Compassion
We will treat all Veterans and their families with the utmost dignity and compassion. We will provide services in a caring
manner, with a sympathetic consciousness of others’ distress together with a desire to alleviate it.
Commitment
Veterans have earned our gratitude and respect. Their health care, benefits, and memorial service needs drive our actions.
Excellence
We strive to exceed the expectations of Veterans and their families. We strive to perform at the highest level of
competence and take pride in our accomplishments.
Professionalism
Our success depends on maintaining a highly skilled, diverse, and compassionate workforce. We foster a culture that
values equal opportunity, innovation, and accountability.
Integrity
We recognize the importance of accurate information. We practice open, truthful, and timely communication with
Veterans, employees, and external stakeholders. By listening and responding to their concerns, we seek continuous
improvement in our programs and services.
Accountability
We will perform in a manner that makes us accountable and responsible to Veterans and their families, our leaders and
other employees, as well as to external stakeholders.
Stewardship
We will ensure responsible stewardship of natural resources as well as data and information entrusted to us. We will
improve performance through the use of innovative technologies and sound business principles.
Values
Mission, Vision, and Values
VA’s Mission
To fulfill President Lincoln’s promise—“To care for him who shall have borne
the battle, and for his widow, and his orphan”—by serving and honoring the
men and women who are America’s Veterans.
VA Franchise Fund’s Mission
To be the provider of choice of common administrative support services for
VA and other government agency customers, enabling them to best meet
their primary missions.
A Franchise Fund’s Vision
To provide Comprehensive Business Solutions for Tomorrow’s Government.
VA Franchise Fund’s Values
To guide us in fulfilling our mission, our employees strive to uphold core
values that are consistent and closely aligned with those of VA. These values
include compassion, commitment, excellence, professionalism, integrity, ac-
countability, and stewardship.
Secretary of Veterans Affairs
Assistant Secretary
for Management,
Chief Financial Officer
Assistant Secretary
for Operations,
Security and
Preparedness
Assistant Secretary
for Information and
Technology,
Chief Information Officer
Franchise Fund
Board of Directors
Deputy
Assistant Secretary
for Finance
Deputy
Assistant Secretary
for Security and
Law Enforcement
Debt
Management
Center
Franchise and
Trust Fund
Oversight Office
Financial
Services
Center
Law Enforcement
Training Center
Security and
Investigations
Center
Austin Information
Technology Center
VA Records
Center and Vault
Deputy Assistant
Secretary for
Personnel Security
and Identity
Management
Members of the VA Franchise Fund Network
Origin of the VA Franchise Fund
The VA Franchise Fund was established under the authority of the Government Management Reform Act of 1994 and the VA
and Housing and Urban Development and Independent Agencies Appropriations Act of 1997. VA was selected by the Office
of Management and Budget (OMB) in 1996 as one of six Executive branch agencies to establish a franchise fund pilot pro-
gram. Created as a revolving fund, the VA Franchise Fund began providing common administrative support services to VA
and other government agencies in 1997 on a fee-for-service basis. In 2006, under the Military Quality of Life and Veterans
Affairs Appropriations Act, Public Law 109-114, permanent status was conferred upon the VA Franchise Fund.
Organizational Structure
The VA Franchise Fund is composed of an administrative office (Franchise and Trust Fund Oversight Office) and six self-
supporting lines of business (Enterprise Centers). The directors of the individual Enterprise Centers and their staffs are
responsible for customer liaison and coordination, business planning and development, staffing, and execution of day-to-
day business activities consistent with their annual business plans. The Franchise Fund Board of Directors is composed of
representatives from the three VA organizations that manage the Enterprise Centers (the Office of Management; Office
of Operations, Security, and Preparedness; and Office of Information and Technology), major organizations within VA,
i.e., Veterans Health Administration (VHA), Veterans Benefits Administration (VBA), and National Cemetery Administration
(NCA), and pertinent VA staff offices.
Washington,
DC
Little Rock,
AR
St. Paul,
MN
Austin,
TX
Neosho,
MO
Entrepreneurial Network
We are one of the leading fee-for-service operations in government. By employing
people nationwide to execute our day-to-day business activities, we provide our
customers with services that save resources and allow them to concentrate on
mission-critical functions within their organization. We have positioned ourselves
to meet the needs of any Federal agency at competitive prices.
Business Segments
The VA Franchise Fund comprises three major segments: information technology (IT), financial
management (FM), and security and law enforcement (S&LE). The chart below shows the
revenue among our segments for FY 2008 through FY 2010.
The IT segment ended FY 2010 with over $170 million in revenue, compared to $138 million in
FY 2009.
The FM segment generated over $186 million in revenue in FY 2010, a 17 percent increase over
FY 2009’s revenue of $159 million.
The S&LE segment experienced an increase in revenue of approximately 24 percent. Revenue in
FY 2010 was nearly $16 million compared to nearly $13 million in FY 2009.
Members of the
VA Franchise Fund Network
Financial Services Center (Austin, TX)
• Financial Reports and Accounting
• Audit Recovery
• Credit Card Payments
• Data Matching and Reconciliation
• Discount Subsistence Purchases
• Document Management System
• Electronic Commerce/Electronic Data
Interchange
• Invoice Payments
• Medical Claims Adjudication and
Payment Processing
• Customer Support Help Desks for Travel
and Payments
• Payroll Support Services
• Permanent Change of Station and
Temporary Duty Travel
• Vendor File Maintenance
• Common Administrative Services
• Accounting Training
• Consulting
Financial Management (FM)
0
50000
100000
150000
200000
250000
300000
350000
400000
$ 0
$ 50,000
$ 100,000
$ 150,000
$ 200,000
$ 250,000
$ 300,000
$ 350,000
$ 400,000
FY 2008
$112,946
$107,301
$ 10,945
FY 2009
$159,236
$138,430
$ 12,601
FY 2010
$186,176
$170,265
$ 15,653
VA Franchise Fund
Revenue Trend by Major Segments
($ in thousands)
FM
IT
S&LE
Records Center and Vault (Neosho, MO)
• Records Storage
• Records Management Services
Information Technology (IT)
Washington,
DC
Little Rock,
AR
St. Paul,
MN
Austin,
TX
Neosho,
MO
Austin Information Technology Center
(Austin, TX)
• Systems Hosting Services
• Application Management
• Information Assurance
• Configuration Management
• Data Conversion and Data Interfacing
Information Technology (IT)
Franchise and Trust Fund Oversight Office
(Washington, DC)
• Administrative Support to the Enterprise Centers
• Budget Formulation and Execution Analysis
• Financial and Business Planning Oversight
• Audit of Consolidated Financial Statements
• Annual Report Coordination
• Marketing Strategies
• Strategic Plan Coordination
• Simplified Acquisition Procurement Support
Financial Management (FM)
Law Enforcement Training Center (Little Rock, AR)
Security and Law Enforcement (S&LE)
Security and Investigations Center (Little Rock, AR)
• Background Investigations and Adjudications
Security and Law Enforcement (S&LE)
Debt Management Center (St. Paul, MN)
• Account Maintenance
• Administrative Offset
• Administrative Support
Financial Management (FM)
Courses:
• Active Threat Response
• Advanced Crime Scene
Collection
• Armorer
• Basic Training
• Basic Training w/o meals
and lodging
• Computer Crime
• Crime Scene Photography
• Detective
• Firearms Instructor
• Firearms Instructor
Recertification
• Ground Defense
• Instructor Development
• New Chief Supervisory
• Police Chief Conference
• Police Officer Refresher
• Physical Security
• Theft and Fraud in Hospitals
• Tactical Firearms Instructor
• Technical Surveillance
Installation
• Traffic Accident
Investigations
• USAF Basic
• USAF Security Officer
• Weapons Trainer
• Weapons Trainer Refresher
Information Technology
Corporate Data Center
Operations (CDCO) – Austin
Information Technology Center
(AITC). Located in Austin,
TX, the AITC provides comprehensive
electronic government solutions to
match the critical needs of VA and
other federal agency customers,
from managing data to automating
business processes. The AITC supports
over 100 customer applications
that provide mission-critical data
for financial management, payroll,
human resources, logistics, medical
records, eligibility benefits and supply
functions. In addition, the AITC offers a
full complement of technical solutions
to best meet customer needs.
