Even as agencies’ annual budget requests must be approved by Congress through the appropriations process, they offer valuable insight into departmental priorities and planned activities for the upcoming fiscal year.

The VA requests $144.9B in discretionary funding, an increase of $11.B over the FY 2026 enacted level. This total is outside of the department’s request of $54.6B for the mandatory Cost of War Toxics Exposures Fund (TEF), $4.2B for the Medical Care Collections Fund (MCCF), and $554M for the Recurring Expenses Transformational Fund (RETF).

The 2028 Medical Care Advance Appropriation (AA) request is $138.2B in base discretionary funding, alongside the $307.5B in mandatory funding for veteran’s benefits programs and $53.8B for the TEF.

Below is a visual breakdown of the VA’s FY 2027 discretionary budget by top mission areas. Note that the parenthesis signifies the percentage difference between the FY 2027 request and FY 2026 enacted levels.

Source: VA FY 2027 budget request

Key funding, program and organizational changes include:

• An additional $8.5B in medical care discretionary budget funding to support tailoring healthcare services to veterans’ needs
• $4.5B (+$176M over FY 2026) to end veteran homelessness, including $500M to build facilities, $30M to augment services at the West LA VA Medical Center, and $5M to support the new Warrior Independence and Self-Sufficiency Ethos (WISE) Office under the Office of the Secretary to streamline enterprise-wide efforts in veteran homelessness prevention
• $3.9B in base discretionary construction funding, including $3.0B for major construction projects and $861M for minor construction projects
• $3.8B (+$531M over FY 2026) for suicide prevention outreach
• $478M in VA’s Telehealth Services and Connected Health programs
• Reorganization of the management structure at the Veterans Health Administration
• Elimination of the Office of Enterprise Integration
• Consolidation of all information technology functions to the Office of Information and Technology (OIT)
• Consolidation of all contracting functions under the Principal Executive Director for the Office of Acquisition, Logistics, and Construction (OALC)

Electronic Health Record Modernization (EHRM)

The VA requests $4.2B in discretionary funding for the department’s continued rollout of the new electronic health records system. The FY 2027 request is an $840M increase above the FY 2026 enacted level. Language within the VA’s budget documents matches that of the conditions set by Congress in the department’s FY 2026 appropriations: “Provided, That the Secretary of Veterans Affairs shall submit to the Committees on Appropriations of both Houses of Congress quarterly reports detailing obligations, expenditures, and deployment implementation by facility, including any changes from the deployment plan or schedule..” As a reminder, rollout of VA’s EHR system faced much scrutiny as it resumed last year following a pause in the rollout in April 2023 due to complications in deployment readiness and user concerns.

Breakdown of EHRM funding includes:

• $2.8B (+$484M) for the VA’s EHR contract to sustain operations of 19 live sites and deployment of 26 additional sites in 2027. Site operations include help desk, release management, end user training, veteran portal, and application management services
• $745M (+$192M) for Infrastructure Readiness to ensure the additional 28 sites planned for go-live in 2028 are prepared to receive the EHR through increased interface development and sustainment, deployment of end user devices, critical testing and security services at those forthcoming go-live sites
• $727M (+$164M) for the Program Management Office to provide the personnel needed to support an increased number of deployments in 2027, including the hiring of experts to oversee and manage the technical, functional and project-based work for ongoing and expansion support of the EHR. Funding also supports the Federal Electronic Health Record Modernization (FEHRM) program office

Information Technology Systems

VA requests $6.4B for its IT Systems budget, a $97M increase ($89M discretionary + $8M offsetting collections) over the FY 2026 enacted level. Budget documents describe the department’s request for two primary changes to IT Systems appropriations. The first is to delete three subaccounts within IT Systems (Development, Operations and Maintenance, and Pay and Associated Costs) and the second, the ability to request three-year periods of availability for appropriated funds.

“Eliminating statutory subaccounts would increase execution flexibility without reducing oversight. VA will continue to track and report spending by Development, Modernization, and Enhancement (DME), Operations and Maintenance (O&M), and Pay through existing IT Capital Planning and Investment Control (CPIC) reporting and governance processes,” explains the VA in Volume 5 of FY 2027 budget documents.

Moreover, requesting a three-year period of availability provides flexibility to the department by avoiding year-end spending pressures, improving acquisition planning and lowering procurement and schedules risks for multi-year IT efforts. In other words, the three-year availability would allow VA to align funding to multi-year IT programs and contract deliverables and reduce disruption caused by Continuing Resolutions.

Boasting a mission of “Ready. Secure. Faster.” for its IT program, the VA attributes several increases in IT program funding among these three propositions:

• Ready - Scale execution-ready mission delivery: The VA requests $2.4B (+$12M) within its Health and Social Services Portfolio to bolster support in systems that veterans interact with most: appointment scheduling, telehealth, and clinical care delivery ($546M); platforms that extend access through remote patient monitoring and community care coordination ($115M); and administrative systems that reduce documentation burden on clinical staff ($167M)
• Secure - Protect trust as delivery accelerates: Within the Delivery Solutions Portfolio, VA requests $791M (+$74M) to increase security and compliance, $248M (+$12M) to strengthen zero trust implementation, and $327M (+$38M) to increase infrastructure readiness and sustain lifecycle replacement and reduce technical debt with enterprise modernizations
• Faster – Remove execution bottlenecks that delay care and benefits: Requests $292M (+$37M) towards efforts to advance enterprise financial and acquisition modernization activities (i.e. configuration, data migration, interfaces, cloud infrastructure, automation, etc.), and $186M (+$51M) to support Financial Management Business Transformation (FMBT) and Integrated Financial Acquisition Management System (iFAMS) implementation and expansion

Stay tuned as the GovWin’s Market Analysis team continues reviewing agency budget documents to analyze Administration priorities, track contractor implications, highlight key funding increases and decreases, and identify major IT investments and programs for FY 2027.