renewal requests and patient medication profiles. Project APPLES provides improved service by reducing or eliminating backlogs in the refill mail-out program, and by providing readily accessible information to respond to patient and physician inquiries. Automated controls are provided to guard against prescription duplication and excessive drug use.

An Inter-VA Data Processing Center Telecommunications Network was established which allows all the data processing centers to efficiently and effectively exchange information via electronic transmissions. This network, consisting of minicomputer transceivers, features full redundancy (duplicate resources in case of full or partial breakdown) with unlimited expansion and total standardization in hardware, software and operation, giving it the capability of high speed transmission as well as total network switching versatility. It not only supports inter-VA DPC transmissions, but also augments the VA/General Services Administration Advanced Record System transmissions, thereby giving nationwide flexibility in the movement of information.

Telephone Service for Assistance to Veterans

Special toll free telephone services were further expanded during FY 1976, to assist veterans in obtaining benefits. Engineering efforts were also continued to improve telephone answering facilities at numerous VA regional offices. These efforts resulted in the installation and enlargement of automatic and manual call distributing systems for more efficient call handling of veterans' telephone inquiries.

The demand for telecommunications facsimile facilities to expedite transmission of veterans' information and priority documents increased significantly. Facsimile equipment was installed at 55 VA hospitals, 15 outpatient clinics, three regional offices, four centers and one national cemetery office.

The total number of VA field stations not provided with Federal Telecommunications System telephone service was reduced from 15 to seven VA hospitals or centers.

Technical assistance was provided to VA hospitals in identifying telephone service and engineering requirements for replacement, enlargement and modernization of hospital telephone systems. During FY 1976, special replacement engineering studies were made at 20 VA hospitals and out

patient clinics for the purpose of preparing technical specifications to obtain new electronic type telephone systems. Orders were placed for new systems at six of these locations.

Radio Frequency Management

As a member of the Executive Office of the President's Interdepartment Radio Advisory Committee (IRAC) for 15 months, the VA is a participant in scheduled bi-monthly meetings of the IRAC, the Spectrum Planning Subcommittee (SPS), and the Frequency Assignment Subcommittee (FAS). VA has participated in the IRAC ad hoc committees on Drafting U.S. Position for the 1979 General Radio Conference and on the Provision of Additional Channels for Citizens Band Radio. The VA is also a member of the Inter-agency Communications Work Group for Improvement of Emergency Medical Services through establishment of national standards and policies governing communications between federal and local authorities.

In the past year, VA's use of the radio spectrum increased significantly and the number of VA radio frequency assignments increased by 25 percent.

In support of VA's participation in the Communications Technology Satellite (CTS) experiments, coordination was effected with the Federal Communications Commission so that the VA can obtain radio frequency authorizations to transmit medical programs from selected hospitals or medical schools, via the CTS satellite, within 30 days of scheduling.

Closed Circuit Television Systems

Closed circuit television systems (CCTV) throughout the VA and the private hospital community are enjoying a popularity never before seen in this industry. In the VA, new systems are being installed and older systems are being upgraded to color, adding a new dimension to the delivery of health care services, hospital administration, and medical education programs. To design, engineer, test and evaluate these systems, over 80 field engineering trips were made in the past year. The CCTV systems installed and upgraded included color cameras, video recorders, monitoring, testing, processing and switching equipment.

An endoscopic CCTV system installed at the VA Hospital Lake City, Florida, several years ago, was recently upgraded and equipped with one of the latest types of TV color cameras, improving the colorimetry and resolution. This system was a first for the VA and a pioneer in the field of television for endoscopic use.

New systems were installed or existing systems modernized by increasing coverage and providing direct dial access and "group call" features. The direct dial feature allows anyone with a hospital telephone to access the radio paging system. The group call feature provides the ability to alert an entire medical team to respond to a medical emergency.

Nurse Call Communications

Engineering and design activities for nurse call systems continued to grow during FY 1976. Activities included designing and engineering systems for new construction projects, and for the replacement of old and obsolete systems. Using portable television receivers, the new equipment combines audio/visual nurse-patient communications and entertainment in a single multifunctional system.

Hospital Radio Page Systems

During the past year an intensive effort was made to improve radio paging at VA hospitals.

Satellite Communications

In the past year, the Application Technology Satellite (ATS-6) "Slow Scan TV" experiments were concluded with good results. Communications Technology Satellite (CTS) was launched from Cape Kennedy on January 13, 1976, and its coverage (footprint) will encompass 11 western states and parts of Mexico and Canada. The VA will become a participant in the CTS program. The purpose is to conduct biomedical and clinical experiments among 32 VA hospitals and to determine and publish the feasibility and cost effectiveness of such communication within the VA Health Care System. These experiments are expected to

begin in April 1977 with full color television broadcasting.

Installation of a network of color CCTV systems in Louisiana and Mississippi was completed and the systems are now operational. In the future, these systems will be inter-connected via microwave and/or telephone lines to form an interactive CCTV network. Presently, data are being gathered and evaluated to determine the desirability of interconnecting additional VA hospitals via microwave with their affiliated medical teaching hospitals. This would add another valuable source of medical education for the VA hospital staffs. The VA Hospital Houston, Texas, is the latest hospital scheduled for an interconnected microwave system with the Baylor University Medical School.

