VETERANS HOSPITAL FUNDING FAULTED.(CAPITAL REGION)

Byline: JOHN MACHACEK Gannett News Service

WASHINGTON -- Congressional investigators say a government spending formula that cost veterans hospitals in the Northeast and Midwest almost a billion dollars last year is flawed and needs to be immediately fixed.

The controversial 6-year-old formula used to allocate funds among 22 veterans hospital networks shifted about $921 million to the South and West in 2001, according to a new report by the General Accounting Office, Congress' investigative arm. The formula was devised in 1997 to recognize the shift in the veterans population to the Sunbelt, but unfairly penalized the North and Midwest because it doesn't fully …