[House Hearing, 110 Congress]
[From the U.S. Government Printing Office]



 
                  U.S. DEPARTMENT OF VETERANS AFFAIRS
                       GRANT AND PER DIEM PROGRAM

=======================================================================

                                HEARING

                               before the

                         SUBCOMMITTEE ON HEALTH

                                 of the

                     COMMITTEE ON VETERANS' AFFAIRS
                     U.S. HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                           SEPTEMBER 27, 2007

                               __________

                           Serial No. 110-48

                               __________

       Printed for the use of the Committee on Veterans' Affairs



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                     COMMITTEE ON VETERANS' AFFAIRS

                    BOB FILNER, California, Chairman

CORRINE BROWN, Florida               STEVE BUYER, Indiana, Ranking
VIC SNYDER, Arkansas                 CLIFF STEARNS, Florida
MICHAEL H. MICHAUD, Maine            JERRY MORAN, Kansas
STEPHANIE HERSETH SANDLIN, South     RICHARD H. BAKER, Louisiana
Dakota                               HENRY E. BROWN, Jr., South 
HARRY E. MITCHELL, Arizona           Carolina
JOHN J. HALL, New York               JEFF MILLER, Florida
PHIL HARE, Illinois                  JOHN BOOZMAN, Arkansas
MICHAEL F. DOYLE, Pennsylvania       GINNY BROWN-WAITE, Florida
SHELLEY BERKLEY, Nevada              MICHAEL R. TURNER, Ohio
JOHN T. SALAZAR, Colorado            BRIAN P. BILBRAY, California
CIRO D. RODRIGUEZ, Texas             DOUG LAMBORN, Colorado
JOE DONNELLY, Indiana                GUS M. BILIRAKIS, Florida
JERRY McNERNEY, California           VERN BUCHANAN, Florida
ZACHARY T. SPACE, Ohio
TIMOTHY J. WALZ, Minnesota

                   Malcom A. Shorter, Staff Director

                         SUBCOMMITTEE ON HEALTH

                  MICHAEL H. MICHAUD, Maine, Chairman

CORRINE BROWN, Florida               JEFF MILLER, Florida, Ranking
VIC SNYDER, Arkansas                 CLIFF STEARNS, Florida
PHIL HARE, Illinois                  JERRY MORAN, Kansas
MICHAEL F. DOYLE, Pennsylvania       RICHARD H. BAKER, Louisiana
SHELLEY BERKLEY, Nevada              HENRY E. BROWN, Jr., South 
JOHN T. SALAZAR, Colorado            Carolina

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public 
hearing records of the Committee on Veterans' Affairs are also 
published in electronic form. The printed hearing record remains the 
official version. Because electronic submissions are used to prepare 
both printed and electronic versions of the hearing record, the process 
of converting between various electronic formats may introduce 
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current publication process and should diminish as the process is 
further refined.


                            C O N T E N T S

                               __________

                           September 27, 2007

                                                                   Page
U.S. Department of Veterans Affairs Grant and Per Diem Program...     1

                           OPENING STATEMENTS

Chairman Michael Michaud.........................................     1
    Prepared statement of Chairman Michaud.......................    30
Hon. Jeff Miller, Ranking Republican Member......................     2
    Prepared statement of Congressman Miller.....................    30

                               WITNESSES

U.S. Government Accountability Office, Daniel Bertoni, Director, 
  Education, Workforce, and Income Security Issues...............     7
    Prepared statement of Mr. Bertoni............................    37
U.S. Department of Veterans Affairs:
  George Basher, Chair, Advisory Committee on Homeless Veterans, 
    and Director, New York State Division of Veterans' Affairs...    17
    Prepared statement of Mr. Basher.............................    44
  Pete Dougherty, Director, Homeless Veterans Programs, Veterans 
    Health Administration........................................    20
    Prepared statement of Mr. Dougherty..........................    46

                                 ______

National Coalition for Homeless Veterans, Cheryl Beversdorf, RN, 
  MHS, MA, President and Chief Executive Officer.................     3
    Prepared statement of Ms. Beversdorf.........................    31
Volunteers of America of Florida, Kathryn E. Spearman, President 
  and Chief Executive Officer....................................     5
    Prepared statement of Ms. Spearman...........................    34

                       SUBMISSIONS FOR THE RECORD

American Legion, Ronald F. Chamrin, Assistant Director, Economic 
  Commission, statement..........................................    48

                   MATERIAL SUBMITTED FOR THE RECORD

Post Hearing Questions and Responses for the Record:
  Hon. Jeff Miller, Ranking Republican Member, Subcommittee on 
    Health, Committee on Veterans' Affairs, to Hon. Gordon 
    Mansfield, Acting Secretary, U.S. Department of Veterans 
    Affairs, letter dated October 5, 2007........................    52


                  U.S. DEPARTMENT OF VETERANS AFFAIRS
                       GRANT AND PER DIEM PROGRAM

                              ----------                              


                      THURSDAY, SEPTEMBER 27, 2007

             U.S. House of Representatives,
                            Subcommittee on Health,
                            Committee on Veterans' Affairs,
                                                    Washington, DC.

    The Subcommittee met, pursuant to notice, at 10:02 a.m., in 
Room 334, Cannon House Office Building, Hon. Michael Michaud 
[Chairman of the Subcommittee] presiding.
    Present: Representatives Michaud, Snyder, Salazar, and 
Miller.

             OPENING STATEMENT OF CHAIRMAN MICHAUD

    Mr. Michaud. The Subcommittee on Health will come to order.
    I would like to thank everyone for coming today. Today we 
will examine the U.S. Department of Veterans Affairs (VA) Grant 
and Per Diem (GPD) Program for homeless veterans.
    On any given night, there are approximately 200,000 
homeless veterans on the streets in America. The majority of 
these veterans served in Vietnam. Ninety-six percent are male 
and about 45 percent suffer from mental illness.
    VA has many programs to help homeless veterans including 
the Grant and Per Diem Program. VA needs to continually 
evaluate these programs to ensure that veterans are getting the 
services that they need and that provider organizations can 
effectively provide these services as well.
    For example, while the vast majority of homeless veterans 
are male, female veterans are the fastest-growing segment in 
this population. Women homeless veterans face similar 
challenges to their male counterparts, but they are very likely 
to have experienced serious trauma including abuse or rape and 
a significant number also have children to support. VA programs 
must be flexible to meet this new challenge.
    I believe that the VA should make sure that they give 
community-based organizations the tools they need to provide 
comprehensive service to our homeless veterans. The way in 
which the Grant and Per Diem Program is currently structured 
sometimes make this difficult, particularly for providers in 
high-cost areas.
    It is my belief that the goal of the VA homeless program 
should be not only to provide veterans with a bed for the night 
and a meal, but to provide them with the resources they need to 
attain permanent housing and a steady job and a renewed sense 
of self-worth.
    Today I hope that we will learn what VA is doing to provide 
service to homeless veterans to help them break out of this 
cycle. We will hear from the Grant and Per Diem Program on what 
is working and the ways that it can be changed. This is a 
problem that we can solve by working together. One homeless 
veteran is too many.
    [The prepared statement of Chairman Michaud appears on
p. 30.]
    Mr. Michaud. I would now like to recognize a colleague of 
mine who cares deeply about our veterans, Ranking Member 
Miller, for any opening statement he might have.

             OPENING STATEMENT OF HON. JEFF MILLER

    Mr. Miller. Thank you very much, Mr. Chairman.
    This year marks the 20th anniversary of VA providing 
specialized services for homeless veterans. VA's homeless 
program began in 1987 with Public Law 100-6, which provided VA 
with $5 million to support care for veterans in community-based 
and domiciliary facilities.
    Since that time, VA's homeless programs have expanded and 
grown significantly. VA currently budgets almost $2 billion to 
treat and assist homeless veterans, and administers over 9 
specialized programs that integrate housing and mental health 
and substance abuse counseling.
    Although it remains difficult to obtain an accurate count 
of the number of homeless veterans, and I think most of us 
agree that 200,000 is a close number. There are indications 
that we are making good progress in helping reintegrate 
homeless veterans into stable community environments and lead 
productive and sober lives.
    Still, there are far too many veterans out on the street. I 
concur with you, Mr. Chairman, that one homeless veteran on any 
given night is too much. On any given night in my home State of 
Florida, there are 17,000 homeless veterans are on the streets.
    I think that with the increasing number of returning 
veterans from the conflicts in Iraq and Afghanistan, the 
development of innovative services to help veterans at-risk for 
homelessness is extremely important.
    Today, we meet to review VA's Homeless Providers Grant and 
Per Diem (GPD) Program. This program is considered to be a very 
successful collaboration between VA, nonprofit, and faith-based 
organizations. Our Committee has always worked in a bipartisan 
manner to strengthen healthcare, housing, employment training, 
and other services to assist at-risk veterans. Mr. Chairman, I 
look forward to working with you to continue that relationship.
    I would like to welcome all of the witnesses that are here 
with us today, especially Kathryn Spearman who is with 
Volunteers of America Florida, for participating in our hearing 
this morning. I am grateful for her dedication and many years 
of service and work to provide services that assist homeless 
veterans in our home State of Florida.
    Mr. Chairman, I yield back the balance of my time.
    [The prepared statement of Congressman Miller appears on
p. 30.]
    Mr. Michaud. I thank the gentleman.
    Our first panel today is Cheryl Beversdorf who is President 
and Chief Executive Officer (CEO) of the National Coalition for 
Homeless Veterans (NCHV).
    Welcome, Cheryl.
    And Kathryn Spearman who is President and CEO of Volunteers 
of America from Tampa, Florida.
    I also want to welcome you, Kathryn.
    And Daniel Bertoni who is Director of Education, Workforce 
and Income Security Issues from the U.S. Government 
Accountability Office (GAO).
    I would like to welcome our panelists today and we will 
start off with Cheryl and just work down.
    So I turn the floor over to you.

  STATEMENTS OF CHERYL BEVERSDORF, RN, MHS, MA, PRESIDENT AND 
   CHIEF EXECUTIVE OFFICER, NATIONAL COALITION FOR HOMELESS 
 VETERANS; KATHRYN E. SPEARMAN, PRESIDENT AND CHIEF EXECUTIVE 
OFFICER, VOLUNTEERS OF AMERICA OF FLORIDA; AND DANIEL BERTONI, 
DIRECTOR, EDUCATION, WORKFORCE AND INCOME SECURITY ISSUES, U.S. 
                GOVERNMENT ACCOUNTABILITY OFFICE

                 STATEMENT OF CHERYL BEVERSDORF

    Ms. Beversdorf. The National Coalition for Homeless 
Veterans appreciates the opportunity to submit testimony to the 
Health Subcommittee of the House Veterans' Affairs Committee 
regarding the VA Grant and Per Diem Program.
    NCHV's membership represents nearly 280 community-based 
organizations in 48 States and the District of Columbia. As a 
network, NCHV members provide the full continuum of care to 
homeless veterans and their families including emergency 
shelter, food and clothing, healthcare, addiction and mental 
health services, employment support, educational assistance, 
legal aid and transitional housing and other kinds of services.
    NCHV members serve approximately 150,000 veterans annually. 
Regarding homelessness among veterans, the VA reports homeless 
veterans are mostly males, although 3 percent are females, and 
the vast majority are single, although service providers are 
reporting an increased number of veterans with children seeking 
their assistance.
    About half of all homeless veterans have a mental illness 
and more than two-thirds suffer from alcohol or other substance 
abuse problems. Nearly 40 percent have both psychiatric and 
substance abuse disorders.
    In addition, the majority of women in homeless veteran 
programs have serious trauma histories, some life threatening, 
and many of these women have been raped and reported physical 
harassment while in the military.
    Veterans are at high risk of homelessness due to 3 factors: 
Extremely low or no livable income; extreme shortage of 
affordable housing; and limited access to healthcare. These 
factors combined with circumstances experienced during their 
military service put them at even greater risk of homelessness.
    Findings from a 2006 NCHV survey suggest the homeless 
veteran population in America is experiencing significant 
changes. Homeless veterans receiving services today are aging 
and many need permanent supportive housing. With more women in 
the military, the percentage of women veterans seeking services 
is increasing.
    In general, a growing number of combat veterans returning 
home from Iraq and Afghanistan, both men and women, are 
suffering from war-related conditions including post traumatic 
stress disorder (PTSD) and traumatic brain injury (TBI), which 
may put them at risk for homelessness.
    The homeless providers Grant and Per Diem Program supports 
development of transitional community-based housing and 
delivery of supportive services for homeless veterans through 
competitive grants to community-based, faith-based, and public 
organizations.
    To underline the importance of the Grant and Per Diem 
Program, in September 2006, the GAO released a study that found 
while VA has attempted to improve its services and increase the 
capacity of the Grant and Per Diem Program, an additional 9,600 
transitional housing beds are still needed to meet current 
demand.
    Regarding Grant and Per Diem appropriations, NCHV is 
pleased both the House and Senate have passed bills increasing 
the fiscal year 2008 appropriations to the fully authorized 
level of $130 million. If approved, funding at this level will 
increase beds available to serve more men and women veterans at 
risk of homelessness.
    In addition to the need for more beds and increased program 
funding, NCHV believes the mechanism for paying providers under 
the Grant and Per Diem Program must be modified.
    Regarding payment, many Grant and Per Diem providers report 
even the maximum rate of up to $31.30 provides far less than 
the actual daily cost of care to a veteran in the Grant and Per 
Diem Program.
    Providers often experience lengthy, ongoing communication 
with the VA and questions regarding expenses incurred and 
accountability resulting in a delay in timely reimbursement and 
ultimately, interruption of services to their clients.
    The accounting burden is particularly onerous for smaller 
faith-based and community-based organizations that may lack the 
necessary resources to easily resolve these issues.
    At the time the law creating the Grant and Per Diem Program 
was written, Congress had limited knowledge as to how services 
to veterans outside VA facilities should be reimbursed. As a 
result, the rate authorized for State homes for domiciliary 
care was used as the standard for paying homeless veterans' 
service providers.
    Over time, evidence has shown clients in the two settings 
have very different needs. Accordingly, a modified payment 
system that reflects the special needs of homeless veterans and 
the comprehensive services they receive must be applied.
    Whereas residents receiving domiciliary care in State homes 
are more likely to remain permanently in VA facilities, the 
goal of community-based veteran service providers is to promote 
independent living for their clients and reintegration back 
into civilian life.
    To address these issues, NCHV urges Congress to introduce 
legislation that would allow payments for services to be 
related to costs rather than a capped rate.
    In addition to creating a more user-friendly system, this 
approach may increase service provider participation in high-
cost service areas.
    A reasonable practice of outcome and performance 
measurement of Grant and Per Diem providers should be included 
under this system.
    The requirements for grant recipients should also allow 
service providers to use other available sources of income 
besides the Grant and Per Diem Program including payments or 
grants from other Federal departments and agencies in addition 
to those of State or local governments.
    While the current law was intended to ensure VA per diem 
payments do not replace payments or contributions from other 
income sources, it has instead created the unintended 
consequences of penalizing Grant and Per Diem providers 
successful in securing other sources of income for services to 
homeless veterans by reducing their per diem payment rate.
    Congress should devise a payment provision that encourages 
Grant and Per Diem providers to seek funding from the non-VA 
sources in a manner that does not penalize them if they are 
successful.
    All payment modifications should also allow VA funds to be 
used as a match or leverage for other Federal funds and allow 
other Federal funds to be used without offset by VA.
    When Grant and Per Diem providers are able to receive the 
maximum rate in addition to other income sources, they can 
expand the scope and quantity of services to homeless veterans 
and increase the likelihood of their successful reintegration 
into the community.
    Additional income will help providers develop and support 
additional housing units, provide veterans a more robust 
service package, and serve homeless veterans not qualified for 
Grant and Per Diem support.
    In conclusion, I want to thank you for inviting NCHV to 
present our views about the Grant and Per Diem Program. We urge 
Congress to introduce and pass legislation that will address 
the concerns that we have presented today.
    I will be happy to answer your questions.
    [The prepared statement of Ms. Beversdorf appears on p. 
31.]
    Mr. Michaud. Ms. Spearman.

                STATEMENT OF KATHRYN E. SPEARMAN

    Ms. Spearman. Chairman Michaud, Ranking Member Miller, and 
Members of the Subcommittee, thank you for the invitation to 
testify today and for all you do to assist our Nation's 
veterans.
    I work for Volunteers of America of Florida, as stated 
earlier, which is a statewide faith-based social service 
organization in Florida for the past 87 years. And we are an 
affiliate of the larger Volunteers of America, a national 
organization around for 111 years and with affiliates in 44 
States.
    Volunteers of America of Florida offers housing and 
services and we serve multiple and different types of 
populations including the homeless. Our service continuum 
includes housing, healthcare, training, education, employment, 
and services that all enhance self-sufficiency.
    We currently operate in 13 Florida cities and we are in 
development in 3 more cities. And we do some consultation with 
some grass-roots groups that have a rural focus.
    For my Florida Members, I would like to say, Representative 
Miller, we are developing Pensacola and we have some new things 
that are going to be going on there. So we are happy with that.
    And I guess Representatives Brown and Stearns are not 
present right now, but we have some things in their area as 
well.
    Florida attracts many homeless veterans and we have been 
focused on addressing the needs of these individuals for the 
past 10 years. We partner with the VA Grant and Per Diem 
Program in serving this population.
    And as far as transitional housing and support services 
currently, we have a 216-bed capacity with 81 in development. 
And most of those are from the Grant and Per Diem. Also 
included are 45 U.S. Department of Housing and Urban 
Development (HUD) Supportive Housing Program transitional beds 
for veterans as well.
    Our first Grant and Per Diem was a 40-foot state-of-the-art 
vehicle that is a fully-contained medical, dental, and health-
service facility that does mobile outreach all over the State 
of Florida. And that is still in operation.
    I would also like to say that all of our beds are filled 
with veterans. And I know we have the 25-percent rule, but we 
never had any, you know, reason to use that because the need is 
so great.
    As far as the Grant and Per Diem Program, I would like to 
say some positive things that I really do appreciate as a 
provider.
    First of all, the dedication of Roger Casey and his staff 
to try to keep making this program what it needs to be, the 
continual funding that we have been receiving recently to add 
more beds, the grant segment, which provides tremendous 
leverage and incentive, the opportunity for the VA and the 
community to work together to help homeless veterans, the per 
diem that strengthens the operations and program, the potential 
for the service center, and also I very much see this as a 
gateway for veterans to become more a part of the community.
    Our 10 years of experience have led us to an increasing 
awareness of the issues facing the Grant and Per Diem Program 
and the providers. And I want to spend the rest of my testimony 
mentioning some information I would like to share but also a 
few suggestions.
    In relation to partnership, the overall partnership between 
the VA and the community needs strengthening. Local providers 
address the needs of veterans every day and complement the VA's 
services. We are good at what we do and we need the VA and the 
VA needs the community providers. And the veteran needs us to 
work more closely together.
    A partnership approach, I feel strongly does work, and with 
a good partnership comes shared risk because we both own the 
problem and work together to solve those problems.
    A suggestion I would have today is a work group to advise 
and the task would be for a Grant and Per Diem payment 
mechanism that is provider friendly and also offers the 
accountability that the VA needs. And the representation on 
that group would be all the members of the partnership.
    Next--what it takes in helping homeless veterans. I think 
there are eleven essential services and I have listed those in 
my written testimony, things that I think are essential to 
bringing a veteran back to being a part of the community.
    I doubt most people know how disengaged and disabled many 
of the homeless veterans are when they come to our programs and 
drug and alcohol addiction is very serious and disruptive to 
rebuilding a life acceptable in our society.
    Next I want to talk about cost. The services, the eleven 
essential services go all the way from outreach to treatment 
and then integration back into the community. But the cost, I 
just want to say that the service cost and the payment do not 
match up, the $32.00 a day. And I have put some breakdowns in 
my written testimony to show actually what things do cost as an 
example.
    And then the service center payment mechanism does not 
relate, just does not relate. We need to change that.
    And then the construction, rehab and acquisition require 30 
percent cash and we need more flexibility with that. There are 
many creative ways to combine development funding or put 
together the assets of providers, the VA grant and some 
financing.
    I have proposed some options for payment possibilities in 
my written testimony based on experience.
    I think the flexibility we need now in this program should 
also be with an eye to the future when we will be focused on a 
new era of veterans with a whole new set of circumstances and 
needs.
    Veterans now returning from Operation Iraqi Freedom (OIF) 
or Operation Enduring Freedom (OEF) should benefit from the 
lessons we have learned in developing support and 
interventions.
    As we work together and address program improvements, we 
will be better prepared to continue to meet the needs of 
current homeless veterans and wisely anticipate the needs of 
our returning troops.
    Thank you for the opportunity to share my views today.
    [The prepared statement of Ms. Spearman appears on p. 34.]
    Mr. Michaud. Thank you very much.
    Mr. Bertoni.

