks against evolving threats in an increasingly remote 
connectivity environment;

      Increased bandwidth across the entire VA enterprise that 
supported and facilitated remote telemedicine applications such as 
TeleCritical Care; and

      Instrumentation of nearly 100 critical clinical 
applications and infrastructure to build the telemetry and visibility 
necessary to support and sustain resiliency properly.

    CARES Act and ARP funds remain crucial in providing much-needed IT 
services and infrastructure, ultimately protecting and improving 
Veteran care. OIT is working to obligate the remaining ARP funds, 
currently committing $237 million to project-level funding execution in 
data integration and management, cybersecurity, hardware maintenance, 
and Veteran-facing services on VA.gov.

Research

    VHA remained invested in ongoing research and innovation, and was 
also a significant contributor to the national research response to 
COVID-19. VHA rapidly established its clinical trials enterprise to 
contribute to several treatment studies and vaccine trials sponsored by 
the National Institutes of Health and private industry. Through its 
Office of Research and Development (ORD), VHA funded a number of 
clinical studies including ones looking at convalescent plasma and 
Degarelix, an FDA-approved medication for prostate cancer (these were 
not pivotal trials); VA also leveraged its infrastructure to partner 
with the National Institutes of Health and industry in trials they 
sponsored on various COVID treatments (e.g., ACTIV trials) and 
vaccines; leveraged its electronic medical records to conduct in-depth 
analyses on COVID-19 and Long-COVID, and the creation of a national 
biorepository, the VA Science and Health Initiative to Combat 
Infectious and Emerging Life-Threatening Diseases (VA SHIELD). In a 
partnership with the Department of Defense, ORD co-funded a 
longitudinal research cohort in which VA enrolled over 2,800 Veterans 
to learn more about the natural history and outcomes among those 
affected by COVID-19.
    VA also established a Veteran research volunteer registry in which 
over 58,000 Veterans stepped up to participate in COVID-19 research 
studies when needed. While specific to COVID-related research, this 
effort helped lay some groundwork for what VA can do for other studies 
in the future. During a 7-month period in 2021, VHA started more than 
50 COVID-19 studies and published 316 COVID-19 related articles. The 
research includes studies on health effects such as Long COVID, 
clinical trials, treatments and genomic sequencing for variant 
identification. Additionally, VHA Advanced Manufacturing (part of the 
VHA Innovation Ecosystem) continued to provide COVID-19 support through 
its 3D Printing Network by producing face shields, face masks, ear 
savers and nasal swabs that were utilized across VHA. A key activity 
related to this effort, the Nasal Swab Objective and Statistical 
Evaluation Study, was done in partnership with the Food and Drug 
Administration (FDA). As part of this effort, three VAMCs registered 
with the FDA as medical device manufacturers. VHA is exploring how 
point-of-care manufacturing can be used in operating rooms and 
hospitals, as well as for immediate supply chain resilience.

Non-Recurring Maintenance

    ARP resources supported VA facility enhancements to better prepare 
VHA to deliver care in a pandemic or post-pandemic environment. More 
than 170 individual contracts were issued for infrastructure and 
delivery improvements to VAMCs across the country, amounting to more 
than $193 million in emergent investments, many of which were issued at 
the height of the pandemic and continuing throughout the emergency. 
Funds were directed to such functions as increased air-flow in patient 
areas, creating negative pressure spaces where recommended, conversions 
of space to inpatient care areas, improving laboratory testing 
facilities, providing safe and secure entryways and alternate patient 
triage, intake and testing areas, sterilization equipment and 
utilities, placement of related medical equipment, improved patient 
communication systems, pandemic equipment storage facilities, and 
improvement of isolation facilities. In addition, utility systems such 
as electrical and steam generation and distribution were upgraded at 
some facilities to better manage increased energy consumption and 
heating, ventilation and air conditioning upgrades, boiler upgrades and 
other projects to prevent pandemic contagion were executed.
    ARP resources also supported the modernization of VHA facility 
infrastructure to support new systems such as the electronic health 
record, financial management, and biomedical technologies. In FY 2022, 
$818 million was obligated to fund design and construction projects to 
modernize data centers, telecommunication rooms, and upgrade fiber and 
cabling backbones to improve data connectivity and resiliency. An 
additional $183 million was invested in FY 2023 with plans to spend the 
remaining $253 million on projects that are currently in solicitation.

Education Service

    VA used CARES Act funding to start the modernization of the GI Bill 
information technology (IT) platform to deliver benefits faster, 
provide better customer service, and strengthen our compliance and 
oversight activities. By streamlining and automating the Post-9/11 GI 
Bill application experience, VA is now able to provide some Veterans 
and Service members eligibility decisions within seconds, pre-filled 
service history, quick access to digital copies of eligibility letters 
and a better user experience with intuitive designs.
    Another program, the Veteran Rapid Retraining Assistance Program 
(VRRAP), was enacted as part of the ARP. It offers eligible Veterans up 
to 12 months of tuition and fees, and a monthly housing allowance. VA 
stopped accepting applications from Veterans on December 10, 2022. As 
of May 1, 2023, VA has received 31,593 applications from Veterans and 
issued 22,817 Certificates of Eligibility. To date, there have been 
13,626 total VRRAP participants. As of this same date, VA has verified 
1,294 Veterans' employment statuses with an average starting salary of 
$54,049. Of the $386 million authorized for VRRAP in ARP, VA currently 
anticipates obligating $366 million in benefit payments through the end 
of the program.

File Conversion Services

    VBA was able to increase scanning records efforts at the National 
Personnel Records Center (NPRC) in St. Louis, Missouri and College 
Park, Maryland as a result of National Archives and Records 
Administration facilities closings. VBA utilized CARES Act funding to 
execute Option Year 1 of its File Conversion Services contract, which 
provides contractor support to retrieve and digitize historical paper 
and alternative media records stored at NPRC, making those materials 
available for immediate use to adjudicate Veteran disability 
compensation claims. CARES Act funds paid for digitizing nearly 700,000 
Veteran Claims Files, and nearly 1.1 million Official Military 
Personnel Files. We established an onsite scanning facility at the 
NPRC, which enables VBA to scan up to 1,500 records per day within 24 
hours of receipt.

State Home Per Diem Program

    VA's Office of Geriatrics and Extended Care (GEC) received $100 
million in CARES Act and $250 million in ARP funding to distribute one-
time payments to State Extended Care Facilities for COVID-19-related 
expenditures and operational costs. The funds also assisted in 
providing additional staffing, tuition forgiveness and recruitment and 
retention incentives for personnel at SVHs. SVHs also used funds for 
COVID-19 testing (which allowed several States to maintain compliance 
using aggressive COVID-19 testing practices), PPE supplies, purchases 
of freezer systems for COVID-19 vaccinations, mobile air purification 
systems and purchases of entry point systems at each SVH that screen 
for COVID-19 and takes individual temperatures. SVH facilities also 
strengthened their telehealth and video conferencing capabilities 
through equipment purchases and modification to existing facilities to 
create isolation capabilities.
    VA waived the 90 percent occupancy rate for bed holds for Veterans 
in the hospital up to the first 10 consecutive days, allowing 129 of 
153 State Veteran Homes not meeting the 90 percent Veteran occupancy 
threshold to continue to receive payments for bed holds. Additionally, 
VA waived the 75 percent Veteran and 25 percent non-Veteran occupancy 
requirements, consistent with authority granted by Congress. VA GEC 
provided additional supplemental per diem increases of 2.9 percent in 
March 2020, 2.6 percent in April 2022, and 2.2 percent in April 2023. 
Per diem was not supplementally increased in FY 2021.

State Veterans Homes (SVH) Construction Grant Program

    $500 million from ARP was designated to provide grants through the 
current grant program for SVH construction in addition to the regular 
FY 2021 appropriation for SVH construction grants of $90 million. There 
was a total of 34 projects for $500 million. All funds were obligated.
    Funding of $150 million from the CARES Act was designated for SVH 
construction grants, but specifically for projects preventing, 
preparing for, and responding to COVID-19, and which modify or alter 
existing SVHs, or for previously awarded projects, to cover 
construction cost increases due to COVID 19. The CARES Act, as amended 
by section 513 of the Consolidated Appropriations Act, 2021 (P.L.116-
260), removed the general requirement of 35 percent matching funds by 
the State for SVH construction grant projects, as well as other 
requirements, to include the requirement to establish a priority list, 
but the Secretary was required to establish a new competition to award 
grants to States. The Secretary signed a memo establishing a 
competition to award grants for these COVID-19 related projects funded 
under the CARES Act, accepting applications on a rolling basis, and 
awarding grants on a first come, first serve basis. States that had 
previously submitted approved CARES Act COVID-19 Project applications 
were sent funding offers on March 18, 2021, for 35 projects totaling 
$124 million.

