The Business of Government Hour


About the show

The Business of Government Hour features a conversation about management with a government executive who is changing the way government does business. The executives discuss their careers and the management challenges facing their organizations. Past government executives include Administrators, Chief Financial Officers, Chief Information Officers, Chief Operating Officers, Commissioners, Controllers, Directors, and Undersecretaries.

The interviews

Join the IBM Center for a weekly conversation about management with a government executive who is changing the way government does business.

William Campbell interview

Friday, October 31st, 2003 - 20:00
William Campbell
Radio show date: 
Sat, 11/01/2003
Intro text: 
William Campbell
Complete transcript: 

Monday, August 18, 2003

Arlington, Virginia

Mr. Lawrence: Good morning and welcome to The Business of Government Hour. I am Paul Lawrence, partner in charge of the IBM Center for the Business of Government. We created the Center in 1998 to encourage discussion and research into new approaches to improving government effectiveness. Find out more about us by visiting on the web at

The Business of Government Hour features a conversation about management with a government executive who is changing the way government does business. Our conversation this morning is with Bill Campbell, Assistant Secretary for Management, and Chief Financial Officer of the Department of Veterans Affairs.

Good morning, Bill.

Mr. Campbell: Good morning, gents.

Mr. Lawrence: And joining us in our conversation is Steve Watson.

Good morning, Steve.

Mr. Watson: Good morning, Paul. Good morning, Bill, thanks for joining us.

Mr. Lawrence: Bill, let's start off by finding out more about the Department of Veterans Affairs. Could you tell us its purpose and its mission?

Mr. Campbell: Well, the mission is one of the most succinct I've ever seen. It comes from President Lincoln's second inaugural address. And the quote is -- and it's on the outside of our building and practically every document that we print for publication -- "To care for him who have borne the battle and for his widow and his orphan." The purpose, quite frankly, for VA is to provide outstanding benefits and services to our nation's veterans.

Mr. Lawrence: How do we do that? What are the programs of the Department?

Mr. Campbell: Well, we basically have nine programs. Not necessarily in order of size, but: medical care and medical research, compensation, pension, education, vocational rehabilitation, housing, insurance and burial.

Mr. Lawrence: As I understand it, the Department is the second-largest in the federal government. Could you give us a sense of how you think about the size, employees, budget?

Mr. Campbell: Well, the size of the agency is somewhat deceptive. We have 225,000 full-time-equivalent employees. Our budget right now is about $60 billion per year. But you have to put it in somewhat of a broader context. For instance, we have 162 hospitals or medical centers; we have 137 nursing homes; 43 domiciliaries, 850-plus community outpatient clinics and facilities; 57 regional benefit centers and 120 cemeteries. We are a very complex business, as you can tell by our business lines, and we are located all over the United States and in a couple of overseas locations.

Mr. Lawrence: How about the skills of the employees? I began when you first started going through the hospitals and I thought, 'Lot's of health care.' But then you began to move into different lines - businesses, as you say.

Mr. Campbell: We have just about every type of employee that you can think of. From medical researchers who are doing work in Alzheimer's disease, diabetes, spinal cord injury. We have the people who provide the direct care, medical care, doctors, nurses. Our largest number of employees is actually nurses -- people that do housekeeping, accountants, contracting officers. We use just about every single type of employee that you could use in the federal government. Civil engineers, mechanical/electrical engineers. We are indeed a very complex business.

Mr. Watson: Bill, what are your roles and responsibilities as the Assistant Secretary for Management and Chief Financial Officer?

Mr. Campbell: Well, I have several. As well as being the Chief Financial Officer, I am also the senior procurement executive. And my organization basically has several key roles. One is to formulate the budget. As I said, we have a 60-plus billion dollar budget that goes over nine missions. Once the budget is formulated, I am responsible for the actual spending of the money, and therefore, I am in charge of financial management and accounting. Then I am responsible for all of the assets of the corporation, the agency, so I have a treasury role. And then I am responsible for contracting as the senior procurement executive to make sure that all laws and regulations are properly applied, and that we buy goods and services at the best price. Then I also am in charge of logistics. I am the chief logistician. It's a business, and I have it from the very beginning of the business cycle to the very end. So getting the money to buy something, contracting at buying it, receiving it, using -- the people that use it don't work for me necessarily, but then the disposal of it in the end. So I run the business.

