action which enhanced the integrity of our compensation program. In the same spirit, VA recently submitted to Congress proposed legislation that, among other things, would add a new section to title 38, United States Code, prohibiting service connection of a death or disability on the basis that it resulted from injury or disease attributable, in whole or in part, to the use of tobacco products by the veteran during his or her service. Our proposal regarding tobacco use would apply only with respect to claims filed after the date of its enactment, and would not preclude establishment of service connection where the disease or injury became manifest or was aggravated during active service or became manifest to the requisite degree of disability during any applicable presumptive period specified in section 1112 or 1116 of title 38, United States Code.

Mr. Chairman, this concludes my testimony. I will now be happy to answer any questions you might have.

Mr. Chairman and Members of the Subcommittee:

We are pleased to be here today to provide our views on the progress made and challenges faced by the Veterans Benefits Administration (VBA) in implementing the Government Performance and Results Act (GPRA). As you know, over the past several years, the Congress has taken steps to fundamentally change the way federal agencies go about their work. The Congress took these steps in response to management problems so common among federal agencies that they demanded governmentwide solutions. GPRA was passed in 1993 to require agencies to clearly define their missions, set goals, measure performance, and report on their accomplishments.

VBA is responsible for administering the Department of Veterans Affairs' (VA) nonmedical programs that provide financial and other benefits to veterans, their dependents, and survivors. These benefits include disability compensation, pensions, rehabilitation assistance, education benefits, home loan benefits, and insurance coverage. As requested by the Subcommittee, my statement will center primarily on VBA's largest program-the compensation and pension program-which accounts for more than 90 percent of VBA's $20 billion appropriation for fiscal year 1996 and provides compensation and pensions to over 3 million veterans and their survivors. My statement will address the purpose and requirements of GPRA, the progress VBA has made, and challenges it faces in implementing the act. The information in this statement is based on our past work in the area, a review of VBA's strategic plan, and discussions with VBA officials.

In summary, VBA has taken an important first step in implementing GPRA, but this process is an evolving one. To date, VBA has developed a strategic plan with a mission and goals and has begun consultation with the Congress and other stakeholders to obtain their views on its plan. For the compensation and pension program, VBA has identified specific performance measures for such factors as timeliness and accuracy in processing claims. However, these measures are primarily process oriented. As it continues through the planning process, VBA also needs to ensure that its strategic plan focuses on results, as required by GPRA, such as those related to the overall purpose of the program, and not merely on the process used to administer the benefits. In addition, to help ensure quality service, VBA needs to integrate its strategic plan with VA's overall plan and with the plans of other key federal agencies, such as the Department of Defense and the Department of Labor's Veterans' Employment and Training Service. Down the road, VBA will also need to ensure that it effectively measures and assesses its performance, as mandated by GPRA, to determine how well its programs are meeting their goals and making improvements. Our prior work suggests that VBA will be challenged in implementing GPRA because it has had difficulties in the past in bringing about program improvements.

PURPOSE AND REQUIREMENTS OF GPRA

GPRA is the centerpiece of a statutory framework provided by recent legislation to bring needed improvements to federal agencies' management activities. (Other parts of the framework include the 1990 Chief Financial Officers Act, the 1995 Paperwork Reduction Act, and the 1996 Clinger-Cohen Act.) Under GPRA, executive branch agencies are to set strategic goals, measure their performance, and use that performance information to make improvements.

GPRA was designed to focus federal agencies' attention on the results of the programs they administer-not just on program operations. Instead of focusing on the amounts of money they spend or the size of their workloads, agencies are expected to rethink their missions in terms of the results they provide, develop goals based on their results-oriented missions, develop strategies for achieving their goals, and measure actual performance against the goals.

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Our reviews of federal programs have found numerous examples of management problems that GPRA is intended to correct.' Several examples follow:

Some agencies do not have clear understandings or statements of what their missions are. GPRA requires agencies to articulate their missions.

In some program areas, responsibilities are fragmented among several agencies, which wastes scarce funds, confuses and frustrates customers, and limits the overall effectiveness of federal efforts to serve customers. GPRA aims to help agencies to address the fragmentation of program areas, and to coordinate their strategic planning efforts with other agencies.

Many agencies measure performance on the basis of their workloads, rather than on the results of their programs. Instead of the more difficult task of measuring how well programs are serving customers and achieving the results intended by the Congress, agencies focus on such measures as how many applications they process and how quickly they process them. Thus, agencies do not know, and cannot inform the Congress, how well their programs are actually achieving their purposes. GPRA requires agencies to develop results-oriented performance measures.

