Watchdog Dings VA for Poor Management of Rural Health Program

The Veterans Health Administration has not adequately managed a large chunk of funds associated with a program that provides patient services to vets in rural areas, according to a report from the department's inspector general.

The IG concluded the Office of Rural Health lacked certainty that it effectively allocated $273.3 million, or 51 percent, of $533 million in funding it received during fiscal 2009 and fiscal 2010. "Specifically, we found ORH did not adequately manage the use of fee funds and the proposal selection process," the report said.

The watchdog blamed a lack of internal financial controls and performance measures as well as ineffective communication and collaboration among department officials for the problems. The report also said that, until recently, ORH "did not have the management staff in place that had the knowledge, skills and experience required to lead and manage a newly established organization." The department has hired staff with more experience in financial management and budgeting, and is trying to rectify that weakness, the IG said.