Mr. Watson: Could you tell us a little bit about your organization that you manage to accomplish those functions?

Mr. Campbell: Well, I have staff here in Washington. And I have business centers in different parts of the country. For instance, in Austin, Texas, I have a financial services center. I have a debt management center in St. Paul, Minnesota. I have a distribution center for prosthetics and hearing aids in Denver. I have a national acquisition center in the suburbs of Chicago. So I have about 1,000 people that work directly for me. Then I put out policies and exercise oversight to about 8,000 people that do those functions, but do them for one of the administrations like Veterans Health Administration, Veterans Benefits Administration, or the National Cemetery Administration. So I have several roles; I run my own businesses, and I promulgate policies and exercise oversight over people that do those kinds of functions that don't work directly for me.

Mr. Watson: Do the administrations at VA have similar functions?

Mr. Campbell: Yes, and the three large administrations have a Chief Financial Officer so that the policies and guidance that comes down from my organization goes into theirs, and then they have somebody there that will make sure that all of the policies are complied with.

Mr. Watson: Bill, can you tell us a little bit about your career prior to joining VA?

Mr. Campbell: Well, it's been strange. In the federal government, I started off as an engineer, and then I fell in with bad company about 12 years ago, and first became a contracting person and then became a Chief Financial Officer with the Coast Guard. I was actually drafted. I was conscripted; I didn't volunteer for the job, but I was told that I had the skills that they wanted and I had enough time left before I could retire that I'd have to do it, or else they would be able to reach me. So I spent seven years working very hard as the CFO at the Coast Guard, and we finally got a clean audit opinion for fiscal year '99. The Coast Guard is the first and only military service ever to get a clean audit opinion.

Mr. Watson: And then you moved from there to VA?

Mr. Campbell: Yes. As I said, I had been working for seven years to become an overnight success at the Coast Guard, and I was interested in doing additional work. The Coast Guard was very happy with the clean audit opinion and was quite content to continue on the way they were. I thought that I'd like to do some more things, particularly in bringing in information technology into the accounting arena and logistics. I was approached by the then-Assistant Secretary for Management and Chief Financial Officer for VA, Ned Powell, and he asked if I would like to come over as his Deputy CFO. So I came over in the fall of 2000 as the Deputy Assistant Secretary for Finance and the Deputy CFO.

Mr. Watson: Bill, how did you move from deputy to CFO at VA?

Mr. Campbell: I'm not really sure. I was asked if I would like to be considered for the job, I said yes. I was interviewed by the Deputy Secretary and the Secretary of Veterans Affairs, Mr. Principi, the next thing I knew, I was being vetted at the White House, and after an eight-month process to be fully vetted and nominated and then confirmed, I was confirmed last November 29.

Mr. Watson: Bill, how have your prior experiences at Coast Guard and even prior to that prepared you for your job at VA?

Mr. Campbell: I think having such a broad background, being an engineer and a logistician and a contracting specialist and a financial manager, because of the complexity and the size of the business at VA, I didn't know it at the time, but it was the right kind of training, so that I can sit down and talk to the civil engineers over construction projects, and I can talk to people that need to buy goods and services and can understand what they are going through, trying to get their statements of work prepared and get their contracting actions on the street and finalized. I never would have thought that way, but it really did work. And when you look back at the original concept of the senior executive service in the government, it was to have broadly experienced generalists managing the government, and not necessarily subject matter experts. In my case, I think it has worked out pretty well.

Mr. Lawrence: You've spent a lot of time at the Coast Guard, and they have their way of doing things, their culture. And now you're at VA and they have their own culture. How would you compare the two in terms of, say, the management styles?