Conclusion

    Chairman Bost, Ranking Member Takano, thank you for the opportunity 
to speak on VA's record fighting COVID-19 today. I look forward to your 
questions.
                                 ______
                                 

                  Prepared Statement of Michael Missal

    Chairman Bost, Ranking Member Takano, and Committee Members, thank 
you for the opportunity to discuss the Office of Inspector General's 
(OIG) oversight of VA's expenditure of supplemental funds to respond to 
the COVID-19 pandemic. The OIG expresses our deep gratitude to the VA 
employees who-often at significant risk and great personal sacrifice-
worked tirelessly throughout the pandemic and navigated the intense 
healthcare demands of not only veterans and their families, but also 
those of community members whose hospitals were stressed or under-
resourced. VA's employees showed their commitment during a time in 
history when commitment was needed most, and the OIG recognizes and 
lauds them for that dedication.
    I would also like to thank and recognize the OIG staff who 
seamlessly continued our oversight work throughout these challenging 
times. COVID-19 required adaptability and perseverance on the part of 
OIG personnel, who had to find alternatives to onsite inspections and 
other oversight measures to effectively address VA's response to the 
pandemic. The additional funding Congress provided the OIG was integral 
to these efforts. To minimize the time our work typically requires of 
VA leaders and clinical personnel, OIG teams found other ways to inform 
their ongoing oversight activities, such as expanded internal 
capabilities for data collection and monitoring, advanced analytics, 
and data modeling. These capabilities were used to assess, for example, 
mortality and patient flow at VA community living centers and medical 
facilities, and monitor COVID-19 outbreaks, appointment cancellations 
and rescheduling, and emergency and urgent care activity.
    When I testified before this Committee earlier this year, I 
discussed several recurring themes and deficiencies in VA programs that 
centered around accountability, which is critical to continuous 
improvement.\1\ Since April 2020, the OIG has published over 40 
pandemic-related reports. These reports identify deficiencies in 
several areas of accountability, such as strong governance, adequate 
staffing, and quality assurance. I will initially focus my statement on 
deficiencies in information technology (IT) systems and business 
processes, and then discuss criminal prosecutions and healthcare access 
and delivery. In short, the OIG pandemic-related reports referenced 
below illustrate how system and process limitations can negatively 
affect veterans, their families, and their caregivers and can lead to 
waste or misuse of taxpayer dollars.\2\
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    \1\ VA OIG, Statement of Inspector General Michael J. Missal, 
Hearing on ``Building and Accountable VA: Applying Lessons Learned to 
Drive Future Success,'' February 28, 2023.
    \2\ See the appendix for a list of OIG reports related to the 
COVID-19 pandemic.

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OIG OVERSIGHT OF COVID-19 SUPPLEMENTAL FUNDS

    The COVID-19 pandemic was declared a national emergency on March 
13, 2020. Within two weeks, Congress provided $60 million in 
supplemental funding for VA to respond to the pandemic through the 
Families First Coronavirus Response Act (FFCRA) and then another $19.6 
billion through the Coronavirus Aid, Relief, and Economic Security 
(CARES) Act.\3\ About $17.2 billion of these funds was appropriated to 
the Veterans Health Administration (VHA) to support VA's efforts to 
prevent, prepare for, and respond to the COVID-19 pandemic, including 
$14.4 billion allocated to the VHA medical services fund, which is the 
fund for direct patient care. Later, in March 2021, VA received another 
$17.1 billion in supplemental funding from the America Rescue Plan Act 
of 2021 (ARP).\4\
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    \3\ Families First Coronavirus Response Act (FFCRA), Pub. L. No. 
116-127, 134. Stat. 178 (March 2020); Coronavirus Aid, Relief, and 
Economic Security (CARES) Act, Pub. L. 116-136, 134 Stat. 281 (March 
2020).
    \4\ American Rescue Plan Act of 2021, Pub. L. No. 117-2, tit. VIII, 
135 Stat. 4, 112-17 (March 2021).
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    The OIG found that VA has had significant challenges in assuring 
accountability and transparency in how it obligates and expends funds 
due to VA's outdated financial management systems. While this problem 
existed long before the pandemic, it ultimately led to a lack of 
assurance that funds allocated specifically for COVID-19-related 
purposes were being spent as intended.

VA Lacks Adequate Controls on Expending COVID-19 Supplemental Funds

    Following the Office of Management and Budget's guidance, the OIG 
initiated a June 2021 review to report on efforts by VHA to establish 
financial oversight mechanisms for tracking and reporting supplemental 
funding.\5\ VA did, in fact, meet the FFCRA and CARES Act requirements 
to submit monthly reports to OMB and Congress on COVID-19 supplemental 
fund obligations and expenditures, and it supplemented established 
policies related to accounting structures for use during declared 
emergencies. However, the OIG identified concerns that impacted the 
completeness and accuracy of VA's reporting, which are indications of 
weaknesses in VA and VHA internal controls for meeting reporting 
requirements. Additionally, the OIG found that VHA's reliance on 
several accounting subsystems for payroll and purchase card 
transactions meant that VHA staff had to perform a significant amount 
of manual work to identify and perform adjustments so that the COVID-19 
obligations and expenditures were captured in VA's reporting. The 
complexity of VHA's reporting process indicates that controls around 
VA's data reporting and validation efforts can be improved. 
Accordingly, the OIG recommended VHA and VA's Office of Management 
develop procedures to review and validate data to ensure that 
information in reports accurately represents the underlying source 
transactions.
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    \5\ VA OIG, Review of VHA's Financial Oversight of COVID-19 
Supplemental Funds, June 10, 2021.
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    To provide for greater oversight of VA's spending of these 
supplemental funds, the VA Transparency & Trust Act of 2021 
(Transparency Act), which was enacted in November 2021, requires the 
OIG to report semiannually on VA's actual obligation and expenditure of 
the supplemental funds compared to its plans.\6\ To date, the OIG has 
published three reports, and the inaugural report concluded that VA 
only partially complied with the Transparency Act. In the inaugural 
report, the OIG found it unclear whether all of the planned uses of ARP 
Act funds were captured in the plan VA submitted to Congress, as the 
plan did not include a projected cost to support maintaining IT 
projects originally started with CARES Act funds.\7\ The OIG made two 
recommendations to the assistant secretary for management/chief 
financial officer and both are closed.
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    \6\ VA Transparency & Trust Act of 2021, Pub. L. No. 117-63, Sec.  
2(c), 135 Stat. 1484, 1485 (November 2021).
    \7\ VA OIG, VA's Compliance with the VA Transparency & Trust Act of 
2021, March 22, 2022.
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    In the second Transparency Act report, the OIG found VA generally 
complied with the Transparency Act because VA provided justification 
for its spend plan programs and activities and generally aligned actual 
spending to the plan.\8\ However, VA was using expenditure transfers, a 
manual adjustment process to transfer funds from one account to 
another, for nearly half of its ARP Act obligations and expenditures. 
The OIG found that VA's manual expenditure transfer process resulted in 
at least 53 potential reporting errors. VA corrected these errors by 
manually adjusting funding balances to avoid misstating VA's reported 
obligations and expenditures to Congress.
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    \8\ VA OIG, VA's Compliance with the VA Transparency & Trust Act of 
2021 Semiannual Report: September 2022, September 22, 2022.
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    VA was again found to have generally complied with the Transparency 
Act in the OIG's third and most recent review, but VA did not provide 
sufficient supporting documentation requested by the review team to 
assess line-level details needed to make a full assessment.\9\ 
Additionally, VA's Office of Management acknowledged that ``manual 
processes for expenditure transfers can lead to potential reporting 
errors and data reliability issues'' and that replacing its 
``antiquated legacy financial management system by implementing a 
modern solution'' will reduce these potential errors.
---------------------------------------------------------------------------
    \9\ VA OIG, VA's Compliance with the VA Transparency & Trust Act of 
2021 Semiannual Report: March 2023, March 21, 2023.
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    This issue of using manual expenditure transfers due to system 
limitations contributed to the lack of transparency and accountability 
into VHA purchases that used CARES Act funds. Earlier this month, the 
OIG published a proactive audit on the effectiveness of VA's controls 
over VHA's use of supplemental funds, which found issues involving both 
methods used by VHA medical facility staff to process COVID-19-related 
transactions: (1) manual expenditure transfers and (2) the direct 
obligation of funds from the CARES Act medical services funds.\10\ 
First, manual expenditure transfers require staff to make several 
manual entries using journal vouchers to document the transfers in VA's 
financial management software system, so that an audit trail is 
maintained. However, medical facility staff were not always properly 
preparing the journal vouchers, supporting the vouchers with 
documentation showing amounts or reasons for transfers, or having the 
vouchers signed by an authorizing official. This failure limits 
transparency and accountability. This happened, in part, because VHA's 
Office of Finance was not following established VA financial policies. 
In other words, the systems' limitations and lack of guidance meant 
that VHA medical facility staff were left to determine what 
documentation would be sufficient to ensure the vouchers were supported 
without the benefit of proper internal controls.
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    \10\ VA OIG, VHA Can Improve Controls Over Its Use of Supplemental 
Funds, May 9, 2023.
---------------------------------------------------------------------------
    Second, medical facility staff did not comply with key controls 
when they made pandemic-related purchases directly from CARES Act 
supplemental funds. In an estimated more than 10,000 transactions, 
medical facility staff did not always

