2. Hospital and Domiciliary Facilities

The $3,000,000 requested under this program will provide grants to assist the States to remodel, modify or alter existing hospital and domiciliary facilities in State homes. The grant may not exceed 50 percent of the total cost of the project, nor may any one State receive in any fiscal year more than 20 per centum of the amount appropriated for that fiscal year. A majority of the existing buildings comprising the State Soldiers' homes were constructed prior to the turn of the century and many need updating. The States of California, Connecticut, Iowa, Massachusetts, Nebraska and Wyoming have expressed an interest in securing financial assistance under this program.

The following table presents a comparative analysis of cost and appropriation requirements for fiscal years 1970, 1971 and 1972:

The unobligated balance of $2,475,749 at the end of fiscal year 1970, plus the $7,500,000 appropriation in fiscal year 1971 will be fully utilized during fiscal year 1971 to honor all current commitments and other applications listed on the preceding pages, with projects receiving priority in the order in which the formal applications are received.

Mr. BOLAND. You are requesting $8 million for 1972, a $500,000 increase over the 1971 amount of $7,500,000. There is $5 million requested for 1972 to provide grants to States to help construct State facilities to provide nursing home care for veterans. A total of $23.5 million has been appropriated to date for this program.

There is also a request for $3 million for grants to assist States to remodel, modify, or alter existing hospital and domiciliary facilities in State homes.

Why is there an increase of $500,000 in this program for 1972?

Dr. HABER. This represents a combination of two separate legislative authorities under Public Law 88-450 which permitted us to help the States with the construction of nursing homes, and the 91st Congress passed a law which enables us to help the States modernize domiciliary and hospital facilities. The combination of these two laws has given us the opportunity to help the States with extended care type construction for a total of $8 million.

Mr. BOLAND. What is the total authorization in the legislative bill to help construct State facilities to provide nursing home care?

Dr. HABER. It was $25 million for the first 5 years that this committee recommended to the Congress, and it was favorably acted that it should be extended and we are in that second phase now. Mr. BOLAND. What is the patient load in these nursing homes? Dr. HABER. It is a little bit less than 3,000.

upon

Mr. BOLAND. What is the average stay of veterans in these homes? Dr. HABER. The average stay of veterans in the domiciliary facilities is several years. In the nursing home there it is almost 2 years. In the hospital, I have no figures because this program is relatively new.

STATE NURSING HOMES

Mr. BOLAND. All States do not have nursing homes, is that right? Dr. HABER. That is right, sir.

Mr. BOLAND. Can you list for the record the States that do have nursing homes?

Dr. HABER. Yes, sir. There are, I think, 23 State homes.

Mr. JOHNSON. We can insert it.

Mr. BOLAND. Insert it in the record.

(The information follows:)

The following 15 States have State Nursing homes under construction or in operation-a total of 2,325 beds have been approved.

Mr. BOLAND. We will turn to the revolving and trust funds. Place the summary tables and pages 7-3 through 7-13 in the record at this point.

(The material follows:)

CANTEEN SERVICE REVOLVING FUND

No appropriation by the Congress will be required for the operation of the Veterans Canteen Service during fiscal year 1972. The Veterans Canteen Service was established by Congress in 1946 to furnish at reasonable prices merchandise and services necessary to the comfort and well-being of veterans in hospitals and domiciliaries operated by the Veterans Administration (38 U.S.C. 4201-08). The $14,302,000 budget estimate (comprised of $9,144,000 for total working capital and $5,158,000 for investment in equipment) is submitted for the purpose of providing for the maintenance and operation of the Veterans Canteen Service during fiscal year 1972.

The Congress originally appropriated a total of $4,965,000 for the operation of the Veterans Canteen Service and no additional appropriations have been required. Funds in excess of the needs of the Service totaling $12,068,000 have been paid to the Treasury.

Capital Requirements:

At the end of fiscal year 1970, there were canteens in operation at all VA Hospitals and Domiciliaries. Capital requirements for operation of the Veterans Canteen Service for fiscal year 1972 are as follows:

1. Cash

2.

3.

4.

Petty Cash and Change Funds: A total sum of $162,000 is considered necessary for the purpose of making Timited local purchases, paying incidental operating and housekeeping expenses, and providing adequate change requirements. Such funds are established in amounts commensurate with the size and requirements of each individual canteen.

At the Field Station Depositaries: It is estimated that $1,584,000 will be required for the maintenance of field station depositary accounts.

At the Field Offices and Central Office: It is estimated that the capital
requirements for five field offices and Central Office will amount to
$3,479,000. This will provide the cash advance of $1,850,000 required by
the U. S. Treasury for payroll purposes under the Veterans Administration
automated payroll system, and a portion of the funds required for payment
of outstanding liabilities.

Accounts Receivable, Prepaid Expenses and Other Assets. It is estimated that accounts receivable, prepaid expenses and other assets will be $967,000.

Inventories - Commodities for Sale

Retail Departments: It is estimated that a retail inventory of $6,600,000
is required.

Food Departments: It is estimated that a food department inventory of
$366,000 is required.

Service Departments: It is estimated that a service department inventory of $18,000 is required.

Equipment

Capital requirements for new hospital canteens, remodeling and replacement of worn-out equipment during fiscal year 1972 are estimated to be $964,000.

Operating Results:

It is expected that sales will amount to $69,090,000 in fiscal year 1972, and that a net income of $506,000 will be realized.

Personnel Requirements:

In the area of manpower control and utilization, the Veterans Canteen Service uses many of the techniques that are generally applied in commercial retail chain store operations. Major consideration is given to salary expense in relation to sales. Salary expense data is provided to management personnel periodically for each department in each canteen, as well as consolidated data for each field office and the total Veterans Canteen Service. This data is compared to the corresponding period for the previous year and to the budget. This has been and will continue to be an effective control.

Employment comparisons for fiscal years 1970, 1971 and 1972 are as follows:

The increase of 75 average employment over fiscal year 1971 is required as follows:

The current assets of the Veterans Canteen Service consist of cash, accounts receivable, merchandise inventories, prepaid expenses and other assets. At the close of fiscal year 1972, it is expected that cash on hand and on deposit will be $5,225,000. It is estimated that accounts receivable, consisting mainly of amounts due from personal funds of incompetent patients will be $954,000. It is believed a capital investment in inventory of $6,984,000 will be required. Prepaid expenses and other assets should amount to $13,000. Current assets are estimated to total $13,174,000. Current liabilities are estimated to be $4,031,000; this amount will be made up of trade accounts payable, accrued payrolls, accrued leave, unredeemed coupons, and other current liabilities. The total working capital (current assets less current liabilities) as detailed above will amount to $9,143,000. It is estimated that the net investment in equipment will amount to $5,158,000.