                  STATEMENT OF DANIEL BERTONI

    Mr. Bertoni. Good morning, Mr. Chairman, Members of the 
Subcommittee. Thank you for inviting me here today to discuss 
VA's homeless providers' Grant and Per Diem Program.
    Last year, VA ordered $95 million in GPD grants to over 300 
local agencies who provide transitional housing for veterans. 
The program is not designed to serve all homeless veterans but 
targets those most in need such as veterans with mental illness 
and substance abuse problems.
    The program's goals are to help veterans achieve 
residential stability, increase income or skills, and greater 
self-determination.
    My testimony today draws on our prior work and focuses on 3 
areas. We have updated some of the data to bring it up to real-
time time frames.
    Focusing on VA's efforts to expand program capacity to meet 
demand, provide collaboration and challenges to serve homeless 
veterans, and VA's processes for gauging program effectiveness.
    In summary, VA estimates that on any given night, about 
196,000 veterans are homeless and in need of transitional beds. 
Since fiscal year 2000, the agency has increased the number of 
beds from about 2,000 to over 8,000 and increased the number of 
annual admissions from 4,800 to over 15,000.
    Although the number of transitional beds available 
nationwide from all sources increased to more than 40,000 in 
2006, VA estimates that about 11,000 more beds are needed to 
meet demands.
    At the time of our review, the agency planned to expand the 
program by about 2,000 beds and to make beds available in every 
State. However, an important demographic shift may require VA 
to reassess the type of housing and services provided in the 
future.
    Officials told us that they expect to see more homeless 
women veterans and more veterans with dependents in coming 
years, a trend that is directly related to the current makeup 
of our active and Reserve forces.
    The providers we visited often collaborated with public and 
nonprofit agencies in helping veterans recover from substance 
abuse or mental illness and obtain permanent housing, 
employment, financial stability, and services to facilitate 
independent living.
    However, some providers face challenges serving veterans 
such as finding affordable permanent housing for those ready to 
leave the program as well as transportation, legal assistance, 
dental care, and substance abuse treatment.
    Perhaps most importantly, however, we found that some 
providers did not fully understand certain program eligibility 
requirements and stay rules which could affect the veteran's 
ability to get care. And VA was not consistently holding them 
accountable to program performance goals.
    For example, some providers incorrectly believe that 
veterans could not participate in the program unless they were 
eligible for VA healthcare. Others understood the life-time 
limit rule of 3 stays but were unaware that waivers could, in 
fact, be granted.
    Per our recommendation, VA has taken steps to improve 
communication and ensure its policies are understood by VA 
liaisons and providers responsible for implementing the 
program.
    To assess program performance, VA primarily relies on 
measures of veterans' status at the time they leave the program 
rather than obtaining such information months or years later. 
In part, this has been due to concerns about cost, benefits, 
and feasibility of doing more extensive follow-up.
    Generally VA's data show that since 2000, an increasing 
percentage of veterans met each of the program's 3 goals at the 
time they left the program.
    During 2006, over half of veteran participants obtained 
independent housing. Another quarter were in transitional 
housing programs, halfway houses, hospitals, and nursing homes. 
Nearly one-third had jobs and significant percentages also 
demonstrated progress with alcohol and other substance abuse 
problems.
    To obtain a more complete understanding of the program's 
effectiveness, we have recommended that VA explore feasible and 
cost-effective ways to obtain information on how veterans are 
faring in the longer term.
    VA is considering an approach that would allow it to obtain 
information of participants' status 30 days after leaving the 
program. While this is a step in the right direction, we 
continue to believe that obtaining additional information at a 
later point would provide a better indication of long-term 
program success.
    Mr. Chairman, this concludes my statement. I am happy to 
answer any questions that you or other Members of the 
Subcommittee may have. Thank you.
    [The prepared statement of Mr. Bertoni appears on p. 37.]
    Mr. Michaud. I would like to thank all 3 panelists for your 
testimony this morning.
    My first question is for Ms. Spearman. As a Grant and Per 
Diem Program provider, can you speak to how the reimbursement 
process and the restrictions have affected your ability to 
provide services? And I know you mentioned about setting up a 
work group, but do you have any specific recommendations 
yourself on how to make the reimbursement process less 
burdensome?
    Ms. Spearman. Well, I would say that I do not have all the 
answers for that. I think that there are various things on the 
table right now that people are looking for. But I do think 
that uncapping and looking at directly what the real costs are 
and developing a mechanism for that.
    We have a lot of paperwork and a lot of monitoring that 
goes on and I feel like that it is excessive for the amount of 
money that it takes to do the program.
    And I have mentioned also that the $31.30, I think that it 
is today, is just about what it would cost to just do the 
housing management or one overlay of service.
    So even though the paperwork has been cumbersome, more 
important are the delays in getting stuff processed, I think 
mentioning the contract liaisons, I think that their training 
is hopefully going to improve that.
    But another recommendation in my written comment was that 
we would actually have them as part of the Grant and Per Diem 
Program because I do not think the goals of the VA medical 
centers are the same so that when they are processing, I think 
that our concern is that the VA takes the risk with us about 
putting people in beds at night, if that is what they need, 
that we are able to process that quickly and that we share some 
risk that that vet may not be exactly the right person for our 
program or we may be able to refer them on or to bring in some 
additional services.
    We have just made the policy to go ahead and take the 
person into the bed and take all the risk. VA has not been able 
to step forward and say we will pay, you know, due back 
payments on that particular veteran. So we do have that issue 
of the paperwork interfering there. We could go on on lots of 
individual things, but----
    Mr. Michaud. Thank you.
    Do you want to answer as well, Ms. Beversdorf? Are there 
any specific recommendations how the reimbursement process can 
be less burdensome?
    Ms. Beversdorf. I believe Kathy's testimony contains 
recommendations worth considering. There needs to be more 
dialogue. Most of the time, our members are frustrated because 
there is not good communication between the VA liaisons at the 
VA medical center and service providers.
    Sometimes the easy way out is for service providers to not 
participate in the program or providers choose not to stay in 
the program. That very much concerns us. Given the need for 
additional beds, there is a need to modify the process so more 
providers are willing to participate.
    Mr. Michaud. Mr. Bertoni, you are the Director of 
Education, Workforce, and Income Security Issues. Are there 
ways that we could streamline the reimbursement process? Also, 
when you look at what is happening, particularly with more 
veterans coming back from Iraq and Afghanistan, with the 
Department of Labor cutting career centers, that is what they 
are called in Maine, how can we improve helping homeless 
veterans in finding job opportunities?
    Mr. Bertoni. I am sorry. What was the first part of your 
question?
    Mr. Michaud. As far as the reimbursement being burdensome 
and ways to streamline the process.
    Mr. Bertoni. All right. The reimbursement aspects and the 
payment scheme was not part of our review. But in general, I 
would say personally we would like to see some empirical 
evidence as to what the effect is, what impact it would be 
having on providers, whether they are opting out of the 
program. That would be helpful to determine, you know, factual 
base that there is a problem indeed.
    As far as going to sort of an up front payment versus 
reimbursement after the fact, I can understand where that would 
have a positive view amongst certainly the providers, why they 
would want that in terms of their planning and their ability 
basically to plan and figure out who they can serve going 
forward.
    It does take some level of control away from the VA in 
terms of from an internal control standpoint. So, again, GAO 
would have to do some type of analysis to assess the soft 
points, the sticking points, how substantive they really were 
before we could come down. And, you know, what changes would be 
needed, I could not answer at this point.
    As far as job opportunities, I think it is very important. 
We have OIF and OEF servicemembers coming back. Certainly in 
the Army, infantry members, many have very low levels of 
education, in need of job training. There are programs out 
there. I am not sure to the extent they are coordinated.
    We are doing some analysis right now in terms of 
eligibility for those programs, who is eligible, who is not 
being deemed eligible, the programs that are the comprehensive 
menu of services that are out there, as well as participation 
in outcome rates.
    And the bottom like, I think, from the Dole-Shalala 
Commission, we are trying to follow-up behind them and do some 
of our own analysis of that, there is no good data out there as 
to outcomes and long-term outcomes. So I think we need to do 
some work there.
    And certainly the changing nature of the injuries coming 
back now, the traumatic brain injuries, PTSD, really a lot of 
value in up-front screening, finding out what exactly these 
people need medically and then to get them set up for 
vocational rehabilitation training.
    Mr. Michaud. Great. Thank you.
    Mr. Miller.
    Mr. Miller. Mr. Bertoni, are you pretty satisfied with, or 
do you think the number of 200,000 is a relatively realistic 
number?
    Mr. Bertoni. That is a tough one. I think we looked at what 
VA did, their point-in-time analysis. And given the unstable 
nature of the homeless population, we had no reason to question 
the reliability of that information.
    Mr. Miller. Is there another, more reliable method or 
recommendation that you could give VA to help them get that 
number?
    Mr. Bertoni. We did not get behind the methodology or 
question the number, but we did walk through what they did to 
come to that number. I think we are satisfied that they used a 
reliable approach in terms of point-in-time analysis and going 
down to the local level to try to get those counts.
    They did consult other groups that would have information 
like HUD. So I think while it is probably not a perfect figure, 
it is a reasonable figure.
    Mr. Miller. The VA Office of Inspector General (IG) 
recommended that the operational oversight authority and 
responsibility for the GPD Program be centralized at a national 
GPD Program office. Do you think this is a positive 
recommendation or do you have a view on it?
    Mr. Bertoni. I do not have a specific view on that. I would 
just say in terms of oversight and accountability, whoever does 
it, there needs to be a sound program put in place with 
specific guidelines and criteria as to what guidelines have to 
be followed.
    I do not think that is the case right now or it was not the 
case a year ago. So in terms of whether it is centralized or it 
is decentralized, I think there still needs to be an 
accountability program and oversight aspect to this program 
that I do not think has always been there.
    Mr. Miller. Ms. Beversdorf, you talked about reasonable 
measures of outcome and I had written down prior to that how do 
we grade success. Can you describe what you would call a 
reasonable measure of outcome?
    Ms. Beversdorf. Our members report there is an evaluation 
system already. And I would defer to Ms. Spearman for more 
details on that.
    But there certainly needs to be an evaluation of the 
outcomes. If a community-based organization submits a grant 
proposal with certain expected outcomes with respect to how 
many veterans they are hoping to treat, how many they are going 
to employ, how many they are going to provide services to, then 
those outcomes should be evaluated.
    Obviously if our community-based organizations receive 
grant funding from the VA, they need to be responsible with 
respect to following through and performing the services they 
have indicated they would do. It is necessary to measure to see 
if they have accomplished the purposes they said they would do.
    I will give you a comparison. The National Coalition for 
Homeless Veterans was recently awarded a grant from the VA to 
provide technical assistance to community-based organizations. 
We are required to provide quarterly reports indicating what 
services that we have provided to our members in the way of 
communications, training programs, educational programs, and 
publications.
    Receipt of per diem payment is not a blank check. It 
requires responsiveness. Community-based organizations must 
show the funding they receive is spent in a way that will 
ultimately benefit the client.
    Mr. Miller. This is for both of you, Ms. Spearman and Ms. 
Beversdorf, would not the ultimate success be that the veteran 
is no longer homeless? That he or she is placed, and is off the 
addiction, the alcohol or whatever drug addiction that they may 
be suffering from? I know you have to check boxes, but would 
that not be the ultimate measure?
    Ms. Spearman. Definitely, yes. I mean, integration back in, 
working, those are things that I--I think we have all grown in 
this Grant and Per Diem Program since we have been a part of it 
for 10 years and the staff have as well. I think it may be time 
that we really could be more articulate about the goals that we 
are really looking to attain here because, as I said, it is 
very unrealistic when you think about what the steps are to 
take a person from, you know, the Ocala national Forest all the 
way to, you know, having a job, being retrained, being back 
into the community, and feeling good about that and, you know, 
no longer----
    Mr. Miller. Is that one of the things that you track?
    Ms. Spearman. We do all those things, but we do not do it 
with Grant and Per Diem money alone. And so our goal, in fact, 
in the testimony that I have written, we have shown that we 
have been a part of a pilot project, two pilot projects in 
Florida doing outcomes only. We only get paid if we deliver and 
it is a marvelous way to do business. It takes some time. It 
really takes sitting at the table, deciding what it is you want 
and how you are going to do those measures.
    But we get paid one-twelfth of our grant as long as 80 
percent of all of our--if every single individual, 80 percent 
of the individuals move forward toward independence. So it is a 
marvelous way to do business, but it is difficult. But it is 
definitely an option.
    Mr. Miller. Thank you for putting Pensacola in the mix. We 
are glad to hear that there are some things planned.
    Again, between the two of you, is there more of a need for 
homeless veterans services in rural areas or urban areas 
because most of the focus appears to be on urban areas? I was 
interested that you picked Trenton of all places.
    Ms. Spearman. Yeah.
    Mr. Miller. Trenton is an extremely rural community. I was 
a Deputy Sheriff there when they only had one light in the 
county.
    Ms. Spearman. It still only has one light.
    Mr. Miller. Right there in downtown Trenton, the whole 
county had one red light. I know it is great everywhere, but 
where is the need the greatest?
    Ms. Spearman. Well, I will answer that first. Okay. I think 
there is a lot of need in the urban areas and they do 
congregate, a lot do. But one of the reasons that we did the 
mobile service center, and that came from working with the VA 
staff in Veterans Integrated Services Network 8, is that 
everybody got together and sat at the table and talked about 
how were we going to outreach to the barrier islands around the 
Keys and into the national forest and how were we really going 
to go back in there. And that is how the mobile service center 
came about and then, you know, we developed the housing after 
that. But I do not know.
    Ms. Beversdorf. I would echo. Sometimes, frankly, that is 
the frustration. The National Coalition for Homeless Veterans 
represents community-based organizations in 48 States. However, 
if you take a look at our annual report or a map of the United 
States, which indicates where these community-based 
organizations are, of course, there are fewer in Wyoming and 
North Dakota and some southern States as opposed to Florida or 
New York or California or Texas or Ohio.
    And it is a dilemma. One of the things I am most proud of 
with respect to the direct services NCHV provides is we have a 
1-800 toll free number. And we get as many as 300 calls a 
month, many of them from veterans who are either homeless 
already or at risk.
    Someone will call and say, ``Hi, I am so and so and I am 
homeless.'' He will also say, ``Where can I go?'' I immediately 
log onto our Web site and ask, ``Where are you calling from?'' 
``Well, Shreveport, Louisiana.''
    Because we have a list of all the community-based 
organizations, I really want to try and connect these 
individuals with community-based organizations that are located 
there. I may be lucky. I may be not.
    So then I may have to become more creative. Well, let's 
see. How about faith-based organizations? I go through that 
list. How about perhaps veteran service organizations that 
might be able to help you? Have you contacted the Red Cross? 
How about other religious organizations? You are absolutely 
right, Mr. Miller. If there is not any community-based 
organization there, a place where they can go, they remain 
homeless and that's a problem. They are coming to these 
community-based organizations if they know where they are 
located. This is one of the reasons why NCHV has been trying to 
reach out to non-VA supported community-based organizations as 
well because there are places where VA funding has not been 
provided or, in some cases, these organizations do not know 
about Grant and Per Diem. Major issue.
    Ms. Spearman. And let me just say one more thing in terms 
of I think they are harder to reach in the rural areas. But I 
think the Vietnam era, that is where they have gone to to live. 
Those who have not, you know, stayed in the city. There is a 
good number.
    So we have found many, many back in the forests. And you do 
not go back in there uninvited. And so you build rapport and it 
takes a very long time. But there are thousands back in the 
forests in Florida that we have identified and actually had an 
opportunity to interact with.
    So they are harder to serve. They are harder to find. They 
are harder to bring into the system. They have been off the 
streets, in the woods. And so it is a mix, but I think the 
numbers are in the urban areas.
    Mr. Miller. Thank you.
    Mr. Michaud. Thank you.
    Mr. Salazar.
    Mr. Salazar. Thank you, Mr. Chairman.
    And, first of all, let me thank all 3 of you for the 
services that you provide for veterans.
    Ms. Spearman, you talked a little bit about taking veterans 
in at risk, not really knowing whether you are going to get 
reimbursed or not. And, of course, veterans would be eligible 
for not only veterans' programs but probably eligible for 
Medicare, Medicaid, and other programs.
    Do you think that maybe centralizing the system like, I 
think that is what you were getting to, Mr. Miller, maybe doing 
a pilot program to figure out if we would have a clearinghouse 
to see what programs each veteran was eligible for? Do you 
think that would help or is there already such a program?
    Ms. Spearman. I do not think there is anything specific 
like you mentioned. And I do not know that would be the answer. 
I just do not have an opinion on the centralization. I am 
sorry.
    Mr. Salazar. Well, when I get questions in my office from 
many veterans, well, you know, I think I am eligible for this, 
I do not know whether I am, can you help me.
    Ms. Spearman. We have staff that do that. We have staff 
that have been trained by the VA, the VA benefits 
administrators. And I think that is one thing about the VA 
working more closely with the community is that a lot of 
community providers have no idea what a veteran is entitled to 
through the VA. And then those who have veterans in their 
programs who are not a part of the the Veterans Benefits 
Administration system, just have chosen not to, it just works 
both ways.
    There is a lot of lack of communication about what a 
veteran is entitled to. And we spend a lot of time as 
Volunteers of America of Florida in the State, you know, trying 
to go to meetings and saying, you know, there are a lot of 
things that you are providing that veterans are eligible for. 
So I think a close working relationship on that, whether a 
screening or a centralized system.
    I think the key is that we need to be able to respond a lot 
faster than we are responding. And I think that the community 
providers feel that most strongly and I think the VA typically 
just, you know, they do not see it as very positive, so it does 
not happen that way. So we are just much more proactive on an 
individual person by person because we are sitting there eye to 
eye and we are the provider.
    We are the 24/7, you know, care service for that person or 
we are there in the community and available 24/7 and we have 
access to other linkages, so we spend more time believing in 
that system and how that----
    Mr. Salazar. So the burden basically becomes yours to 
figure out what programs this individual is----
    Ms. Spearman. Yes.
    Mr. Salazar [continuing]. Eligible for?
    Ms. Spearman. Yes.
    Mr. Salazar. Mr. Bertoni, could you respond to that? Do you 
think that would help maybe expedite the process and be able to 
reach more veterans than what we are reaching right now?
    Mr. Bertoni. If you had a single entity that essentially 
counseled folks on the menu and range of services that were 
available to them, the alternatives----
    Mr. Salazar. Right.
    Mr. Bertoni [continuing]. Is that the question? I suppose 
it would work. I do not know if it is necessary. Again, we have 
not done enough thinking about it to give you a definitive 
answer.
    I do know at all 57 VA regional offices, there are veteran 
service organizations, VSOs, that are supposed to be doing just 
that, to sit down with veterans who are walking in. And I am 
sure they have a great handle on the range of services.
    And I would hope that the veterans that are involved in the 
GPD Program are interfacing. And I think they would because 
there is a healthcare aspect there in terms of veterans' 
healthcare.
    So if right now without a total restructuring, I think a 
good source would be for referral or a more aggressive role for 
the VSOs.
    Mr. Salazar. But do not VSOs just work specifically with VA 
programs? But there are other Government programs such as 
Medicare, Medicaid, that, you know, your veterans are 
transitioning to and become eligible for that maybe some kind 
of a pilot program, Mr. Chairman, could be set up to where we 
could expedite this process. And I think it would make it much 
simpler and the risk would not fall upon the service providers.
    Mr. Bertoni. One observation. I do believe the Social 
Security Administration and VA are beginning a similar effort 
to try to coordinate in terms of Social Security benefits 
versus VA benefits. I think it is very early on now. I do not 
know how far along it is. We are actually thinking about 
looking at that.
    Mr. Salazar. That is all I have, Mr. Chairman. Thank you.
    Thank you.
    Mr. Michaud. Thank you very much.
    Dr. Snyder.
    Mr. Snyder. Thank you, Mr. Chairman.
    This challenge reminds me of the challenge that we were 
facing several years ago with regard to TRICARE payments to 
medical providers and probably some of my provider friends are 
probably telling me that they are still facing, but I think it 
is substantially improved, which was one of my doctor friends 
back home that managed a very large practice said that the 
problem with TRICARE payments is that they were low, they were 
slow, it is complicated.
    And you could handle one of those as a provider. You cannot 
handle all 3 of them together, where if the payment is low, it 
is slow getting to you and the paperwork burden is complicated 
to finally get the low payment to you in a slow manner. Help 
me, if you would, because this is an area that I do not know a 
lot about.
    It seems to me that there are like 5 options out there. One 
is to do nothing and just going with the current reimbursement 
rate which I do not think anyone would be satisfied with that.
    The second one would be to increase the per diem rate, but 
basically keep the system like it is.
    The third one would be to go to a cost of service option 
probably with some kind of geographical variation that people 
would have to say here is what our actual costs were to get 
reimbursed.
    A fourth would be to have some kind of grant program that 
would pay for, I assume, some kind of annual grant to provider 
services that may or may not allow for some beds being empty.
    And the fifth one is some kind of program of permanent 
housing, supporting homeless veterans in permanent housing.
    Are those the basic 5 options we are looking at?
    Ms. Spearman. I will respond to that. I think that is 
definitely in the mix. I think there are some others that could 
be considered.
    Mr. Snyder. What are those?
    Ms. Spearman. One would be doing a housing per diem base; 
what it really does cost to do housing management and place 
people in housing and house them. And then maybe some service 
overlays. I know geographical consideration is important, but 
also the level of service.
    There are providers that are excellent providers that can 
only do a minimal amount of services, whereas Volunteers of 
America of Florida may be able to do, you know, clinical 
treatment, substance abuse treatment, a lot of other things 
that VA is not able to, you know, keep up with. And we could do 
a lot more levels of service.
    So obviously with services come dollars. So there could be 
levels of service of per diem on top of that. And they are, you 
know, an outcome base where you would have like maybe a grant 
based on cost and then you would do it with performance.
    So there are some others. There are some others that are 
used by HUD that are used by other programs that some of us are 
familiar with. But you hit on some. I hope we will not pick the 
one to do nothing. I hope that we will move forward.
    Mr. Snyder. I appreciate what you are saying about the 
different levels of services that different organizations 
choose to provide or can provide or have the capability to 
provide and some of that is going to be geographic because some 
areas have more services available than others.
    But when it is based on cost, what is the incentive for the 
organization to keep costs down? Tell me how that works as you 
see it.
    Ms. Spearman. Well, you know, you are going to have to 
operate within your cost if you do the budget and you are 
monitored on the budget to keep your costs within. I do think 
there should be, you know, a cap on, you know, what it is, 
whatever you presented in your budget.
    I think a per diem for a larger organization, the incentive 
is that you have the flexibility to spread some of your costs 
and get some money to the bottom line. In terms of a business, 
it is an on-going concern to make sure that you are putting 
more money back into the program.
    So I mean, I just think you are going to be bringing in 
other dollars regardless from other--I mean, I do not think 
that the grant per diem is going to pay for all that needs to 
be done for homeless veterans to get them where they need to 
go. So I mean, I do not know. Maybe I did not answer the 
question.
    Mr. Snyder. Thank you, Mr. Chairman.
    Mr. Michaud. Thank you.
    Once again, I would like to thank the 3 panelists for your 
testimony this morning and look forward to working with you as 
we move forward on this issue. So thank you very much.
    Ms. Spearman. Thank you.
    Mr. Michaud. I would like to have the second panel come 
forward. George Basher who is Chair of the United States 
Department of Veterans Affairs Advisory Committee for Homeless 
Veterans. He is also Director of the New York State Division of 
Veterans Affairs.
    Peter Dougherty who is the Director of Homeless Veterans 
Program at the Department of Veterans Affairs who is 
accompanied by Paul Smits who is Associate Chief Consultant for 
Homeless and Residential Rehabilitation at the Department of 
Veterans Affairs.
    I would like to welcome this next panel and we will start 
off with Mr. Basher.