Records Center and Vault
(RC&V). Located in a subterranean,
climate-controlled facility in a remote
Midwestern part of the country,
the RC&V provides records storage,
protection, and management services
for official federal records. The
403,160 square foot facility is certified
by the National Archives and Records
Administration to operate as an
agency records center. General, vital,
unscheduled, and records pending
litigation freezes are safely and securely
stored in paper or film format.
Financial Management
Debt Management Center
(DMC). Located in St. Paul, MN,
the DMC is a centralized facility that
provides direct collection of delinquent
consumer debt owed to VA.
Financial Services Center
(FSC). Located in Austin, TX,
the FSC provides a full range of
financial and accounting services
including financial reports and
accounting, invoice payments,
credit card payments, medical
claims adjudication and payment
processing, vendor file maintenance,
discount subsistence purchases, and
payroll support services. The FSC also
provides customer support help desks
for travel and payment processing,
electronic commerce/electronic data
interchange, automated document
management, audit recovery,
permanent change of station and
temporary duty travel pay processing,
common administrative services,
accounting training, and consulting.
Franchise and Trust Fund
Oversight Office (FTO). Located in
Washington, DC, the FTO functions as
the business office for the VA Franchise
Fund. As such, the FTO is responsible
for providing administrative support
to the Enterprise Centers by directing
and analyzing budget formulation and
execution processes, administering
financial resources, overseeing business
planning activities, managing the
annual financial statement audit for
the Fund, preparing the annual reports
and strategic plans, coordinating
marketing activities, and serving as the
liaison between the Enterprise Centers,
their customers, and the VA Franchise
Fund Board of Directors.
Security and Law Enforcement
Law Enforcement Training
Center (LETC). Located in Little
Rock, AR, the LETC provides special
training for police officers working
in a health care or service-oriented
environment. Emphasizing training
in health care or limited jurisdiction
environments, the LETC is available to
approximately 3,900 law enforcement
personnel working at VA health care
facilities and to law enforcement
professionals at other federal
agencies.
Security and Investigations
Center (SIC). Located in Little Rock,
AR, the SIC provides quality and
timely background investigations
and adjudications for employees and
contractors in sensitive positions for
VA entities nationwide.
Members of the VA Franchise Fund Network
Robert Cagle, Director, Law
Enforcement Training Center
Rodney Wood, Director
Financial Services Center
Daniel Osendorf, Director
Debt Management Center
Marianne Condon, Director
Franchise and Trust Fund
Oversight Office
Judy Downing, Acting
Executive Director, Corporate
Data Center Operations and
the Records Center and Vault
Walter Dodd, Acting
Director, Security and
Investigations Center
Letter to Stakeholders
On behalf of the Franchise Fund, I invite you to examine our FY 2010 Annual Report
outlining the VA Enterprise Centers’ accomplishments and plans for next year, and the
Franchise Fund’s audited financial statements. This report documents the Franchise
Fund’s progress in the delivery of common administrative services to VA and other
government agencies (OGA). We ended FY 2010 with total revenue of $372 million,
an increase of 20 percent over FY 2009 revenue of $310 million.
The Franchise Fund’s progress resulted in many noteworthy accomplishments.
They include:
➤ Integrating five data centers into Corporate Data Center Operations to provide
more efficient data processing and maximize knowledge transfer opportunities
(AITC).
➤ Increasing debt collections at a rate of return of $149 for every dollar spent in
FY 2010, compared to $101 in FY 2009 (DMC).
➤ Creating a Web-based Permanent Change of Station (PCS) travel portal to
automate the flow of interagency transfer requests, thus streamlining the process
for initiating and approving travel documents (FSC).
➤ Constructing a 48-room dormitory to accommodate the growing need for
in-residence training programs (LETC).
➤ Conducting the Records Center and Vault’s first customer satisfaction survey to
enhance records storage and management services capabilities (RCV).
➤ Developing SecurityManager, a comprehensive Web-based enterprise security
management database (SIC).
➤ Attaining an unqualified audit opinion of our financial statements for the 13th
consecutive year.
These successful endeavors are examples of “Demonstrating Sound Business
Practices” through our efficiency in delivering common administrative support
services. The success of the Franchise Fund would not have been possible without
the support of its customers. We thank all of our customers for their continuing
support.
I am pleased to submit the Department of Veterans Affairs Franchise Fund FY 2010
Annual Report. We look forward to the coming year and are confident that we will
continue to demonstrate sound business practices.
W. Todd Grams,
Acting Assistant
Secretary for
Management and
Chief Financial Officer
External Stakeholders
➤ Veterans and their families
➤ Office of Management and Budget
➤ Congressional authorization and
appropriations committees and
subcommittees
➤ Veterans Service Organizations
➤ Private sector vendors
➤ Department of Agriculture
➤ Department of Defense
➤ Department of Energy
➤ Department of Health and Human Services
➤ Department of Homeland Security
➤ Department of Interior
➤ Department of Justice
➤ Department of Labor
➤ Department of Transportation
➤ Department of the Treasury
➤ Department of State
➤ Denali Commission
➤ Environmental Protection Agency
➤ Food and Drug Administration
➤ General Services Administration
➤ Government Accountability Office
➤ Internal Revenue Service
➤ National Aeronautics and Space
Administration
➤ National Archives and Records
Administration
➤ National Geospatial-Intelligence Center
➤ Office of Personnel Management
➤ Postal Regulatory Commission
➤ United States Postal Service
➤ White House Commission on the
National Moment of Remembrance
Internal Stakeholders
➤ Veterans Benefits Administration (VBA)
➤ Veterans Health Administration (VHA)
➤ National Cemetery Administration (NCA)
➤ VA Staff Offices
Our ultimate stakeholders are Veterans and their families who directly
benefit from the services VA provides and those who carefully monitor
the delivery of these services, including the Office of Management and
Budget, Congressional authorization and appropriations committees and
subcommittees, and Veterans Service Organizations. Other stakeholders
include VA and other government agencies.
As knowledgeable government professionals, we provide our stakeholders
with creative, cost-effective, and practical solutions to help them
accomplish their primary mission. Although Federal agencies have unique
missions, our collective experience enables us to give expert advice from
an insider’s point of view as we understand unique requirements and
financial constraints. We realize that we must compete for business every
day to retain our customers’ trust and confidence.
The American public also holds us accountable to high standards as we
spend their tax dollars to administer government programs. Expensive
and wasteful practices are not acceptable. We embrace resilience and
resourcefulness as we adopt business practices that enable us to become
more efficient and responsive.
Our Stakeholders
0
50000
100000
150000
200000
250000
300000
350000
400000
FY 2008
$69,834
$161,358
FY 2009
$76,971
$233,296
FY 2010
$95,830
$276,264
VA Franchise Fund
Revenue Sources – VA vs. OGA
($ in thousands)
OGA
VA
$ 0
$ 50,000
$ 100,000
$ 150,000
$ 200,000
$ 250,000
$ 300,000
$ 350,000
$ 400,000
NCA $608
0.3%
VA Staff Offices $40,212
17.4%
VHA $97,699
42.2%
OGA $69,834
30.2%
VBA $22,840
9.9%
NCA $1,042
0.4%
VA Staff Offices $50,029
16.1%
VHA $146,780
47.3%
OGA $76,971
24.8%
VBA $35,445
11.4%
Comparison of
Customer Revenue
from FY 2008–2010
VA Franchise Fund Revenue by Customer
As of September 30, 2009
(Dollars in Thousands)
VA Franchise Fund Revenue by Customer
As of September 30, 2008
(Dollars in Thousands)
Approximately three-fourths of our revenue
comes from VA customers. The remaining
one-fourth comes from a wide variety of other
government agency (OGA) customers. Within VA,
VHA programs provide the most revenue to the
Enterprise Centers.