Mr. Campbell: Absolutely completely different. I've been with the Navy; I've been with the Coast Guard three different times, for a total of 18 years. I was with the National Transportation Safety Board for three years, and I was with the Department of the Navy for six years, and now VA almost three years. Every government agency is completely different. They all have their own cultures. And one of the things that you have to do upon coming aboard is learn how the culture works if you are going to be effective. If you have a particular mindset that it only works one way, the way you grew up with and the way that you are familiar with, I don't think you are going to be very successful. You cannot force change in a culture that you don't understand. You have a difficulty forcing change anyway. So the more you can learn about the new culture, the more you can learn about the key decisionmakers who are involved, the better off you are going to be.

Mr. Lawrence: That's a good point about forcing change.

What are the challenges of running a business when both the costs of care and the number of people requiring care are increasing each year? We'll ask Bill Campbell of Veterans Affairs when for his insights when The Business of Government Hour continues.


Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, and this morning's conversation is with Bill Campbell. Bill is the Assistant Secretary for Management, and Chief Financial Officer for the Department of Veterans Affairs.

And joining us in our conversation is Steve Watson.

Bill, can you tell us about some of the highlights from VA's most recent budget request?

Mr. Campbell: Well, the President's 2004 budget request asked for a total of slightly under $64 billion for our programs. This is a 7.7 percent increase over the previous year, 2003. This is the largest percentage increase of any Cabinet agency. So we are doing pretty well in the budget regard, as far as getting the money to do our programs.

Mr. Watson: Bill, for the fiscal year 2004 budget, I understand the VA implemented a new budgeting structure. What are the major features of this budget account restructuring and how has it changed the VA budgeting?

Mr. Campbell: One of the things we have tried to accomplish in the last couple of years is to have full costing of all of our programs to identify the total cost of ownership for all of these programs. When you have an agency like ours that's been around for quite a while, you end up with a patchwork quilt of programs, and their costs are held in different pots. What we wanted to do, what we have been striving to do, is to identify fully the costs. Two years ago, if you'd asked me, "Bill, how much does VA spend on burial?" I would have said, 'Paul, let me look in the budget document, and looking under our budget document, I'd find $142 million for the National Cemetery Administration. However, that would have been erroneous. If you look at all of the little pots of money that have anything to do with burial: markers, headstones, so forth, benefits that go to dependents and survivors, and you added it up, it was $355 million. So what we're trying to do, to help us manage our programs is to get a better handle on what they actually cost.

So this year, for 2004, we have restructured our budget submission; we also are working on having the same budget submission for 2005. For 2004, because it is brand-new and you have to be able to work with the people on the Hill for your appropriation, we have a crosswalk so they can see what it would be under the old budget structure and what it is under the new budget structure. We are still negotiating with the Congress, Congressional staff and OMB as to how this is all going to work out.

Mr. Watson: Bill, I also understand that most of the VA budget is mandatory spending and only a small portion discretionary funding. How does that affect your budgeting process?

Mr. Campbell: Well, actually, it is not as small as you would think. Mandatory are our big programs like compensation and pension, burial and so forth. That makes up 53 percent of our budget. So the discretionary part, which is medical care and some other things like medical research and general administration, makes up 47 percent.

But it is remarkable that you have these two different types of creatures living in the same -- you have to pay attention to the mandatory programs. There is no negotiation on them; they are what they are. We use very sophisticated actuarial models to come up to tell us what the benefit should be. Then we spend the majority of our time, of course, refining and negotiating a discretionary budget. But the discretionary budget is still rather large, and because of the increases in health care costs, it is quickly making up the gap, and I would think in the next five or so years, it might be a 50-50 split.

Mr. Watson: Tying in there and digging a little deeper, how have the rising medical care costs and the number of older veterans impacted your budget?

Mr. Campbell: A tremendous impact. It isn't so much the money, but everything gets back to money so that you can pay for the services and the benefits that you are giving the veteran. But the money would allow us to hire the staff and make sure that our facilities and our equipment are up to snuff. We have had such a rapid growth in the last few years in the number of veterans using VA for medical care, it is unbelievable.