      have documented purchase authority;

      segregate duties so the same employee was not approving 
the purchase or acting as the purchase card holder and requestor;

      certify and pay invoices properly; and/or

      track the receipt of goods to ensure the quantities 
ordered were received.

    These issues occurred because VHA did not develop guidance that 
included protocols for accounting processes and procedures that 
outlined clear roles and expectations related to the oversight of its 
supplemental fund's purchases. As a result, the OIG reported an 
estimated $187 million in questioned costs in CARES Act funds, and the 
OIG made nine recommendations to the Office of Management and VHA to 
resolve these problems. Notably, the OIG recommended that VA assess the 
financial system it is currently implementing, the Integrated Financial 
and Acquisition Management System (iFAMS), to determine whether 
integration with payroll subsystems can be accomplished to resolve some 
of the payroll-related expenditure transfers. VA concurred, noting that 
it would develop interfaces for an end-to-end automated solution by 
September 2030.\11\
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    \11\ VA has also been attempting since the early 2000's to replace 
its financial management system. After several failed attempts in 2004 
and 2010, VA used the lessons learned and established the Financial 
Management Business Transformation (FMBT) program. Central to the FMBT 
program's modernization efforts is the multiyear deployment of the 
iFAMS.
---------------------------------------------------------------------------
    These reports echo the problems of the decentralized nature of 
governance seen in VA's financial management structure. Under the Chief 
Financial Officers (CFO) Act of 1990, the VA CFO has the responsibility 
for establishing financial policy, systems, and operating procedures 
for all VA financial entities. VA administrations and other offices are 
responsible for implementing those policies and producing financial 
information, but they are not under the supervision of the VA CFO. This 
fragmented structure has been a consistent concern and finding in the 
audit of VA's consolidated financial statements.\12\ Without active 
involvement from VA's senior leaders to overcome organizational silos 
and ensure collaboration, problems at the administration level may not 
be elevated for resolution.
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    \12\ VA OIG, Audit of VA's Financial Statements for Fiscal Years 
2022 and 2021, December 7, 2022.

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VHA Can Improve Its Equipment Acquisition and Distribution Processes

    Like healthcare systems across the globe, VA faced challenges in 
securing and distributing personal protective equipment (PPE) during 
the first weeks and months of the pandemic. The OIG determined that 
while VHA swiftly developed tools to gather supply and demand data at 
its medical facilities, it had issues with recording expired supplies, 
the double-counting of inventory, a limited inventory management 
system, and inconsistent data reporting.\13\
---------------------------------------------------------------------------
    \13\ VA OIG, Reporting and Monitoring Personal Protective Equipment 
Inventory during the Pandemic, February 24, 2021.
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    In addition to surges in the need for PPE, medical facilities were 
concerned about securing enough ventilators, which are used in the 
treatment of patients with severely impaired lung functions. In a 
report published last month, the OIG examined the acquisition and 
accountability process for ventilators procured for the Audie L. Murphy 
Memorial Veteran's Hospital in Texas from March 1, 2020, through 
November 30, 2021, and found the hospital acquired more ventilators 
than were needed for veteran care.\14\ Facility and VHA officials 
duplicated purchases, resulting in the facility obtaining 112 
ventilators, while it usually had about 40. The 56 ventilators from the 
VHA purchase, worth about $2.5 million, were left unused for more than 
19 months, while other facilities reported insufficient ventilator 
stocks.\15\ The hoarding of ventilators occurred because leaders were 
concerned about a congested ventilator supply chain, and they also 
lacked a method to determine how many ventilators they needed. 
Contributing to these unnecessary purchases was VHA's lack of an 
inventory system that can identify excess inventory nationally. Later, 
the excess ventilators were redistributed to other VHA sites. The OIG 
recommended the facility determine the number of ventilators it needs 
and turn in excess equipment.
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    \14\ VA OIG, Audie L. Murphy Memorial Veterans' Hospital Missed 
Opportunities to Distribute Excess Ventilators during the COVID-19 
Pandemic, April 11, 2023.
    \15\ For example, leaders in Veterans Integrated Service Networks 2 
and 5 described having an inadequate number of ventilators during the 
pandemic. VA OIG, Comprehensive Healthcare Inspection of Facilities' 
COVID-19 Pandemic Readiness and Response in Veterans Integrated Service 
Networks 2, 5, and 6, April 7, 2022.
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    VHA facilities also had existing options to secure ready supplies. 
The four prime vendors of VHA's Medical/Surgical Prime Vendor-Next 
Generation (MSPV-NG) program offered medical facilities a no-cost 
option to develop advance-order supply lists tailored to catastrophic 
events and contingency plans.\16\ Three of the four vendors also 
offered options to purchase and store medical supplies in advance. The 
OIG found none of the 16 medical facilities assessed took advantage of 
those emergency strategies, and most leaders did not know those plans 
existed. Most medical facilities reported maintaining their own 
contingency stocks, which were at risk of quickly depleting. That risk 
increased when prime vendors were unable to fulfill orders, leading 
staff to purchase medical supplies on the open market where VHA's data 
showed they paid higher prices. VA can apply lessons learned during the 
pandemic, and the OIG shaped its recommendations to address those 
lessons. VA can continue to refine its contract requirements for prime 
vendors to address catastrophes and ensure that chief logistics 
officers learn about existing contingency plans and ensure they 
understand how these can help mitigate supply shortages. The OIG also 
recommended clarifying for local facilities the intent of the emergency 
and continuous supply contract provisions.
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    \16\ VA OIG, Medical/Surgical Prime Vendor Contract Emergency 
Supply Strategies Available before the COVID-19 Pandemic, June 14, 
2021.
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    The problems that have plagued the VA supply chain, however, are 
not new. Prior to the pandemic, OIG reports and congressional 
testimonies identified long-standing IT, contracting, and staffing 
problems that contributed to some VA medical centers not consistently 
having supplies when and where they needed them for patient care.\17\ 
Facilities have long experienced barriers to real-time tracking of 
inventory, purchasing, distribution, storage, and other supply 
management functions, leading to operational breakdowns and the need 
for work-arounds that sometimes lack compliance with VA policies and 
procedures. These work-arounds are often the result of dedicated VA 
clinical staff on the front lines doing whatever is necessary to meet 
the needs of patients under difficult circumstances.
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    \17\  VA OIG, Statement of Leigh Ann Searight, Hearing on 
``Examining the U.S. Department of Veterans Affairs Supply Chain'', 
November 18, 2021.