Revenue from OGA customers has increased over
the past 3 years. We ended FY 2010 with $96
million, an increase in OGA sales of 25 percent
over FY 2009 levels of $77 million. This increase is
mainly due to additional revenue from Immigration
and Customs Enforcement (ICE) and Office of
Refugee Resettlement (ORR) for medical payment
processing, ICE credit cards processing, and
travel payments.
NCA $1,188
0.3%
VA Staff Offices $60,729
16.3%
VHA $174,431
46.9%
OGA $95,830
25.8%
VBA $39,916
10.7%
VA Franchise Fund Revenue by Customer
As of September 30, 2010
(Dollars in Thousands)
Information Technology Segment
CDCO – AITC National Service Desk
CDCO – AITC National Service Desk professionals are
certified through an accredited service desk institution,
and receive extensive training and certification from the
Information Technology Infrastructure Library (ITIL). The
NSD provides a vital customer interface for processing
and managing incidents, problems, inquiries, and service
requests. The purpose of this interface is to manage and
minimize the impact of any disruption to customer service.
The CDCO – AITC service desk receives an average of over
16,000 contacts monthly, and consistently exceeds their
FY 2010 goal of 80 percent resolution on “first contact.” It
also meet its goal of ensuring that 5 percent or fewer of all
calls are abandoned. Year after year, the AITC service desk
receives high marks on its annual customer satisfaction
survey, conducted independently by Gartner. The service
desk provides support on a corporate-wide basis for VA
Central Office, VHA, and VBA systems and applications
processed at all four Centers. In addition to its VA
customers, the service desk supports such Federal customers
as the Environmental Protection Agency (EPA), National
Archives and Records Administration (NARA), and the
Government Accountability Office (GAO).
All CDCO ITIL professionals in all areas are well trained and
receive professional certification where available, and all of
the various ITIL implementations are closely integrated.
Department of Defense (DoD) and VA
AITC hosts several important sharing projects between the
Department of Defense and VA.
➤ The Consolidated Mail Out Pharmacy (CMOP) project
allows DoD patients to receive prescription refills using
VA CMOP facilities, which has resulted in substantial cost
savings to DoD and enhanced revenue for VA.
➤ The Laboratory project is similar to CMOP and allows
DoD hospitals to order lab results from VA medical centers
and have results transferred back to them securely using a
virtual private network (VPN) hosted at AITC. DoD is also
investigating the benefits of using the DoD-VA gateway
at AITC to transmit images, such as X-ray, CAT scan, and
other digitized medical data to VA medical centers for
analysis. Such telemedicine projects have already been
effective within VA.
Meeting VA Franchise Fund Objectives
Meeting VA Franchise Fund Objectives
➤ Part of the Veterans Relationship Management program,
eBenefits (EBN) is a Web portal that is a joint VA and DoD
project allowing servicemembers and Veterans to access and
retrieve copies of their official military personnel records,
view VA disability compensation and pension claim status,
obtain or submit an application for a home loan certificate
of eligibility, and directly access MyHealtheVet accounts.
VA has a critical need for assistance in establishing,
implementing, integrating and maintaining an identity and
access management (IAM) system for the EBN Web portal.
This IAM system must be secure and available to link to EBN
sites (i.e., DoD, VA, Department of Labor, and the Social
Security Administration) for use by wounded, ill, and injured
servicemembers, Veterans and their families. The EBN Web
portal is the VA and DoD benefits Web site for information
on benefit and assistance programs for this user population.
The AITC is providing a complete, secure, highly scalable
IAM solution that seamlessly manages audits, and protects
and stores identity data for access to the EBN Web portal
and supported sites.
OMB Exhibit 300 Project Support
For IT, Exhibit 300s are designed to be used as non-stop
documents for many IT management issues. CDCO – AITC
provides support to the following OMB Exhibit 300 level
investment and steady state projects:
➤ The Decision Support System legacy application
enables hospitals to compute their costs for treating
individual patients and providing specific services, view
corporate data for management and quality improvement
purposes, and conduct clinical studies.
➤ The Financial Management System is VA’s
standardized, integrated, VA-wide accounting system that
interfaces externally with the Department of the Treasury,
GSA, the Internal Revenue Service, the Defense Logistics
Agency, and various commercial vendors and banks for
electronic billing and payment purposes. This system
supports the collection, processing, and dissemination
of several billion dollars of financial information and
transactions each fiscal year.
➤ VETSNET provides a system that will support claims
processing from establishment, development, and
rating, to award and payment. VETSNET will provide
for more streamlined, accurate processing of claims and
availability of Veteran data, including claims history. This
translates into better, timelier service to Veterans through
the improved access to Veteran and claim data, on-time
updates, and immediate status on pay.
➤ VistA Foundations Modernization applications
include Dental Encounter System, Debt Management
System, Lab Sharing and Interoperability, Data
Translation, Environmental Agents Systems, Environmental
Epidemiology Service, Emerging Pathogens Initiative,
Essence, Functional Status and Outcomes Database,
Financial Management Information System, Home Based
Primary Care, Hospital Laboratory, Lockbox, Medical
Statistical Analysis Software (SAS) files, Mailserver Mumps
Farm, Master Patient Index, National Item File, National
Patient Care Database, Non-VA Hospital System, Patient
Assessment File, Program Cost Reporting, Purchase
Order Management System, Prisoner of War, Residential
Home Care, Spinal Cord Injury, Treasury Offset Program,
Veterans Canteen Application, Vitria/Veterans Health
Information Systems and Technology Architecture (VISTA)
Interface Engines, VHA Work Measurement, and Workers
Compensation Information System.
➤ Enrollment applications include Enrollment
Database, Enrollment System Redesign, Health Eligibility
Center, Enrollment Priority Letters Phase II, Operation
Enduring Freedom, and Social Security Confirmation.
➤ VA Computing Infrastructure and Operations
applications include Automated Customer Registration
System, Delegation of Authority, Electronic Data
Interchange, Freedom of Information Act Reporting,
Information Collection Budget, Privacy Officer Database,
and Remote Customer System Use.
➤ Payroll/HR Systems applications include Personnel
and Accounting Integrated Data (PAID) System and front
end systems like Electonic Time and Attendance (ETA).
➤ The Health Data Repository (HDR) is a data
repository of clinical information that resides on one or
more independent platforms and is used by clinicians and
other personnel to facilitate longitudinal patient-centric
care. The data in HDR will be retrieved from existing VistA
files and organized in a format that supports the delivery
of care, regardless of the patient's location or where the
patient has been treated at VA in the past.
➤ Loan Guaranty Maintenance and Operations
applications include Lockbox Funding Fee, Loan Guaranty
Web Processing, Loan Guaranty Processing, Loan Service
and Claims, Mortgage Loan Accounting Center, and
Customer Owned Assets.
➤ Compensation and Pension Maintenance and
Operations includes the Beneficiary Identification and
Records Locator System/Veterans Assistance Discharge
System (BIRLS/VADS), Benefits Delivery Network
(BDN) Maintenance and Operations, Insurance System
Maintenance and Operations, Burial Operations Support
System, Automated Monument Application System, VA
Enterprise Architecture, Capital Asset Management System,
and Program Integrity/Data Management.
➤ Other applications include Allocation Resource
Center, Patient Financial Services System, Fee Basis
Treatment/Central Fee (FEE), Replacement Scheduling
Application, Pharmacy Re-Engineering and IT Support, VA
Learning Management System, Federal Health Information
Exchange, HealtheVet-Vista, and MyHealtheVet.