In 1996, when we opened enrollment to all veterans, we were treating about 2.9 million people at our medical facilities. This past year, we treated 4.5 million, and we have an aging population of veterans. Our information shows us from statistical modeling that when medical care recipients reach age 65, their cost of care goes up remarkably. Right now, the average age for all veterans for all benefits is about 58. But for medical care, it is 63. They are approaching almost a year-for-year increase in age that they are approaching the point where in probably a couple of years, those things that get more critical as you become geriatric are going to just drive the price of health care and the number of people we will need to treat our patients through the roof.

Mr. Lawrence: Isn't longevity also affecting how long they are in the system as well as the population getting older?

Mr. Campbell: Yes. The population is getting older and the longevity is increasing. So we will have older, sicker patients for a longer period of time.

Mr. Watson: You mentioned a large increase in the number of veterans serviced. What is driving that increase?

Mr. Campbell: Well, there are many things. One is the longevity. My grandfather was a World War I veteran; he died in 1950 at the age of 51. My dad died six years ago at the age of 74. He was a World War II and Korean War veteran. The longevity is certainly increasing, and we don't have a lot of programs that give medical care to people. So veterans naturally look to wherever they can get their care, and that would be the Veterans Administration.

Mr. Watson: We recently had Deputy Secretary Leo Mackay on our show, and he mentioned the Capital Asset Realignment for Enhanced Services, otherwise known as the CARES program. Can you tell us a little bit more about the CARES program and how VA is allocating its capital investment resources?

Mr. Campbell: Well, first of all VA, as I said earlier, because of all of the medical facilities and so forth that we have, has a tremendously large capital plant. Every square foot of grounds and buildings that we have cost something to keep and maintain. There is no free property. Just because it was paid for years ago doesn't mean it's free. You still have to keep it in decent shape and you have to make sure that no harm comes to it. That is a tremendous bill that sucks resources that could be applied to improving the healthcare for veterans to let something less productive -- keeping an empty building, or a building that is not completely full, up and running.

What we are trying to do is to reduce the footprint and put those facilities where we need them. If you look at the typical veterans, most of them, or a good deal of them, have moved away from the northeast where we have a lot of facilities, to what you could call the Sunbelt. If you look at three states, California, Texas and Florida, they have together about 23 percent of all the veterans. Those are the big three. States that we have traditionally had a lot of veterans, the more populous states like New York, they seem to be losing veterans as the veterans pass away, and as many of them move into retirement in Florida or Texas or California.

Mr. Watson: How are you using CARES for decisionmaking at VA?

Mr. Campbell: Right now, we are not, because CARES is not finished. The process is ongoing; the Veterans Health Administration had worked on proposals to give to the Secretary. The Secretary has approved those proposals and has given them to an independent commission called the CARES Commission. The CARES Commission has started its deliberations, and I believe that in the first quarter of fiscal year 2004, we will present the Secretary with recommendations on which facilities to close, which ones to realign and which ones to expand. It's not a zero sum game. We are trying to free up resources to put the care to the veterans where they are located. That's why we have over 850 community-based outpatient clinics. A building by itself provides no care. You need to have -- whatever facility -- needs to have a trained and professional staff and it needs equipment. To spend money to keep empty buildings erect and watertight is not a very good use of the money, in my opinion.

Mr. Lawrence: What are the management challenges of the kind of reallocations you are talking about?

Mr. Campbell: There is always a concern by the community. When they have had a facility for a long time, it is difficult for them to believe that they are going to get the same care, or even a greater amount of care -- and that's what CARES is -- to enhance the delivery of medical services and care. It is not merely to cut the budget. But as I said, we don't want to leave these resources fallow when we have a tremendous backlog of patients. At the beginning of this year because of the increased use in VA medical facilities, we had a backlog waiting list of over 300,000 veterans. I would rather see the money be used to hire staff and reduce the waiting times down to 30 days for primary and specialty care than to have a building in a place that we don't have any staff to adequately man it.

Mr. Lawrence: It's an interesting point about the community.