THE OIG IDENTIFIED AND TERMINATED ATTEMPTS TO DEFRAUD VA OF 
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SUPPLEMENTAL FUNDS

    From the beginning of the pandemic, the OIG's Office of 
Investigations redirected resources to detect and prevent attempts to 
defraud VA of supplemental funds, particularly cases involving the 
safety and care of veterans and medical staff. These efforts were first 
marked by stopping those attempting to profit from scarce PPE supplies 
at start of the pandemic. Kenneth Ritchey was charged with conspiracy 
to commit wire fraud and mail fraud, conspiracy to defraud the United 
States, conspiracy to commit hoarding of designated scarce materials, 
and hoarding of designated scarce materials.\18\ After the first US-
confirmed case of COVID-19, Ritchey participated in a scheme to defraud 
healthcare providers, including VA, of more than $1.8 million by 
acquiring PPE and other designated materials from all possible sources, 
including home improvement stores and online retailers, and ultimately 
hoarding the same. Due to nationwide PPE shortages and COVID-19-related 
fears, Ritchey directed sales representatives to solicit healthcare 
providers, including VA, to purchase PPE and other designated materials 
at excessively inflated prices through high-pressure sales tactics and 
misrepresenting sourcing and actual costs. Ritchey sold PPE to 
healthcare providers desperate to acquire it at incredible markups. For 
instance, he sold N-95 masks to VA and other companies for as much as 
$25 a mask, despite acquiring such masks at much lower prices. Ritchey 
pleaded guilty in March 2023.
---------------------------------------------------------------------------
    \18\ U.S. Department of Justice, Businessman Charged in Scheme to 
Hoard Personal Protective Equipment and Price Gouge Health Care 
Providers, January 27, 2021.
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    In addition to these challenges, VA was also forced to deal 
immediately with individuals intent on fraudulently obtaining 
government contracts for PPE. For example, Robert Stewart Jr. was the 
owner and president of Federal Government Experts LLC.\19\ In this 
capacity, between April 1, 2020 and May 14, 2020, he made false 
statements to the Federal Emergency Management Agency (FEMA) and VA to 
obtain lucrative contracts to provide PPE. In addition to the false 
statements to FEMA and VA, he fraudulently obtained loans under the 
federal Paycheck Protection Program and the Economic Injury Disaster 
Loan Program. Stewart also defrauded VA by falsely claiming to be 
entitled to veteran's benefits for serving in the US Marine Corps 
despite never having served. He was sentenced to 21 months in prison 
with three years of supervised release for making false statements to 
multiple federal agencies to fraudulently obtain multimillion-dollar 
government contracts, COVID-19 emergency relief loans, and undeserved 
military service benefits.
---------------------------------------------------------------------------
    \19\ US Department of Justice, Former CEO Sentenced for Defrauding 
Multiple Federal Agencies, June 16, 2021.
---------------------------------------------------------------------------
    In a particularly egregious case, Christopher Parris was sentenced 
to 244 months in prison and restitution of approximately $106 million 
after pleading guilty to wire fraud in connection with a COVID-19 scam 
and an unrelated Ponzi scheme.\20\ Importantly, this investigation came 
about after a VA senior official from VA's Office of Acquisition, 
Logistics, and Construction referred their concerns to the OIG. Parris 
also agreed to forfeit approximately $3.2 million that was seized by 
the VA OIG and Homeland Security Investigations. In March 2020, Parris 
made fraudulent misrepresentations in an attempt to secure orders from 
VA for PPE that would have totaled more than $806 million. Parris 
promised that he could obtain millions of genuine 3M masks from 
domestic factories but knew this would not be possible. He attempted to 
acquire an upfront payment from VA of over $3 million and received 
approximately $7.4 million from State governments and private entities 
by making similar false representations regarding his ability to get 
PPE.
---------------------------------------------------------------------------
    \20\ US Department of Justice, Former Rochester Man Going To Prison 
For More Than 20 Years For His Role In Ponzi And COVID-19 Fraud 
Schemes, December 20, 2022.
---------------------------------------------------------------------------
    Unfortunately, some VHA employees also took the early days of the 
pandemic as an opportunity to steal from VA. From 2019 to 2020, the 
assistant chief of supply chain management for the Gulf Coast Veterans 
Healthcare System in Biloxi, Mississippi, stole N-95 masks, 
electronics, and medical devices. He received 12 months of 
incarceration, 36 months of probation, restitution of more than 
$23,000, and a fine of $40,000.\21\ A respiratory therapist at the VA 
medical center in Seattle who stole a ventilator and other respiratory 
medical equipment during the pandemic was later sentenced to three 
months in prison, nine months of home confinement, and restitution of 
more than $132,000.\22\
---------------------------------------------------------------------------
    \21\ US Department of Justice, Former Biloxi VA Employee Sentences 
to Prison for Stealing VA Property , January 7, 2022.
    \22\ US Department of Justice, Veterans Affairs respiratory 
therapist pleads guilty to stealing and selling COVID-19 respiratory 
supplies, October 5, 2020.

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OIG OVERSIGHT OF VHA'S HEALTHCARE RESPONSE TO THE COVID-19 PANDEMIC

    VA's COVID-19 response plan issued March 23, 2020, included 
providing most outpatient care using telehealth when appropriate. The 
OIG recognizes VHA has been a pioneer in the development of telehealth 
delivery, particularly in using clinical video telehealth, which 
allowed VA providers to diagnose and often treat veterans in real time 
via interactive, live video.\23\ In 2016, VA established the Office of 
Connected Care (OCC) to administer telehealth programs throughout VA. 
In 2017, VA launched its VA Video Connect (VVC) mobile app to provide a 
secure environment for patients and providers to carry out video 
telehealth visits, regardless of where the veteran and provider were 
located. VHA clinicians also provide telehealth care via telephone. 
Starting in March 2020, VHA took actions to expand telehealth delivery 
to patients. They expedited the credentialing and privileging of 
healthcare providers in anticipation of staffing shortages and 
authorized VHA clinicians to use any third-party audio or video 
communication technology with privacy features for telehealth 
appointments. In the first year of the pandemic, VHA doubled the number 
of patients with a telehealth encounter.
---------------------------------------------------------------------------
    \23\ Pandemic Response Accountability Committee, Insights on 
Telehealth Use and Program Integrity Risks Across Selected Health Care 
Programs During the Pandemic, December 2022.

---------------------------------------------------------------------------
Opportunities and Challenges with Increased Utilization of Telehealth

    The OIG recently assessed the implementation and use of VVC prior 
to and during the pandemic.\24\ Specifically, the review team explored 
factors affecting why primary and specialty care providers used 
telephone communication more frequently than VVC at the onset of the 
pandemic and in lieu of in-person encounters, and how VHA resolved 
technology issues. The OIG also examined VHA provider experience with 
VVC prior to and during the pandemic to identify benefits of and 
barriers to VVC use. When the pandemic started, VHA was not readily 
able to support the increased demand of VVC use, leading providers to 
perform patient care through telephone encounters. This occurred 
despite VHA having developed telehealth strategic plans, which focused 
on improving technology to support VVC, increasing provider capability, 
and identifying emergency preparations for disaster scenarios.
---------------------------------------------------------------------------
    \24\ VA OIG, Review of Access to Telehealth and Provider Experience 
in VHA Prior to and During the COVID-19 Pandemic, April 26, 2023.
---------------------------------------------------------------------------
    Notably, OCC's chief officer said video visits increased from 2,000 
to 40,000 per day and emphasized that, ``the technical infrastructure 
was not scaled to that kind of . . . unexpected and unplannable [sic] 
for growth.'' As the pandemic continued, providers continued to use 
VVC, recognizing its value in increasing access to care, and enabling 
more comprehensive evaluations than telephone encounters could offer. 
There were identifiable barriers, however, including patient 
difficulties with technology, lack of clinical and administrative 
support during the encounters, and challenges with scheduling VVC 
appointments. VHA concurred with the OIG's three recommendations to 
address those barriers.
    Veterans also received more telehealth through community care.\25\ 
In the 12 months before the pandemic (March 2019 through February 
2020), less than one percent of veterans who received care in the 
community did so at least once via telehealth. From March 2020 through 
February 2021, however, about 19 percent of the 871,000 veterans who 
received care in the community did so at least sometimes via 
telehealth. Fewer veterans received at least some telehealth care in 
the community from March 2021 through December 2021-only 8 percent of 
about 1.1 million veterans.
---------------------------------------------------------------------------
    \25\ Pandemic Response Accountability Committee, Insights on 
Telehealth Use and Program Integrity Risks Across Selected Health Care 
Programs During the Pandemic, December 2022.