   STATEMENTS OF GEORGE BASHER, CHAIR, ADVISORY COMMITTEE ON 
  HOMELESS VETERANS, U.S. DEPARTMENT OF VETERANS AFFAIRS, AND 
  DIRECTOR, NEW YORK STATE DIVISION OF VETERANS' AFFAIRS; AND 
PETE DOUGHERTY, DIRECTOR, HOMELESS VETERANS PROGRAMS, VETERANS 
  HEALTH ADMINISTRATION, U.S. DEPARTMENT OF VETERANS AFFAIRS; 
 ACCOMPANIED BY PAUL SMITS, DIRECTOR, HOMELESS AND RESIDENTIAL 
REHABILITATION, VETERANS HEALTH ADMINISTRATION, U.S. DEPARTMENT 
                      OF VETERANS AFFAIRS

                   STATEMENT OF GEORGE BASHER

    Mr. Basher. Chairman Michaud and Members of the 
Subcommittee, I am pleased to be here today to discuss the VA 
Grant and Per Diem Program serving homeless veterans. I thank 
you for the invitation to testify before the Subcommittee and 
discuss this worthy program.
    I have had the honor of serving as the Director of the New 
York State Division of Veterans Affairs for the past 10 years 
and also currently serve as the Chair of the Department of 
Veterans Affairs Advisory Committee on Homeless Veterans.
    In both of these roles, I have had the opportunity to 
witness not only the benefits of this program to those veterans 
who need a hand getting back on their feet, but also the 
challenges it brings to the provider community.
    Recent estimates by the National Alliance to End 
Homelessness place the number of homeless individuals in the 
United States at 750,000. VA estimates the number of homeless 
veterans to be approximately 180 to 200,000, making homeless 
veterans one-quarter of the entire homeless population.
    Established by Congress in 1992, the Grant and Per Diem 
Program has provided nearly 10,000 transitional beds for 
homeless veterans through the efforts of over 300 community-
based providers. These community and faith-based organizations 
provide shelter, food, and supportive services to homeless 
veterans for up to 2 years for a per diem currently set at a 
maximum of $31.30 a day.
    Originally designed to meet the needs of Vietnam era 
veterans, I believe it is time to revisit the Grant and Per 
Diem Program in light of the need to also serve the veterans of 
the current conflict as well as those older veterans.
    VA estimates they have already seen over 1,500 OEF/OIF 
veterans in various settings with several hundred referred to 
GPD providers for assistance.
    The VA Advisory Committee on Homeless Veterans in its 
recent report discussed concerns about Grant and Per Diem. 
Specifically, first, the VA Grant and Per Diem Program uses a 
process to reimburse providers designed like the system VA uses 
to reimburse State Governments for the State Home Program. The 
Advisory Committee is concerned that this capped process 
discourages providers in high-cost areas from even applying.
    The current $31.30 rate is based in law on the rate paid to 
State Home programs. There is no basis, in fact, for the $31.30 
rate in the State Home Program and no defined rationale for 
determining that figure.
    Additionally, the current process does not allow the use of 
other Federal funds without offset by VA. While the State Home 
Program rules were recently changed to allow this, the 
restriction of offsets still applies to Grant and Per Diem 
programs.
    Second, the accounting process required for reimbursement 
is a burden on small community-based providers. Asking this 
group to meet the same level of expertise as State Governments 
with larger accounting staff is unreasonable and discourages 
participation.
    Additionally, recent audits of some providers have led to 
allegations of significant overpayments sometimes years after 
the fact based on differing interpretations of allowable 
expenses.
    Parenthetically this devolves from that idea that the 
contract oversight and inspections are done by VA medical 
center staff, the liaisons, and I think we have over 120 
different people inspecting 300 different programs. The notion 
that this is all being done uniformly, fairly, and accurately 
is probably silly when you stop and think about it.
    Third, community-based Grant and Per Diem providers 
frequently use other Federal programs to augment the services 
provided to veterans. Current Grant and Per Diem regulations do 
not allow these funds to be used as a match for VA programs 
often discouraging participation.
    Conversely, other Federal programs do allow VA funds to be 
used as a match creating a disincentive to participate in VA 
programs.
    The Advisory Committee recommended the per diem be revised 
to allow payments to be related to service costs rather than a 
capped rate allowing higher cost areas where homeless veterans 
are often numerous to participate.
    The Advisory Committee also recommended allowing other 
Federal funds to be used as a match to VA funds and also allow 
other Federal funds to be used without offset.
    Incorporated in these recommendations is implied the 
recommendation that the current burdensome accounting process 
would be scrapped and replaced by a simpler mechanism to 
provide reimbursement and protect the taxpayers' interest. 
Paying a fee-for-services provided meets the needs of both the 
veteran client and the providers without placing an undue 
burden on either the providers or the Government.
    Beyond adjustments to the existing Grant and Per Diem 
Program, other related concerns need to be addressed. 
Historically most homeless and housing services have been 
provided by the U.S. Department of Housing and Urban 
Development and the U.S. Department of Health and Human 
Services.
    VA housing initiatives have focused almost exclusively on 
transitional housing reasoning that traditional VA programs 
coupled with Grant and Per Diem support services were all that 
was needed to return homeless veterans to a permanent housing 
environment.
    With 20 years' experience in homeless veterans programs, we 
now know this is a simplistic view. Veterans with a comorbidity 
of substance abuse and behavioral health disorders are 
frequently incapable of making the jump from transitional 
housing and programs to self-sufficiency. Experience has again 
taught that supportive permanent housing is often the most 
effective and economical way to have these individuals reenter 
the mainstream.
    The existing HUD-Veterans Affairs Supportive Housing (HUD-
VASH) Program providing Section 8 vouchers is woefully 
inadequate due to a lack of specific appropriations for the 
program by HUD. The Advisory Committee has recommended to VA 
that HUD-VASH be expanded and further that VA look for 
opportunities to partner with HUD and other agencies to find 
innovative ways to bring permanent housing and supportive 
services to veterans.
    Consideration should be given to site-based Section 8 
vouchers as a way to provide those services on an ongoing basis 
by community-based providers.
    Success of programs such as New York City's New York, New 
York 3 initiative have demonstrated an integrated approach like 
this can provide positive results at an affordable cost.
    The still ongoing Capital Asset Realignment for Enhanced 
Services, CARES, process VA is using to identify capital 
requirements for the next 20 years has identified a significant 
amount of surplus VA land and facilities. One of the Advisory 
Committee recommendations was to have VA make reuse of this 
land for veteran housing a priority.
    VA officials contend the existing Enhanced Use Lease 
Program is adequate to meet that need, but experience shows the 
Enhanced Use Lease to be a time-consuming, cumbersome process 
fraught with opportunity for delay and lost opportunities.
    The Department of Defense Base Realignment and Closure 
procedure, BRAC, is much more efficient in terms of making 
reuse opportunities a reality in a reasonable period of time.
    There is a growing concern regarding women veterans. With 
women now making up nearly 20 percent of today's military, VA's 
programs are being accessed by an increasing number of women 
veterans including programs for homeless veterans.
    There are unique challenges in this shift. Most VA programs 
were designed when the military was nearly exclusively male, 
necessitating changes by Veterans Healthcare Administration to 
facilities and procedures that are ongoing even today.
    Transitional housing programs for women veterans are rare 
given the relatively low numbers involved and the economies of 
scale needed to provide services. Issues of safety and 
appropriateness of facilities likewise challenge traditional 
homeless service providers.
    Another consideration is the authority of VA to only care 
for the veteran. Children who have no other parent to care for 
them also often accompany the increasing number of women 
veterans. Accessing VA services by these veterans means leaving 
children with other relatives or nonfamily caregivers, a 
difficult choice that often leads to walking away from VA care 
and looking for help elsewhere.
    VA should explore ways to cope with the changing 
demographics of the military and adjust accordingly either in 
partnership with other agencies or through programmatic changes 
of its own.
    The VA Grant and Per Diem Program has provided a valuable 
service to homeless veterans over the past 15 years. Adjusting 
the program in light of experience is appropriate. Creating new 
policy to meet the needs of returning veterans from the current 
conflict is a necessity.
    Mr. Chairman, this concludes my formal remarks. I 
appreciate the opportunity to present my views and am prepared 
to answer any questions you or Members of the Subcommittee may 
have.
    Thank you.
    Mr. Michaud. Thank you very much.
    [The prepared statement of Mr. Basher appears on p. 44.]
    Mr. Michaud. Mr. Dougherty.

