Review of Open Obligations in VBA’s General Operating Expenses Account

Report Information

Issue Date
Report Number
25-02887-107
VA Office
Office of Management (OM)
Report Author
Office of Audits and Evaluations
Report Type
Review
Report Topic
Financial Management
Major Management Challenges
Stewardship of Taxpayer Dollars
Recommendations
3
Questioned Costs
$0
Better Use of Funds
$895,257,953
Congressionally Mandated
No

Summary

Summary

The VA OIG reviewed the Veterans Benefits Administration’s (VBA) oversight of open obligations—including undelivered orders and unpaid delivered orders (accruals)—from March 1 through May 15, 2025. The review assessed whether VBA effectively managed funds within its $4 billion fiscal year 2025 general operating expenses account, which supports the administration and delivery of veterans’ benefits. VA financial policy requires monthly reviews and reconciliation of all open obligations to ensure balances are accurate, documented, and valid. Obligations that are open beyond their period of performance or are inactive for more than 90 days are considered stale and must be reviewed and, when appropriate, deobligated.

The OIG found that VBA did not consistently follow these requirements, delaying the identification and release of funds that could have been redirected to support veterans. From March 1 through May 15, 2025, about 2,200 undelivered orders valued at $1.9 billion were stale. From a statistical sample, the OIG projected that nearly 2,100 of these orders—totaling about $1.7 billion—had not been properly reviewed, and about 1,600 (representing $895.3 million) should have been deobligated but were not. VBA also did not review an estimated 1,000 accruals. Staff relied on an automation in the Integrated Financial and Acquisition Management System rather than verifying expenses and confirming that they aligned with each obligation’s period of performance as required.

Contributing factors included outdated guidance that did not reflect current financial systems, insufficient documentation of reviews, and inconsistent communication among finance, requesting, and contracting offices. Leaders noted challenges with staffing and reliance on legacy systems.

The OIG made three recommendations to the assistant secretary for management, who also serves as chief financial officer, to improve oversight, strengthen policy compliance, and enhance financial stewardship as VA continues to realign its finance and budget functions.

Open Recommendation Image, SquareOpenClosed and Implemented Recommendation Image, CheckmarkClosed-ImplementedNot Implemented Recommendation Image, X character'Closed-Not Implemented
No. 1
Open Recommendation Image, Square
to Office of Management (OM)

Standardize and enforce a documented monthly process for reviewing and validating open obligations—including undelivered orders and accruals—with defined staff roles, responsibilities, and communication protocols, in alignment with VA financial policy.

No. 2
Open Recommendation Image, Square
to Office of Management (OM)

In conjunction with the Office of Acquisition, Logistics, and Construction, establish and document procedures that define roles and communication requirements with requesting and contracting offices to ensure timely end-date modifications and deobligation of funds that are no longer needed.

No. 3
Open Recommendation Image, Square
to Office of Management (OM)

In coordination with the VA Office of Financial Policy, develop VBA‑specific procedures aligned with appendix F of VA Financial Policy, “Obligations,” and confirm those procedures are consistently implemented to support reconciliation, documentation, and closure of open obligations in the Integrated Financial and Acquisition Management System.

Total Monetary Impact of All Recommendations
Open: $ 895,257,953.00
Closed: $ 0.00