➤ Direct Access Storage Device (DASD)
The AITC – CDCO has an established enterprise DASD
environment that meets mainframe and open systems
storage performance and data volume requirements,
protects data against hardware failure, creates data
snapshots, and replicates data to remote sites for
contingency planning and disaster recovery (DR). Until
recently, industry-wide decreases in hardware costs per
unit and the use of best practices resulted in a continued
decline in our DASD rates. Current market research
indicated a need for extensive reconfiguration of the
existing hardware configuration with greatly increased
software costs to accommodate projected 30 percent
annual growth rates. In FY 2010, the CDCO-AITC procured
and installed Hitachi hardware and software at all of the
CDCO data centers, excluding the Capital Region Data
Center (CRDC). This DASD infrastructure supports routine,
essential support and mission critical, high availability
disaster tolerant storage at the three data centers. Under
this new infrastructure, failover at one primary site can
be accomplished by any of the other two DR sites. This
new solution includes two petabytes of usable storage and
incorporates and interoperates with the existing investment
in EMC Corporation storage subsystems, software, and
infrastructure. This capital expenditure and its depreciation
expense are included in FY 2011 and FY 2012 rates. So
while the DASD mirrored rate increased from $1.89 in
FY 2010 to $2.02 in FY 2011, the AITC-CDCO does not
anticipate further increases in the DASD rates into FY 2012.
The AITC plans to incorporate all disk storage into this
replacement solution; then, as the environment’s individual
current hardware components reach the end-of-life cycle,
each can either be replaced or disposed of depending upon
the existing DASD workload at that point in time. The AITC
anticipates additional DASD workload from new initiatives in
FY 2011 such as VBA’s Image Management System, Veterans
On Line Applications (VONAPP), Paperless, and Virtual VA
applications. Additionally, several legacy applications are
expecting increases in DASD workload. These applications
include Loan Guaranty (LGY), VBA Corporate (CRP),
ESSENCE (ESE), and Administrative Data Repository (ADR).
FY07
FY08
FY09
FY10 FY11
FY12
DASDWorkload
818,024
1,705,123
2,249,416
4,234,809
3,164,132
3,320,898
DASDRate
$6.35
$3.03
$1.91
$1.89
$2.02
$2.02
DASDREPLWorkload
68,537
130,318
152,045
317,678 666,578
699,935
DASDREPLRate
$28.03
$29.30
$8.62
$10.42
$11.32
$11.32
FY07 FY08 FY09 FY10 FY11 FY12
DASDWorkload
818,024
1,705,123
2,249,416
4,234,809
3,164,132
3,320,898
DASDRate
$6.35
$3.03
$1.91
$1.89
$2.02
$2.02
DASDREPLWorkload
68,537
130,318
152,045
317,678 666,578
699,935
DASDREPLRate
$28.03
$29.30
$8.62
$10.42
$11.32
$11.32
* REPL = replicated
➤ Central Processing Unit (CPU)
Rate trends are illustrated in the CPU chart below. With
workloads relatively stable between FY 2007 and FY 2010,
AITC was able to reduce the CPU rate in FY 2009 with a
moderate increase in FY 2010. Increases in estimated FY
2011 and 2012 workload will result in modest decreases in
the CPU rates in FY 2011 and 2012.
FY07
FY08
FY09
FY10
FY11
FY12
CPUWorkload
76,404
76,133
90,640
92,881
109,913
115,913
CPURate
$167.21
$155.46
$154.83
$170.27
$165.31
$165.31
CPUEWorkload
7,891
8,374
9,335
10,849
14,778
15,526
CPUERate
$195.63
$181.74
$187.76
$206.48
$200.47
$200.47
CPUCWorkload
35,736
34,969
38,652
43,383
45,703
47,992
CPUCRate
$219.16
$197.89
$218.39
$240.15
$233.16
$233.16
FY07 FY08 FY09 FY10 FY11 FY12
CPUWorkload 76,404 76,133 90,640 92,881 109,913 115,913
CPURate $167.21 $155.46 $154.83 $170.27 $165.31 $165.31
CPUEWorkload 7,891 8,374 9,335 10,849 14,778 15,526
CPUERate $195.63 $181.74 $187.76 $206.48 $200.47 $200.47
CPUCWorkload 35,736 34,969 38,652 43,383 45,703 47,992
CPUCRate $219.16 $197.89 $218.39 $240.15 $233.16 $233.16
* CPU-E: Essential
CPU-C: Critical
➤ Records Center and Vault (RC&V) Workload
Trends: Records Management Center (RMC) services
continued to escalate in FY 2010 as the scope of the
records inventory changed from the initial retired
educational files to currently include military medical
records. Increased workload to locate and ship files for
VBA/RMC staff to examine/process Veteran compensation
benefits for other than education and pending litigations,
including the Nehmer Review case, requires the RC&V to
temporarily increase staff with contract labor. To recover
the additional operating expenses, the RC&V will increase
RMC’s combined box storage and services rate in FY 2011.
When RMC’s workload requirements decrease, the annual
combined charge per box will re-adjust accordingly.
➤ Z9 upgrade. The z9 is the AITC’s large mainframe
enterprise server and requires an upgrade in capacity
to address the need to support customer requests for
more processing power, to accommodate the increased
processing demands during end of year cycles, and to
continue production processing on a vendor supported
platform. Additionally, the disaster recovery mainframe
located at the Philadelphia Information Technology
Center (PITC) will also be upgraded to match the AITC’s
production server configuration. This upgrade, planned
for second quarter FY 2011, will enhance the AITC’s
ability to continue to provide scalable, reliable, and
supportable processing environments for its customers.
The estimated cost is $7.2 million.
➤ Generator Expansion. By fourth quarter FY
2011, four additional two mega watt emergency diesel
generators will be purchased at an estimated cost of
$3.4 million. The Uptime Institute considers a data
center’s local generators to be the primary source of
power; therefore, all designs and upgrades are targeted
to achieve a Tier III rating (Concurrently Maintainable
Site Infrastructure) for reliability, redundancy, and
maintainability. The Uptime Institute’s Tier Classification
and Performance Standards define performance-based
outcome requirements for different levels of reliability
and availability of data centers. This begs the question
“why not target to achieve a Tier IV rating?” This is a
four-tier standard with Tier IV being the highest rating.
➤ Customer Request for New Service. During
customer meetings in June 2010, the RC&V staff met
with VHA records management staff to determine
how it could better serve VHA’s records storage and
management needs. A key request was made that the
RC&V offer scanning services. The RC&V will actively
pursue this initiative in FY 2011 for feasibility and cost
effectiveness. If viable, initial plans would be to offer
scanning services in FY 2012.
➤ Disk Storage Upgrade. At the current rate of
growth and with the creation of additional logical
partitions (LPARS) on the mainframe, an estimated $5
million disk storage upgrade is anticipated in support of
natural growth and forecasted new workload. This figure
may be reduced if efforts are taken to reduce disk usage.
This upgrade is planned for third quarter FY 2011.
➤ UPS Expansion. Power for all IT equipment
inside the AITC’s data center is delivered from an
uninterrupted power supply (UPS). The AITC’s UPS
consists of three 675 KW modules and their battery
strings providing uninterrupted support of electric
power. Short, momentary losses of utility power
occur frequently, and without a UPS, IT equipment
processes would be disrupted. The AITC will soon reach
maximum capacity on the existing UPS and expanding
this system will be required in the fourth quarter FY
2011 to keep up with IT growth. The estimated cost for
this upgrade is $1 million.
Information Technology Segment Plans for
2011 and Beyond
Commercial Vendor
Payments
VA continued to enhance its vendor
payment processes throughout
2010. Overall VA interest penalties
paid per million dollars disbursed
decreased from $73 per million in FY
2009 to $64 per million in FY 2010.
At the same time, VA earned 96
percent ($4.8 million) of its available
discounts. The FSC interest penalties
paid per million dollars disbursed also
declined from $45 per million in FY
2009 to $27 per million (40 percent
reduction) in FY 2010. Additionally,
the FSC earned over 96 percent ($4.7
million) of its available discounts.
