WASHINGTON, D.C. — The Department of Veterans Affairs has consolidated payroll processing for its more than 430,000 employees and all VA medical centers into a single processing center, a move the agency says will reduce administrative costs and save taxpayers more than $24 million annually.
The consolidation, which became fully effective June 1, was completed 15 months ahead of the agency’s original late-2027 target, according to the VA.
Before the transition, 114 VA medical centers maintained their own payroll systems even though the department’s Financial Services Center had already been established to provide centralized payroll services.
VA Secretary Doug Collins described the effort as an attempt to reduce administrative duplication and redirect resources toward the agency’s core mission.
“Needless duplication of bureaucracy is the opposite of putting Veterans first,” Collins said in a statement. “Consolidating payroll support for all medical centers to one payroll office is a commonsense reform that will let us focus on our real mission.”
The Financial Services Center already processed payroll for the Veterans Benefits Administration and National Cemetery Administration before assuming responsibility for Veterans Health Administration facilities.
The new system will be operated by approximately 600 employees. The department said no employees were laid off as a result of the consolidation and that workers whose positions were no longer needed for payroll processing were reassigned to other duties.
The initiative is part of a broader effort across federal agencies to streamline administrative functions and reduce operating costs while directing more resources toward frontline services.
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