VA IG Witness Delivers Damning Testimony During House Committee on Veterans’ Affairs Hearing

WASHINGTON D.C.- U.S. Senator Richard Burr (R-NC), Ranking Member of the Senate Committee on Veterans' Affairs, released the following statement after the testimony of Linda Halliday, witness from the VA Office of Inspector General (IG), at last evening's House Committee on Veterans' Affairs hearing. Halliday's testimony outlines many troubling issues at the Department of Veterans Affairs, including a high rate of errors in processing claims, as mentioned in an IG report released yesterday; work that does not fall under the Veterans Benefits Administration's (VBA) backlog statistic "increasing at alarming rates"; "notable weaknesses in financial stewardship"; and mis-management at regional offices.

"This testimony is particularly damning, as it shows the utter dysfunction and deeply systemic problems at the Department of Veterans Affairs," said Senator Richard Burr. "I cannot see how VA can continue to claim success in their reduction of the backlog or their charge of caring for our veterans. Clearly, the Veterans Benefits Administration has not been upholding its responsibilities either to veterans or to taxpayers."

Below are some of the problems outlined in Halliday's testimony:

  • VBA's two-year-old claims initiative, including use of provisional rating decisions, was "less effective than VBA's existing rating process in providing benefits to veterans quickly." (Read press release on VA IG's report on the claims initiative here.)

o VBA removed claims from the backlog once they received a provisional decision, even though more work remained to be done; this "misrepresented the actual workload of pending claims and its progress toward eliminating the overall claims backlog."

o "Because VBA did not ensure existing controls were functioning as needed to effectively identify and manage provisionally rated claims, some veterans may never have received final rating decisions if not for our review."

o VBA did not correctly process about 31 percent of claims handled through this initiative, because regional offices "felt pressured to complete these claims within VBA's 60-day deadline." This is estimated to have resulted in $40 million in improper payments.

  • VBA's focus on reducing the backlog of disability claims came at the expense of other work.

o "Although VBA's reported backlog has decreased by over 50 percent since March 2013, other workloads such as appeals management and benefit reductions have had significant corresponding increases."

o The appeals workload "has continued to grow at an alarming rate."

  • VBA has not been timely processing benefit offsets when Guard/Reservists concurrently receive drill pay and VA compensation. In total, VA could recover a total of over $623 million in improper payments.
  • VBA is not properly following up on cases where veterans had been assigned a temporary 100 percent disability rating, primarily because staff do not timely schedule medical re-examinations once the factor requiring the temporary rating has ended.

o The IG noted that VBA's response to their prior recommendations about temporary ratings has been "unacceptable and raises major concerns over VBA's willingness to reduce its risk of improper payments."

o This could lead VBA to make $371 million in improper payments over 5 years.

  • VBA continues to make significant processing errors with regard to disability claims for traumatic brain injury. Claims processing employees were using inadequate medical examinations to rate these claims because of "pressure to meet production requirements."
  • The Fiduciary hub in Indianapolis is not timely processing allegations of fiduciaries mis-using beneficiary funds, conducting field examinations, and processing incoming mail. Without proper oversight, "the general health and well-being of beneficiaries are placed at increased and unnecessary risk."
  • Of 200 files reviewed, 46 percent of students using Post-9/11 GI Bill benefits in 2013 experienced delays in approval of their original claims; 18 percent experienced delays in receiving the housing allowance and book stipend; and 20 percent received improper payments. Over 5 years, VBA may make $205 million in inaccurate payments.
  • In 2013, VBA accurately processed only 69 percent of claims handled through its Quick Start program for separating servicemembers.
  • In June 2014, the IG received information that the Philadelphia regional office was "cooking the books" by manipulating the date recorded for when a claim was filed.

o The IG found some instances where staff were inputting more recent dates than when the claim arrived, which made the average number of days claims had been pending appear better than it was.

o The IG also found bins of claims and evidence that had not been scanned into their systems since 2011.

o The IG found instances where veterans received duplicate payments because of duplicate records in VBA's electronic system; management was aware of this on-going problem, but did not consider it a priority to correct it.

  • In June 2014, the IG received information from VA that a Baltimore regional office employee had 8,000 documents and 80 claims folders inappropriately kept in his office. VA later found 1,500 additional documents inappropriately held by 7 other employees.
  • In July 2014, the IG identified an employee at the Los Angeles regional office who was incorrectly recording that actions such as ordering medical examinations had been taken, when they had not.