---------------------------------------------------------------------------
Overcoming the Digital Divide

    During the summer of 2020, VA introduced a new consult process 
called the digital divide consult, where patients are issued a video-
capable device after obtaining a referral from their care team, 
licensed independent practitioner, or designee, and the approval of a 
social worker who has conducted a socioeconomic assessment. The process 
also allowed veterans experiencing homelessness who were enrolled in 
the Department of Housing and Urban Development-VA Supportive Housing 
(HUD-VASH) Program to receive devices. The CARES Act gave VA the 
authority to expand mental health services to isolated veterans through 
telehealth and required VA to ensure that telehealth capabilities were 
available to HUD-VASH participants.\26\
---------------------------------------------------------------------------
    \26\ VA OIG, Purchases of Smartphones and Tablets for Veterans' Use 
during the COVID-19 Pandemic, May 4, 2022.
---------------------------------------------------------------------------
    The OIG found that the VA's digital divide program was successful 
in distributing devices to veterans but identified several gaps in 
oversight and guidance preventing the program from fully meeting its 
intended purpose for patients to receive virtual care via VVC.\27\ 
After introducing the digital divide consult, VA issued devices (iPads) 
to about 41,000 patients during the first three quarters of fiscal year 
2021. These devices were not always used to connect to video 
telehealth, as only an estimated 20,300 of those patients (about 49 
percent) with issued devices completed a VVC appointment. The remaining 
patients (about 51 percent) had not used the devices for VVC 
appointments. An estimated 10,700 patients never had a VVC appointment 
scheduled, as there was no requirement to schedule, and neither the 
patient nor the staff initiated scheduling a VVC appointment. The OIG 
also estimated that more than 10,000 patients had a VVC appointment 
scheduled but not completed for various reasons, such as technical 
issues or a cancellation, and a subsequent VVC appointment was not 
completed.
---------------------------------------------------------------------------
    \27\ VA OIG, Digital Divide Consults and Devices for VA Video 
Connect Appointments, August 4, 2022.
---------------------------------------------------------------------------
    There were also lapses in device issuance and management during the 
review of VA's tablet dashboard data. VA staff did not retrieve about 
8,300 unused devices (valued at $6.3 million) for other patients' use 
when they did not have VVC activity, as required by the standard 
operating procedures. As of January 2022, there was a backlog of about 
14,800 returned devices pending refurbishment before they could be 
redistributed. The returned devices accumulated primarily because of 
technical issues with the refurbishment system VA used. Despite the 
backlog, VA did not suspend purchases of new devices from its 
contractor and placed a purchase order for additional new devices in 
August 2021. As of December 2, 2021, VA bought 9,720 devices under this 
purchase order, totaling about $8.1 million.
    The program does have positive value, with VHA noting an April 2022 
study that found veterans with a history of mental healthcare use and 
in receipt of a video-enabled tablet were associated with increased use 
of telemental health services, increased psychotherapy visits, and 
reduced suicidal behavior and emergency department visits.\28\ VA-
loaned devices represent a sizable investment, and their use should be 
monitored closely. The OIG's recommendations included revising the 
program's standard operating procedures, implementing an alert system 
that notifies the requesting clinic that a patient has received a 
device and can now be scheduled a VVC appointment, and updating and 
enabling systems to check for and initiate retrieval activities for 
duplicate devices and augment tracking mechanisms.
---------------------------------------------------------------------------
    \28\  Kritee Gujral, James Van Campen, Josephine Jacbos, etc., 
``Mental Health Service Use, Suicide Behavior, and Emergency Department 
Visits Among Rural US Veterans Who Received Video-Enabled Tablets 
During the COVID-19 Pandemic,'' JAMA Network Open (April 6, 2022), 
https://doi.org/10.1001/jamanetworkopen.2022.6250.

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Assuring Access to Care

    Taking advantage of telehealth's opportunity requires VA to 
schedule appointments timely. At the onset of the pandemic, VHA was 
challenged to track and follow-up on millions of canceled 
appointments.\29\ While VHA had made progress in tracking canceled 
appointments, it had opportunities to strengthen monitoring of follow-
up of care, particularly in specialty care.\30\ In another inspection, 
the OIG found that inadequate staffing within the Martinsburg, West 
Virginia, VA medical center's Care in the Community Service led to 
delays in scheduling community consults.\31\ Sixty-two percent of the 
COVID Priority 1 cardiology consults during a one-year period were 
scheduled more than 30 days beyond the clinically indicated date, which 
is the date the patient needs to be seen based on their clinical 
status. To meet workload demands, the facility needed a minimum of 23 
schedulers and 11 clinical employees. At the time of the inspection, 
they had only 10 scheduling and four clinical staff, with facility 
leaders reporting significant staff turnover and a lack of training as 
contributing factors.
---------------------------------------------------------------------------
    \29\ VA OIG, Appointment Management During the COVID-19 Pandemic, 
September 1, 2020.
    \30\  VA OIG, VHA Progressed in the Follow-Up of Canceled 
Appointments during the Pandemic but Could Use Additional Oversight 
Metrics, November 3, 2022.
    \31\ VA OIG, Care in the Community Consult Management During the 
COVID-19 Pandemic at the Martinsburg VA Medical Center in West 
Virginia, February 16, 2022.

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CONCLUSION

    The OIG appreciates the supplemental funds Congress provided to 
increase oversight and will continue to make recommendations that 
assist VA in achieving the most from its resources. The COVID-19 
pandemic stressed all aspects of every healthcare system in the 
country, and the existing problems and limitations within each 
healthcare system were further exposed and tested. This includes the 
limitations of systems and processes that are critical to VA 
operations, and whose deficiencies continue to impact patient care, 
supply management, as well as stewardship of taxpayer dollars. Congress 
provided VA with significant regular and supplemental funds to respond 
to the COVID-19 pandemic, while requesting clarity into their use. The 
OIG has repeatedly found that VA's failure to effectively modernize its 
systems leads to significant challenges in assuring accountability and 
transparency in how it obligates and expends any funds; makes it 
difficult for VA staff to plan, order, and track the expenditure of 
supplies; and hampers transparency and oversight into VA's use of these 
funds. The OIG recognizes that the overwhelming number of VA leaders 
and personnel are committed to serving veterans, their families, and 
caregivers, as well as answering the call for assistance from their 
local communities in times of crisis. However, their efforts are 
undermined by aging systems that create additional hurdles.

     APPENDIX: COVID 19-RELATED OIG PUBLICATIONS FROM 2023 TO 2020

1. VHA Can Improve Controls Over Its Use of Supplemental Funds, May, 9, 
2023.

2. Review of Access to Telehealth and Provider Experience in VHA Prior 
to and During the COVID-19 Pandemic, April 26, 2023.

3. Audie L. Murphy Memorial Veterans' Hospital Missed Opportunities to 
Distribute Excess Ventilators during the COVID-19 Pandemic, April 11, 
2023.

4. VA's Compliance with the VA Transparency & Trust Act of 2021 
Semiannual Report: March 2023, March 21, 2023.

5. Physician's Falsification of VA Video Connect Blood Pressures at the 
North Las Vegas VA Medical Center in Nevada, January 25, 2023.

6. Insights on Telehealth Use and Program Integrity Risks Across 
Selected Health Care Programs During the Pandemic, December 1, 2022. 
Published in conjunction with the Pandemic Response Accountability 
Committee.

7. VHA Progressed in the Follow-Up of Canceled Appointments during the 
Pandemic but Could Use Additional Oversight Metrics, November 3, 2022.

8. VA's Compliance with the VA Transparency & Trust Act of 2021 
Semiannual Report: September 2022, September 22, 2022.

9. The Veterans Health Administration Needs to Do More to Promote 
Emotional Well-Being Supports Amid the COVID-19 Pandemic, May 10, 2022.

10. Purchases of Smartphones and Tablets for Veterans' Use during the 
COVID-19 Pandemic, May 4, 2022.

11. Comprehensive Healthcare Inspection of Facilities' COVID-19 
Pandemic Readiness and Response in Veterans Integrated Service Networks 
2, 5, and 6, April 7, 2022.

12. VA's Compliance with the VA Transparency & Trust Act of 2021, March 
22, 2022.

13. Audit of Community Care Consults during COVID-19, January 19, 2022.

14. Systems and Tools Implemented to Track COVID-19 Vaccine Data, 
December 7, 2021.

15. Comprehensive Healthcare Inspection of Facilities' COVID-19 
Pandemic Readiness and Response in Veterans Integrated Service Networks 
1 and 8, November 18, 2021.