The VA continues to provide technical consultant services to the Department of Health, Education and Welfare (HEW) for their CCTV network in the Wyoming Valley of Pennsylvania. The system was designed and contracts awarded for the CCTV studios and the interconnect microwave system. The VA will still provide technical assistance during the installation and testing of these systems.

MANAGEMENT AND ORGANIZATION

Paperwork Management

For the 15-month period July 1, 1975 through September 30, 1976, year-end record holdings increased 53,000 cubic feet or 3.9 percent to 1,382,000 cubic feet.' There was a 6.1 increase in the disposal of records over the previous year. In addition, there was an increase in records retired to Federal Archives and Records Centers, and a significant decrease of 12,100 cubic feet in the

1

The enactment of the Congressional Budget and Impoundment Control Act of 1974 (Public Law 93-344) required that the fiscal year begin October 1 and end September 30. The Federal Property Management Regulations requiring the submission of the fiscal year "Annual Records Inventory" was modified for FY 1976 to cover the 15-month period from July 1, 1975 through September 30, 1976. Beginning with FY 1977, future submissions of this report will involve the 12-month period beginning October 1 of each year and ending September 30 of the following year.

amount of non-record holdings. However, even though records disposal actions increased substantially, the volume of new records added to the agency's files also increased, as a result of large numbers of veterans and other eligible persons applying for VA benefits.

Significant records management activities during FY 1976 included the following accomplishments.

The first of three phases for relocation of inactive claims folders from 19 regional offices to low cost storage at the Records Processing Center, St. Louis, Mo., was completed in May 1976. The project, when completed will involve relocating approximately 1.3 million folders. Projected cost avoidance savings for space and equipment are equivalent to 7,428 filing cabinets costing almost $1.5 million and 52,00 square feet of prime office space valued at $348,900. Additional costs, including man-hours required to select and box folders, shipping and supply costs, will amount to approximately $205,300, producing a projected net cost avoidance savings of nearly $1.6 million.

Since 1956 VA has used Federal Archives and Records Center facilities to store over 6 million paid-in-full and certain active guaranteed or insured and direct loan folders for an indefinite period. A recently approved retention standard now permits the destruction of paid-in-full folders five years after being returned to a Federal Records Center. As a result, approximately 1.9 million loan folders paid-in-full between the years 1946 to 1971 have been destroyed, releasing 42,394 cubic feet of storage space valued at $33,000.

Negotiations with the General Services Administration were completed on the relocation of approximately 22,000 XC (deceased claim) folders from the Manila Regional Office to the Federal Archives and Records Center, Seattle, Washington. In May 1976, this project was completed releasing 928 square feet of prime high cost office space and 140 five-drawer filing cabinets for use. The net cost avoidance savings realized was approximately $25,000.

A reduction in the retention period for inactive medical records from 5 years to 3 years was approved. This action will reduce medical records holdings by approximately 70,000 cubic feet, and will release prime health care facility space for other uses.

On June 30, 1976, there were 12,493 different VA forms and form letters in use of which 36 percent were standardized for VA-wide use. Dur

ing the year, 202 standardized forms and form letters were eliminated as no longer necessary, 365 were created to meet new requirements, and 622 were updated and improved.

Management Improvement

Management reviews and analyses of major programs, systems and procedures are conducted regularly to improve the effectiveness and efficiency of VA operations in the accomplishment of the agency's overall mission of service to veterans.

A program evaluation system was developed during the fiscal year, and a new methodology, including the establishment of objectives, selection of criteria, data collection and evaluation techniques, was tested in two prototype programs.

Cost-benefit studies were conducted on the expansion of automated clinical laboratories, an automated prescription processing, labeling, editing and storage system for pharmacies in VA health care facilities and the Target system, the redesign of VA's current automated compensation, pension and education system.

The Department of Veterans Benefits continued to expand and improve its word processing capability during the past year. Stationwide remote control dictating systems are now used at 51 out of 59 field stations. In addition, obsolete dictating systems were replaced with modern magnetic media dictating/transcription systems in eight field stations, and three field stations expanded their existing systems to accommodate increased correspondence workloads. A productivity increase of 10 percent realized whenever an obsolete dictation system is replaced. To further expand the capability of these transcription activities, utilization of automatic typewriters has also increased. Ninety-nine machines are now in use for automated preparation of repetitive and semi-repetitive correspondence.

A program to reduce employee travel costs was placed in effect in January 1976. Guidelines and suggested methods to achieve savings in travel costs were distributed agency-wide. As a result of this effort, the VA achieved savings in employee travel costs of approximately $4 million during the second half of FY 1976.

An in-house agency-wide study of the VA's beneficiary travel allowance policy was conducted during FY 1976. Data was furnished by 171 VA hospitals and outpatient clinics. Among the factors considered were the adequacy of mileage and per diem reimbursement rates, the adequacy of park

ing facilities at VA installations, the availability of public transportation facilities nationally, and the appropriateness of general VA policies regarding beneficiaries authorized to receive travel reimbursement.