VA also continued to gain efficiencies
and improve performance through
an initiative started in FY 2004
which centralized vendor payment
activities at the FSC. Through this
centralization, VA strengthened its
focus on identifying and preventing
improper vendor payments. The
FSC reviews VA vendor payments
daily to systematically identify,
prevent, and recover improper
payments made to commercial
vendors. Current payment files are
matched to identify and, where
possible, prevent duplicates prior
to payment. Payments from prior
fiscal years are matched to identify
potential duplicate payments for
further analysis, assessment, and, as
appropriate, collection. Additionally,
the FSC reviews vendor payments
to identify and collect improper
payments resulting in erroneous
interest penalties.
Overall, during FY 2010, collections
of improper payments and recovery
audits totaled over $2.6 million.
Improved payment oversight also
enabled VA to identify and cancel
nearly $7.8 million in potential
improper payments prior to
disbursement. Since the inception
of the FSC’s audit recovery effort
Financial Management Segment
$ 0
$ 100
$ 200
$ 300
$ 400
$ 500
$ 600
0
100
200
300
400
500
600
FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010
Interest Per $Million Disbursed
Financial Services Center
Interest Per $Million Disbursed
Good is a
Downward
Trend
$ 506
$ 302
$ 125
$ 144
$ 91
$ 84
$ 56
$ 47
$ 45
$ 27
0
1000
2000
3000
4000
5000
6000
FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006
FY 2007
FY 2008 FY 2009
FY 2010
$ 0
$ 1,000
$ 2,000
$ 3,000
$ 4,000
$ 5,000
$ 6,000
0%
20%
40%
60%
80%
100%
Good is an
Upward
Trend
Dollars in Thousands
Percent Earned
Financial Services Center
Discounts Earned
$609 $734 $1,594 $2,041 $2,897 $3,772 $4,522 $4,692 $4,702$787
40
60
80
100
53%
53%
69%
83%
86%
92%
91%
90%
90%
96%
FSC Goal
91%
in FY 2001, VA recovered over $28.5 million in improper
payments and prevented the improper payment of another
$70.7 million.
The FSC continued to improve its business processes,
adding customer value. The FSC enhanced functionality
of its Financial Accounting Service-Federal (FASFED)
application enabling Web access to the Intra-Governmental
Payment and Collection System (IPAC) supporting
documentation, thus reducing delays in receiving
information needed to record these transactions at the
station level. The expanded use of the SF 224 Statement
of Transactions Web-based application and the improved
coordination with station accounting personnel facilitated
the clearing of unmatched transactions and reduced to 4
months the time needed to resolve these items nationwide.
Through FY 2010, the FSC processed 5 million purchase
card transactions, representing over $3.3 billion in
purchases. The electronic billing and payment process for
centrally billed card accounts earned VA over $70 million in
credit card refunds, which is a 9 percent increase from FY
2009 levels. These refunds are returned to VA entities for
use in Veterans programs.
The Fee Basis credit card program automates health care
Fee Basis payments, eliminates processing of paper checks,
and earns VA additional credit card refunds. Through
the 4th quarter of FY 2010, the volume of transactions
exceeded 487,000 and was valued at more than $164
million, earning VA over $3.3 million in refunds. By
comparison, in FY 2009, VA’s Fee Basis credit card program
processed over 480,000 transactions representing over
$140 million in payments and generated over $2.5 million
in refunds. The growth in this program was attributed to
additional Fee Basis medical providers agreeing to receive
payment via the Fee Basis purchase card and more VA
medical centers joining the program.
VA’s Travel Management Centers (TMCs) serve Veterans
and employees who travel frequently. The billings are
transmitted electronically from each TMC and payment
is sent daily through the Department of the Treasury’s
Electronic Certification System. Through the 4th quarter of
FY 2010, the travel management program processed over
481,000 transactions, disbursed payments of almost $62
million, and earned over $1.1 million in refunds compared
to over $856,000 during FY 2009.
VA’s Prime Vendor Payment System automates payments
under a nationwide prime vendor centralized purchasing
contract. The system provides VA medical centers with an
efficient way to order supplies at low, negotiated contract
prices and guarantees delivery within 24 hours, eliminating
the need for warehousing large volumes of supplies.
Through the 4th quarter of FY 2010, 132 VA medical
centers used the Prime Vendor System to electronically
process 617,000 payments valued at $3.9 billion.
FSC Electronic Commerce (EC)/Electronic
Data Interchange (EDI) Services
The EC/EDI system uses commercially available, off-
the-shelf software and national standards to move
mission critical information between VA and each of its
trading partners, which includes commercial vendors,
telecommunication/utility service providers, health care
entities such as VA medical centers, and Healthcare
Clearinghouses. EC/EDI also provides for internal exchange
of information among VA application systems. Electronic
data transfers enable program offices to restructure their
work processes, take advantage of the accuracy and
timeliness of electronic data, and concentrate on service
objectives. The FSC will continue to support VA’s efforts to
increase cost savings and program efficiencies through the
expansion of electronic data transfers in VA applications.
The FSC supports VHA’s efforts to comply with EC/EDI
mandates identified in the Health Insurance Portability
and Accountability Act of 1996 (HIPAA). The FSC
provided gap/risk analysis, project plans, and requirements
documents and other artifacts. FSC personnel participated
in meetings and conference calls with VA stakeholders
to discuss business and technology requirements. These
include development efforts, overall project plans, partner
readiness, testing, and production rollout. The FSC also
supported software upgrades and VistA patches needed to
sustain HIPAA requirements.
In addition to VHA, the FSC provides EC/EDI services to
VA’s Denver Acquisition and Logistics Center for invoices,
billing documents, and payment vouchers. Those
transactions are now processed using the FSC-owned
software which reduces operational cost and facilitates day-
to-day operational support. Commercial invoices, Financial
Management System (FMS) payments, and subsistence
0
10
20
30
40
50
60
70
80
Dollars in Millions
FY 2003 FY 2004 FY 2005 FY 2006
FY 2007
FY 2008 FY 2009
FY 2010
$18.2 $30.3 $35.0 $37.3 $42.0 $49.4 $64.3 $70.2
$ 0
$ 10
$ 20
$ 30
$ 40
$ 50
$ 60
$ 70
$ 80
Government Purchase Card Program Refunds
prime vendor program services are also provided to VA
entities nationwide. The FSC also provides EDI services
to assist the Veterans Canteen Service in receiving and
processing invoices, payments, and purchase orders.
The FSC continues to provide support to the U.S.
Department of Agriculture (USDA). Under a franchise
agreement, the FSC accepts invoices from USDA utility and
telecommunication providers, translates them to a USDA-
approved file format, and transfers these invoices to USDA
via a secure connection. The invoices are automatically
input into legacy systems for processing and payment.
This processing takes place using FSC-owned translator
software, which ensures license compliance and reduces
processing costs for USDA.
Medical Claims Processing
The FSC provides the Department of Homeland Security’s
Division of Immigration Health Services (DIHS) with an
integrated, end-to-end medical claims payment processing
application in conjunction with document processing
through an Optical Character Reader. State-of-the-art
technology is being applied to automate and Web-enable
this application. This application truly represents a full life-
cycle automated service from the time an invoice reaches
the FSC through generation of payment, and fully complies
with the Prompt Payment Act (PPA) and HIPAA.
At VHA Central Business Office’s (CBO) request, the FSC
undertook a major medical claims payment project that
has the potential to significantly expand the FSC’s Medical
Claims Payment Product line. The project is designed to
develop a system to process all types of Fee Basis claims
starting with one Veterans Integrated Service Network
(VISN) as a pilot. The FSC is developing an automated
process which includes an eligibility check process that
integrates data from existing VA data systems to automate
the process of determining a Veteran’s eligibility for care, an
Internet based Referral and Authorization System for medical
centers to manage care for Veterans, and a newly procured
off-the-shelf claims adjudication software and a business
process management tool to create a highly automated
claims adjudication processing system. Upon completion
of the pilot, the FSC anticipates a decision to implement
a nationwide process. In addition to this project, the FSC
supports the following VHA CBO claims processing projects:
• HERO program claims auditing
• Dialysis program claims processing
• Millennium Act claims processing for VISNs 20 and 22
• Processing reclaims for laboratory and dialysis payments
Customer Support
The Customer Support Help Desk (CSHD) offers a
comprehensive one-stop response team to support
inquiries from VA stations and vendors. CSHD is organized
to provide timely and accurate responses to questions
ranging from how to navigate in FMS to assisting a Veteran
with benefits information. The e-Travel Help Desk assists
travelers and stations in processing travel requirements in
the E-gov Travel System (ETS) system.