Competitive sourcing is part of the President's Management Agenda that generates much interest and emotion. What's the VA doing in the area of competitive sourcing? We'll ask Bill Campbell of the Department of Veterans Affairs to bring us up to date when The Business of Government Hour returns.


Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, and this morning's conversation is with Bill Campbell. Bill is the Assistant Secretary for Management, and Chief Financial Officer for the Department of Veterans Affairs.

And joining us in our conversation is Steve Watson.

Bill, VA has one of the largest challenges in the government when it comes to the President's Management Agenda and the competitive sourcing initiative. Could you tell us more about what the Department is doing is this area?

Mr. Campbell: Yes. Of our 225,000 employees, 195,000 of them are in activities that are predominantly commercial. So they are called commercial activities. They would be targeted for studies to see whether those functions should be done by a contractor or should be done by government employees. We were going to do studies on 55,000 of those 195,000 positions over the next couple of years. However, we have run into a snag. We have found that there is a prohibition in our appropriations language from many years ago that doesn't allow us to use medical care money, which is by far the largest segment of our discretionary funds, for these types of studies.

So we've gone back to our committees in the House and the Senate and asked for appropriations to be given to us in 2004 and 2005 to do these studies. We are not completely dead in the water. We had been looking at laundry services, which we have many. We'd done a study on laundry services, and we have a non-appropriated fund activity called the Veterans Canteen Service. They run stores and cafeterias in our medical facilities for patients and their dependents who bring them. So that's about 3,000 jobs. So we are going to have a very, very small group of studies done, and it will affect very few positions until we can appropriate funds to increase it.

Mr. Lawrence: Have there been any lessons learned from just the conduct of those studies? You know, it is a lot of emotion, it takes a long time, and it's very unclear and people lose jobs. Are there any --

Mr. Campbell: I think that you have to put it in the proper context. One, the public should get the very best service at the very best price. We need to look and see if things should be done within the government with our own employees, or done by contractor support. I don't have an answer in saying at all times it should be contracted, at all times it should be our own employees. But it is remarkable, though, when you look at the long history of similar studies under A-76 and the Fair Act, usually, two-thirds of the time, the government employees win the competition. So I think as the President has said, it is good to have competition. And it is good to look at it fresh every once and a while to be sure the public is being well-served.

Mr. Watson: Bill, another aspect of the President's Management Agenda is budget and performance integration. What is VA doing in the area of budget and performance integration?

Mr. Campbell: We were one of the first agencies to become part of what is now known as PART (?). And last year, which was the first year, we had three of our programs reviewed: medical care, compensation and burial. It was the first year and there were some growing pains, I would say, some teething pains, and it was difficult to figure out whether the programs were as effective as they needed to be. So in the first year, our medical care program was marked as not demonstrating its benefit, as was compensation, and burial was marked as moderately effective.

This year, for 2003, we are taking another look at medical care, we are looking at medical research and we are looking at education. We have not gotten our mark from OMB yet; I understand that it will be coming out around February. But I think there has been a great deal of improvement with the process; it is running much smoother. I applaud looking at PART, because these things should not be on automatic pilot. You should evaluate all programs from time to time to see if they are really effective and if they are worth the money that the public wants to spend on them.

Mr. Watson: Moving down the agenda, Bill, to financial management, it is my understanding that the VA has had a clean opinion for a number of years. What direction is VA taking in the area of financial management?

Mr. Campbell: This is the area that drew me to VA, because I've been a Chief Financial Officer now for over a decade and -- a lot of exciting things. We have had clean audit opinions for the last six years. And that's not really static. When you look at it, the bar for financial stewardship is continuously being raised. It is more and more difficult to maintain a clean audit opinion. You have to work harder and smarter and do better things. In that time, we have gone from having an annual audit. We now submit quarterly unaudited statements. We will eventually be going to audited quarterly statements and then down to monthly statements.

We are negotiating right now with the Office of Management and Budget on how to do component-level audits. We have three large administrations - well, the National Cemetery Administration is not very large. We are having discussions with OMB, and I think that medical care, the Veterans Health Administration will probably have its own component audit, as will the Veterans Benefit Administration, and then perhaps the rest of the VA in a consolidated audit. This makes the work much more difficult. You have to have greater sampling, but the levels, the limits for materiality reduce significantly so that you have to be much more careful about your bookkeeping. I think that this is the right direction to go.