Many agencies lack coherent strategies for achieving their missions. In a time of budget constraints, agencies need to rethink how they manage their programs, and they need strategies for achieving their missions more efficiently and effectively. GPRA requires agencies to develop such coherent strategies.

Many agencies lack adequate information on program results and costs. Without such information, the Congress has difficulty making informed policy and budget decisions. GPRA requires agencies to develop results-oriented performance measures and to report annually on their performance. As we noted in a recent report, GPRA aims for a closer and clearer linkage between spending decisions and the results of federal programs.

Also, GPRA requires agencies to consult with the Congress in developing their strategic plans. This gives the Congress the opportunity to work with agencies to ensure that their missions and goals are focused on results; consistent with the Congress' intent in establishing programs; and reasonable, in light of fiscal constraints. The products of this consultation should be clearer guidance to agencies on their missions and goals and better information to help the Congress make choices among programs, consider alternative ways to achieve results, and assess how well agencies are achieving the results the Congress intended for programs.

GPRA requires VA and other agencies to complete their strategic plans by September 30, 1997. Future actions required under GPRA include the following:

Beginning in the fall of 1997 (for the fiscal year 1999 budget cycle), agencies will submit an annual performance plan to the Office of Management and Budget (OMB).

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Beginning with the fiscal year 1999 budget, OMB will include a governmentwide performance plan in the President's budget submission to the Congress.

On March 31 of each year, beginning with 2000, agencies will submit annual performance reports, comparing their actual performance with their goals, to the Congress and OMB.

'Managing for Results: Using GPRA to Assist Congressional and Executive Branch Decisionmaking (GAO/T-GGD-97-43, Feb. 12, 1997).

2Performance Budgeting: Past Initiatives Offer Insights for GPRA Implementation (GAO/AIMD-97-46, Mar. 27, 1997).

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PROGRESS VBA HAS MADE IN IMPLEMENTING GPRA

In implementing GPRA, VBA's planning process has been evolving. VBA first developed a strategic plan in December 1994 covering fiscal years 1996-2001. The plan laid out VBA's mission, strategic vision, and goals. For example, the compensation goal was to provide compensation benefits to veterans who were disabled while in the service and to their eligible dependents upon the veterans' death. The pension goal was to provide pension benefits to veterans of wartime periods who are disabled and do not meet minimum income requirements, and to their eligible dependents upon the death of the veterans. However, in a 1995 report, VA's Inspector General stated that the goals in the strategic plan could not be measured because the plan did not contain specific performance information.3

In fiscal year 1995, VBA established a new GPRA strategic planning process. VBA began developing five "business line" plans corresponding with its major program areas: compensation and pension, educational assistance, loan guaranty, vocational rehabilitation and counseling, and insurance. These business plans were to supplement the overall strategic plan and to specify program performance objectives and measurements.

In VA's fiscal year 1998 budget submission, VBA has set forth its business goals and measures. VBA has identified seven goals for the compensation and pension program that are oriented toward the efficiency of claims processing and customer satisfaction.

Be responsive to customer and stakeholder needs.

Maintain a 97-percent accuracy rate for claims processing.

Reduce the time required to process claims.

Reduce operating costs.

Ensure the best value for the taxpayers' dollar.

Maintain a highly skilled, motivated, and adaptable workforce.

Improve communications and outreach.

VBA has also identified specific performance measures for the compensation and pension program. For instance, the measures include reducing processing time for original compensation claims from 144 days to 53 days and achieving a 97-percent accuracy rate for claims processing by fiscal year 2002.

CHALLENGES VBA FACES

As VBA continues its process of implementing GPRA, it faces some difficult challenges. If the full intent of GPRA is to be achieved, VBA will need to develop a strategic plan with a clear mission, goals, and performance measures that are truly results oriented. In addition, VBA will need to integrate its strategic plan with those of VA and other federal agencies to ensure quality service, since VBA is not the only agency providing veterans' benefits. Furthermore, VBA will need to effectively measure and assess its performance to fully complete the process that GPRA mandates for improved federal programs.

Focusing on Results

VBA has identified specific goals and measures in its current strategic plan, but again, they tend to be process oriented. While these goals and measures are important, they do not reflect program results. For example, the purpose of the disability compensation program is to compensate veterans for the average loss in earning capacity in civilian occupations that results from injuries or conditions incurred or aggravated during military service. Given this program purpose, results-oriented goals would focus on issues such as whether disabled veterans are indeed being compensated for average

'Office of the Inspector General, Review of the Implementation of VBA's Strategic Plan and Performance Measurements, 5R1-B18-100 (Washington, D.C.: VA, Aug. 25, 1995).

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