FSC staff continued to provide vendor payment history
on the Internet. The Vendor Inquiry System (VIS) Internet
application stores over 7 years of information. Once vendors
complete an authentication process, they can access a
secure Web site to view payment information for their
company. Currently there are over 26,000 active registered
vendors. VIS provides FSC vendors an easy-to-use tool for
immediate access to their payment information 24 hours a
day. VIS has also improved customer service efficiency by
handling many routine inquiries and freeing FSC staff to
work the more difficult customer issues.
Registered VIS users have the ability to submit electronic
invoices directly to the FSC. Vendors complete easy-to-use
forms to create invoices and can manage and track them.
This online system provides vendors with a list of valid
purchase orders, virtually eliminating the primary error that
causes payment delays. Errors identified by the system are
immediately returned to the VIS user, who can instantly
correct them prior to submission. This prevents payment
delays and results in quicker and more accurate vendor
payments.
VA-wide Travel
The FSC serves as the Travel Project Office for the
Department. The VA-wide travel system, known as
FedTraveler.com, gives approximately 80,000 VA frequent
travelers, as well as VA managers, a much more efficient
and accountable way to plan, book, and track travel
arrangements as well as request and approve expense
reimbursements.
The FSC supports the VA-wide travel system providing the
following services for program sustainment: Global System
Administration; support for Local System Administrators;
sponsorship of Super User conference calls; user acceptance
testing of new software releases; training on new software
releases; Contracting Officer’s Technical Representative
support; and participation in meetings hosted by GSA such
as FedTraveler User Group meetings; Program Change
Control Board meetings; and Executive Change Control
Board meetings.
e-Invoicing
The FSC began the second vendor enrollment recruitment
plan for its e-Invoicing initiative in May 2010. This
initiative, in partnership with A&T Systems, Inc., and
OB10 Inc. (OB10), goes beyond traditional electronic
data interchange methods by offering a solution that
does not require vendors to purchase any additional
software or hardware. All vendors can easily participate
without changing existing invoicing formats. OB10 can
accept any invoice format or layout from the vendor’s
existing billing system using the vendor’s choice of
electronic communication method. The electronic
invoice data is then passed to the FSC to automatically
populate the appropriate payment applications. This
approach eliminates the errors and expense associated
with traditional paper invoice submission, improving cost
effectiveness, payment accuracy, and timeliness for both VA
and the vendor. The FSC is targeting 2,900 vendors which
represents approximately 70 percent of the FSC’s total
annual payment volume. Currently, over 1,000 vendors
participate in e-Invoicing.
Centralization of Payments
During FY 2010, the FSC continued to serve as VHA’s
centralized payment office for certified and matched invoices
for purchased goods and services as well as construction
payments, processing over 1 million commercial vendor
payments. Performance results indicated improvements in
payment processing timeliness, accuracy, and cost savings.
Continued reductions in interest penalties for late payments
were realized along with consistently strong performance in
maximizing vendor discounts earned.
Strategic Asset Management System (SAM)
The FSC supports VA’s Strategic Asset Management
System (SAM) initiative to standardize business processes
and modernize the information technology environment
supporting asset management. The FSC provided
leadership and assistance to facilitate preparation of
the Interface Control Documents for the SAM pilot site
in Milwaukee, WI. FSC staff continues to provide the
SAM project with assistance in order to meet VA Project
Management Accountability System goals and deliverables.
Financial Policy Rewrite
Based on an audit recommendation, the VA Office of
Financial Policy (OFP) awarded a contract to Grant
Thornton to review and update VA’s financial management
policies and procedures. These policies and procedures are
currently contained in various formats: manual procedures,
directives, handbooks, and bulletins – making it difficult for
VA organizations to ensure they are working with the most
current policies and procedures. The FSC provides subject
matter experts and is a voting member on the Financial
Policy Working Group.
FSC Information Technology (IT) Support
The FSC relies on IT support to provide financial services
to customers. FSC IT staff uses proactive research and
development efforts to leverage technology as a workforce
multiplier, ensures personnel are up-to-date on the latest
technological advances, and strives to provide the FSC and
VA with world-class, cost-effective services. The FSC IT
staff’s resourcefulness is a major factor in the FSC’s ability to
develop timely and innovative solutions for its customers.
The IT staff provides the FSC the following support:
• Application development and maintenance
• Helpdesk and PC desktop support
• Database administration
• Network administration
• Server administration
• EC/EDI services
Disaster Recovery
The FSC enhanced its ability to respond to and survive
any disaster by upgrading its disaster recovery site at the
Waco VA Medical Center which is located 100 miles away
from the FSC’s primary Austin, TX, site. This recovery site
is in a different communication and utility grid, enhancing
its survivability. The FSC uses a “mirrored” data storage
capability which reduces the time needed to bring critical
applications back online from days to minutes.
Electronic-Business (e-Business)
The FSC continues to support VHA CBO e-Business initiatives
by processing medical claims and insurance verifications and
sending them to the VA-contracted clearinghouses, Emdeon
and MedData. Claims status messages and reports on the
status of claims submitted through the EDI process are sent
to VA medical centers. Furthermore, the FSC processes
medical claims payments and explanation of benefits
and sends them to VA medical centers for processing in
their accounts receivable system. Also, the FSC works
with its partners, VA medical centers, VistA developers,
clearinghouses, and VHA CBO Project Managers to research
issues, provide solutions, reach a consensus on action plans,
and implement any necessary changes.
Throughout FY 2010, the FSC worked on implementing
a software toolset to provide medical claims data analysis
and reports. One of the benefits VHA CBO will gain from
this tool is analysis of claim rejections which will help it
decide what actions are required to reduce future claim
rejections. This will lead to quicker collections of medical
care cost recovery from third party insurance companies.
The tool will also benefit FSC operations by providing the
ability to better track transactions as they flow through
their processes and applications.
DMC Debt Collection Services
The DMC collects debts arising from Veterans’ or
beneficiaries’ participation in education, compensation,
pension, and loan guaranty benefit programs.
The Department pays benefits to Veterans or their
beneficiaries to further their education. Compensation
benefits are paid to Veterans who incurred a disability while
in military service. Pension benefits are paid under an
income-based program. The loan guaranty program allows
a Veteran to acquire a VA guaranteed loan for housing
purposes. Debts normally arise as a result of a change in
entitlement that either reduces the amount to be paid or
terminates the benefit due to non-entitlement. The DMC
attempts to contact the debtor as soon as possible after the
debt arises. If collection efforts are unsuccessful, the DMC
ensures that the accounts are referred to the Department
of the Treasury for offset under the Treasury Offset Program
or are referred to Treasury for cross-servicing action when
they become eligible.
0
200000
400000
600000
800000
1000000
1200000
$585,918 $745,132 $1,018,347
FY 2008 FY 2009 FY 2010
Collections/Offsets FY 2008-2010
($ in thousands)
$ 0
$ 200,000
$ 400,000
$ 600,000
$ 800,000
$ 1,00,000
$ 1,200,000
This chart reflects collections/offsets on benefits and medical debts. The increase from FY 2008 to FY 2009 is attributed
to a concerted effort on the DMC’s part to identify and initiate offset when benefits become available. In FY 2010, the
DMC experienced a significant increase in education receivables due to students receiving advance payments under the
Post 9/11 GI Bill. In many cases, the students either paid the debt or their benefits were withheld to recover the advance
payment.