                  STATEMENT OF PETE DOUGHERTY

    Mr. Dougherty. Thank you, Mr. Chairman, Members of the 
Subcommittee.
    VA has the largest and most comprehensive collaboration for 
homeless veterans in the country. We have more than 300 
community and faith-based organizations, State and local and 
tribal Governments who work with us in this program.
    I am very pleased to be joined today with Mr. Paul Smits 
who is the Director of Homeless and Residential Rehabilitation 
Program for the Veterans Health Administration.
    The effort to engage community and faith-based providers 
began with this Committee with the passage of H.R. 5400, the 
``Homeless Veterans Comprehensive Service Act,'' later signed 
by President George Herbert Walker Bush on November 10th, 1992.
    VA has offered funding under this proposal or under this 
law since 1994 and has awarded new funding each year since 
then. We now have awarded funding to more than 400 programs and 
have authorized more than 11,000 transitional housing beds.
    There are more than 8,000 transitional beds in service 
today and the remaining ones are coming on once the 
rehabilitation or the acquisition of property and repairs and 
renovations have been completed. And we will soon announce that 
we will add about another 900 to 1,000 new beds to those that 
have been previously approved.
    We continue to offer new funding because we have great 
faith in the ability of the many community providers to provide 
high-quality services to veterans. Our goal based upon this 
Congress' mandate is to end chronic homelessness among 
veterans. We have made good strides in achieving that goal. We 
simply would not be able to do so without our community-based 
partners.
    There was some discussion earlier on and I want to remind 
the Committee that VA unlike any other agency that is out 
there, both private and public, monitor and evaluate every 
veteran who comes to a homeless specific program.
    Since 1987 when VA began homeless specific programs, we 
have identified and provided services to about 400,000 veterans 
who we have identified as being homeless. We have a system of 
accountability because ultimately it does not matter as much to 
us about the money as to the outcome for the veteran. Just as 
we do in every other healthcare program, if the veteran needs 
the services to get better, we are going to use the money to 
get the veteran to a position where they get well.
    In this case, we do have a capitation on our funding, but 
we work in a very close partnership. What the Committee Members 
were asking about before, is we not only have great community 
providers that we work with, but we have a lot of VA dedicated 
staff who work in community programs.
    Some of them are there on a daily basis working hand in 
glove. Some of the questions about the accessibility and 
availability of benefits and other services are responded to 
because we have people on both sides (VA and community) who can 
answer those questions.
    We have performance measures that we have implemented in 
the last few years that we think help. If you are identified as 
a homeless veteran, we want to make sure you get a primary 
healthcare visit within 30 days and you get follow-up specialty 
care within 60 days.
    When we first started it, there was a lot of groaning on 
our side about putting that requirement on us. We are meeting 
that performance measure.
    We also have many of the providers that we are working 
with. Ms. Spearman and others have very significant, 
substantial programs. She has a lot of other resources because 
her organization has been very effective at doing that.
    Some of the smaller programs do not have that. One of the 
good things that the Department did this past year is added 30 
substance abuse counselors who work on-site in community-based 
programs.
    We are getting an increasing number of community programs 
where dental care services to these veterans are being provided 
and we now have reentry specialists working with veterans 
returning from prison.
    We are in the process of completing hiring at least one 
person in each network to work with the criminal justice system 
to make sure that veterans who are coming out of the criminal 
justice system do not show up in the ranks of the homeless, 
that they get their benefits and get on with their lives and do 
not become homeless in the meantime.
    We think all of these things are having some increasingly 
positive results of what is happening. We closely monitor and 
we aggressively reach out to all veterans who are homeless, but 
we would like to make note of those who are coming back from 
Iraq and Afghanistan. It gets a lot of attention. We wanted to 
give you an update today.
    During the past 3 years, we have been specifically 
monitoring veterans who have returned from Iraq and Afghanistan 
who have shown up at the ranks of the homeless. More than 1,500 
of those veterans that we have seen in outreach have served in 
those theaters of war and more than 400 of those have been in a 
homeless specific program.
    What that tells you in part is that some of the veterans 
that we are seeing in the outreach are not what you and I might 
consider to be literally homeless today. They may, in fact, 
have a full-time job, but they may still be going to a soup 
kitchen to get something to eat. They may have relationship 
problems with family and others that are putting them at risk.
    It is also important to know, because sometimes people 
wonder, ``Is this Government sort of turning a blind eye or is 
this Department turning a blind eye to that problem?'' The 
point is it is not just our staff and our people out there 
seeking them out. It is the community-based organizations who 
were at this table a few moments ago and State and county 
veteran service officers. All those people are making contact 
with us and doing outreach.
    I can tell you on a positive side, although people say is 
it not tragic, what we are finding is those veterans who are 
coming back from Iraq and Afghanistan who are coming in and 
getting treatment are doing, well. In fact, slightly better 
than other homeless veterans both in getting back into 
permanent housing and into employment.
    As the Committee knows, we are limited as to how much we 
can provide in reimbursement for support and that is that 
$31.30 a day for housing under the Grant and Per Diem Program.
    As you have heard today, and we understand there is a lot 
of concern among providers about that amount of payment, I 
think it may be a little bit illustrative and informative for 
the Committee to have you understand the process that goes on.
    When a veteran comes into a community-based program, we are 
supposed to have 3 days in which to determine their eligibility 
to be in that program. They provide services to that veteran. 
They provide to us a list with name, date, and Social Security 
number by bed day of care for the veteran who is in the 
program. We verify the information and then we reimburse after 
the fact.
    One of the things that does make us different than most 
Federal grant agencies is when you get a grant from them to do 
this type of service, you get to draw on a monthly basis. In 
our case, you have to wait until we get verification, until we 
can assess, make sure the information is correct, and we pay 
you after the fact.
    That creates problems because many of these folks do not 
have a lot of income, if you will, to float. Most other Federal 
programs do it differently. They let you draw in advance during 
the month you are actually doing the services.
    One of the questions that we get and one of the things you 
heard is sort of what is called the flat rate concept. The flat 
rate concept, we are sometimes asked why we do not have it? The 
reason is per diem payments are considered to be a grant under 
the law. And, therefore, we must comply with the Office of 
Management and Budget (OMB) circulars.
    VA guidance requires us to determine the allowable and 
unallowable cost based on the OMB circulars. It is our 
understanding that a flat rate of a straight payment. It would 
only be feasible if we had specific statutory authority and a 
waiver of the circulars from OMB.
    Mr. Basher mentioned a moment ago, and I would like to 
remind the Committee under the HUD-VASH Program, which we 
consider to be a very successful initiative where we provide 
case management services and HUD provides money for permanent 
housing, that you have already passed on the House side in the 
appropriations bill that would include 1,000 additional HUD-
VASH vouchers. The Senate has actually put in its bill $75 
million which we believe would create more than 6,000 new HUD-
VASH vouchers.
    For the first time in many, many years, it looks like there 
will be authority for new permanent housing which is the top 
unmet need according to our Advisory Committee on Homeless 
Veterans, as well has our community partners for more than a 
decade.
    VA along with our partners have done a good job. I think 
the quality of care veterans get in most of these programs are 
very good. We do understand the frustration of the payment 
system. We are trying to do the best we can with the process 
that we have.
    Mr. Chairman, this would conclude my formal statement and 
certainly we would be happy to answer any questions you and the 
Subcommittee have.
    [The prepared statement of Mr. Dougherty appears on p. 46.]
    Mr. Michaud. I would like to thank both of you gentlemen 
once again for your testimony this morning.
    Is there a change that we could make that would maintain or 
improve the oversight of funds while reducing the paperwork 
burden to providers and provide flexibility?
    I mean, everyone has said this morning that it is slow, 
that it is cumbersome. There must be a way that it could be 
streamlined and still have the accountability that we need to 
make it a worthwhile program.
    Mr. Dougherty. Mr. Chairman, I think that, yes, there 
probably is. We are already tied, if you will, to the State 
Home reimbursement rate. If we use that as a straight payment 
system and we then said to the recipient of the grant, the 
recipient of the payment what is it you would do specifically 
with that amount of money, then we would simply go back in and 
we would audit for that purpose of those expenditures.
    Right now we have to look at everything the organization 
does. The bigger and the more complex the organization is, the 
harder it is.
    I think the other thing, as was mentioned by the Committee 
Members as well in questioning, is that also incentivizes me to 
do more. At $31.30 a day, given the kinds of services that we 
require, it is a very modest amount of money. But I think if we 
could define for the providers that this is the amount that is 
being provided for you to do certain things for us. If you may 
need more employment and you could go to the Department of 
Labor or your State job services and they give you funding to 
provide an employment specialist in your program, it is good 
for the veteran and, if we were not paying for it anyhow, so 
what?
    We need better housing outcomes, it is the most critical 
problem we face in the homeless program. If you come through a 
good program and you may be too disabled to go back into 
independent living and go out and get a job. If you could get 
into good, stable housing, we would get you out of the grant 
program. We would not keep you there without an expectation of 
getting a better outcome.
    So if you could go to your local continuum of care and get 
a housing specialist to work part time with you and your 
program, if VA were not funding it under our grant, the veteran 
would get a better housing outcome, good for the veteran, good 
for the program.
    So I think there is a way to do that, but it would require 
some change in law.
    Mr. Michaud. Great.
    Following up on that, when you look at the services that 
the providers provide depending on which provider it is, they 
provide a variety of different types of service, is there a 
minimum standard that all Grant and Per Diem providers must 
follow and, if so, what is that?
    Mr. Dougherty. Yes, there are. In the application that they 
file, there are minimum things that we expect you to do be able 
to provide.
    Now, as Ms. Spearman mentioned this a few moments ago. The 
level of services that may be offered is one of the things when 
Congress created this program. The program addressed the urban 
and rural conditions. In Los Angeles, California, we have 20-
some programs in Los Angeles County. They have some specialty 
services, if you will, that they provide.
    In the more rural areas, you may be a more comprehensive 
sort of service because you may not have just expertise in 
substance abuse treatment or you may not have more expertise in 
mental health services. And so you may be more comprehensive.
    We do expect you to both provide a safe, decent environment 
in which the veteran is to live. You are to provide case 
management. You are to work on objectives of improving your 
daily living. You are supposed to reduce your healthcare 
dependency. In other words, you are to get us connected with 
that veteran for healthcare or to get that veteran to other 
healthcare services.
    You are to work on improvements in your living skills. You 
are to do other things related to improving their health 
condition and reduce substance abuse and other kinds of 
destructive behaviors.
    We do have minimum requirements that apply to everybody, 
but many programs have specialties that they provide. And the 
grant process is designed to meet the local need as it is in 
your community to address the needs of homeless veterans.
    Mr. Michaud. Mr. Miller.
    Mr. Miller. Mr. Basher, are the risk factors for veterans 
from the all-volunteer Army any different from those that were 
part of the draft era?
    Mr. Basher. In my opinion, yes, they are. The thing that I 
have observed over that period of time is that if you look at 
the Vietnam era veterans, they were largely a component of 
draftees overseen by a cadre of regular military. Today you 
have all volunteers. And the big difference is age.
    When I came home from Vietnam, I was a unit commander in 
Vietnam and I was 21 years old. When I came home, I was the old 
guy. You know, most of the people in my unit were 17, 18, and 
19 years old.
    Today I think you will find if you look at the 10th 
Mountain Division in New York, the average age of the second 
combat brigade up there is probably about 25 to 26 years old. 
They tend more to be married. They tend to have more 
dependents.
    And I think that as we drill down and are starting to 
learn, the very nature of this conflict, particularly in Iraq, 
is very, very different than any other war we have ever fought. 
And it is creating some new challenges and I think also some 
new opportunities for us. So, yes, they are very different.
    The incidence of Post Traumatic Stress Disorder, incidence 
of Traumatic Brain Injury clearly are already indicated to be 
higher than they have in past conflicts. Those require some 
different things. You know, when you stop and think about it, 
treating a veteran with a condition like PTSD or treating 
Traumatic Brain Injury and, again, VA by statute is required to 
treat the veteran and not the family, but everybody that is 
involved suffers with that kind of condition whether it is PTSD 
or TBI.
    The absurd extreme example would be, you know, the VA is 
only allowed to talk to the Alzheimer's patient, not the family 
that is with them. So, you know, we need to look at what is to 
leverage all these services and maybe adapt and grow to meet 
those changing demographics.
    Mr. Miller. What about other factors like alcohol or drug 
abuse?
    Mr. Basher. We are seeing a fair amount of that in New 
York. I mean, the only real on-the-ground experience I have is 
the 10th Mountain and 10th Mountain, the second combat brigade 
is the most deployed unit in this country.
    If you signed on to that group in the year 2000, you have 
already completed your fourth combat tour since 9/11. If you 
are a promotion hound, you are on your fifth or sixth. So if 
you do the math with the time and rotations, you know what the 
level of time that these people have when they return home.
    So there is some stress on those soldiers and as they 
return, you know, it does not manifest itself immediately, but 
I think over time, you start seeing challenges and family 
challenges and readjustment. And the military is trying to cope 
with this too. But we definitely see an increase in both 
substance abuse and also alcoholism coming back from those 
deployed units.
    Mr. Miller. Mr. Dougherty.
    Mr. Dougherty. Yes. Mr. Miller, we can tell you that the 
level of homelessness relates very specifically to the military 
standard. As Mr. Basher indicated, when you look at the late 
Vietnam War period and the immediate post Vietnam War period, 
that is the biggest bulge, if you will, in the list.
    We do get concerned when the military standard changes. Dr. 
Bob Rosenheck who does all the program monitoring and 
evaluation of all of VA's homeless programs will tell you that 
the incidence of homelessness actually went down, have gone 
down rather dramatically when we went to the all volunteer 
Army. When you look at the late eighties and early nineties, 
the incidence of homelessness among veterans seemed to have 
changed. So there is a relationship.
    Regarding the recently returning veterans, we can tell you 
that among those who have shown up in the ranks of the homeless 
there is a significant difference in that the level of 
substance abuse which is much less among this group than all 
homeless veterans and the level of combat and mental illness 
are related.
    We have a much higher ratio of mental illness among the 
recently returning veterans from Iraq and Afghanistan than we 
do in all homeless programs, about 45 percent in all homeless 
programs, closer to 70 percent in those who have come back from 
Iraq and Afghanistan.
    One of the differences among all veterans who we see in 
homeless programs, about 20 percent have been combat veterans 
or what you and I would consider to be combat veterans, and 
those coming back from Iraq and Afghanistan is closer to 70 
percent.
    I had a conversation before with the gentleman from GAO. We 
were talking about this issue. And, you know, truck convoys are 
not necessarily combat-related duty, but certainly none of us 
who know anything about what is going on would assume that 
riding convoy patrols is a very safe mission in Iraq and 
Afghanistan. It may have been in many of our previous wars, but 
it is not in this one.
    Mr. Michaud. Dr. Snyder.
    Mr. Snyder. Thank you, Mr. Chairman.
    I just have one question that I would like both Mr. Basher 
and Mr. Dougherty to respond to, if you would.
    In fact, Mr. Dougherty, you mentioned in your written 
statement about the problem of incarcerated veterans and when 
they are released.
    Would you both talk about this issue of incarcerated 
veterans and where we are at with that and, you know, you 
always have perspectives? So if you each take a couple of 
minutes.
    Mr. Dougherty. I can talk about it in a broad sense. And 
Mr. Basher, because he is in a State that has done a very good 
job with it, can even talk about it in more specifics.
    This Congress a few years ago asked VA and the Department 
of Labor to work on a pilot initiative which we have been doing 
for the last few years. The initial results of that are rather 
positive.
    About 40 percent of the veterans that we see in homeless 
programs have been previously incarcerated which is not 
surprising because many people who end up in the incarcerated 
ranks are substance abusers and have mental illness problems. 
And many of them when they come out without a good discharge 
planning process show up in homeless programs. It is just sort 
of a normal happenstance.
    We have been working with the Department of Labor on pilots 
authorized by the Congress. We are actually in the process of 
finishing a report. We think that what we will be able to show 
you in our report is that there will be a significant reduction 
among veterans going back into incarceration when they have 
been engaged with community providers prior to discharge, 
benefits assessments have been made, and discharge planning 
established to get the appropriate healthcare they need if 
eligible when they come out.
    I think without sort of prejudging what our final report 
will say, I can tell you clearly it will be at least half of 
what the normal re-incarceration rate is by using this kind of 
intervention.
    The Volunteers of America in Kentucky, which is one of the 
pilot sites, they believe that it saved re-incarceration costs 
in the State of Kentucky by more than what it costs the entire 
initiative to cost the Federal Government for the 7 pilots 
across the country. It has a very positive relationship.
    I am the Department's representative at the U.S. 
Interagency Council on the Homelessness, the senior policy 
group; and we know homelessness, one of the biggest risk 
factors of homelessness is having parents who are homeless and 
parents who are incarcerated.
    And so obviously even though it does not necessarily end 
the problem for us right away, we think that by addressing this 
issue better in the future, we may, in fact, help society down 
the line.
    Mr. Snyder. Thank you.
    Mr. Basher.
    Mr. Basher. Yeah. In New York, what we did about 7 years 
ago was we started definitely identifying veterans who were 
entering the State prison system and we currently have about 
60,000 inmates. And out of that number with an average sentence 
length of a little over 3\1/2\ years, we graduate about 1,000 
veterans into society at the end of every year.
    And we discovered early on that nobody has got enough money 
to do everything, so the VA cannot take this on by themselves. 
The State of New York Prison System certain cannot. Our parole 
system cannot. But we have worked together and figured out, 
first of all, how to get around some of the programmatic 
things.
    New York has 2 VA networks, Network 2, Network 3, and their 
geography and their chain of command is very different than how 
our State Prison System works. Most of our offenders come from 
the major metropolitan areas, the largest being the New York 
City area. And if you have been incarcerated, you wind up 
serving your sentence primarily up in the Adirondacks, some 
place far, far, far away from home in a different VA network.
    As you get closer to your release date, you get moved 
closer to home. But what we have managed to do is seamlessly 
follow these people and when they get within 6 months of 
release, our parole people start working on their release plan.
    And we send a counselor, one of our State counselors in 
because we are not constrained by the same rules as VA and make 
sure that we know if somebody has got eligibility for comp to 
be turned back on when they get out. We make sure that happens 
seamlessly.
    We make sure that if they do not have family to go back to 
and a place to live that they get handed off to the VA, to the 
system, and work into the dom system or whatever appropriate 
program there is.
    We think we have managed to reduce the recidivism for that 
group of people to under 40 percent which we think is more than 
cost effective. It has taken us a long time to work out all the 
kinks, but now it is almost automatic.
    Mr. Snyder. Thank you.
    Thank you, Mr. Chairman.
    Mr. Michaud. Just one last question to follow-up on Mr. 
Miller's question about dealing with homelessness for veterans 
in rural areas and the programs that are available. 
Unfortunately in some instances, service providers may not be 
able to reach some of these rural veterans, which brings up the 
use of faith-based organizations.
    My question is, do you work very closely with the Red Cross 
in rural areas to see if they could help with some of these 
problems?
    Mr. Dougherty. We work very closely with a whole host of 
agencies across the country and rural areas. Mr. Miller talked 
about being a Deputy Sheriff. I was a County Magistrate in West 
Virginia. And, those kinds of relationships are where it does 
not matter who you are and what you do.
    The problem comes forward in little towns and little 
communities in ways that big communities have the bureaucracy 
to deal with; in little communities, somebody just calls 
somebody who calls somebody.
    We work with a whole variety of partners. We have been out 
to the White House Faith-Based and Community Initiatives 
Program telling them about the availability of healthcare and 
services. We meet with the State Directors on a regular basis, 
the County Veteran Service Officers across the country. We have 
met with the Red Cross and Volunteers of America and national 
organizations like that, Salvation Army, to make those kind of 
relationships.
    In this day and age, even in most rural communities, there 
is a pretty good understanding, I think, that there is some 
help. It is really a question of access. And that is why one of 
the reasons that what we have done in the last few years is 
tried to make sure that, for example, on tribal lands, we have 
put some targeting in our funding to make sure that tribal 
lands, which are historically pretty remote and rural, have 
some opportunity to get funding or enhanced opportunities to 
get funding so that programs can be there.
    The other good thing about this program is it does not have 
a minimum and a maximum. In other words, some Federal programs 
say you have to have 50 units before you can get funded. We 
have programs as small as 6. Those are the kinds of programs 
that meet local needs.
    I use the terminology a lot that there is an intensity of 
need and the intensity of need is, different where there are a 
lot more homeless veterans in New York City than in an upstate 
New York. But if you have that problem in your upstate New York 
location, you also want to have an opportunity to get some 
reasonable way to address it for the veterans who are in your 
community. And so I think we have the opportunity to do that.
    Mr. Basher. Just to use New York as an example, our 
Division of Veterans Affairs is in 60 different locations in 
New York State. And while we have 11 offices in New York City, 
we also have an office in Malone. So, you know, it is local 
knowledge on the grounds of who the providers are and generally 
they have a pretty good sense of who the customers are, too, 
when the homeless folks show up.
    And as Mr. Dougherty pointed out, big programs are in the 
urban area, but Glens Falls, New York, has a little 7-bed house 
that does not have any empty beds. So, you know, the need is up 
there. And it is almost an if you build it, they will come 
situation.
    Mr. Dougherty. Also, Mr. Chairman, many communities come to 
us because they do stand downs. And the Interagency Council on 
the Homeless now does a thing called Project Connect. And the 
largest one in the country last year was Libby, Montana, which 
is not exactly the biggest metropolis on the face of the Earth. 
Over 1,000 veterans and family members of veterans came to that 
event. And, you know, it did not just attract you purely 
because you are homeless, but a lot of veterans who needed 
services came to that event.
    And so there are increasing opportunities. We support those 
opportunities. We provide a lot of staff both from the Benefits 
Administration and the Health Administration to help make sure 
that healthcare and benefits are there and in some cares are 
provided on-site.
    Mr. Michaud. Once again, I would like to thank this panel 
and the first panel very much for your testimony today and look 
forward to working with you as we move forward on this very 
important issue.
    So, once again, thank you. This hearing is adjourned.
    [Whereupon, at 11:29 a.m., the Subcommittee was adjourned.]



                            A P P E N D I X

                              ----------                              

             Prepared Statement of Hon. Michael H. Michaud,
                    Chairman, Subcommittee on Health

    Today, we will examine the Department of Veterans Affairs Grant and 
Per Diem Program for homeless veterans.
    On any given night, there are approximately 200,000 homeless 
veterans on the streets in America. The majority of these veterans 
served in Vietnam, 96 percent are male and about 45 percent suffer from 
some mental illness.
    VA has many programs to help homeless veterans--including the Grant 
and Per Diem Program. VA needs to continually evaluate these programs 
to ensure that veterans are getting the services that they need and 
that provider organizations can effectively provide these services.
    For example, while the vast majority of homeless veterans are male, 
female veterans are the fastest growing segment of this population.
    Women homeless veterans face similar challenges to their male 
counterparts, but they are very likely to have experienced serious 
trauma including abuse or rape and a significant number also have 
children to support. VA programs must be flexible to meet this new 
challenge.
    I believe that VA should make sure that they give Community Based 
Organizations the tools they need to provide comprehensive services to 
our homeless veterans.
    The way in which the Grant and Per Diem program is currently 
structured sometimes makes this difficult--particularly for providers 
in high cost areas.
    It is my belief that the goal of VA homeless programs should be to 
not only provide veterans with a bed for the night and a meal--but to 
provide them with the resources that they need to attain permanent 
housing, a steady job and a renewed sense of self-worth.
    Today, I hope that we will learn what VA is doing to provide 
services to homeless veterans to help them break out of this cycle. We 
will hear about the Grant and Per Diem Program--both what is working 
and ways that it can be.
    One homeless veteran is one too many. This is a problem that we can 
solve by working together.

                                 
                Prepared Statement of Hon. Jeff Miller,
                       Ranking Republican Member

    Thank you Mr. Chairman.
    This year marks the 20th Anniversary of VA's programs to provide 
specialized services for homeless veterans. VA's first homeless program 
began in 1987, with the enactment of Public Law 100-6. This law 
provided VA with $5 million to support care for veterans in community-
based and domiciliary facilities.
    Since that time, VA's homeless programs have expanded and grown 
significantly. VA budgets almost $2 billion to treat and assist 
homeless veterans and administers over nine specialized homeless 
programs that integrate housing and mental health and substance abuse 
counseling.
    Although it remains difficult to obtain an accurate count of the 
number of homeless veterans, there are indications that we are making 
good progress in helping to reintegrate homeless veterans into stable 
community environments and lead productive and sober lives.
    Still, there are far too many veterans out on the streets. On any 
given night in my home State of Florida alone it is estimated that 
there are 17,000 homeless veterans.
    Critical to ending homelessness among veterans is being able to 
identify vulnerable service men and women early and make sure that 
these veterans are aware and have immediate access to the services and 
benefits available through VA and in coordination with other Federal 
agencies.
    With the increasing number of returning veterans from the conflicts 
in Iraq and Afghanistan, the development of innovative services to help 
especially at risk veterans is extremely important.
    Another area of great concern is addressing the needs of women 
veterans and increasing the availability of facilities that are able to 
provide appropriate accommodations for women and women veterans with 
children.
    Today, we will review VA's Homeless Providers Grant and Per Diem 
Program (HGPD).
    The Grant and Per Diem program is considered to be a very 
successful collaboration between VA and non-profit and faith-based 
organizations.
    However, in a 2006 report that we requested from GAO, they found 
that improved communications and follow-up could further enhance the 
program. GAO reported that liaisons responsible for coordinating with 
local providers sometimes found it hard to assist due to large 
caseloads and other administrative tasks within their duties and a VA 
identified need for an additional 9,600 beds.
    Our Committee has always worked in a bipartisan manner to 
strengthen health care, housing, employment training, and other 
services to assist at risk veterans.
    I look forward to continuing to work with Chairman Michaud to 
provide aggressive oversight of VA's implementation of homeless 
programs and establish greater Federal collaboration between VA, HUD, 
and HHS to coordinate efforts to assist homeless veterans.
    I would like to welcome all of our witnesses. Especially I would 
like to thank Kathryn Spearman with the Volunteers of America, Florida 
for participating in our hearing this morning. I am grateful for your 
dedication and many years of work to provide services to assist 
homeless veterans in my home State of Florida.
    Thank you Mr. Chairman, I yield back the balance of my time.

                                 
         Prepared Statement of Cheryl Beversdorf, RN, MHS, MA,
                 President and Chief Executive Officer,
                National Coalition for Homeless Veterans