16. Deficiencies in Select Community Care Consult (Stat) Processes 
During the COVID-19 Pandemic, November 10, 2021.

17. Vet Center Inspection of Southeast District 2 Zone 2 and Selected 
Vet Centers, September 30, 2021.

18. Vet Center Inspection of Continental District 4 Zone 2 and Selected 
Vet Centers, September 30, 2021.

19. Vet Center Inspection of Pacific District 5 Zone 1 and Selected Vet 
Centers, September 30, 2021.

20. Failure to Mitigate Risk of and Manage a COVID-19 Outbreak at a 
Community Living Center at VA Illiana Health Care System in Danville, 
Illinois, September 28, 2021.

21. Care Concerns and the Impact of COVID-19 on a Patient at the 
Fayetteville VA Coastal Health Care System in North Carolina, September 
27, 2021.

22. Comprehensive Healthcare Inspection of Facilities' COVID-19 
Pandemic Readiness and Response in Veterans Integrated Service Network 
19, July 7, 2021.

23. Medical/Surgical Prime Vendor Contract Emergency Supply Strategies 
Available before the COVID-19 Pandemic, June 14, 2021.

24. Review of VHA's Financial Oversight of COVID-19 Supplemental Funds, 
June 10, 2021.

25. Use and Oversight of the Emergency Caches Were Limited during the 
First Wave of the COVID-19 Pandemic, June 9, 2021.

26. Inconsistent Documentation and Management of COVID-19 Vaccinations 
for Community Living Center Residents, April 14, 2021.

27. Review of Community-Based Outpatient Clinics Closed Due to the 
COVID-19 Pandemic, April 6, 2021.

28. Comprehensive Healthcare Inspection of Facilities' COVID-19 
Pandemic Readiness and Response in Veterans Integrated Service Networks 
10 and 20, March 16, 2021.

29. Potential Risks Associated with Expedited Hiring in Response to 
COVID-19, March 11, 2021.

30. Review of Veterans Health Administration's Virtual Primary Care 
Response to the COVID-19 Pandemic, March 11, 2021.

31. Reporting and Monitoring Personal Protective Equipment Inventory 
during the Pandemic, February 24, 2021.

32. Medication Delivery Delays Prior to and During the COVID-19 
Pandemic at the Manila Outpatient Clinic in Pasay City, Philippines, 
January 28, 2021.

33. Added Measures Could Reduce Veterans' Risk of COVID-19 Exposure in 
Transitional Housing, December 18, 2020.

34. Review of Veterans Health Administration's Emergency Department and 
Urgent Care Center Operations During the COVID-19 Pandemic, December 
17, 2020.

35. Enhanced Strategy Needed to Reduce Disability Exam Inventory Due to 
the Pandemic and Errors Related to Canceled Exams, November 19, 2020.

36. Veterans Crisis Line Challenges, Contingency Plans, and Successes 
During the COVID-19 Pandemic, October 28, 2020.

37. Date of Receipt of Claims and Mail Processing during the COVID-19 
National State of Emergency, September 17, 2020.

38. Appointment Management During the COVID-19 Pandemic, September 1, 
2020.

39. Alleged Deficiencies in the Management of Staff Exposure to a 
Patient with COVID-19 at the VA Portland Health Care System in Oregon, 
August 27, 2020.

40. Review of Veterans Health Administration's COVID-19 Response and 
Continued Pandemic Readiness, July 16, 2020.

41. Review of Highly Rural Community-Based Outpatient Clinics' Limited 
Access to Select Specialty Care, July 7, 2020.

42. OIG Inspection of Veterans Health Administration's COVID-19 
Screening Processes and Pandemic Readiness, March 26, 2020.
                                 ______
                                 

                   Prepared Statement of Whitney Bell

    Chairman Bost, Ranking Member Takano and Members of the Committee:

    Thank you for inviting the National Association of State Veterans 
Homes (NASVH) to testify about the impact of the COVID-19 pandemic on 
State Veterans Homes (SVHs), and how the Department of Veterans' 
Affairs (VA) supported SVHs and the veterans we care for. As you may 
know, NASVH is an all-volunteer organization dedicated to promoting and 
enhancing the quality of care and life for the veterans and families in 
our SVHs through education, networking, and advocacy.
    My full-time job is Administrator of the State Veterans Home in 
Fayetteville, North Carolina, where I oversee a 150 bed facility 
providing skilled nursing care to aging and disabled veterans. Today I 
am pleased to share with the Committee my direct experiences and 
observations, together with those of my NASVH colleagues, about how the 
pandemic has and continues to challenge State Veterans Homes, and the 
many ways that VA has been able to support us over the past three 
years.

Background

    The State Veterans Homes program is a partnership between the 
federal government and state governments that dates back to the post-
Civil War period. Today, there are 163 State Veteran Homes located in 
all 50 states and the Commonwealth of Puerto Rico, with over 30,000 
authorized beds providing a mix of skilled nursing care, domiciliary 
care, and adult day health care. SVHs provide half of all federally 
supported institutional long-term care for our nation's veterans, 
however as VA's FY 2023 budget submission makes clear, State Veterans 
Homes will consume less than 20 percent of VA's FY 2023 total 
obligations for veterans' long term nursing home care. Furthermore, 
VA's calculation of the institutional per diem for SVH skilled nursing 
care is 40 percent lower than for private sector community nursing 
homes and less than one-eighth that of VA's Community Living Centers 
(CLCs). It's clear that this federal-state partnership provides 
tremendous value for VA and for veterans.
    To help cover the cost of America's veterans residing in SVHs, VA 
provides per diem payments at different rates for skilled nursing care, 
domiciliary care, and adult day health care (ADHC). VA also provides 
State Home Construction Grants to cover up to 65 percent of the cost to 
build, renovate and maintain SVHs, with States required to provide at 
least 35 percent in matching funds for those projects.
    As a responsibility of providing Federal funding, VA certifies and 
closely monitors the care and treatment of veterans in State Veterans 
Homes. Although VA does not have direct statutory ``...authority over 
the management or control of any State home.''[38 USC 1742(b)], federal 
law provides VA the authority to ``...inspect any State home at such 
times as the Secretary deems necessary.'' and to withhold per diem 
payments if VA determines that the Home fails, ``to meet such standards 
as the Secretary shall prescribe...''[38 USC 1742(a)]

Oversight of State Veterans Homes

    As required by law, VA performs a comprehensive inspection survey 
of each State Veterans Home annually to assure resident safety, high-
quality clinical care, and sound financial operations. This inspection 
survey is typically an unannounced week-long comprehensive review of 
the Home's facilities, services, clinical care, safety protocols and 
financial operations.
    VA has extensive regulations covering every aspect of SVH 
operations. 38 C.F.R. Part 51, Subpart D, sections 51.60 through 
51.210, provide a description of the standards for skilled nursing 
facilities that every State Veteran Home must comply with to ensure 
resident rights, quality of life, quality of care, nursing services, 
dietary services, physician services, specialized rehabilitative 
services, dental services, pharmacy services, infection control, and 
the physical environment of the Homes. In total, there are more than 
200 clinical standards reviewed during VA's annual inspection survey, 
in addition to dozens of fire and life safety standards, which are 
outlined in the National Fire Protection Association (NPFA) Life Safety 
Codes and Standards. Finally, VA surveys and inspections conduct a 
financial audit concerning the Homes financial operations and to ensure 
proper stewardship of residents' personal funds. There are also 
similarly detailed regulations for domiciliary and adult day health 
care programs run by State Veterans Homes.
    About 72 percent of State Veterans Homes are also certified to 
receive Medicare support for their residents and must undergo annual 
inspections by the Centers for Medicare and Medicaid Services (CMS) to 
assure safety and quality care. The CMS inspection survey process also 
covers more than 90 percent of the same clinical life and safety 
sections of the VA inspection survey in a week-long inspection that is 
not announced in advance. All deficiencies identified by the CMS 
inspection must be corrected as a condition of continuing to receive 
CMS financial support.
    In addition to the VA and CMS inspections, State Veterans Homes are 
also subject to both regular and periodic inspections and audits from 
the Inspector General of the Department of Veterans Affairs, and the 
Civil Rights Division of the Department of Justice. SVHs generally 
function within a state's department or division of veterans' affairs, 
public health, or other accountable agency, and typically operate under 
the governance and oversight of a board of trustees, a board of 
visitors, or other similar accountable public body. State Veterans 
Homes also have regular inspections from State and local authorities 
examining their fire safety preparedness, pharmaceutical practices, 
health and sanitary protocols, food safety practices and other public 
health and sanitization protocols.