Audit Responsibility

Major organizational and functional realignments were accomplished during FY 1976 which fundamentally changed the focus and procedures of the internal audit program. The primary objective of these changes was to achieve greater impact through individual audit reports and composite trend reports made possible by an accelerated audit cycle. They were also designed to conform with audit standards prescribed by the General Accounting Office and audit programming requirements of the Office of Management and Budget. Functions of the former Fiscal Audit Division were absorbed by an expanded and redesignated Management Evaluation Division to incorporate tests of financial transactions, accounts and reports into an overall evaluation of the management of an activity. Simultaneously, the Contracts and Special Audits Division was created to strengthen audit overview in the increasingly important area of contract and grant administration and to represent VA concerns in audits performed by the Defense Contract Audit Agency and the Department of Health Education and Welfare. In recognition of the agency's reliance on automated data processing for both internal transactions and the delivery of direct monetary benefits, the Automated Data Processing Evaluation Division was established as a separate entity.

As fiscal year 1976 audit activities were accomplished under two organizational arrangements, the number of audits accomplished under either approach is not entirely descriptive of audit impact or results. The figures do help to portray, however, the scope and range of activity in the audit program.

Financial and compliance audits were accomplished at Central Office, 16 regional offices or VA centers, 21 hospitals and 15 State homes. Eighteen contract and special audits were completed along with an additional 18 desk reviews. Thirty financial and compliance audits, accomplished by either the Defense Contract Audit Agency or the Department of Health, Education and Welfare were also monitored and evaluated during the past year. These audits resulted in an estimated savings of approximately $650,000. Broad scope manage

ment (or operational) audits were accomplished at twenty-four field installations and in four program elements. In addition, nine broad scope audit follow-ups were conducted to ascertain response to recommendations and to provide a quality control of audit effort. Twelve audit manager screening visits were accomplished which, in conjunction with a recently developed automated data base, assist in determining audit priority. An entirely new survey guide was developed utilizing a highly selective sampling approach for the use of audit managers and designated senior audit staff.

The potential for direct savings from an accelerated broad scope audit program is now beginning to be realized. For example, the salary and travel costs associated with these projects totaled approximately $750,000 while the potential tangible, savings and/or cost avoidance resulting from the same projects amounted to slightly over $7.5 million. The report recommendations primarily related to improving staff utilization, more comprehensive facility planning, and strengthening controls over purchase and use of equipment and supplies.

Activities of the Automated Data Processing Evaluation Division were heavily weighted toward consultation with other department and staff offices to foster improved management practices over the entire range of agency automated data processing (ADP) activities. These consultations included preparation of position papers on overall long range planning for ADP by the Department of Medicine and Surgery, and a paper on the development of the Clinical Automated Laboratory System. In addition, the Division has been involved in establishing the Agency position in a series of internal ADP developments, such as consulting with the review group within Department of Veterans Benefits evaluating the Centralized Accounts Receivable System and reviewing Computer Security Guidelines required by the Privacy Act of 1974. The Division provided in-depth knowledge and support to the traditional Internal Audit Service function of liaison with the General Accounting Office which has greatly increased overview and reporting in this critical area.

Investigation and Security

Administrative investigations, surveys and special studies of activities are made at all levels of the VA and of those organizations or individuals having official dealings with the VA. Investigation reports containing recommendations are submitted

to department heads and top staff officials for appropriate actions such as disciplinary actions, changes or clarification of policies and procedures, recovery of funds or disbarment of individuals doing business with the VA. Liaison is maintained with other government agencies on investigative matters. Reports of investigation from other agencies are reviewed and disseminated to appropriate VA elements for action. Complaint mail received in Central Office is screened and complaints not warranting Central Office investigation are referred to department or staff offices for appropriate development. Reports of local investigations conducted by VA field stations are reviewed for adequacy of investigation and action.

Other functions conducted on a continuing basis include a nationwide missing veterans program, and the VA personnel and documents security program implementing the requirements of Executive Orders 10450 and 11652. In addition a technical laboratory is operated for the examination of questioned documents and other materials subject to laboratory analysis in connection with investigative or adjudicative activities throughout the VA.

Reports Management

During FY 1976, follow-ups continued on recommendations made in earlier studies of the total information needs of elements in the Department of Veterans Benefits (Area Field Directors, Loan Guaranty Service and Budget Staff) and in the Office of Personnel. As a result of these follow-up activities, nine reports and nearly 450 report copies were discontinued. Studies were completed of the information needs of the Department of Data Management (DDM) and the Department of Medicine and Surgery's (DM&S) Social Work Service. The DDM analysis contained 30 recommendations, which called for cancellation of 19 reports, automation of 12 reports, revision of seven reports and control of three reports. The Social Work Service study's nine recommendations included suggestions on automation of certain manual computations, elimination of data items and changes in report frequencies.

Improvements in the Patient Treatment File (PTF) resulted in discontinuance of eight reports and reduction of the number of copies of 16 reports, at a savings of 12,599 pages of paper for FY 1976. The system was changed from an inventory to a discharge system reducing the