Introduction
    The National Coalition for Homeless Veterans (NCHV) appreciates the 
opportunity to submit testimony to the Health Subcommittee of the House 
Committee on Veterans' Affairs regarding the VA Grant and Per diem 
Program. Established in 1990, NCHV is a not for profit organization 
with the mission of ending homelessness among veterans by shaping 
public policy, promoting collaboration, and building the capacity of 
service providers. NCHV is the only national organization wholly 
dedicated to helping end homelessness among America's veterans.
    NCHV was founded by a group of community-based homeless veteran 
service providers who sought to educate the public about the 
extraordinarily high percentage of veterans among the homeless 
population and to place the needs of homeless veterans on the national 
public policy agenda. The founders, all former members of the military, 
were concerned that neither the public nor policy makers understood 
either the unique reasons for homelessness among veterans or 
appreciated the reality that so many veterans were overlooked and 
underserved during their periods of personal crisis.
    In the years since its founding, NCHV's membership has grown to 
nearly 280 organizations in 48 states and the District of Columbia. As 
a network, NCHV members provide the full continuum of care to homeless 
veterans and their families, including emergency shelter, food and 
clothing, primary health care, addiction and mental health services, 
employment supports, educational assistance, legal aid and transitional 
housing.
Homelessness Among Veterans
    The VA reports homeless veterans are mostly males (3 percent are 
females) and the vast majority are single, although service providers 
are reporting an increased number of veterans with children seeking 
their assistance. About half of all homeless veterans have a mental 
illness and more than two thirds suffer from alcohol or other substance 
abuse problems. Nearly 40 percent have both psychiatric and substance 
abuse disorders. The VA reports the majority of women in homeless 
veteran programs have serious trauma histories, some life-threatening, 
and many of these women have been raped and reported physical 
harassment while in the military.
    According to the VA Northeast Program Evaluation Center (NEPEC), 
male veterans are 1.3 times more likely to become homeless than their 
non-veteran counterparts, and female veterans are 3.6 times more likely 
to become homeless than their non-veteran counterparts. Like their non-
veteran counterparts, veterans are at high risk of homelessness due to 
extremely low or no livable income, extreme shortage of affordable 
housing, and limited access to health care. But these factors combined 
with their military service put them at even greater risk of 
homelessness.
    Prior to becoming homeless, a large number of veterans at risk of 
homelessness have struggled with Post Traumatic Stress Disorder, also 
known as PTSD, or have addictions acquired during or after their 
military service. NEPEC reports nearly 74 percent of homeless veterans 
are likely to have medical problems upon admission to either VA or 
community-based assistance programs. About 70 percent will have 
alcohol-related problems; 63 percent will have drug abuse histories; 
and 69 percent will have a mental illness diagnosis. These conditions 
can interrupt their ability to keep a job, establish savings, and in 
some cases, live with their families. Veterans' family, social, and 
professional networks may have been damaged and their lives disrupted 
due to extensive mobility while in service or lengthy periods away from 
their hometowns and their civilian jobs. These problems are directly 
traceable to their experience in military service or to the difficulty 
of transitioning back into civilian society.
    While most Americans believe our Nation's veterans are well-
supported, in fact many go without the services they require and are 
eligible to receive. According to a Congressional staff analysis of 
2000 U.S. Census data, 1\1/2\ million veterans have incomes that fall 
below the Federal poverty level, including 634,000 with incomes below 
50 percent of poverty. Neither the VA nor State and county veteran 
service departments are adequately funded to respond to these veterans' 
health, housing, and supportive services needs. Moreover, community-
based and faith-based service providers also lack sufficient resources 
to keep up with the number of veterans needing help.
    The VA reports its homeless veteran programs serve about 100,000 
veterans annually. NCHV member community-based organizations (CBOs) 
serve 150,000 each year. With an estimated 400,000 veterans 
experiencing homelessness at some time during the year, and the VA 
reaching only 25 percent and CBOs reaching 35 percent of those in need, 
that still leaves almost 40 percent of the nation's homeless veterans 
who do not receive the help they need. It is likely some of these 
veterans are receiving assistance from other community resources, but 
there is no way to determine the extent or nature of services being 
provided.
    In testimony presented to Congress in 2006, a U.S. Department of 
Veterans Affairs (VA) representative reported the number of homeless 
veterans on the streets of America on any given night decreased by 
nearly 25 percent during the last 5 years, from about 250,000 to 
190,000. Despite the reported decrease, many veterans still need help. 
Findings from a survey conducted by NCHV in November 2006 suggest the 
homeless veteran population in America may be experiencing significant 
changes. Homeless veterans receiving services today are aging and many 
are in need of permanent supportive housing. With the increase in the 
number of women serving in Iraq and Afghanistan, the percentage of 
women veterans seeking services is growing. According to studies 
published by the New England Journal of Medicine and the VA, a growing 
number of combat veterans of Operation Iraqi Freedom, Operation 
Enduring Freedom and the Global War on Terror are returning home and 
suffering from war-related conditions including PTSD and Traumatic 
Brain Injury, which may put them at risk for homelessness.
Homeless Provider Grant and Per Diem Program
    Administered by the U.S. Department of Veterans Affairs, the 
Homeless Providers Grants and Per Diem (GPD) program is the nation's 
largest VA program to help address the needs of homeless veterans and 
supports development of transitional, community-based housing and 
delivery of supportive services. The program also funds GPD liaisons 
who coordinate outreach, case management, referrals to benefits 
counselors, and linkage to health care and housing assistance. Also 
funded under the GPD program are Special Needs Grants, which assist 
homeless women veterans including homeless women veterans with 
children, in addition to veterans who are chronically mentally ill, 
frail elderly and terminally ill.
    The Homeless Provider Grant and Per Diem Program provides 
competitive grants to community-based, faith-based, and public 
organizations to offer transitional housing or service centers for 
homeless veterans. The GPD program is an essential component of the 
VA's continuum of care for homeless veterans, assuring the availability 
of social services, employment supports, and direct treatment or 
referral to medical treatment.
    In September 2006 the Government Accountability Office (GAO) 
released its study, Improved Communications and Follow-up Could Further 
Enhance the Grant and Per Diem Program. The agency found while VA has 
attempted to improve its services and increase the capacity of the GPD 
program, an additional 9,600 transitional housing beds are needed to 
meet the current demand. According to the study, VA reports a total of 
45,000 transitional beds are needed and has identified 35,400 beds 
available from various sources, including the GPD program, resulting in 
a shortfall of about 9,600 beds. In FY 2005, the GPD program had about 
8,000 available for homeless veterans. GAO states VA plans to increase 
GPD beds by 2,200 in the near future.
    NCHV is pleased that both the House and Senate have already passed 
bills increasing FY08 appropriations for the GPD program to the fully 
authorized level of $130,000,000. Funding at this level will make more 
beds available to serve the expected number of men and women returning 
from Iraq and Afghanistan who are at risk of homelessness. NCHV is 
hopeful Congress will soon pass a final bill that includes this level 
of funding and the bill will be signed into law.
Payment for Services
    In addition to needed increased program funding, however, NCHV 
believes the mechanism for paying providers under the Homeless 
Providers Grant and Per Diem Program (GPD) must be simplified. Current 
law (38 U.S.C. 2012(a)(2)) authorizes the VA Secretary to provide per 
diem payments to GPD providers at a rate not to exceed the rate 
authorized for State homes for domiciliary care. GPD providers report 
even this maximum rate (up to $31.30 per day) provides far less than 
the actual daily cost of care to a veteran in the GPD program.
    Moreover, VA has applied current law in a manner such that GPD 
providers must expend a significant level of effort and resources to 
gather and submit extensive documentation about each source of income 
and the location of costs for each homeless veteran being served with 
GPD funds. Providers often experience lengthy ongoing communication 
with the VA and questions regarding expenses incurred and 
accountability, resulting in a delay in timely reimbursement and 
ultimately, interruption of services to their clients. The accounting 
burden is particularly onerous for smaller faith-based and community-
based organizations, and is contrary to the aim of the President's 
Faith-Based and Community Initiative, which seeks to welcome grassroots 
organizations to Federal funding streams.
    Often the VA demands repayment of funds when providers temporarily 
have empty beds--the problem that comes about because the formula is 
based on an unsuitable model. At the time the original law was written, 
Congress was limited in determining how services to veterans outside 
traditional VA facilities should be reimbursed. As a result, the rate 
authorized for State homes for domiciliary care was used as the 
standard for paying homeless veteran service providers. Over the past 
several years, however, evidence has shown because clients in the two 
settings have different needs a payment system reflecting those needs 
and the more comprehensive services they are receiving must be applied. 
Residents receiving domiciliary care in State homes are more likely to 
remain permanently in VA facilities while the goal of community based 
homeless veteran service providers is to promote independent living for 
its clients and reintegration back into civilian life. The current GPD 
system is too rigid and doesn't reflect the reality of hiring and 
compensating staff even when beds are temporarily empty.
    To address these issues, NCHV urges Congress to introduce 
legislation that would provide relief to current community- and faith-
based providers in addition to organizations that may be interested in 
applying to the GPD program in the future. The new legislation would 
revise the per diem payment program to allow payments to be related to 
service costs rather than a capped rate and would also encourage high 
cost service areas to participate. The revised system would allow the 
Secretary to increase annually and adjust accordingly the rate of 
payment to providers to reflect changes in the cost of furnishing 
services in a particular geographic area. The Secretary would set a 
maximum amount providers would receive based on available funds.
    To ensure GPD funds are being spent in accordance with the purpose 
of the GPD program, NCHV supports statutory language requiring the VA 
Secretary to develop a reasonable system of outcome and performance 
measurement of GPD providers. In the current arena, the VA Homeless 
Grant and Per Diem liaison (HGPD) assigned to each grant program 
through the local VA medical center, provides continuous oversight 
throughout the year and conducts an annual inspection of each program. 
Results of these activities are reported to the VA HGPD Office. 
Oversight includes an inspection of the physical plant where the 
program operates, and a review and evaluation of the overall program 
including veterans' goals, objectives and outcomes as described in the 
original grant proposal that received the award. Maintaining the 
reporting process between the VA HGPD Office and the Secretary ensures 
the Secretary has in place a procedure that can determine if GPD funds 
are justified and utilized appropriately. Grant recipients provide the 
VA with information on financial integrity, solvency, operational 
accounting systems, as well as an annual independent audit.
Use of Other Funding
    In addition to revising the GPD payment system, new legislation 
should change the requirements for grant recipients and allow service 
providers to use other available sources of income besides the GPD 
program to furnish services to homeless veterans. These sources may 
include payments or grants from other departments and agencies of the 
United States or from departments or agencies of State or local 
Government.
    While the current law was intended to ensure VA per diem payments 
do not replace payments or contributions from other income sources, it 
has instead created the unintended consequence of penalizing GPD 
providers successful in securing other sources of income for services 
to homeless veterans by reducing their per diem payment rate. Thus, the 
predictable effect of this provision is that it discourages providers 
from developing partnerships with other Federal agencies or State and 
local Governments. Congress should devise a payment provision that 
encourages GPD providers to continue to seek funding from non-VA 
sources in a manner that does not penalize them if they are successful.
Matching Funds
    All payment modifications should also allow VA funds to be used as 
a match or leverage for other Federal funds and allow other Federal 
funds to be used without offset by VA. When GPD providers are able to 
receive the maximum rate in addition to other income sources, they are 
able to expand the scope and quantity of services to homeless veterans 
and increase the likelihood of their successful reintegration into the 
community. Conversely, when GPD providers are forced to use other 
sources of income to offset any reduction in payments made under the 
GPD program, as is currently the case, new services cannot be offered. 
Providers may not use such other income to develop and support 
additional housing units, provide veterans a more robust service 
package, or serve homeless veterans not qualified for GPD support.
    Currently, GPD grantees are being required to submit extensive 
documentation on all of their sources of project funding in order to 
secure per diem payments at the maximum rate permitted by statute, 
straining grantees and VA alike. If the GPD program is to remain viable 
in the future, Congress needs to simplify the conditions under which 
GPD payment amounts are established.
Conclusion
    The verdict is clear from homeless veteran service providers and 
veterans' advocates that the current GPD payment mechanism affects the 
ability of community- and faith-based organizations to effectively and 
efficiently serve veterans experiencing homelessness. We urge Congress 
to address this situation in whatever legislation is deemed an 
appropriate vehicle.
    Thank you for providing NCHV an opportunity to present our views. I 
am happy to answer your questions.

                                 
               Prepared Statement of Kathryn E. Spearman,
                 President and Chief Executive Officer,
                    Volunteers of America of Florida

    Chairman Michaud, Ranking Member Miller and Members of the 
Subcommittee:
    Thank you for the invitation to testify today and for all you do to 
assist our Nation's veterans. Volunteers of America of Florida is a 
statewide 501(c)(3) non-profit, faith-based social service community 
provider in Florida for 87 years. We are an affiliate of Volunteers of 
America, a national organization whose headquarters are located in the 
Washington, DC area, in existence for 111 years, with affiliates in 44 
states.
    Volunteers of America of Florida, in partnership with various 
committed funding sources, provides housing and services to the 
homeless, low-income elderly, persons with mental illness, and persons 
with developmental disabilities. With a continuum of services, 
Volunteers of America offers housing, health care, training, education 
and employment services to advance self-sufficiency. Housing and 
support services are offered in 13 Florida cities: Jacksonville, 
Gainesville, Tampa, Sebring, Bradenton, Clearwater, Orlando, Cocoa, 
Lakeland, Miami, Ft. Lauderdale, Pompano, and Key West. Currently, 
there are new projects in development in Pensacola, Punta Gorda, and 
Lake City, and assistance is being offered to potential providers in 
Trenton and Sebastian, Florida.
    Florida attracts many homeless veterans, and Volunteers of America 
of Florida has been focused on addressing the needs of these 
individuals for the past 10 years. We partner with the VA Grant and Per 
Diem Program in serving this population of veterans. This partnership 
is demonstrated by the fact that Volunteers of America of Florida and 
VISN 8 have jointly responded to five major hurricanes utilizing the 
Mobile Service Center which we will mention later in our talk. On any 
given night in Florida between 17,000 and 23,000 homeless veterans are 
living in shelters, on the streets, in encampments, on derelict boats 
or in other places not meant for human habitation. Volunteers of 
America of Florida currently has transitional housing and support 
services capacity for 216 homeless veterans in seven Florida cities: 
Jacksonville, Gainesville, Cocoa, Key West, Miami, Ft. Lauderdale, and 
Lake City. There are 171 beds through the VA Grant and Per Diem Program 
and 45 through our HUD Supportive Housing Programs. Another 81 beds are 
in development bringing our service capacity to 297 veterans in nine 
Florida cities and surrounding communities. Our first and most 
innovative Grant and Per Diem program is the Florida Veterans Mobile 
Service Center, a 40-foot state-of-the-art vehicle with a fully 
contained medical, dental and health service facility that outreaches 
to homeless veterans throughout the state. Veterans also benefit from a 
Multi-Service Center in some cities.
    Volunteers of America of Florida currently has the largest number 
of Veterans Affairs Grant and Per Diem supportive housing and service 
programs in Florida, as well as one of the largest number of HUD 
McKinney-Vento Supported Housing Programs in the State.
    Our service to veterans is based on excellent partnerships and 
common goals to support the needs of homeless veterans. As a provider, 
I appreciate the dedication of Roger Casey and his staff to make the 
program what it needs to be; the continual funding to add more beds; 
the grant segment which provides tremendous leverage and incentive; the 
opportunity for the VA and the community to partner to address the 
needs of homeless veterans; the per diem that strengthens the 
operations and program; the service center potential; and the strategic 
gateway for veterans to live in and be part of the community.
    Volunteers of America of Florida's success with homeless veterans 
is founded in strong partnerships, the ability to work statewide, a 
continuum of housing options and array of support services, and 
diligence in combining Federal and local resources to get the job done. 
Our 10 years of experience in working with homeless veterans, first in 
outreach and then in providing housing and support services including 
multi service centers, has led us to an increasing awareness of the 
issues facing Grant and Per Diem providers. From a provider perspective 
I will spend the rest of my testimony offering information and 
suggestions.
    Partnership_The overall partnership between the VA and the 
community needs strengthening. Local providers address the needs of 
veterans everyday and complement the VA services. We accept this as our 
role and we would like the VA to value that role in partnership--often 
a tall order I believe for the ``big VA''. In service to the homeless 
veterans, local community providers offer easier accessibility, 24/7 
availability of staff in our programs, fewer barriers to receive 
immediate service, and a more coordinated individualized, and timely 
approach to the needs of each homeless veteran. Providers are good 
housing developers; problem solvers; resource developers; and grant 
writers. We are a linkage for the veteran to the community where we 
offer an expansion to VA's clinical and substance abuse treatment as 
well as training and education in preparation for employment.
    Furthermore, the community needs the VA and its tremendous assets 
and resources in order to meet the goal of ending homelessness among 
veterans. The homeless veteran needs us both and the homeless veteran 
needs us to work together. A partnership approach does work and 
Volunteers of America of Florida is becoming more selective in its 
funding partners because so much more can be accomplished if we sit at 
the same table trying to find ways to reach an agreed upon outcome. 
With a good partnership comes shared risk because we own the problem 
together.

      Suggestion: A work group to advise on a provider 
friendly/VA accountability and funding mechanism for Grant and Per Diem 
payment with representation from all members of the partnership.
    VA Medical Center Relationship_Volunteers of America of Florida has 
worked well with the Health Care for Homeless Veterans and Compensated 
Work Therapy staff. In my experience, the staff from the VA hospitals 
that provide contract management and site inspections often lack the 
same goals as the VA Grant and Per Diem Program. However, as in many 
monitoring situations, it becomes confusing when the monitoring staff 
misconstrues their role as the expert in housing development, safety, 
service delivery, client intake, and generally--everything that is good 
for the veterans. I believe being a more integral part of the Grant and 
Per Diem staff and its strategies to work with the community could be 
beneficial.

      Suggestion: Staff those positions under Grant and Per 
Diem. Training, scheduling and a positive attitude could build a better 
rapport with community providers serving veterans. We could actually 
problem solve as a team. At a minimum the hospital representatives, as 
well as everyone representing the VA Grant and Per Diem Program, need 
to focus on the positive partnership.
    Helping the Homeless Veterans_In order to move a homeless veteran 
to a healthful and productive life in the Grant and Per Diem Program, 
most of the following services will be required:

      Outreach to identify, locate, establish trust and 
rapport, and link veterans to services
      Immediate access to shelter, food, clothing, and health 
care
      Assessment of need
      Housing placement
      Medical and dental care
      Support Services--transportation, linkage to assistance 
and benefits, legal aid, and building a personal support system
      Mental Health and/or Substance Abuse Treatment
      Training and education, and employment assistance
      Employment assistance
      Community integration, support networks
      Relocation to permanent housing

    Outreach and services will be successful when they are conducted to 
build trust and respect. Recognition should be given to the importance 
of all sources that help the homeless veteran succeed. I must say that 
I doubt most people realize how disengaged and disabled many of the 
homeless veterans are when they enter our programs. Drug and alcohol 
addiction is very serious and disruptive to rebuilding a life 
acceptable to our society.
    Costs in Relation to the VA Grant and Per Diem Payment_The complex 
barriers experienced by our Nation's homeless veterans reinforce the 
need to be flexible as a service provider. Costs for housing and 
services must be constantly evaluated to offer the highest quality of 
service. The following are some industry costs for your information on 
this topic. While costs will vary by factors such as quality and 
volume, the information below shows activities and associated costs.


------------------------------------------------------------------------
                      Activity                               Cost
------------------------------------------------------------------------
Housing Management                                              $25/day
------------------------------------------------------------------------
Clinical Care (non clinic)                                      $32/day
------------------------------------------------------------------------
Service Center Operation (for serving 50 veterans)           $1,000/day
------------------------------------------------------------------------


    Therefore, the $32/day per diem note will always fall short of 
paying in total for what is needed. Identification and combining of 
resources is essential and should be encouraged strongly. In my 
opinion, the VA Grant and Per Diem service center payment does not 
relate to operating a center.
    Construction, rehab and acquisition require a 35 percent cash match 
from the provider. This usually comes from additional funding sources 
that are easier to access with the VA portion committed as a grant and 
a per diem to strengthen the ability to operate. Flexibility needs to 
be exercised to create projects that offer beds to homeless veterans. 
There are many creative ways to combine development funding or put 
together assets of providers, VA grant, and financing. It is crucial 
also that VA Grant and Per Diem be understood as providers attempt to 
mesh funding and funders' requirements. It is not a perfect process and 
each is different and often challenging.

      Suggested Options of Service Payment:

    1.  Provider prepares an expense budget reflecting housing and 
services expenses they want the VA to pay for. The provider is then 
monitored according to that proposed budget and the services those 
expenses covered. VA is flexible and helpful as circumstances require 
adjustments. Cost is impacted by the level and type of service.
    2.  Determine a housing base per diem and then two or three levels 
of service per diem as an overlay (basic to more intensive).
    3.  Determine outcomes desired and steps to arrive at those 
outcomes. Then determine cost and pay the provider monthly (\1/12\) of 
budget if 80 percent of outcomes are being met or if veterans are 
moving toward independence that month (documented). Volunteers of 
America of Florida has two pilots of this nature with the State 
Department of Children and Families, Office of Substance Abuse and 
Mental Health. It has a remarkable impact on how services are 
delivered!

       Note: The VA must pay their portion of administrative overhead 
based on a reasonable percent. It costs a viable organization between 
12 and 25 percent (12-25 percent) of administrative costs--the higher 
percent for the smaller organization.

    The flexibility we build now, in this program, should also be with 
an eye to the future when we will be focused on a new era of veterans 
with a whole new set of circumstances and needs. Our work over the last 
decade has been primarily with homeless veterans who served during the 
Vietnam era. Veterans now returning from Operation Iraqi Freedom or 
Operation Enduring Freedom should benefit from the lessons we have 
learned in developing support and interventions. Our returning troops 
have Post Traumatic Stress Disorder, Traumatic Brain Injury, and other 
serious mental health/substance abuse disorders which will require 
services on a longer term basis. Please consider the need for permanent 
supported housing for these veterans. As we work together to address 
program improvements, we will be better prepared to continue to meet 
the needs of current homeless veterans and wisely anticipate the needs 
of our returning troops.
    In closing, I hope the pressure on the Grant and Per Diem Program 
will lift so the staff can more effectively advance the Program goals. 
We all need to be more secure in what we are doing and why we are doing 
it! When we embrace common goals to serve and support homeless 
veterans, and reach out with a sincere helping hand, powerfully 
positive outcomes will result.
    Thank you for the opportunity to share my views on this important 
and worthwhile program. I hope my comments are representative of other 
providers or that their opinions are represented in the comments of my 
other colleagues testifying with me today.