How the COVID-19 Pandemic Has Impacted State Veterans Homes

    Chairman Bost, when COVID-19 first emerged in 2020, State Veterans 
Homes were among the first institutions to take significant precautions 
to protect our residents. Battling communicable viruses has always been 
a regular part of our operations and we have strong infection control 
regimens which have long been utilized to help prevent and mitigate the 
spread of influenza and other viruses in our facilities. However, the 
outbreak and spread of COVID-19, particularly in its early asymptomatic 
form, made it virtually impossible to prevent it from entering any 
facility or location in the country. Despite myriad precautions taken - 
including enhanced use of personal protective equipment (PPE), 
suspension of visitation and new admissions, screening of staff and 
residents for symptoms, and strict social distancing - the lack of 
vaccines, treatments and testing capacity nationally made all nursing 
homes a prime target of COVID-19.
    It is important to note that veterans in State Veterans Homes are 
primarily older men who have significant disabilities and 
comorbidities, and that studies have shown that COVID-19 
disproportionately affected older men with underlying health 
conditions. In fact, the percentage of veterans residing in SVHs aged 
85 or older (38 percent) is double the percentage of both VA's CLCs (18 
percent) and community nursing homes (19 percent).
    From the onset of the pandemic, State Veterans Homes proactively 
sought to procure sufficient PPE to protect veterans and staff. 
However, inadequate national inventory and stockpiles of PPE - 
particularly N95 masks, isolation gowns and face shields - posed a 
tremendous problem. Another critical challenge was the inability to 
quickly and accurately test for COVID-19 and receive timely, valid 
results for both residents and staff. As a result, when one resident or 
staff member tested positive, Homes would often quarantine other staff 
or residents who might have come in contact with the person who tested 
positive. This resulted in large numbers of staff in some State 
Veterans Homes being required to remain at home until they passed a 14-
day quarantine period or had one or more negative test results to 
indicate they did not carry the virus. Consequently, SVHs were forced 
to dramatically increase overtime for remaining staff or to bring in 
additional temporary staff, significantly increasing costs.
    As the pandemic stretched from months to years, the impact on the 
finances of SVHs has been devastating. Every State Veteran Home has had 
to significantly increase expenditures for PPE, cleaning and sanitizing 
supplies, and laundry services. Depending on the level of COVID-19 
spread in a facility, Homes have had enormous increases for personnel 
costs to cover wages, overtime, hazard pay, sick leave and temporary 
staffing. In addition, many Homes have made modifications to buildings 
and rooms for isolation and sanitization, including the purchase of new 
equipment.
    At the same time, occupancy levels in most SVHs declined as veteran 
residents passed away due to COVID and non-COVID causes, and because 
new admissions were suspended. Today, even with effective vaccines, 
treatments, and testing now available to mitigate many of the dangers 
from COVID-19, SVHs still face significant challenges in bringing their 
occupancy rates back up to normal levels, primarily due to national 
staffing shortages impacting all health care facilities. As a result, 
the level of VA per diem support provided each year to State Veterans 
Homes has declined significantly over the past three years, creating 
serious financial challenges for Homes to remain solvent at a time when 
their State budgets are also in crisis.

How VA Supported State Veterans Homes During the COVID-19 Pandemic

    Early in the COVID-19 pandemic, VA began to provide a range of 
support to SVHs under its ``Fourth Mission'' to support the Nation's 
health care system in national emergencies. In North Carolina, VA 
provided testing, PPE, training for properly using respirators, and 
additional training in infection control to our Homes. Our relationship 
with VA throughout the pandemic has been very strong and made a key 
difference for our Homes and our veterans.
    Other SVHs also received a variety of support, depending on their 
local needs and VA's local capabilities. For example, VA provided 
thousands of face masks and protective gowns to Homes in Illinois and 
Michigan. In California, VA provided testing for up to 200 State Home 
residents and employees weekly. In Iowa and in Idaho, VA provided 
direct staffing support for Homes facing critical vacancies, 
specifically nurses. In Idaho, the VA also supplied testing collection 
kits and rendered COVID-19 testing services through their lab for the 
State Homes' residents and staff. South Carolina received over 100,000 
gowns, gloves, masks, face shields, and 2,000 test kits. In New York, 
VA supported a Long Island State Veteran Home program that delivered 
meals and checked regularly via telehealth on veterans unable to access 
the Adult Day Health Care program due to COVID-19 restriction. These 
are just some examples of the many ways that VA worked to support SVHs 
during the pandemic.

Waivers During the Public Health Emergency

    As the pandemic quickly took hold in March 2020, NASVH worked with 
this Committee and its counterpart in the Senate to look for ways to 
mitigate the impact of COVID-19 on State Veterans Homes. One of the key 
challenges was meeting staffing requirements as employees either 
contracted COVID-19 or had to be quarantined due to exposure. To help 
limit the loss of financial support during the pandemic, Congress 
included provisions in the CARES Act (P.L.116-136) to provide temporary 
waivers from occupancy rates and veteran percentage requirements, as 
well as a provision authorizing VA to provide PPE to SVHs during this 
public health emergency. VA was also able to waive the bed hold 
requirement during the public health emergency so that SVHs would not 
lose per diem for veterans who were receiving temporary in-patient 
treatment in an acute care setting.
    However, with the formal end of the public health emergency on May 
11, 2023, SVHs are now at risk of losing significant financial support 
from VA, which is particularly challenging at a time when staffing 
shortages continue to limit their ability to bring up their occupancy 
rates. To address this financial burden, bipartisan legislation was 
introduced in the Senate (S. 1436) which, among other provisions, would 
allow SVHs to receive per diem payments for bed-holds even when the SVH 
does not meet the required 90 percent occupancy rate. The bill would 
also continue to allow VA to provide PPE and supplies to SVHs at its 
discretion to help keep residents and staff safe during other health 
emergencies. Mr. Chairman, we would welcome the opportunity to talk 
with you or other members of the Committee who might be interested in 
sponsoring companion or similar legislation to support veterans 
residing in SVHs.

Financial Support for Per Diem and Construction Grants

    NASVH would like to thank this Committee for all its outreach and 
support during the pandemic, particularly for helping to secure 
emergency supplemental funding for SVHs. As a result of provisions 
included in the American Rescue Plan (ARP) Act of 2021 and the 
Coronavirus Aid, Relief, and Economic Security Act (CARES) Act as 
amended by the Consolidated Appropriations Act, 2021, VA was able to 
provide $1 billion in supplemental support to SVHs:

      $500 million from the ARP designated to provide 
additional State Home Construction Grants

      $250 million from the ARP for one-time grants related to 
operating needs based on each SVH's share of total veteran residents 
receiving skilled nursing home and domiciliary care;

      $150 million from the CARES Act designated State Home 
Construction Grants to modify buildings to prepare, prevent, respond 
to, or mitigate the risk of COVID-19; and

      $100 million designated by the Consolidated 
Appropriations Act, 2021, for grants for emergency payments to existing 
State Veterans Homes to prevent, prepare and respond to COVID-19.

    SVHs have been able to use these supplemental resources to sustain 
operations, hire new staff, expand, and build new infection control 
systems, and modify facilities to help prevent the spread of COVID, 
influenza, other viruses, and infectious diseases.
    In addition, VA has begun accelerating basic per diem rate 
increases to support veterans in SVHs with two increases a year, rather 
than just a single annual cost-of-living adjustment. NASVH is grateful 
for all the emergency support provided by Congress and VA over the past 
three years, and we are proud of the continued partnership between 
states and the federal government to support the men and women who 
served.

