A federal spending watchdog has found the Department of Veterans Affairs (VA) faced “challenges” in understanding the correct number of licenses it should hold for the top five vendors in its $985 million annual software expenditure.

In a report published last month, the Government Accountability Office (GAO) found that “while the VA identified its five most widely used software vendors with the highest quantity of licenses installed, it faced challenges in determining whether it was purchasing too many or too few of these software licenses.”

The GAO said that for fiscal 2025, the VA planned to spend about $985 million on software, including commercial software licenses.

In 2015, the GAO identified “the management of software licenses as a focus area” for the VA in a high-risk report.

Another GAO report in January 2024 said the VA should track licenses in use within its inventories and compare them with purchase records.

The VA agreed with the recommendations and – as the latest report states – had taken “preliminary actions” to track software license usage and was due to implement initial functionality for a centralised software license inventory in late March 2026.

“If successful, this could be a critical first step in improving the department’s ability to track and analyse licenses across the department. Implementation of these recommendations would allow VA to identify opportunities to reduce costs on duplicate or unnecessary licenses,” it said.

Before that system went live, the GAO remained concerned that “VA was not tracking the appropriate number of licenses for each item of software currently in use.”

The GAO notes the VA “did not compare inventories of software licenses that were currently in use to purchase records on a regular basis.”

The GAO was also concerned with “restrictive software licensing practices” from vendors, which it defined as “any software licensing agreements or vendor processes that limit, impede, or prevent agency efforts to use software in cloud computing.”

The GAO has tracked progress on this issue since an earlier report in November 2024. It found restrictive software licensing practices affected federal agencies’ cloud computing efforts, including those of VA.

“These practices either increased costs of cloud software or services or limited the department’s options when selecting cloud service providers. VA had not established guidance for effectively managing impacts from restrictive practices for cloud computing or determined who is responsible for managing these impacts,” it said.

The GAO said that “fully assessing software licenses and effectively managing impacts from restrictive licensing practices at VA is an issue of vital importance.”

However, it said that the VA had not fully implemented recommendations from earlier reports.

“If the department continues to experience the challenges we have previously identified and does not take further actions to address our recommendations, it may jeopardise its ability to effectively manage its software licenses that provide critical services to veterans,” said the report.

VA told the GAO it expected to implement additional actions to address the recommendations by September 30, 2026. As of March 2026, VA had not provided an update on the status of the working group, the report said.