                                 
            Prepared Statement of Daniel Bertoni, Director,
           Education, Workforce, and Income Security Issues,
                 U.S. Government Accountability Office
  Homeless Veterans Programs--Bed Capacity, Service and Communication 
             Gaps Challenge the Grant and Per Diem Program
                             GAO Highlights

Why GAO Did This Study
    The Subcommittee on Health of the Committee on Veterans' Affairs 
asked GAO to discuss its recent work on the Department of Veterans 
Affairs' (VA) Homeless Providers Grant and Per Diem (GPD) program.
    GAO reported on this subject in September 2006, focusing on (1) 
VA's estimates of the number of homeless veterans and transitional 
housing beds, (2) the extent of collaboration involved in the provision 
of GPD and related services, and (3) VA's assessment of program 
performance.
What GAO Found
    VA estimates that about 196,000 veterans nationwide were homeless 
on a given night in 2006, based on its annual survey, and that the 
number of transitional beds available through VA and other 
organizations was not sufficient to meet the needs of eligible 
veterans. The GPD program has quadrupled its capacity to provide 
transitional housing for homeless veterans since 2000, and additional 
growth is planned. As the GPD program continues to grow, VA and its 
providers are also grappling

with how to accommodate the needs of the changing homeless veteran 
population that will include increasing numbers of women and veterans 
with dependents.
    The GPD providers we visited collaborated with VA, local service 
organizations, and other State and Federal programs to offer a broad 
array of services designed to help veterans achieve the three goals of 
the GPD program--residential stability, increased skills or income, and 
greater self-determination. However, most GPD providers noted key 
service and communication gaps that included difficulties obtaining 
affordable permanent housing and knowing with certainty which veterans 
were eligible for the program, how long they could stay, and when 
exceptions were possible.
    VA data showed that many veterans leaving the GPD program were 
better off in several ways--over half had successfully arranged 
independent housing, nearly one-third had jobs, one-quarter were 
receiving benefits, and significant percentages showed progress with 
substance abuse, mental health or medical problems or demonstrated 
greater self-determination in other ways. Some information on how 
veterans fare after they leave the program was available from a onetime 
follow-up study of 520 program participants, but such data are not 
routinely collected.
    We recommended that VA take steps to ensure that GPD policies and 
procedures are consistently understood and to explore feasible means of 
obtaining information about the circumstances of veterans after they 
leave the GPD program. VA concurred and, following our review, has 
taken several steps to improve communications and to develop a process 
to track veterans' progress shortly after they leave the program. 
However following up at a later point might yield a better indication 
of success.
                               __________
Mr. Chairman and Members of the Subcommittee:

    Thank you for inviting me here today to discuss the Homeless 
Providers Grant and Per Diem (GPD) program, the largest program of its 
kind administered by the Department of Veterans Affairs (VA). On any 
given night in the United States, an estimated 750,000 people, 
including veterans, are homeless and may sleep on the streets or in 
shelters. Veterans constitute about one-third of the adult homeless 
population, and many veterans who are not yet homeless may be at risk. 
To address the needs of these homeless veterans, VA officials told us 
that through the GPD program they fund over 300 grants to local 
agencies to house approximately 15,000 homeless veterans over the 
course of a year at a cost of about $95 million. The program is not 
designed to serve all homeless veterans--it focuses on transitional 
housing and supportive services for veterans who are most in need, 
including those who have had problems with mental illness, substance 
abuse, or both.
    My statement draws on GAO's report on this program issued in 
September 2006 that reviewed (1) VA's estimates of the number of 
homeless veterans and transitional housing beds, (2) the extent of 
collaboration involved in the provision of GPD and related services, 
and (3) VA's assessment of program performance. \1\ I have also 
included information we obtained in following up on VA's efforts to 
implement our recommendations.
---------------------------------------------------------------------------
    \1\ GAO, Homeless Veterans Programs: Improved Communications and 
Follow-up Could Further Enhance the Grant and Per Diem Program, GAO-06-
859 (Washington, D.C. Sept. 11, 2006).
---------------------------------------------------------------------------
    In summary, VA reported in 2006 that about 196,000 veterans were 
homeless and that not enough transitional beds were available through 
VA and other organizations to meet the needs of homeless veterans 
eligible to use this assistance. To help meet these needs, the GPD 
program has quadrupled its capacity since 2000 to about 8,200 beds, and 
additional growth is planned. In addition to increasing transitional 
bed capacity, VA and its providers are also grappling with how to 
accommodate the needs of the changing homeless veteran population that 
will include increasing numbers of women and veterans with dependents. 
When we met with GPD providers who operate the program and their local 
VA liaisons, we found that they were working collaboratively with other 
organizations to deliver supportive services, but most also noted key 
resource and communications gaps. Specifically, providers reported 
difficulties finding affordable permanent housing for veterans ready to 
leave the program. In addition the eligibility rules for the GPD 
program were not always clear, a fact that could cause confusion and 
could keep veterans from obtaining needed care. VA data showed that 
many veterans were better off in terms of housing; employment; receipt 
of public benefits; and progress with substance abuse, mental health, 
or medical problems at the time they left the program, but VA did not 
know how they were faring months or years later.
    We recommended that VA take steps to ensure that GPD policies and 
procedures are consistently understood and to explore feasible means of 
obtaining information about the circumstances of veterans after they 
leave the GPD program. VA concurred and, following our review, has 
taken several steps to improve communications and to develop a process 
to track veterans' progress shortly after they leave the program. 
However following up at a later point might yield a better indication 
of success.
Background
    The GPD program is one of six housing programs for homeless 
veterans administered by the Veterans Health Administration, which also 
undertakes outreach efforts and provides medical treatment for homeless 
veterans. \2\ VA officials told us in Fiscal Year 2007 they spent about 
$95 million on the GPD program to support two basic types of grants--
capital grants to pay for the buildings that house homeless veterans 
and per diem grants for the day-to-day operational expenses. \3\ 
Capital grants cover up to 65 percent of housing acquisition, 
construction, or renovation costs. The per diem grants pay a fixed 
dollar amount for each day an authorized bed is occupied by an eligible 
veteran up to the maximum number of beds allowed by the grant--in 2007 
the amount cannot exceed $31.30 per person per day. VA pays providers 
after they have housed the veteran, on a cost reimbursement basis. 
Reimbursement may be lower for providers whose costs are lower or are 
offset by funds for the same purpose from other sources.
---------------------------------------------------------------------------
    \2\ The other five programs are the Contracted Residential 
Treatment Program, the Domiciliary Residential Rehabilitation and 
Treatment Program, the Compensated Work Therapy/Transitional Residence 
Program, the Loan Guarantee for Multifamily Transitional Housing, and 
the Housing and Urban Development-VA Supported Housing program.
    \3\ On a limited basis, special needs grants are available to cover 
the additional costs of serving women, frail elderly, terminally ill, 
or chronically mentally ill veterans.
---------------------------------------------------------------------------
    Through a network of over 300 local providers, consisting of 
nonprofit or public agencies, the GPD program offers beds to homeless 
veterans in settings free of drugs and alcohol that are supervised 24 
hours a day, 7 days a week. Most GPD providers have 50 or fewer beds 
available, with the majority of providers having 25 or fewer. Program 
rules generally allow veterans to stay with a single GPD provider for 2 
years, but extensions may be granted when permanent housing has not 
been located or the veteran requires additional time to prepare for 
independent living. Providers, however, have the flexibility to set 
shorter timeframes. In addition, veterans are generally limited to a 
total of three stays in the program over their lifetime, but local VA 
liaisons may waive this limitation under certain circumstances. The 
program's goals are to help homeless veterans achieve residential 
stability, increase their income or skill levels, and attain greater 
self-determination.
    To meet VA's minimum eligibility requirements for the program, 
individuals must be veterans and must be homeless. A veteran is an 
individual discharged or released from active military service. The GPD 
program excludes individuals with a dishonorable discharge, but it may 
accept veterans with shorter military service than required of veterans 
who seek VA health care. A homeless individual is a person who lacks a 
fixed, regular, adequate nighttime residence and instead stays at night 
in a shelter, institution, or public or private place not designed for 
regular sleeping accommodations. \4\ GPD providers determine if 
potential participants are homeless, but local VA liaisons determine if 
potential participants meet the program's definition of veteran. VA 
liaisons are also responsible for determining whether veterans have 
exceeded their lifetime limit of three stays in the GPD program and for 
issuing a waiver to that rule when appropriate. Prospective GPD 
providers may identify additional eligibility requirements in their 
grant documents.
---------------------------------------------------------------------------
    \4\ The definitions appear at 42 U.S.C. Sec. 11302 and 38 C.F.R. 
Sec. 61.1.
---------------------------------------------------------------------------
    While program policies are developed at the national level by VA 
program staff, the local VA liaisons designated by VA medical centers 
have primary responsibility for communicating with GPD providers in 
their area. VA reported that in Fiscal Year 2007, there were funds to 
support 122 full-time liaisons. \5\
---------------------------------------------------------------------------
    \5\ Liaisons told us in 2006 that they experienced large caseloads 
and multiple GPD responsibilities--including eligibility determination, 
verification of intake and discharge information, case management, 
fiscal oversight, monitoring program compliance and inspections of GPD 
facilities, among other duties. To address some of these concerns, VA 
obtained funding to increase the number of full-time positions to 122.
---------------------------------------------------------------------------
VA Has Expanded GPD Program Capacity to Help Meet Homeless Veterans' 
        Needs, but Demand Still Exceeds Supply
    Since Fiscal Year 2000, VA has quadrupled the number of available 
beds and significantly increased the number of admissions of homeless 
veterans to the GPD program in order to address some of the needs 
identified through its annual survey of homeless veterans. In Fiscal 
Year 2006, VA estimated that on a given night, about 196,000 veterans 
were homeless and an additional 11,100 transitional beds were needed to 
meet homeless veterans' needs. However, this need was to be met through 
the combined efforts of the GPD program and other Federal, state, or 
community programs that serve the homeless. VA had the capacity to 
house about 8,200 veterans on any given night in the GPD program. Over 
the course of the year, because some veterans completed the program in 
a matter of months and others left before completion, VA was able to 
admit about 15,400 veterans into the program, as shown in figure 1. 
Despite VA rules allowing stays of up to 2 years, veterans remained in 
the GPD program an average of 3 to 5 months in Fiscal Year 2006.

            Figure 1--Numbers of GPD Admissions and Beds in
                       Fiscal Years 2000 and 2006

[GRAPHIC] [TIFF OMITTED] T9457A.001


    The need for transitional housing beds continues to exceed 
capacity, according to VA's annual survey of local areas served by VA 
medical centers. The number of transitional beds available nationwide 
from all sources increased to 40,600 in Fiscal Year 2006, but the need 
for beds increased as well. As a result, VA estimates that about 11,100 
more beds are needed to serve the homeless, as shown in table 1. VA 
officials told us that they expect to increase the bed capacity of the 
GPD program to provide some of the needed beds.


 Table 1--Available and Needed Transitional Beds for Homeless Veterans,
                            Fiscal Year 2006
------------------------------------------------------------------------
       Available and Needed Transitional Beds               FY 2006
------------------------------------------------------------------------
Transitional beds needed                                         51,700
------------------------------------------------------------------------
Total transitional beds available, including GPD                 40,600
------------------------------------------------------------------------
Additional beds still needed                                     11,100
------------------------------------------------------------------------
Source: GAO analysis of VA's annual survey estimates rounded to nearest
  100.


    Most homeless veterans in the program had struggled with alcohol, 
drug, medical or mental health problems before they entered the 
program. Over 40 percent of homeless veterans seen by VA had served 
during the Vietnam era, and most of the remaining homeless veterans 
served after that war, including at least 4,000 who served in military 
or peacekeeping operations in the Persian Gulf, Afghanistan, Iraq, and 
other areas since 1990. About 50 percent of homeless veterans were 
between 45 and 54 years old, with 30 percent older and 20 percent 
younger. African-Americans were disproportionately represented at 46 
percent, the same percentage as non-Hispanic whites. Almost all 
homeless veterans were men, and about 76 percent of veterans were 
either divorced or never married.
    An increasing number of homeless women veterans and veterans with 
dependents are in need of transitional housing according to VA 
officials and GPD providers we visited. The GPD providers told us in 
2006 that women veterans had sought transitional housing; some recent 
admissions had dependents; and a few of their beds were occupied by the 
children of veterans, for whom VA could not provide reimbursement. VA 
officials said that they may have to reconsider the type of housing and 
services that they are providing with GPD funds in the future, but 
currently they provide additional funding in the form of special needs 
grants to a few GPD programs to serve homeless women veterans.
GPD Providers Collaborate to Offer a Range of Services, but Face 
        Challenges in Helping Veterans
    VA's grant process encourages collaboration between GPD providers 
and other service organizations. Addressing homelessness--particularly 
when it is compounded by substance abuse and mental illness--is a 
challenge involving a broad array of services that must be coordinated. 
To encourage collaboration, VA's grants process awards points to 
prospective GPD providers who demonstrate in their grant documents that 
they have relationships with groups such as local homeless networks, 
community mental health or substance abuse agencies, VA medical 
centers, and ancillary programs. The grant documents must also specify 
how providers will deliver services to meet the program's three goals--
residential stability, increased skill level or income, and greater 
self-determination.
    The GPD providers we visited often collaborated with VA, local 
service organizations, and other State and Federal programs to offer 
the broad array of services needed to help veterans achieve the three 
goals of the GPD program. Several providers worked with the local 
homeless networks to identify permanent housing resources, and others 
sought Federal housing funds to build single-room occupancy units for 
temporary use until more permanent long-term housing could be 
developed. \6\ All providers we visited tried to help veterans obtain 
financial benefits or employment. Some had staff who assessed a 
veteran's potential eligibility for public benefits such as food 
stamps, Supplemental Security Income, or Social Security Disability 
Insurance. Other providers relied on relationships with local or State 
officials to provide this assessment, such as county veterans' service 
officers who reviewed veterans' eligibility for State and Federal 
benefits or employment representatives who assisted with job searches, 
training, and other employment issues. GPD providers also worked 
collaboratively to provide health care-related services--such as mental 
health and substance abuse treatment, and family and nutritional 
counseling. While several programs used their own staff or their 
partners' staff to provide mental health or substance abuse services 
and counseling directly, some GPD providers referred veterans offsite--
typically, to a VA local medical center.
---------------------------------------------------------------------------
    \6\ Through the local Continuum of Care networks, the Department of 
Housing and Urban Development contracts with public housing agencies 
for the rehabilitation of residential properties that provide multiple 
single-room dwelling units. These agencies make Section 8 rental 
assistance payments generally covering the difference between a portion 
of the tenant's income (normally 30 percent) and the unit's rent to 
participating owners (i.e., landlords) on behalf of homeless 
individuals who rent the rehabilitated dwellings.
---------------------------------------------------------------------------
    Despite GPD providers' efforts to collaborate and leverage 
resources, GPD providers and VA staff noted gaps in key services and 
resources, particularly affordable permanent housing for veterans ready 
to leave the GPD program. Providers also identified lack of 
transportation, legal assistance, affordable dental care, \7\ and 
immediate access to substance abuse treatment facilities as obstacles 
for transitioning veterans out of homelessness. VA staff in some of the 
GPD locations we visited told us that transportation issues made it 
difficult for veterans to get to medical appointments or employment-
related activities. While one GPD provider we visited was able to 
overcome transportation challenges by partnering with the local transit 
company to obtain subsidies for homeless veterans, transportation 
remained an issue for GPD providers that could not easily access VA 
medical centers by public transit. Providers said difficulty in 
obtaining legal assistance to resolve issues related to criminal 
records or credit problems presented challenges in helping veterans 
obtain jobs or permanent housing. In addition, some providers expressed 
concerns about obtaining affordable dental care and about wait lists 
for veterans referred to VA for substance abuse treatment.
---------------------------------------------------------------------------
    \7\ VA issued a directive for a onetime dental care opportunity for 
homeless veterans (VHA Directive 2002-080) in line with 38 U.S.C. 
Sec. 101 note. VA officials told us that funding was provided in 2006 
to implement this directive.
---------------------------------------------------------------------------
    We found that some providers and staff did not fully understand 
certain GPD program policies--which in some cases may have affected 
veterans' ability to get care. For instance, providers did not always 
have an accurate understanding of the eligibility requirements and 
program stay rules, despite VA's efforts to communicate its program 
rules to GPD providers and VA liaisons who implement the program. Some 
providers were told incorrectly that veterans could not participate in 
the GPD program unless they were eligible for VA health care. Several 
providers understood the lifetime limit of three GPD stays but may not 
have known or believed that VA had the authority to waive this rule. 
\8\ As a consequence, we recommended that VA take steps to ensure that 
its policies are understood by the staff and providers with 
responsibility for implementing them.
---------------------------------------------------------------------------
    \8\ VA may waive the lifetime limit on program stays if the 
services offered are different from those previously provided and may 
lead to a successful outcome. The VA liaisons must review and approve 
or deny the waiver based on their best clinical assessment of the 
individual case.
---------------------------------------------------------------------------
    In response to our recommendation that VA take steps to ensure that 
its policies are understood by the staff and providers with 
responsibility for implementing them, VA took several steps in 2007 to 
improve communications with VA liaisons and GPD providers, such as 
calling new providers to explain policies and summarizing their regular 
quarterly conference calls on a new Web site, along with new or updated 
manuals. Language on the number and length of allowable stays in the 
providers' guide has not changed, however.
VA Data Show Many Veterans Have Housing and Jobs on Leaving the Program 
        and Plans Are Under Way for Follow-up
    VA assesses performance in two ways--the outcomes for veterans at 
the time they leave the program and the performance of individual GPD 
providers. VA's data show that since 2000, a generally steady or 
increasing percentage of veterans met each of the program's three goals 
at the time they left the GPD program.
    Since 2000, proportionately more veterans are leaving the program 
with housing or with a better handle on their substance abuse or health 
issues. During 2006, over half of veterans obtained independent housing 
when they left the GPD program, and another quarter were in 
transitional housing programs, halfway houses, hospitals, nursing 
homes, or similar forms of secured housing. \9\ Nearly one-third of 
veterans had jobs, mostly on a full-time basis, when they left the GPD 
program. One-quarter were receiving VA benefits when they left the GPD 
program, and one-fifth were receiving other public benefits such as 
Supplemental Security Income. Significant percentages also demonstrated 
progress in handling alcohol, drug, mental health, or medical problems 
and overcoming deficits in social or vocational skills. For example, 67 
percent of veterans admitted with substance problems showed progress in 
handling these problems by the time they left. Table 2 indicates the 
numbers or percentages involved.
---------------------------------------------------------------------------
    \9\ Independent housing comprises apartments, rooms, or houses. 
While independent housing may be a more desirable outcome, for some 
veterans, including those with severe disabilities, secured housing may 
be more appropriate.


  Table 2--Number Served by VA's Health Care for Homeless Veterans and
Grant and Per Diem Program and Veterans' Outcomes, Fiscal Years 2000 and
                                  2006
------------------------------------------------------------------------
   Participants Served and Outcomes           2000             2006
------------------------------------------------------------------------
Number of
------------------------------------------------------------------------
   veterans treated by VA's             43,082           60,857
 Health Care for Homeless Veterans'
 (HCHV) staff
------------------------------------------------------------------------
   intake assessments of                34,206           38,667
 homeless veterans by HCHV staff \a\
------------------------------------------------------------------------
   admissions of veterans to             4,841           15,433
 GPDs
------------------------------------------------------------------------
   discharges from GPDs                  4,020       15,037 \b\
------------------------------------------------------------------------
Days a veteran stays at a GPD, on                   91          139 \c\
 average
------------------------------------------------------------------------
Housing stability outcomes:
  Number of discharges from GPDs with
------------------------------------------------------------------------
   independent housing                   1,163            7,723
------------------------------------------------------------------------
   placement in halfway house              991            3,648
 or institution such as hospital,
 nursing home, or domiciliary
------------------------------------------------------------------------
Increased income or skills outcomes:
  Number of discharges from GPDs with
------------------------------------------------------------------------
   full-time or part-time                1,404            4,766
 employment
------------------------------------------------------------------------
   VA benefits \d\               Not Available            3,648
------------------------------------------------------------------------
   Other public benefits \d\     Not Available            3,001
------------------------------------------------------------------------
Greater self-determination outcomes:
 Percentage of discharges from GPDs
 with
------------------------------------------------------------------------
   improved alcohol, drug,               38-42            60-67
 mental health \e\
------------------------------------------------------------------------
   improved medical, social/             43-46            57-62
 vocational condition \e\
------------------------------------------------------------------------
   success in meeting GPD                   30               47
 provider requirements
------------------------------------------------------------------------
Source: GAO analysis of VA data aggregated from individual discharge
  forms completed by VA or GPD providers for veterans at the time they
  leave the program and compiled in annual reports by VA's evaluation
  center.
\a\ Intake assessments are completed by HCHV staff when they first
  encounter a homeless veteran, unless the contact is casual and no
  services are offered or referrals made. After a year, new assessments
  are required if VA care or services are provided and VA staff have not
  been working with the veteran.
\b\ Number of discharges with complete data on their status is 14,710
  and is used to calculate all numbers below.
\c\ Mean is shown. Median is 81 days.
\d\ Numbers shown here include veterans who receive both types of
  benefits as well as those who receive only the designated benefits.
\e\ Percentages are ranges showing the highest and lowest of each of two
  or three outcome measures.


    VA's Office of Inspector General (OIG) found when it visited GPD 
providers in 2005-2006 that VA officials had not been consistently 
monitoring the GPD providers' annual performance as required. \10\ The 
GPD program office has since moved to enforce the requirement that VA 
liaisons review GPD providers' performance when the VA team comes on-
site each year to inspect the GPD facility.
---------------------------------------------------------------------------
    \10\ Veterans Affairs Office of Inspector General, Evaluation of 
the Veterans Health Administration Homeless Grant and Per Diem Program, 
Report No. 04-00888-215 (Washington, D.C.: Sept. 20, 2006).
---------------------------------------------------------------------------
    To assess the veterans' success, VA has relied chiefly on measures 
of veterans' status at the time they leave the GPD program rather than 
obtaining routine information on their status months or years later. In 
part, this has been due to concerns about the costs, benefits, and 
feasibility of more extensive follow-up. However, VA completed a 
onetime study in January 2007 that a VA official told us cost about 
$1.5 million. The study looked at the experience of a sample of 520 
veterans who participated in the GPD program in five geographic 
locations, including 360 who responded to interviews a year after they 
had left the program. Generally, the findings confirm that veterans' 
status at the time they leave the program can be maintained.
    We recommended that VA explore feasible and cost-effective ways to 
obtain information on how veterans are faring after they leave the 
program. We suggested that where possible they could use data from GPD 
providers and other VA sources, such as VA's own follow-up health 
assessments and GPD providers' follow-up information on the 
circumstances of veterans 3 to 12 months later. VA concurred and told 
us in 2007 that VA's Northeast Program Evaluation Center is piloting a 
new form to be completed electronically by VA liaisons for every 
veteran leaving the GPD program. The form asks for the veterans' 
employment and housing status, as well as involvement, if any, in 
substance abuse treatment, 1 month after they have left the program. 
While following up at 1 month is a step in the right direction, 
additional information at a later point would yield a better indication 
of longer term success.
    Mr. Chairman, this concludes my remarks. I would be happy to answer 
any questions that you or other Members of the Subcommittee may have.
Contact and Acknowledgements
    For further information, please contact Daniel Bertoni at (202) 
512-7215. Also contributing to this statement were Shelia Drake, Pat 
Elston, Lise Levie, Nyree M. Ryder, and Charles Willson.