Centralization of Permanent Change
of Station (PCS)
The FSC created a Web-based PCS Travel Portal to
automate the flow of Interagency Transfer Requests,
VA Form 3918, and Requests for Permanent Duty,
VA Form 3036c. This travel portal streamlines the
process for initiating and approving travel documents
required for relocating employees authorized PCS
travel entitlements. This Web-based application with
electronic flow of documents and electronic signature
functionality can now be used by human resources,
authorizing, budget, and approving officials. As of
September 2010, 288 VA stations are using the portal
and have electronically processed 402 employee moves.
The FSC plans to implement the use of the PCS Travel
Portal VA-wide in the first quarter of FY 2011 with plans
to develop additional functionality for the electronic
processing of claims for PCS travel reimbursements.
FSC Expansion
The FSC continues to expand both its customer
base and services provided, with additional growth
forecasted for the near future. The FSC has grown from
120 employees from FY 2009 levels with current staffing
of to approximately 520 employees in FY 2010, with
projections for continued growth to satisfy increased
customer demand for its services. As a result, the FSC
obtained additional available space in its current facility.
This continued business expansion allows the FSC to
spread fixed operating costs over a larger business base
and reduces the unit cost of services for all customers,
allowing the FSC to continue to deliver “world class”
services at competitive rates. Ongoing demand for
additional FSC services led the VA Franchise Fund Board
of Directors to approve the acquisition of additional
office space to support planned growth in customer
requirements. The additional space is expected to be
available in FY 2012.
Customer Service
During FY 2010, the DMC expanded its service hours
by two hours from 7:30 a.m. – 4:00 p.m. CST to 7:30
a.m. – 6:00 p.m. CST. It also increased the number of
telephone lines it services from 18 to 24, and increased
the number of full-time employees (FTE) servicing those
lines. Additional plans are underway to further expand
that service by adding additional lines and FTE. The
improvements will allow more of customers to contact
the DMC by telephone for assistance and information
regarding their debt.
Financial Management Segment Plans for 2011
and Beyond – FSC and DMC
Training
The number of police officers trained at the Law
Enforcement Training Center has steadily increased over
previous years. During FY 2008, 1,175 VA police officers
received basic and specialized training at the Little Rock
campus. In FY 2009, that number rose to 1,250, and in FY
2010 the training facility accommodated 1,450 VA students
and 212 from other government agencies. Additional
courses offered in FY 2010 included Active Threat Response
and Ground Defense and Recovery Instructor Course.
LETC Classroom
During FY 2010, the construction of a 48-room dormitory
was completed. These additional dormitory rooms will
accommodate the growing need for an expanded in-
residence training program and other courses necessary
to continue to meet customers’ needs.
Also completed in FY 2010 was the lease of a new modular
classroom building. This leased classroom is necessary to
prepare for a surge in demand for services in FY 2011 and
FY 2012.
SecurityManager Database
The initial operation of SecurityManager is planned for
FY 2011. SecurityManager is a comprehensive Web-
based enterprise security management database which
is envisioned to become the sole suitability and security
database of records for all VA employees and contractors.
It will provide customers live, up-to-date information on
the status of their individual investigation and the ability to
print certificates at any time. It has an electronic interface
with the Office of Personnel Management (OPM) providing
the SIC with the ability to receive completed investigations
within 24 hours, further decreasing the time required to
adjudicate an investigation.
Security and Law Enforcement Segment
0
300
600
900
1200
1500
1,500
1,000
500
0
FY 2008 FY 2009 FY 2010
1,175 1,250 1,662
Number of Police Officers Trained
Instrumental in E-Gov Initiatives
The SIC has completed the fielding of OPM’s electronic
Questionnaire for Investigations Processing (e-QIP) for all
VA police officers and is in the final planning phases of
deploying it to all VA employees and contractors. This
eliminates the requirement for hard copy investigation
questionnaires that must be completed by the applicants
and provides for a more seamless process through the
system.
Captain James A. Lovell Federal Health Care
Center (FHCC)
The partnership between the Department of Defense
(DoD) and the Department of Veterans Affairs culminated
in the first fully integrated health care center in the Nation
on October 1, 2010. The integration of the Naval Health
Clinic Great Lakes (NHCGL) and North Chicago Veterans
Affairs Medical Center (NCVAMC) into a single federal
health care center is a completely unique situation and has
created new certification requirements for SIC personnel.
DoD is requiring all VA employees and contractors who
have access to Navy personnel records to hold an Access
National Agency Check with Written Inquiries (ANACI)
background investigation. DoD also requires that VA
adjudicators successfully complete the Defense Security
Service (DSS) Academy course, Personnel Security
Adjudications.
Reorganization
The SIC underwent a major reorganization during the first
quarter of FY 2010. The SIC and the LETC shared a director
and support staff in North Little Rock and came under the
immediate supervision of the Deputy Assistant Secretary for
Security and Law Enforcement. Effective January 3, 2010,
Jose Riojas, Assistant Secretary for Operations, Security, and
Preparedness, placed the SIC under the supervision of the
Deputy Assistant Secretary for Emergency Management.
The reorganization resulted in a director and support staff
working exclusively for the SIC business processes. The
director and five support staff personnel all stayed with the
LETC, creating additional vacancies within the SIC bringing
the total to ten. The Office of Operations, Security, and
Preparedness has been granted authority to create a third
division, and on July 12, 2010, hired a Deputy Assistant
Secretary for Personnel Security and Identity Management.
The SIC will be aligned under that Deputy Assistant
Secretary.
Full implementation of OPM’s electronic Questionnaire for Investigations Processing (e-QIP) is scheduled for the first
quarter of FY 2011. SecurityManager and e-QIP combined will provide a true start-to-finish Web-based automated
system for suitability and security investigation packets.
Security and Law Enforcement Segment Plans for
2011 and Beyond
VA’s Guiding Principles, Strategic Goals,
and Integrated Objectives
Guiding principles
➤ People-centric: Veterans and their families are the
centerpiece of our mission and of everything we
do. Equally essential are the people who are the
backbone of the Department – our talented and
diverse workforce.
➤ Results-driven: We will be measured by our
accomplishments, not by our promises.
➤ Forward-looking: We will seek out opportunities for
delivering the best services with available resources,
continually challenging ourselves to do things smarter
and more effectively.
Strategic goals
➤ Improve the quality and accessibility of healthcare,
benefits, and memorial services while optimizing
value.
➤ Increase Veteran client satisfaction with health,
education, training, counseling, financial, and burial
benefits and services.
➤ Raise readiness to provide services and protect people
and assets continuously and in time of crisis.
➤ Improve internal customer satisfaction with
management systems and support services to achieve
mission performance and make VA an employer of
choice by investing in human capital.
Integrated objectives
➤ VA Integrated Objective 1: Make it easier for Veterans
and their families to receive the right benefits,
meeting their expectations for quality, timeliness, and
responsiveness.
➤ VA Integrated Objective 2: Educate and empower
Veterans and their families through proactive outreach
and effective advocacy.
➤ VA Integrated Objective 3: Build our internal capacity
to serve Veterans, their families, our employees, and
other stakeholders efficiently and effectively.
Performance Measures, Goals,
and Objectives
The VA Franchise Fund goals support VA goals by:
➤ Ensuring that all applications processing support and general
support are of the highest quality.
➤ Ensuring that debt management collection services for
delinquent consumer debt meet customer needs and
requirements.
➤ Ensuring that financial services meet customer needs
and requirements.
➤ Ensuring that VA’s work environment is recognized by
employees as conducive to productivity and achievement
and fosters respect among all.
➤ Ensuring high-quality and timely background investigations
and adjudications for employees in national security
and public trust positions and ensuring that customer
identification badges are issued without delay.
➤ Ensuring accurate records management and secure archival
storage, protection, and retrieval services for Veterans’
records and other stored Federal records.
➤ Establishing and managing the business aspects of
the Fund.