In addition, when I came 2-1/2 years ago, we had 10 material weaknesses outstanding. We have gotten rid of eight of them in the last 2-1/2 years. The two that remain are: one is that we do not have an integrated financial system. We hope to fix that. We are in the process of testing for deployment a large, new financial and logistics system called CORE-FLS. We've been very happy to date. We've had three years; it is a five-year project. We are finishing up our third year. We hope to have CORE-FLS completely deployed to over 1,000 locations, and 110,000 people trained in it by March of 2006. So far, we are on track.

The other remaining material weakness is cybersecurity, which is a weakness across the board at the agency; it is not limited to finance. The Chief Information Officer has a very good plan, and I am sure that if that goes according to his plan, we will have that material weakness taken care of in 2005. So we are eating down our list of deficiencies; we don't have any new ones coming in. So I would say that we are doing a very, very good job.

Mr. Watson: Bill, you spent a lot of focus there on more timely reporting, and with quarterly audits, more accurate reporting, and getting even to monthly financial statements. How has that changed the way the Department manages its business, using that financial information?

Mr. Campbell: We are actually managing it as a business. In the past, I think, looking back at my beginning career in the government almost 30 years ago, I think there was more of a view on are we doing what the statute says as far as delivering our program. There was very little interest in managing the projects better, even some things that are relatively small. When I first came to VA three years ago, I don't know for sure what we were paying in late interest penalties, but it was at least $3 million, because that is what we reported. It was probably much worse than that, probably up in the neighborhood of $5- or $6 million, and we were getting virtually no discounts.

By concentrating on improving our billpaying process, this year, we will finish the year, two years after we started making improvements, we will finish the year paying less than a million dollars, around $900,000 in late interest penalties, and we will have collected discounts of about $2.2 million. Now, that means that we are able to spend more money -- over 1 million bucks -- over what we are losing on our veterans. Every dollar we save is a dollar we can spend serving our veterans better. And that is just a small example. There are numerous other examples where we have looked at how we are conducting business, whether we are being good stewards of the public purse, and how we can make improvements. And we are doing a much better job.

Mr. Watson: Another area of the President's Management Agenda of course is strategic management of human capital. What problems are VA facing in terms of human capital, and how are you addressing the issues?

Mr. Campbell: I've become much more interested in this as of about a month ago. About a month ago, I was made the acting Assistant Secretary for Human Resources and Administration, so I am double-hatted, and also the chief human capital officer. And I've been working with our administrations to look at the strategic problems that they have in their own workforce. Up until then, I have been concentrating on my own workforce of budget people, contracting officers and accountants. And it is pretty stark. Although I have read a recent article in, I believe, The Government Executive, saying that there really isn't a human capital crisis, there is.

It isn't the numbers of people. It is the quality of the people that is of interest. Eighty-three percent of my senior financial managers in VA GS-13s and above can retire in 2005, including me. Fifty-six percent of all our senior contracting people can retire in 2005, and I don't see a cadr´┐Ż of well-trained replacements coming along. For a long period of time, the workforce had been shrinking.

Under the National Performance Review from the last administration, there were series, job series, that were targeted: the 200-series, which was human resources and EEO; the 500-series, which was finance and accounting; and the 1100-series, which was business and contracting, were targeted for 50 percent reductions. Although in many cases, we didn't see the 50 percent reduction, we saw better than a 25 percent reduction.

This did two things. One, the tribal elders that knew all of the lore and taught the younger people, many of them saw that this wasn't going to be the kind of work that they wanted to do. It wasn't going to be fun. They are retired; some of them took early retirements and buyouts. And young people that were coming into those jobs looked at it and said, 'I don't think I want to get into this.' So they became program analysts or management analysts, or whatever. And so we didn't have an influx, and so we have an unhealthy situation where we have an aging population that weren't completely trained who are now in charge of many of these programs.