                                 
              Prepared Statement of George Basher, Chair,
                Advisory Committee on Homeless Veterans,
                  U.S. Department of Veterans Affairs,
       and Director, New York State Division of Veterans' Affairs
    Chairman Michaud and Members of the Subcommittee:

    I am pleased to be here today to discuss the VA Grant and Per Diem 
program serving homeless veterans. I thank you for the invitation to 
testify before the Subcommittee and discuss this worthy program. I have 
had the honor of serving as the Director of the New York State Division 
of Veterans' Affairs for the past 10 years and also currently serve as 
the Chair of the Department of Veterans Affairs Advisory Committee on 
Homeless Veterans. In both of these roles I have had an opportunity to 
witness not only the benefits of this program to those veterans who 
need a hand getting back on their feet but also the challenges it 
brings to the provider community. Recent estimates by the National 
Alliance to End Homelessness (NAEH) place the number of homeless 
individuals in the United States at 750,000. VA estimates the number of 
homeless veterans to be approximately 180,000, making homeless veterans 
one quarter of the entire homeless population.
    Established by Congress in 1992, the Grant and Per Diem (GPD) 
program has provided nearly 10,000 transitional beds for homeless 
veterans through the efforts of over 300 community-based providers. 
These community- and faith-based organizations provide shelter, food, 
and supportive services to homeless veterans for up to 2 years for a 
per diem currently set at a maximum of $31.30 per day.
    Originally designed to meet the needs of Vietnam era veterans, I 
believe it is time to revisit the Grant and Per Diem program in light 
of the need to also serve the veterans of the current conflict as well 
as those older veterans. VA estimates they have already seen over 1500 
OEF/OIF veterans in various settings with several hundred referred to 
GPD providers for assistance.
    The VA Advisory Committee on Homeless Veterans in its recent report 
discussed concerns about GPD. Specifically:

    1.  The VA GPD program uses a process to reimburse providers 
designed like the system VA uses to reimburse State Governments for the 
State Home program. The Advisory Committee is concerned this capped 
process discourages providers in high-cost areas from even applying. 
The current $31.30 rate is based in law on the rate paid to State Home 
programs. There is no basis in fact for the $31.30 rate in the State 
Home program and no defined rationale for determining that figure. 
Additionally, the current process does not allow the use of other 
Federal funds without offset by VA. While the State Home program rules 
were recently changed to allow this, the restriction still applies to 
GPD programs.
    2.  The accounting process required for reimbursement is a burden 
on small community-based providers. Asking this group to meet the same 
level of expertise as State Governments with large accounting staff is 
unreasonable and discourages participation. Additionally, recent audits 
of some providers have led to allegations of significant overpayments--
sometimes years after the fact--based on differing interpretations of 
allowable expenses.
    3.  Community based GPD providers frequently use other Federal 
programs to augment the services provided to veterans. Current GPD 
regulations do not allow these funds to be used as a match for VA 
programs, often discouraging participation. Conversely, other Federal 
programs do allow VA funds to be used as a match, creating a 
disincentive to participate in VA programs.

    The Advisory Committee recommended the Per Diem be revised to allow 
payments to be related to service costs rather than a capped rate, 
allowing higher cost areas where homeless veterans are often numerous 
to participate.
    The Advisory Committee also recommended allowing other Federal 
funds to be used as a match to VA funds and also allow other Federal 
funds to be used without offset.
    Incorporated in these recommendations is the implied recommendation 
that the current burdensome accounting process would be scrapped and 
replaced by a simpler mechanism to provide reimbursement and protect 
the taxpayer's interest. Paying a fee-for-services provided meets the 
needs of both the veteran client and the providers without placing an 
undue burden on either the providers or the Government.
    Beyond adjustments to the existing Grant and Per Diem program, 
other related concerns need to be addressed. Historically, most 
homeless and housing services have been provided by the U.S. Department 
of Housing and Urban Development (HUD) and the U.S. Department of 
Health and Human Services (HHS). VA housing initiatives have focused 
almost exclusively on transitional housing, reasoning that traditional 
VA programs coupled with GPD support services were all that was needed 
to return homeless veterans to a permanent housing environment. With 20 
years experience in homeless veteran programs, we now know this is a 
simplistic view. Veterans with the co-morbidity of substance abuse and 
behavioral health disorders are frequently incapable of making the jump 
from transitional housing and programs to self-sufficiency. Experience 
has again taught that supportive permanent housing is often the most 
effective and economical way to have these individuals re-enter the 
mainstream. The existing HUD-VASH program providing Section 8 vouchers 
is woefully inadequate due to a lack of specific appropriations for the 
program by HUD. The Advisory Committee has recommended to VA that HUD-
VASH be expanded and further that VA look for opportunities to partner 
with HUD and other agencies to find innovative ways to bring permanent 
housing and supportive services to veterans. Consideration should be 
given to site-based Section 8 vouchers as a way to provide those 
services on an ongoing basis by community based providers. Success of 
programs such as New York City's New York, NY III initiative have 
demonstrated an integrated approach can provide positive results at an 
affordable cost.
    The still ongoing Capital Asset Realignment for Enhanced Services 
(CARES) process VA is using to identify capital requirements for the 
next 20 years has identified a significant amount of surplus VA land 
and facilities. One of the Advisory Committee recommendations was to 
have VA make reuse of this land for veteran housing a priority. VA 
officials contend that the existing Enhanced Use Lease (EUL) program is 
adequate to meet that need, but experience shows the EUL to be a time 
consuming, cumbersome process fraught with opportunity for delay and 
lost opportunities. The Department of Defense Base Realignment and 
Closure (BRAC) process is much more efficient in terms of making reuse 
opportunities reality in a reasonable period of time.
    There is a growing concern regarding women veterans. With women now 
making up nearly 20 percent of today's military, VA programs are being 
accessed by an increasing number of women veterans, including programs 
for homeless veterans.
    There are unique challenges in this shift. Most VA programs were 
designed when the military was nearly exclusively male, necessitating 
changes by the Veterans Health Care Administration to facilities and 
procedures that are ongoing even today. Transitional housing programs 
for women veterans are rare, given the relatively low numbers involved 
and the economies of scale needed to provide services. Issues of safety 
and appropriateness of facilities likewise challenge traditional 
homeless service providers.
    Another consideration is the authority of VA to only care for the 
veteran. Children who have no other parent to care for them also often 
accompany the increasing number of women veterans. Accessing VA 
services by these veterans means leaving children with other relatives 
or non-family caregivers; a difficult choice that often leads to 
walking away from VA care and looking for help elsewhere. VA should 
explore ways to cope with the changing demographics of the military and 
adjust accordingly, either in partnership with other agencies or 
through programmatic changes of its own.
    The VA Grant and Per Diem program has provided a valuable service 
to homeless veterans over the past 15 years. Adjusting the program in 
light of experience is appropriate; creating new policy to meet the 
needs of returning veterans from the current conflict is a necessity.
    Mr. Chairman, this concludes my formal remarks. I appreciate the 
opportunity to present my views and am prepared to answer any questions 
you or Members of the Subcommittee may have. Thank you.

                                 
            Prepared Statement of Pete Dougherty, Director,
      Homeless Veterans Programs, Veterans Health Administration,
                  U.S. Department of Veterans Affairs

    Mr. Michaud, and Members of the Subcommittee:
    I am pleased to be here today to discuss the Department of Veterans 
Affairs' (VA) Grant and Per Diem program. This program is VA's largest 
and most comprehensive collaboration with more than 300 communities, 
faith based non-profit organizations, state, local and tribal 
Governments. I am pleased to be accompanied by Mr. Paul Smits, Director 
of Homeless and Residential Rehabilitation Programs within the Veterans 
Health Administration.
    I would like to thank you for inviting us to join in today's 
hearing. I am always reminded that the efforts to engage hundreds of 
community and faith-based service providers began with this Committee 
when in July 1992, the House passed HR 5400, the Homeless Veterans 
Comprehensive Service Programs Act 1992. Later that year, the Senate 
also passed that legislation and it was signed into law by President 
George H. W. Bush on November 10, 1992.
    The 102nd Congress acted upon a concern that veterans were 
appearing in a disproportionately high percentage among what was seem 
as an ever increasing number of Americans who were homeless. Congress 
also found that veterans were not able to access existing efforts to 
assist the homeless. Since the provision of that authorization required 
specific appropriation, which took another year to accomplish, VA did 
not offer its first Notice of Funding Availability until 1994 when we 
awarded 15 grants in September, 1994. Since that time each year, we 
have offered one or more notices of funding availability and today we 
now have more than 450 programs that have authorized 11,000 beds. As of 
September 2007, we have over 300 programs and 8,000 beds in service 
today. The remaining 3,000 beds are expected to come into service as 
soon as needed construction, renovation or repairs have been completed. 
VA must also complete its inspection of the physical facility to ensure 
that the program is ready to open with appropriate staffing and 
operational plans.
    As you know, VA will soon announce awards under its latest notice 
of Funding Availability. We expect that we will be able to add 950 beds 
under this program. We have continued to offer new funding because of 
our great faith in the ability of many community providers to provide 
high quality services to veterans. Our goal, based upon this Congress' 
mandate, is to end chronic homelessness among veterans. We have made 
good strides in achieving that goal and we simply would not be able to 
do it without our community-based partners.
    It is troubling when veterans or their families become homeless, 
especially in light of the service these brave men and women have made 
to our country. Our efforts, since the initial programs, have been to 
create positive partnerships. VA is committed to working with local 
communities to find those veterans through outreach programs. VA is 
committed to provide the care and services they need in order to 
facilitate their return to productive lives in their communities.
    Our efforts are national as well as local. We partner with other 
Federal agencies, national, state, local, tribal Governments, local 
non-profits and faith based community providers. Each year, we provide 
health care services to more then 100,000 homeless veterans. We do not 
sit and wait for homeless veterans to come to us. We reach out to 
homeless veterans in shelters, soup kitchens, in parks, on the streets, 
and other places homeless persons frequent, including stand downs for 
homeless veterans. We have dedicated over 330 of our own staff who work 
collaboratively in communities across the country to find homeless 
veterans.
    Mr. Chairman, we understand that this Committee is very interested 
in the effectiveness of our Homeless Grant and Per Diem program to 
serve veterans. The number of veterans being seen has increased and we 
have every intention to continue to increase the availability of 
transitional housing. We have rapidly increased the number of beds 
since last year. We expect to add nearly 2,700 before the end of the 
year. Our performance measures to increase access and availability to 
both primary health care and specialty care within 30 and 60 days are 
showing great success. We are adding substance abuse counselors on-site 
of the community programs. In addition, we are increasing the number of 
veterans in community programs getting dental care, adding VA staff to 
work with community programs both in the form of reentry specialists 
working with veterans returning from incarceration, and fulltime health 
care network coordinators. These efforts are increasingly showing 
positive results.
    In Fiscal Year 2006, VA provided transitional housing services to 
nearly 15,500 homeless veterans. This year, we anticipate that before 
the end of this Fiscal Year, we will serve more than 18,000 veterans. 
We anticipate that the number of veterans will continue to increase as 
programs already approved begin to provide direct services.
    We have been closely monitoring and aggressively reaching out to 
ensure that those men and women who have served in the war in Iraq and 
Afghanistan are seen and offered appropriate services. During the past 
3 years, we have seen more than 1,500 veterans who served in Iraq and 
Afghanistan through our outreach efforts and more than 400 have sought 
our assistance and been placed in a VA or VA supported community based 
treatment program.
    As the Committee knows, VA can provide up to $31.30 for each day of 
care a veteran receives in a Transitional Housing program approved 
under VA's Homeless Providers Grant and Per Diem Program. We are aware 
that there are concerns about how we make payments to providers under 
the Grant and Per Diem Program, and that as a result of these concerns, 
H.R. 2699 was introduced to make a number of amendments to the program. 
Although the Department transmitted our views on H.R. 2699 to Congress 
on August 19, 2007, I would like to take advantage of this opportunity 
to discuss VA's position on the different provisions of the bill.
    Section 1 of that bill would eliminate the statutory offset for 
other, outside sources of income when calculating the amount of a 
grantee's per diem payment. While we support this provision and 
appreciate the need for such a measure, we remain concerned that H.R. 
2699, as written, could result in a grantee-provider receiving more 
than 100 percent of its costs for furnishing services to homeless 
veterans. We therefore recommend that Congress amend that provision to 
ensure safeguards to prevent such an occurrence.
    Section 2 would require the Secretary to carry out a demonstration 
program in at least three locations for the purpose of identifying 
members of the Armed Forces on active duty who are at risk of becoming 
homeless after they are discharged or released from active duty. The 
demonstration program would also have to include the provision (either 
directly or by contract) of referral, counseling, and supportive 
services to help those members, upon becoming veterans, from becoming 
homeless. Section 2 would further require the Secretary to consult with 
the Secretary of Defense and other appropriate officials in developing 
and implementing the criteria for identifying those members who are at-
risk of becoming homeless. Finally, Section 2 would authorize the 
demonstration program up to September 30, 2011, and it would also 
authorize $2 million to be appropriated to carry out the program.
    VA supports Section 2. Research and related literature in this area 
suggest that prevention activities may be of value in identifying high-
risk individuals and preventing them from becoming homeless. The 
challenge, of course, is in our ability to consult with others and, to 
identify criteria that can be used to successfully identify those 
service members who are at high-risk of becoming homeless once they 
leave the service. The demonstration program would help to add evidence 
to the current body of research and help us to determine whether this 
type of approach is effective in reducing the incidence of homelessness 
among recently discharged veterans.
    The cost of Section 2, if enacted, would be insignificant and 
absorbed within the current budget.
    Section 3 would extend, until September 30, 2011, VA's current 
program of referral and counseling for veterans who are transitioning 
from certain institutions and who are at risk for homelessness and will 
eliminate the program's demonstration status. Section 3 would also 
expand the program to include at least six more locations, thereby 
requiring a minimum of 12 sites.
    VA defers to the views of the Department of Labor (DOL), which 
administers this program. DOL's staff advise us that they believe that 
the Incarcerated Veterans Transition Program pilot stage played an 
important and successful role in reducing recidivism among 
transitioning veterans who have been incarcerated.
    Section 4 would authorize grants awarded under the Homeless 
Providers Grant and Per Diem Program to be used by service centers to 
meet staffing requirements.
    VA supports Section 4 in principle. However, we recommend that the 
bill be modified so that funding is based on increased per diem 
payments rates for the service center, not provided to the center in 
the form of a grant.
    Section 5 would require the Secretary to take appropriate actions 
to ensure that the Domiciliary Care programs are adequate, in terms of 
capacity and safety, for women veterans.
    VA supports Section 5. VA has increased, and will continue to 
increase, the development of women specific residential treatment 
programs in VA's domiciliary program. This focus will include efforts 
to develop new programs for women veterans, along with improving 
therapeutic environments and clinical approaches in existing 
residential program.
    VA, along with our partners, continues to make progress in 
prevention and treatment of homeless veterans. We firmly believe that 
one homeless veteran is too many. The brave men and women who have 
served and continue to serve deserve no less.
    Mr. Chairman, this concludes VA's formal statement. We welcome the 
opportunity to respond to any questions you or Members of the 
Subcommittee may have.

                                 
      Prepared Statement of Ronald F. Chamrin, Assistant Director,
                  Economic Commission, American Legion