Additional Support Requested from Congress

    Mr. Chairman, although the public health emergency has ended, State 
Veterans Homes continue to face significant challenges to continue 
caring for aging and disabled veterans, and we respectfully ask this 
Committee to continue working with us to address these needs.
    As mentioned above, the bipartisan CHARGE Act (S. 1436) is pending 
in the Senate, and we would be grateful if a companion or similar bill 
were introduced and considered in the House. NASVH is also seeking 
congressional support for legislation to address several other needs 
SVHs have been facing in recent years.
    Although VA is authorized to pay a basic per diem that covers up to 
50 percent of the cost of a veteran's care, the basic per diem rates in 
recent years have been less than 30 percent, even lower during the 
height of the pandemic. We would ask for legislation to set the basic 
per diem rate at 50 percent of the daily cost of care.
    NASVH is also seeking support from Congress to fully fund the State 
Home Construction Grant program. Over the past decade, annual 
appropriations for this program have been extremely volatile: typically 
providing funding for only a small portion of the qualified state 
matching grants, but fortunately with a couple of years that met the 
full demand for federal matching funds. For FY 2024, NASVH is asking 
Congress to provide at least $600 million to the State Home 
Construction Grant program, although once the VA releases its new 
priority list the actual need may be closer to $900 million.
    Finally, NASVH is asking Congress to enact legislation to help SVHs 
recruit and retain sufficient staffing to allow full occupancy of our 
nursing homes and other programs. As this Committee is fully aware, 
there is a staffing crisis affecting every health care system in the 
Nation, particularly for nurses and other critical clinical positions. 
State Homes have been grateful for the Nurse Recruitment and Retention 
Scholarship program which has had a positive impact on a number of 
SVHs. We are asking Congress to expand that program so that more Homes 
can benefit from it. At the same time, we believe that a similar 
program for other critical staffing vacancies could help boost the 
ability of SVHs to compete with private sector employers who are able 
to offer higher salaries and benefit packages.
    In conclusion, NASVH greatly values the federal-state partnership 
underlying the State Veterans Home program. During the COVID pandemic, 
we experienced firsthand the tremendous value of VA supporting SVHs, 
and that dynamic must continue. The veterans we serve have greatly 
benefited from that partnership, and in particular, from the 
supplemental funding Congress provided to VA. As we look to the future, 
NASVH hopes to continue working with this Committee and Congress to 
find new and innovative ways to further strengthen the State Veterans 
Homes system for the men and women who served.
    Mr. Chairman, that concludes my testimony. Thank you for the 
opportunity to appear before the Committee today. I would be pleased to 
answer any questions that you or members of the Committee may have.

                        Statement for the Record

                              ----------                              


     Prepared Statement of National Coalition for Homeless Veterans

    Chairman Bost, Ranking Member Takano, and distinguished Members of 
the Committee:

    In the United States there is broad bipartisan agreement that no 
man or woman who has sacrificed for and served our country should 
struggle to meet their basic needs. Despite this, over 33,000 veterans 
experience homelessness on any given night. The Department of Veterans' 
Affairs' (VA) continuing ability to provide services to these 
vulnerable veterans expired on May 11th with the end of the Public 
Health Emergency (PHE).
    Since 2009, the United States has cut the number of veterans 
experiencing homelessness on any given night by over half; we know what 
works and what more is needed to cross the finish line. Congress in its 
wisdom enacted provisions into law to enable VA to better serve 
veterans, albeit during a time of national emergency. The initial 
feedback from this response shows certain measures were incredibly 
effective. Last year alone, VA worked with communities to help more 
than 40,000 veterans out of homelessness and into the safe, stable 
homes that they deserve,'' said VA Secretary McDonough. ``We know that 
it's possible to end homelessness because we are making real progress 
every day . . .'' We know that while the community at large was unable 
to keep up with the pace of homelessness over the course of the PHE, VA 
and the homeless veteran community of providers were able to reduce 
veteran homelessness by 11 percent from 2020-2022.
    The bipartisan Johnny Isakson and David P. Roe, M.D. Veterans 
Health Care and Benefits Improvement Act of 2020 (P.L. 116-315) 
strengthened programs that emphasize permanent solutions to housing 
instability and homelessness among veterans. Section 4201 of P.L. 116-
315, also known as Isakson/Roe, is an effective authority that must be 
maintained since as a VA official recently testified, ``we will not 
eliminate veteran homelessness without these additional authorities.'' 
As knowledge of VA's new authorities spread and implementation 
improved, the number of veterans VA has been able to assist has 
skyrocketed. Whereas VA was able to help 32,000 veterans with just 
Section 4201 authorities alone in 2022, these authorities supported 
over 7,000 veterans in 1 month this year.
    A quick real-life example that utilizes multiple authorities such 
as access to hotels, rideshares, and phones. A female veteran was able 
to be placed in a hotel in the rural town where she was seeking 
permanent housing and had no access to shelters there. With the 
stability in the hotel, she was able to engage in substance abuse 
treatment and mental health care at the VA super Community Based 
Outpatient Center or CBOC. Rideshare transported her to these 
appointments until she was housed in HUD/VASH supportive housing. 
Without 4201 she would not have had the opportunity to attain stability 
and the likelihood of her following through with substance and mental 
health care was slim. In addition, the very rural area of Southeast 
Missouri has zero public transportation. The rideshare provided a 
lifeline to their homeless population. The veteran was provided with a 
cell phone, which made all this possible through the ability to contact 
her.
    There are thousands of stories just like this veterans', and NCHV 
takes this opportunity to lift up the legislation introduced in the 
118th Congress that is attempting to rectify the loss of these 
commonsense authorities:

    H.R. 645 the Healthy Foundations for Homeless Veterans Act Veterans 
are better able to get to appointments, access their supportive 
services, have access to necessities as well as be contacted 
facilitating access to telehealth services in remote locations. Using 
section 4201 authority under Isakson/Roe, VAMCs provided additional 
services ranging from items like tents and food, to communications, and 
transportation in the form of bikes and ride shares for tens of 
thousands of veterans during the public health emergency. The bill was 
also referred with bipartisan support by voice vote in the House 
Veterans Affairs Committee's Subcommittee on Economic Opportunity.
    We also highlight the Return Home to Housing Act or H.R. 491, a 
bill that would adjust the maximum reimbursement rate for VA grantees 
for shelter, clinical services, and essential sustenance for veterans, 
as the daily amount available for reimbursement has dropped over 60 
percent to $64.52 a day. The increased financial burden of prioritizing 
COVID safety measures paired with ongoing operating and maintenance 
costs makes these programs unsustainable at this level and may leave 
grantees with no option but to discontinue providing these essential 
services altogether.
    Service providers are being forced to make tough financial decision 
others have related to prioritizing health safety measures at a 
financial loss. Limits are being put on essential services for veterans 
such as meals, wrap around services, beds, facility security and some 
are having to make the decision to maintain staff. NCHV has seen 
providers pleading with their representatives explaining how letting 
these authorities' sunset was essentially cutting their access to funds 
to assist veterans by over $60,000 a month. Every veteran deserves 
access to safe shelter and housing, whether they are currently 
experiencing homelessness or are facing housing-associated costs that 
put them at risk of homelessness.
    The proposals in these two bills are included in the recently 
introduced S. 1436 - the Critical Health Access Resource and Grant 
Extensions (CHARGE) Act of 2023.
    This legislation would extend successful, essential veterans' 
programs and authorities from the last few years that expired May 11th. 
The bill includes extensions of critical provisions related not only to 
homelessness but health care access, caregivers, and State Veterans 
Homes as well:

      Increases the maximum reimbursement amount for grantees 
receiving funds from VA to provide temporary housing for homeless 
veterans. Without this provision, most of these programs, especially in 
rural and isolated areas with minimal financial support alternatives, 
are being forced to reduce services, beds, and even cease their 
programs due to the limitation on reimbursement amounts.

      Allows VA to continue providing gap services and support 
to homeless veterans in circumstances where other support is not 
available, including providing necessary personal and hygiene items, 
transportation services, food, landlord incentives for housing homeless 
veterans, and more.

      Extends authority to allow veterans and caregivers to 
elect for virtual home visits through September 30, 2023, or until VA 
finalizes their new regulations for the Caregivers program.

      Extends the State Veterans Homes' occupancy rate 
requirement waiver until September 30, 2023, so that State homes are 
not financially penalized for staffing shortages.

      Makes permanent an authority that allows VA to share PPE, 
vaccines, medical supplies, and other resources with State Veterans 
Homes.

    As you consider further oversight in the 118th Congress, the 
National Coalition for Homeless Veterans (NCHV) asks you to look at how 
VA is forced to compensate in lieu of passing the Critical Health 
Access Resource and Grant Extensions (CHARGE) Act of 2023 (S. 1436), 
the Healthy Foundations for Homeless Veterans Act (H.R. 645) which has 
already been reported favorably out of the Subcommittee on Economic 
Opportunity, and the Return Home to Housing Act (H.R. 491).
    All three pieces of legislation are a testament to the dedication 
and challenging work of communities nationwide, and the responsiveness 
and bipartisanship of the House and Senate Committees on Veterans' 
Affairs, its Members, and their dedicated staff. We are committed to 
working with Congress and our partners across the country to end 
homelessness among veterans, and passage of H.R 645, H.R. 491, and S. 
1436 will be crucial in this endeavor. Thank you in advance for your 
consideration and support.

    Very respectfully,

    The National Coalition for Homeless Veterans

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