And it makes it extremely difficult, particularly in HR, that's what I see, where we are not as effective in human resources as we want to be. I am one of the most senior people in VA, and when I ask for information on what kind of pension am I going to get and how are my benefits, I have to doublecheck now, because I'm not sure that I've gotten the right answer.

Mr. Lawrence: That's an interesting point.

What does the future hold for VA? We'll ask Bill Campbell, the Assistant Secretary for Management, to give us his perspective when The Business of Government Hour returns.


Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, and this morning's conversation is with Bill Campbell. Bill is the Assistant Secretary for Management, and Chief Financial Officer for the Department of Veterans Affairs.

And joining us in our conversation is Steve Watson.

Mr. Watson: Bill, in the last segment, we talked quite a bit about financial management at VA, which being CFO of course is one of your roles. As CFO, are you a member of the Chief Financial Officers Council? And can you tell us a little bit about the Council and your involvement in it?

Mr. Campbell: Yes, I am; I am a member of the Council. The Council is headed by the comptroller for the Office of Management and Budget, Linda Springer, and it has membership from each of the 24 CFO agencies. So all of the 24 largest agencies, their Chief Financial Officer is a member. It is one of the best successes I've seen in Washington with inter-agency committees. We get together, we discuss common issues and problems, and come up with ways to combat them. One of the things that I talked about earlier was human capital issues, and we've come up with attributes that we would like replacement employees in the financing and accounting areas to have.

We are working on issues that cross-cut government agencies, such as information technology and new accounting systems, and so forth. Things like consolidating payroll. It's been a wonderful venue to get difficult ideas on the table, have the very best minds in the government, because all of these people got where they are because of their hard work and their intellectual capacity, and come up with solutions that can help us all. I think it has been very helpful to me to be on the committee.

Mr. Lawrence: We talked a little bit about this when you were talking about the need for an integrated financial system, but how has technology changed the way VA does business?

Mr. Campbell: It's a completely different organization. If somebody would come back -- before the Chief Financial Officer Act, there was a comptroller at VA. I think if the comptroller for the old Veterans Administration could come back and look, they would not recognize what has happened. Earlier, I mentioned that we have 225,000 employees. We pay between 234,000 and 258,000 people every 2 weeks. On average, we only mess up four checks. We have the processes in place so that we can immediately get them out a replacement check or an electronic funds transfer, which is -- most of our people have direct deposit, about 95 percent of them. So that's one thing.

You look at what we are doing with things like purchase cards and travel cards. I remember one time having to go to London, England in June of 1978, this was before travel cards, and being on a weekend before ATMs, going around and scrounging money from all of my relatives. Going to London -- I don't remember exactly how I flew over there - but going to London and living for two weeks on basically saltines and peanut butter because I didn't have a travel card, and it took me two weeks before I could get the embassy to give me any money.

So now our people can travel on a moment's notice to do their job. They can get the types of accommodations that they require. About 85 percent of all our simplified acquisitions are now done with purchase cards. Not only does this reduce the cost of handling the paper; I don't even know what it would cost to handle a purchase order, but it is not insignificant. We are talking about millions of dollars when you look at the number of actions that we have. And probably about 800 and 1,000 people would be needed just to handle this paper.

So there have been tremendous improvements because of the use of technology. I see that we are probably going to do even more of that in the future. It won't be too long in the future before we use existing technology and we can limit access to specific locations based upon a smart card or some other technology. So that people that need to get into a space can, but others can't. Access to computer records; one of the things that we are most concerned about is HIPAA information not getting out. And making sure that people don't take resources or money that they are not entitled to. So I look at it in the not-too-distant future when you will have one identification card, which will grant you access either to computers or to spaces. It will be your purchase card if you are entitled to have one. It will be your travel card, and it will probably have a lot of your pay and personnel records on them.

Mr. Watson: Bill, looking beyond travel cards and personnel cards, what do you envision VA will look like 5, 10 years from now?