The performance information presented below accurately represents the Enterprise Centers’ performance during fiscal
years 2007–2010. We are committed to ensuring that reported performance information is accurate and based on
reliable information, and we continually seek to improve our data collection and monitoring techniques.
Each component of the VA Franchise Fund is committed to achieving its performance goals to ensure that we remain a
performance-based organization.
Performance Summary Table
Actuals Plan
Were 2010 Goals
Achieved or Exceeded?
Performance Measure 2007 2008 2009 2010 2010 Yes No
Ranking within top 12.5% in the Informa-
tion Technology Customer Satisfaction
database
1
8.0% 12.0% 3.5% N/A N/A
Total collections per dollar spent on
collection activities
$80 $84 $101 $149 $76
✓
Payment processing accuracy rate 98% 98.4% 98.6% 98.9% 98.2%
✓
Class graduation rate 96.5% 98.5% 96.8% 97.2% 95.0%
✓
Percent of investigations that are completed
within the established timeframes 98.0% 96.0% 99.0% 98.0% 98.0% ✓
Percent of recalled records that are
shipped securely and accurately to
requesting facilities within established
timeframes
99.6% 99.9% 99.9% 99.9% 99.0%
✓
Number of audit qualifications for the VA
Enterprise Centers
0 0 0 0 0
✓
1
Through FY 2009, VA’s survey provider had been Gartner Consulting. Beginning in FY 2011, survey work will be conducted by a service-disabled Veteran
owned small business. This change in survey providers will result in inconsistencies with survey results compared to previous years. Hence, VA did not
conduct a survey in FY 2010.
Performance Highlights During FY 2010
➤ For the 13th consecutive year, the audited financial
statements of the VA Franchise Fund received an unqualified
“clean” opinion.
➤ The AITC continued to explore new technologies and update
its equipment and services to meet the needs of its customers.
➤ The DMC demonstrated an exceptional rate of return of $149
collected for every dollar of incurred expense.
➤ The FSC’s new facility received a Leadership in Energy and
Environmental Design (LEED) “Silver” designation as a
“green” facility.
➤ The LETC upgraded course offerings and maintained
graduation rates at high levels.
➤ The RC&V ensured that all customers received recalled
records within established timeframes and that the records
were shipped in a secure manner.
➤ The SIC developed SecurityManager, a comprehensive
Web-based enterprise security management database.
Financial Statement
Analysis
The consolidated financial statements present the Franchise Fund’s
(Fund) financial position, cumulative results of operations, changes in
net position, and information on budgetary resources for FY 2010 and
FY 2009. Highlights of the information contained in the consolidated
financial statements are summarized in this section.
Overview of Financial Position
Assets
The Consolidated Balance Sheets reflect the Fund’s asset balances of
$202.6 million as of September 30, 2010. This is an increase of $35.3
million (21 percent over the previous year’s total assets of $167.3
million). The increase in asset balances is largely due to two factors.
The AITC procured a significant amount of IT equipment including a
new computer server and storage capacity upgrades for its computer
room. Similarly, the FSC procured IT equipment for its current facility
as well as its Waco disaster recovery site. This resulted in an increase in
Property, Plant, and Equipment. The other factor was due to increased
services related to medical payments for Immigration and Customs
Enforcement and the Office of Refugee Resettlement.
The Fund’s assets as presented in the Consolidated Balance Sheets are
summarized in the following table:
(Dollars in Thousands)
2010 2009
Fund Balance with Treasury $118,868 $ 90,624
Property, Plant, and Equipment, Net 42,843 32,565
Accounts Receivable, Net 39,202 42,711
Other Assets
1,682 1,409
Total Assets
$202,595 $167,309
Liabilities
The Fund had total liabilities of $77.0 million as of September 30,
2010. This represents an increase of $18.3 million (31 percent over
the previous year’s total liabilities of $58.7 million). The increase in
Intragovernmental Liabilities is primarily due to the FSC’s increased
activity with the General Services Administration (GSA) and the
Department of Interior for contracting support, and the AITC’s
increased activity with GSA for the purchase of its new computer
equipment. Furthermore, there was an increase in advances received
from the Immigration and Customs Enforcement for medical payment
processing, credit card processing, and travel payments processing by
the FSC.
Limitation Statement
The principal financial statements have
been prepared to report the financial
position and results of operations of the
entity, pursuant to the requirements of
31 U.S.C. 3515(b).
While the statements have been
prepared from the books and records of
the entity in accordance with generally
accepted accounting principles for
Federal entities and the formats
prescribed by OMB, the statements
are in addition to the financial reports
used to monitor and control budgetary
resources which are prepared from the
same books and records.
The statements should be read with
the realization that they are for a
component of the U.S. Government, a
sovereign entity.
Audit Opinion
For the 13th consecutive year (1998-
2010), we have received an unqualified
“clean” audit opinion.
Management Assurances
The financial and performance data
presented in this report are complete
and reliable. Throughout the year, VA
Franchise Fund senior managers assess
the efficiency and effectiveness of their
organizations by analyzing financial
and performance data. Management
relies on this data to identify material
inadequacies in the financial and
program performance areas and to
identify corrective tasks needed to
resolve them.
As part of a VA-wide initiative,
Department managers were responsible
for establishing and maintaining
effective internal controls over
financial reporting, which includes
safeguarding assets and compliance
with applicable laws and regulations.
On the basis of statements of written
assurance provided by the Under
Secretaries, Assistant Secretaries, and
other key officials, the Secretary of
Veterans Affairs provided reasonable
assurance that the internal controls
(as described in the Federal Managers’
Financial Integrity Act and Revisions to
OMB Circular A-123, Management’s
Responsibility for Internal Control)
were operating effectively and no
new material weaknesses were
found. Under the Federal Financial
Management Improvement Act, VA is
substantially compliant with applicable
Federal accounting standards and the
U.S. Standard General Ledger (SGL)
at the transaction level. However,
VA is not compliant with applicable
Federal financial management system
requirements as a result of the material
weakness related to information
technology (IT) security controls.
The Secretary’s signed Statement of
Qualified Assurance on internal control
may be found on page 99 in the
2009 Department of Veterans Affairs
Performance and Accountability Report
(http://www4.va.gov/budget/docs/
report/PartI/FY2010-VAPAR_Part_I.pdf).
The Fund’s liabilities as presented in the Consolidated Balance Sheets are
summarized in the following table:
(Dollars in Thousands)
2010 2009
Other Liabilities $30,996 $21,092
Intragovernmental Liabilities 43,928 34,375
Accounts Payable
2,120 3,219
Total Liabilities
$77,044 $58,686
Net Position
The Fund’s net position increased by $16.9 million in FY 2010 on the
Consolidated Balance Sheets and the Consolidated Statement of Changes
in Net Position. The net position for the Fund was $125.6 million in FY
2010, which yielded a 15.6 percent increase from FY 2009’s ending net
position of $108.6 million. Net position is the sum of unexpended funds
and cumulative results of operations.
Cumulative Results of Operations
The Fund’s cumulative results of operations yielded a net gain of $10.2
million in FY 2010, as reflected in the Consolidated Statement of Net Cost.
Budgetary Resources
The Combined Statement of Budgetary Resources presents budgetary
resources made available to the Fund during the year and the resulting
status of budgetary resources at year-end. The Fund does not receive an
annual appropriation from Congress. The Fund is fully self-sustained by
recovering all costs through reimbursements for services provided. The
Fund had total budgetary resources of $471.7 million, a $49.9 million
increase from the FY 2009 level of $421.8 million.
The Fund’s Budgetary Resources as presented in the Combined Statement
of Budgetary Resources are summarized in the following table:
(Dollars in Thousands)
2010 2009
Beginning Unobligated Balance $ 98,646 $124,072
Spending Authority Earned and Collected 383,148 284,657
Change in Receivable from Federal Sources (3,544) 33,659
Change in Unfilled Customer Orders
(6,558) (20,596)
Total Budgetary Resources
$471,692 $421,792