    Mr. Chairman and Members of the Subcommittee:
    Thank you for this opportunity to submit The American Legion's view 
on the Department of Veterans Affairs (VA) Grant and Per Diem (GPD) 
program.
    The Fiscal Year (FY) 2006 Department of Veterans Affairs Community 
Homelessness Assessment, Local Education and Networking Groups 
(CHALENG) report estimates that there are nearly 200,000 veterans that 
are homeless at any point in time. According to the February 2007 
Homeless Assessment Report to Congress (U.S. Department of Housing and 
Urban Development 2007), veterans account for 19 percent of all 
homeless people in America.
    Since 2001, approximately 300,000 servicemembers are becoming 
veterans every year. This large influx of veterans, some of whom have 
high risk factors of becoming homeless, is unnerving. The mistake in 
incorrectly failing to recognize the increase in homelessness amongst 
Vietnam veterans in the late 1970's and early 1980's cannot be made 
again.
    According to the Urban Institute report in relation to the 1980's 
spike in homeless veterans (Homelessness: Programs and the People They 
Serve, Findings of the National Survey of Homeless Assistance Providers 
and Clients): ``. . . some observers felt that the problem was a 
temporary consequence of the recession 1981-1982, and would go away 
when the economy recovered, while others argued that the problem 
stemmed from a lack of affordable housing and that homeless clients 
were simply a cross section of poor Americans.'' This 2000 study stated 
that of current homeless veterans: ``21 percent served before the 
Vietnam era (before August 1964); 47 percent served during the Vietnam 
era (between August 1964 and April 1975); and 57 percent served since 
the Vietnam era (after April 1975). Many have served in more than one 
time period.''
    In order to prevent a national epidemic of homeless veterans in the 
upcoming years, measures must be taken to assist those that are 
chronically homeless. Steps must also be taken to prevent the future 
homelessness of veterans and their families.
    Therefore, The American Legion strongly supports funding the Grant 
and Per Diem Program for a 5-year period (instead of annually) and 
supports increasing the funding level to $200 million annually.
The American Legion Homeless Veterans Task Force
    The American Legion coordinates a Homeless Veterans Task Force 
(HVTF) amongst its 55 departments. Our goal is to augment existing 
homeless veteran providers, the VA Network Homeless Coordinators, and 
the Department of Labor's Homeless Veterans Reintegration Program 
(HVRP), Veterans Workforce Investment Program (VWIP), Disabled Veterans 
Outreach Personnel (DVOPs) and Local Veterans Employment Representative 
(LVERs). In addition to augmentation, we then attempt to fill in the 
gaps where there is no coverage. Each of The American Legion's 
Departments contains an HVTF Chairman and an employment Chairman. These 
two individuals coordinate activities with The American Legion's local 
posts within their state. The three-tiered coordination of these two 
chairmen and numerous local posts attempt to symbiotically assist 
homeless veterans and prevent future homelessness.
    The American Legion has conducted training with the assistance of 
the National Coalition for Homeless Veterans (NCHV), DOL-VETS, Project 
Homeless Connect, and VA on how to apply for Federal grants in various 
assistance programs, most notably the ``Stand Down'' and Grant and Per 
Diem programs. It is our goal to assist the Grant and Per Diem program 
by enabling individual posts and homeless providers to use The American 
Legion as a force multiplier. We may not have the job-specific 
expertise in the fields of social work and mental health, but we do 
have 2.7 million volunteers with an impressive network of resources 
within their communities.
    The American Legion augments homeless veteran providers with 
transportation, food, clothing, cash and in-kind donations, technical 
assistance, employment placement, employment referral, claims 
assistance, veterans' benefits assistance, and in some cases housing 
for homeless veterans. The American Legion department service officers 
are accredited representatives that assist homeless veterans with their 
VA compensation and pension claims, and are fierce advocates for 
assuring that all VA benefits are afforded to the unfortunate homeless 
veterans that they may encounter.
Potential Homeless Veterans of Operation Enduring Freedom (OEF) and 
        Operation Iraqi Freedom (OIF)
    OEF/OIF veterans are at high risk of becoming homeless. Combat 
veterans of OEF/OIF and the Global War on Terrorism (GWOT) in need of 
assistance are beginning to trickle into the nation's community-based 
veterans' service organizations' homeless programs. Already stressed by 
an increasing need for assistance by post-Vietnam Era veterans and 
strained budgets, homeless services providers are deeply concerned 
about the inevitable rising tide of combat veterans who will soon be 
requesting their support.
    Since 9/11, over 800,000 American men and women have served or are 
serving in a war zone. Rotations of troops returning home from Iraq are 
now a common occurrence. Military analysts and Government sources say 
the military deployments, then the reintegration of combat veterans 
into the civilian society, is unlike anything the Nation has 
experienced since the end of the Vietnam War.
    The signs of an impending crisis are clearly seen in VA's own 
numbers. Under considerable pressure to stretch dollars, VA estimates 
it can provide assistance to about 100,000 homeless veterans each year, 
only 20 percent of the more than 500,000 who will need supportive 
services. Hundreds of community-based organizations nationwide struggle 
to provide assistance to as many of the other 80 percent as possible, 
but the need far exceeds available resources.
    VA's HCHV reports 1,049 OEF/OIF era homeless veterans with an 
average age of 33. HCHV further reports that nearly 65 percent of these 
homeless veterans experienced combat. Now receiving combat veterans 
from Iraq and Afghanistan daily, VA is reporting that a high percentage 
of those casualties need treatment for mental health problems. That is 
consistent with studies conducted by VA and other agencies that 
conclude anywhere from 15 to more than 35 percent of combat veterans 
will experience some clinical degree of PTSD, depression or other 
psychosocial problems.
Homeless Women Veterans and Children
    Homeless veteran service providers' clients have historically been 
almost exclusively male. That is changing as more women veterans, 
especially those with young children, are seeking assistance. Access to 
gender-appropriate care for these veterans is essential.
    The FY 2006 VA CHALENG (Community Housing Assessment, Local 
Education and Networking Group) report states, ``Homeless providers 
continue to report increases in the number of homeless veterans with 
families (i.e., dependent children) being served at their programs. 
Ninety-four sites (68 percent of all sites) reported a total of 989 
homeless veteran families seen, with Los Angeles seeing the most 
families (156). This was a 10 percent increase over the previous year 
of 896 reported families. Homeless veterans with dependents present a 
challenge to VA homeless programs. Many VA housing programs are 
veteran-specific. VA homeless workers must often find other community 
housing resources to place the entire family--or the dependent children 
separately. Separating family members can create hardship.''
    To assist women and veterans with families, The American Legion 
supports adequate funding for all domiciliary programs for all 
qualified veterans.
VA Homeless Providers Grant and Per Diem Program Reauthorization
    In 1992, VA was given authority to establish the Homeless Providers 
Grant and Per Diem Program under the Homeless Veterans Comprehensive 
Service Programs Act 1992, Public Law 102-590. The Grant and Per Diem 
Program is offered annually (as funding permits) by VA to fund 
community agencies providing service to homeless veterans. VA can 
provide grants and per diem payments to help public and nonprofit 
organizations establish and operate supportive housing and/or service 
centers for homeless veterans. There was an initial lag in the 
congressional authorization and appropriations for this program that 
delayed the delivery of funding 2 years after the initial legislation 
passed and only 15 grants were awarded. We have observed that the staff 
of the program has been working diligently and should be commended, but 
the central office staff could use additional members to expand the 
program to reach even more participants.
    The current level of 300 programs and 8,000 beds is not enough to 
assist 200,000 homeless veterans. Reports of an additional 3,000 beds 
to come into service as soon as needed construction, renovation or 
repairs have been completed will bring the total to 11,000 or about 5 
percent capacity of all homeless veterans.
    Funds are available for assistance in the form of grants to provide 
transitional housing (for up to 24 months) with supportive services. 
Funds can also be used for supportive services in a service center 
facility for homeless veterans not in conjunction with supportive 
housing, or to purchase vans. VA can provide up to $31.30 for each day 
of care a veteran receives in a transitional housing program approved 
under VA's Homeless Providers Grant and Per Diem (GPD) Program. This 
token amount is far too little to fully assist a single veteran. 
Finally, all providers must justify that their costs are attributed to 
veterans.
    The American Legion is concerned with the ebb and flow of the 
homeless veteran population and assert that measures should be enacted 
that allows a provider to always maintain a space for a homeless 
veteran. Due to the transient and drifting nature of chronically 
homeless veterans, seasonal weather changes (allowing more homeless 
veterans to venture outside), and other factors, there are periods when 
GPD providers may have an empty bed. If a provider has an empty space 
dedicated for a homeless veteran under the program and (due to factors 
out of their control) a bed remains empty for a period of time, they 
have occasional difficulty justifying the grant and therefore may be 
penalized. However, there are many instances in which a random 
appearing homeless veteran requires their assistance and a bed must 
always be ever ready.
    Unfortunately, we have observed that many homeless veteran 
providers choose not to apply for funding from this program due to 
difficult mechanisms. As stated above, the accounting process required 
for reimbursement is in constant flux during the year and the strain of 
accurately reporting is laden on small community-based providers. 
Additionally, there are other Federal programs that can provide 
monetary assistance to homeless veterans, yet the GPD does not allow 
these funds to be used as a match for VA programs. This often 
discourages participation. However, other Federal programs do allow VA 
funds to be used as a match. VA's GPD program requires unique 
flexibility due to the nature of the funding, homeless veteran 
providers, and homeless veterans.
    VA reports success in their performance measures to increase access 
and availability to both primary health care and specialty care within 
30 and 60 days. Short-term assistance (30 and 60 days) is imperative in 
order to prevent chronic homelessness. Many times, a veteran may be in 
transition due to loss of a job, a medical issue, poor finances, or 
some other factor and only requires a short-term transitional shelter 
that can be provided by the GPD program. In FY 2006, VA reported that 
they provided transitional housing services to nearly 15,500 homeless 
veterans and expects to assist 18,000 veterans for FY 2007. It is 
imperative that these numbers continue to increase and be adjusted to 
meet demand; the consequences will be a stagnant, steady number of 
homeless veterans rather than a decrease of the number of homeless 
veterans.
Departments of Housing and Urban Development--Veterans Affairs 
        Supportive Housing (HUD-VASH) Homeless Program
    The American Legion advocates for increased funding for the Grant 
and Per Diem program and recently adopted a resolution to require 
mandatory funding for the Departments of Housing and Urban Development 
(HUD)-Veterans Affairs (VA) Supportive Housing (HUD-VASH) Homeless 
Program.
    The American Legion supports funding for vouchers for the HUD-VASH 
Program be set aside and transferred to the Secretary of the Department 
of Veterans Affairs from amounts made available for rental assistance 
under the Housing Choice Voucher program. The Homeless Veterans 
Comprehensive Assistance Act of 2001 (P.L. 107-95) codified the HUD-
VASH Program, which provides permanent housing subsidies and case 
management services to homeless veterans with mental and addictive 
disorders. Under the HUD-VASH Program, VA screens homeless veterans for 
program eligibility and provides case management services to enrollees. 
HUD allocates rental subsidies from its Housing Choice Voucher program 
to VA, which then distributes them to the enrollees. A decade ago, 
there were approximately 2000 vouchers earmarked for veterans in need 
of permanent housing. Today, less than half that amount is available 
for distribution.
    The Veterans Benefits, Health Care, and Information Technology Act 
of 2006, P.L 109-461, re-authorizes appropriations for additional 
rental assistance vouchers for veterans. In FY 2007, there will be 500 
vouchers available for veterans and increased to 2,500 by FY 2011. At a 
time when the number of homeless veterans on any given night is 
approximately 200,000, the need for safe, affordable, and permanent 
housing is imperative. The Senate passed its fiscal 2008 
Transportation-Housing spending bill (HR 3074) that funds programs at 
the Department of Transportation and the Department of Housing and 
Urban Development.
    The House FY 2008 Transportation, Housing and Urban Development, 
and Related Agencies (THUD) appropriations bill, H.R. 3074, which 
passed the House on July 24, includes funding for incremental vouchers, 
specifically targeted to the non-elderly disabled population and 
homeless veterans. The bill provides $30 million for these vouchers. Of 
the incremental vouchers provided, 1,000 vouchers are to be provided 
for homeless veterans, in accordance with the HUD-VASH Program.
    The Senate recently passed the THUD appropriations bill, which 
provides $75 million for new vouchers for the HUD-VASH Program. 
Funding, if enacted, should be sufficient to provide assistance for 
6,000 vouchers affecting approximately 8,000 to 10,000 homeless 
veterans.
Census of Homeless Veterans
    The VA CHALENG program, NCHV, HUD and numerous homeless veteran 
providers have all collaborated to make rather accurate estimates on 
the number of homeless veterans on the street each night. This number, 
approximately 200,000 each night, is a travesty. Because of the 
numerous systems in place to attempt to count the number of homeless 
veterans, additional funding should be directed to programs assisting 
and preventing homeless veterans and not entirely to assist a census 
program in counting homeless veterans. Funding would be better spent on 
programs and not just exclusively on counting.
CONCLUSION
    The Homeless Grant and Per Diem program is effective and should be 
continued but augmented with HUD-VASH Program vouchers. With 300,000 
servicemembers becoming veterans each year and the increased visibility 
and outreach of all veteran programs administered by VA, the 
availability of transitional housing must be increased. Our 
observations have shown that when the GPD program is allocated money, 
they are successful in distributing grants and administering their 
program and are only limited by the total dollar amount of funds 
available.
    The American Legion looks forward to continue working with the 
Subcommittee to assist the nation's homeless veterans and to prevent 
future homelessness. Mr. Chairman and Members of the Subcommittee, this 
concludes my testimony.

                                 
          POST HEARING QUESTIONS AND RESPONSES FOR THE RECORD
                                     Committee on Veterans' Affairs
                                             Subcommittee on Health
                                                    Washington, DC.
                                                    October 5, 2007

Honorable Gordon Mansfield
Acting Secretary
U.S. Department of Veterans Affairs
810 Vermont Avenue, NW
Washington, DC 20420

Dear Secretary Mansfield:

    On Thursday, September 27, 2007, Peter Dougherty, Director, 
Homeless Veterans Programs, testified before the Subcommittee on Health 
on the U.S. Department of Veterans Affairs (VA) Homeless Grant and Per 
Diem program. In September 2006, the VA Office of Inspector General 
(OIG) issued a report, Evaluation of the Veterans Health Administration 
Homeless Grant and Per Diem Program. The Government Accountability 
Office (GAO) also conducted a review in 2006. As a follow-up to the 
hearing and the reports, I request that Mr. Dougherty respond to the 
following questions in written form for the record:

    1.  Has VA evaluated the benefits of establishing a centralized 
office of appropriately trained staff that conduct and ensure the 
quality of financial assessments of GPD providers? If so, what were the 
results of the evaluation?
    2.  Have GPD program staff received training that explains the 
difference between donations and discounts and emphasizes that provider 
funding can include nations but cannot include discounts received when 
purchasing goods or services? How is this training translated to the 
field?
    3.  The IG report recommended that the Under Secretary for Health 
review the financial oversight of GPD providers to ensure that per diem 
rates are accurately established and incurred cost reviews are properly 
conducted. VHA agreed to address this issue by obtaining an advisory 
and assistance contractor to review existing policies and procedures 
and to make recommendations to improve policies and procedures and 
financial oversight of the GPD program. What is the status of the 
contractor's review and what are the preliminary findings and 
recommendations? What specific steps have been taken to improve 
financial oversight of the program? The target date for full 
implementation of the recommendations of the contractor is January 
2008. Will this date be met and if not, why and what is the new target 
date?
    4.  Of the 122 GPD Liaison positions that were funded, how many 
positions are currently filled? When will the remaining positions be 
filled? What are the specific responsibilities of the GPD Liaisons and 
has the Handbook been revised to reflect these responsibilities? What 
specific training do the liaisons receive and have they all been 
trained? How does VA measure the effectiveness of the training?
    5.  Of 21 full-time Network Homeless Coordinator positions that 
have been funded, how many are currently filled? When will the 
remaining positions be filled? What are the specific responsibilities 
of the Network Homeless Coordinators? How has VHA specifically revised 
inspection procedures to ensure that GPD providers receive timely 
feedback on the inspection and management of their programs?
    6.  The September 2006 GAO report, Homeless Veterans Programs 
Improved Communications and Follow-up Could Further Enhance the Grant 
and Per Diem Program, made the following two recommendations: (1) To 
aid GPD providers in better understanding the GPD policies and 
procedures, we recommend that VA take steps to ensure that its policies 
are understood by the staff and providers who are to implement them. 
(2) To better understand the circumstances of veterans after they leave 
the GPD program, we recommend that VA explore feasible and cost-
effective ways to obtain such information, where possible using data 
from GPD providers and other VA sources. What actions has VA taken to 
respond to these recommendations?

    The attention to these questions by the witnesses is much 
appreciated, and I request that they be returned to the Subcommittee on 
Health no later than close of business, 5:00 p.m., Friday, November 2, 
2007. If you or your staff have any questions, please call Dolores 
Dunn, Republican Staff Director for the Subcommittee on Health, at 202-
225-3527.

            Sincerely,
                                                        Jeff Miller
                                                     Ranking Member
                               __________
                        Questions for the Record
              Hon. Jeff Miller, Ranking Republican Member
                         Subcommittee on Health
                  House Committee on Veterans' Affairs
                           September 27, 2007
                 VA Homeless Grant and Per Diem Program

    Question 1: Has VA evaluated the benefits of establishing a 
centralized office of appropriately trained staff that conduct and 
ensure the quality of financial assessments of GPD providers? If so, 
what were the results of the evaluation?

    Response: The Department of Veterans Affairs (VA) has hired a 
contractor to evaluate the benefit of establishing a centralized office 
and to evaluate other initiatives that can improve the providing of per 
diem payments. The recommendations provided through the contractor will 
address whether centralization of per diem rate determinations is 
beneficial and, if so, recommendations would follow regarding the 
resources required to make these per diem determinations in accordance 
with regulations and statute. This evaluation should be completed in 
December 2007.

    Question 2: Have GPD program staff received training that explains 
the difference between donations and discounts and emphasizes that 
provider funding can include donations but cannot include discounts 
received when purchasing goods or services? How is this training 
translated to the field?

    Response: VA does not provide training to the Grant and Per Diem 
(GPD) program staff on the difference between donations and discounts, 
as VA clinical staff are not required to understand these differences. 
VA has hired and relies on an auditor to makes determinations on GPD 
capital invoices submitted for reimbursement. Included as part of the 
auditor's review is whether the required match for capital expenditures 
is a donation or discount. Providers are required to call the auditor 
to participate in budget reviews before capital funds are requested; 
information regarding donations and discounts is given to the provider 
at that time and the auditor advises providers accordingly. It is a 
concept that VA's auditor and the grantees billing VA must understand. 
Grantees are to participate in budget reviews before capital funds are 
requested. We feel that it is far more effective to consolidate the 
information from a single source rather than have hundreds of VA 
employees respond to inquiries.

    Question 3: The IG report recommended that the Under Secretary for 
Health review the financial oversight of GPD providers to ensure that 
per diem rates are accurately established and incurred cost reviews are 
properly conducted. VHA agreed to address this issue by obtaining an 
advisory and assistance contractor to review existing policies and 
procedures and to make recommendations to improve policies and 
procedures and financial oversight of the GPD program. What is the 
status of the contractor's review and what are the preliminary findings 
and recommendations? What specific steps have been taken to improve 
financial oversight of the program? The target date for full 
implementation of the recommendations of the contractor is January 
2008. Will this date be met and if not, why and what is the new target 
date?

    Response: Recommendations under the advisory and assistance 
contract are pending. The contractor initiated work during October 
2007, and continues to evaluate the feasibility of various methods that 
could ensure that per diem rates are accurately established and 
incurred cost reviews are properly conducted. It is expected that the 
target date for implementation of the recommendations will be met; 
however, full implementation may depend on the extent of the additional 
resources needed. VA has taken specific steps to increase the 
likelihood of the accuracy of per diem rate determinations by 
standardizing forms and allowing providers to input data on the 
Internet.

    Question 4: Of the 122 GPD Liaison positions that were funded, how 
many positions are currently filled? When will the remaining positions 
be filled? What are the specific responsibilities of the GPD Liaisons 
and has the Handbook been revised to reflect these responsibilities? 
What specific training do the liaisons receive and have they all been 
trained? How does VA measure the effectiveness of the training?

    Response: Presently 111 of the 122 funded GPD liaison positions 
filled. The Veterans Health Administration (VHA) is recruiting for the 
remaining vacancies. The GPD liaison is responsible for: providing 
services to, and oversight of, the GPD-funded community-based programs; 
verifying the veteran status and eligibility of program participants 
and verifying admission and discharge dates of program participants; 
collecting and submitting GPD-funded program participant data; 
complying with criminal conflict of interest laws and Executive Branch 
Standards of Conduct; and providing oversight of GPD-funded program 
participants' care. The responsibilities of the GPD liaison are 
reflected in the VHA Handbook 1162.01 (Grant and Per Diem Program 
Handbook) which has been revised and was published August 8, 2007.
    VHA provides face-to-face training to GPD liaisons. During fiscal 
2007 two such training sessions were provided. VHA also developed an 
online training program for GPD liaisons which provides information 
about the GPD program and the role and responsibility of the liaison. 
The effectiveness of liaison training is evaluated through post-
training surveys and by follow up activities conducted by VA Employee 
Education Service.

    Question 5: Of 21 full-time Network Homeless Coordinator positions 
that have been funded, how many are currently filled? When will the 
remaining positions be filled? What are the specific responsibilities 
of the Network Homeless Coordinators? How has VHA specifically revised 
inspection procedures to ensure that GPD providers receive timely 
feedback on the inspection and management of their programs?

    Response: All 21 of the full-time network homeless coordinator 
positions have been filled. Each network homeless coordinator has 
Veteran Integrated Services Network (VISN)-level responsibility for 
oversight and monitoring of the GPD programs in their VISN. The 
responsibilities of the network homeless coordinator include; 
participating in the initial and annual inspections of GPD-funded 
programs; reviewing copies of the completed initial and annual re-
inspections in the VISN, and ensuring completeness; reviewing the 
medical centers' plans of correction that have been developed as a 
result of inspection deficiencies noted in GPD-funded programs and 
tracking follow-up activities associated with the deficiencies; 
ensuring the annual re-inspections of GPD-funded programs are submitted 
timely and in the proper format and are reviewed and approved by the VA 
Medical Center Director; forwarding reports regarding the status of 
each inspection package for their VISN; ensuring GPD-funded community 
programs are monitored and evaluated as prescribed by established 
protocols; working with GPD liaisons and medical center quality 
management staff to develop risk management and reporting systems for 
GPD-funded programs; reviewing GPD critical incidents and initiating 
appropriate investigation and follow-up activities in collaboration 
with the medical center; providing regular reviews of GPD liaison 
clinical and administrative documentation to ensure compliance with GPD 
policies and procedures; monitoring liaison follow-up of GPD-funded 
program clinical care and administrative issues; providing support, 
guidance, and advice to GPD liaisons.
    VA has revised the GPD Handbook to include a policy that GPD 
liaisons are required to provide the final inspection report to the GPD 
provider. Under the new procedures the finalized inspection form will 
be signed by both the GPD liaison and GPD provider.

    Question 6: The September 2006 GAO report, Homeless Veterans 
Programs Improved Communications and Follow-up Could Further Enhance 
the Grant and Per Diem Program, made the following two recommendations: 
(1) To aid GPD providers in better understanding the GPD policies and 
procedures, we recommend that VA take steps to ensure that its policies 
are understood by the staff and providers who are to implement them. 
(2) To better understand the circumstances of veterans after they leave 
the GPD program, we recommend that VA explore feasible and cost-
effective ways to obtain such information, where possible using data 
from GPD providers and other VA sources. What actions has VA taken to 
respond to these recommendations?

    Response: The GPD program has initiated a number of actions to help 
ensure policies are understood by staff and providers. GPD liaison 
face-to-face training sessions were held in March and August of 2007. 
These 2-day training sessions included an overview of the GPD program, 
the rules and regulations, and monitoring and inspection procedures. 
Additionally, monthly conference calls were conducted with liaisons 
through 2007. The minutes of these calls were placed on the GPD liaison 
Web page. Web-based liaison training was developed and is currently 
available nationally, and a new VHA Handbook was published and 
distributed to VA network homeless coordinators and GPD liaisons. 
Additionally, the GPD liaison Web site was revised and expanded to 
include, along with the regulations, handbooks and legislation, 
template letters, and guidance on reviewing scope and site changes.
    Providers' conference calls were held for the ``new grant 
awardees'' (January, February, and June 2007) and for current 
operational programs (December 2006, June and August 2007). A Providers 
Web Page was developed and is currently posted on the Internet. The Web 
site includes revised capital grant and per-diem-only grant recipient 
guides, conference call minutes, program rules and regulations, methods 
for calculating per diem rates, relevant public laws, and links to 
other helpful Web sites.
    VA has invested in a total of nine outcome studies of its homeless 
programs, five of which are either under analysis or currently 
collecting data. We have completed three outcome studies of our 
homeless programs which consistently showed 60-80 percent of veterans 
housed at 8-12 month follow-up. In addition, we have completed data 
collection on four outcome studies of homeless programs involving 2,500 
homeless veterans that include follow-up of veterans after completion 
of the program. Finally, two additional programs are underway, one 
evaluating a critical time intervention, and the other, outcomes for 
women's programs. Together, these programs represent an investment of 
several million dollars in evaluating and improving outcomes.
    VA believes that the most feasible and cost-effective approach to 
understanding the circumstances of veterans after they leave the GPD 
program would be to complete analysis of these data that have already 
been collected and to determine the best approach to further data 
collection on the basis of the analysis of data already collected. Once 
on-going studies and analyses are completed, VA would have more 
information to make evidence-based decisions on whether to narrow the 
direction of follow up or, as suggested in the report, use more broad 
parameters such as information from existing data bases. While these 
efforts are in progress, we will explore the feasibility, limits, and 
utility of using existing health care performance measures and quality 
indicators, stratified on the basis of previous participation in 
homeless programs as a way to evaluate its continued engagement in 
health care.