Mr. Campbell: That's a very difficult question, because we are so large and because we are still mired in 19th Century technology; that is records for veterans. Until that becomes electronic -- and we are working with the Department of Defense -- we have a joint executive committee; Dr. Chiu for Defense is a co-chair and Dr. Mackay, our Deputy Secretary, is the other co-chair. Until we get automated or electronic records directly from DoD, even when we do that, we are still going to be mired with many old records.

We still have about 600,000 veterans that are 85 years or older. So we still have a lot of records. I don't think in five years, it's going to change, but I think in 10 years, you're going to see a profound change. You're going to find that we'll have one entry point into VA. Instead of now going to a Veterans Health Administration Hospital and registering there and then having to go to a separate benefits office and registering there, and maybe go to NCA for burial benefits. Then if you move right now, you would have to re-register at the new hospital you went to and the new benefits office.

So I would see where we are going to be much like these kiosks that people talk about for e-business, a portal where one-stop shopping, a veteran would be able to come in, register and be universally registered for all things. I think that's going to be the biggest help. And then they can also have access to their records electronically. It will greatly cut down on the amount of time that is taken up right now in mailing things back and forth. And just as people are used to electronic banking now where they can call up their records on their PC, it would be nice if you could call up and see what the status of your appeal on a rating, or when your next appointment is going to be for the ophthalmologist or for the audiologist. I think in 10 years, but five years is a little short because we have this huge mountain of old paper records.

Mr. Watson: Bill, again focusing on the future, what do you see as the biggest challenges facing VA?

Mr. Campbell: The biggest challenge in my opinion is personnel, human resources. People do work. Wiring diagrams and organizational charts, telephone books, they don't do work. It's the people. I'm very concerned, because I've seen over my years-- almost 30 years with the government -- I've seen that there is a general tendency now not to come in and serve the public. For whatever reason, negative publicity about how boring and demeaning some government jobs are; I've never found that. I've had a wonderful career. I've done some tremendous things. I've been fortunate because I've gotten around to lots of different agencies and done a lot of different jobs. I've never been bored, and what I would like to do is to make sure that the next generation of employees has the skills, and that there are enough of them to give the services and benefits to the veterans that they deserve.

Mr. Lawrence: Well, let me pick up on that. As a person with a long history in public service, what advice would you give to a person interested in a career in public service?

Mr. Campbell: I know that there is a great deal of misgiving about coming in to public service and how difficult it is to get a job, and so forth. I would say that we are stuck with some 19th Century rules on employment. Most young people getting out of college, they would like to get a job offer, say, within 72 hours. Unfortunately, because of the patchwork of statues and regulations that we have dating back to the Civil Service Act of 1883, it is a little bit more difficult than that.

You have to go and have your background checked. You also have to have your skills and education verified by somebody to make sure that you are among the best-qualified for a job. And so it takes longer. What I would say, though, is you need to be persistent. When I first came into the government, I put out over 200 applications, I got two interviews and two job offers. When I went to get promoted from a GS-13 to a GS-14, I put out 200 more applications; I got one interview and one job offer. And the same thing with the senior executive. I put out about 200; I got two interviews and one job offer. It is a lot of work, but if you want to come into this type of work, hopefully it will get better in the future. You just have to be persistent.

But I will say that I have had some wonderful opportunities. I have had what then turned out to be the Fuji Blimp for a year and seeing how we could use it to do maritime patrols out in the ocean with the Coast Guard. I've been an accident investigator with the Safety Board. I mean, all kinds of interesting work. It's not the dull, clerical work that is so often attributed to the government.

Mr. Lawrence: Bill, that will have to be our last question because we are out of time. Steve and I want to thank you for joining us this morning.

Mr. Watson: Well, thank you.

Mr. Lawrence: This has been The Business of Government Hour, featuring a conversation with Bill Campbell, Assistant Secretary for Management and Chief Financial Officer of the Department of Veterans Affairs.

Be sure and visit us on the web at . There, you can learn more about our programs and get a transcript of today's very interesting conversation. Again, that's .

This is Paul Lawrence. Thank you for listening.

William Campbell interview
William Campbell

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