B-133071, SEP 2, 1958

B-133071, SEP 2, 1958

PRECIS-UNAVAILABLE

SECRETARY OF DEFENSE:

DURING OUR AUDITS OF THE DEPARTMENT OF DEFENSE AND THE VETERANS ADMINISTRATION (VA), A REVIEW OF CORRESPONDENCE AND DISCUSSIONS WITH AGENCY OFFICIALS DISCLOSED THAT SOME RETIRED MILITARY PERSONNEL ARE RECEIVING EXCESSIVE RETIREMENT PAYMENTS FROM THE MILITARY SERVICES AS A RESULT OF INCOMPLETE INFORMATION FURNISHED TO THE SERVICE DEPARTMENTS BY VA PERTAINING TO PAYMENTS ALSO MADE BY VA TO THESE RETIRED PERSONNEL.

SECTION 1005 OF THE VETERANS' BENEFITS ACT OF 1957 (38 U.S.C. 3005), FORMERLY PUBLIC LAW 314, 78TH CONGRESS (38 U.S.C. 26C), PERMITS A VETERAN TO RECEIVE MILITARY RETIREMENT PAY AND VA COMPENSATION OR PENSION BENEFITS CONCURRENTLY PROVIDED THE VETERAN FILES A WAIVER WITH THE APPROPRIATE SERVICE DEPARTMENT OF AN AMOUNT EQUAL TO THE AMOUNT OF HIS VA COMPENSATION OR PENSION. THE ACT ALSO PLACES THE RESPONSIBILITY ON THE SERVICE DEPARTMENTS TO NOTIFY VA OF THE RECEIPT OF SUCH WAIVER IN ORDER TO PREVENT DUPLICATE PAYMENTS.

AFTER THE ORIGINAL ACT WAS APPROVED ON MAY 27, 1944, THE SERVICE DEPARTMENTS EXPERIENCED DIFFICULTY IN THEIR EFFORTS TO PREVENT DUPLICATE PAYMENTS BY NOTIFYING VA OF THE RECEIPT OF WAIVERS BECAUSE THE SERVICE DEPARTMENTS ARE NOT THE FIRST TO KNOW IN ANY SPECIFIC CASE WHETHER THERE EXISTS A NEED FOR AN ORIGINAL WAIVER OR A CHANGE IN AN EXECUTED WAIVER. VA, HOWEVER, UPON APPLICATION BY A RETIRED VETERAN FOR COMPENSATION OR PENSION, HAS KNOWLEDGE OF THE NEED FOR THE PREPARATION OF A WAIVER. DEVELOP PROCEDURES WHICH WOULD BE EFFECTIVE IN COMPLYING WITH THE ACT, A MEETING WAS HELD IN JULY 1944 BETWEEN REPRESENTATIVES OF THE VA AND THE ARMY, NAVY, AND AND COAST GUARD. AT THIS MEETING, VA AGREED TO FORWARD WAIVERS OF RETIREMENT PAY. SUBSEQUENTLY, VA EXTENDED THIS PROCEDURE TO INCLUDE THOSE CASES IN WHICH THE VETERANS WISH TO WAIVE ONLY THAT PART OF THEIR RETIREMENT PAY WHICH IS EQUAL IN AMOUNT TO THEIR VA COMPENSATION OR PENSION.

THE OVERPAYMENTS BEING MADE BY THE SERVICE DEPARTMENTS RESULT PRINCIPALLY FROM VA'S FAILURE TO SUPPLY THE SERVICE DEPARTMENTS WITH COMPLETE INFORMATION ON THE STATUTORY INCREASES IN COMPENSATION OR PENSION PAYMENTS AUTHORIZED BY PUBLIC LAW 356, 82ND CONGRESS, PUBLIC LAW 695, 83RD CONGRESS, AND PUBLIC LAW 85-168.

OUR PRELIMINARY ESTIMATES, BASED ON INFORMATION OBTAINED FROM THE SERVICE AGENCIES INVOLVED, INDICATE THAT THE DEFENSE DEPARTMENT HAS A RECORD OF APPROXIMATELY 12,000 VETERANS WHO EXECUTED WAIVERS OF RETIREMENT PAY IN ORDER TO RECEIVE VA BENEFITS. VA HAS CODED APPROXIMATELY 7,000 CASES TO INDICATE THE EXECUTION OF WAIVERS. BECAUSE VA HAS INCLUDED IN ITS CONTROLS FEWER WAIVER CASES THAN THE SERVICE DEPARTMENTS HAVE REPORTED, IT IS APPARENT THAT VA'S RECORDS ARE INCOMPLETE. HOWEVER, IN THE ABSENCE OF A RECONCILIATION BETWEEN THE TWO AGENCIES, THE ACCURACY OF THE RECORDS OF BOTH THE SERVICE DEPARTMENTS AND THE VA IS QUESTIONABLE. ANY FAILURE TO MAKE PROPER DEDUCTION FROM THE RETIREMENT PAY IN CASES INVOLVING CONCURRENT PAYMENTS PERMITTED BY WAIVER IS CONTRARY TO THE REQUIREMENTS OF SECTION 1005, PUBLIC LAW 85-56.

WE HAVE EXAMINED CERTAIN CORRESPONDENCE BETWEEN THE VA AND THE ARMY, NAVY, AND AIR FORCE CONCERNING THIS SITUATION AND HAVE NOTED THAT THERE IS A DIFFERENCE OF OPINION BETWEEN VA AND THE SERVICE DEPARTMENTS AS TO THE RESPONSIBILITY FOR THE COLLECTION OF OVERPAYMENTS.

IT IS THE OPINION OF THIS OFFICE THAT, IN THOSE CASES IN WHICH THE VETERAN HAS FILED A WAIVER OF RETIREMENT PAY IN ORDER TO RECEIVE VA COMPENSATION OR PENSION, IT IS THE RESPONSIBILITY OF THE SERVICE DEPARTMENTS TO TAKE THE NECESSARY ACTION TO COLLECT THE AMOUNT OVERPAID. THE SERVICE DEPARTMENTS HAVE NO AUTHORITY IN THESE CASES TO PAY VETERANS IN EXCESS OF THE AMOUNT OF RETIREMENT PAY LESS THE AMOUNT OF THE VA COMPENSATION OR PENSION PAYMENT. (SEC. 1005, PUBLIC LAW 85 56)

AS INDICATED IN THE ATTACHED COPY OF A LETTER TO THE ADMINISTRATOR OF VETERANS AFFAIRS, IT IS OUR OPINION THAT IT IS THE RESPONSIBILITY OF THE VA TO CORRECT ITS RECORDS SO THAT IT WILL BE IN A POSITION TO NOTIFY THE SERVICE DEPARTMENTS CONCERNED, IN ACCORDANCE WITH THE PROCEDURES AGREED UPON, OF THE PROPER DEDUCTIONS TO BE MADE FROM THE RETIREMENT PAY OF ALL VETERANS WHO ARE ALSO IN RECEIPT OF VA COMPENSATION OR PENSION.

YOU WILL NOTE IN OUR LETTER TO THE ADMINISTRATOR THAT WE ARE AWARE THAT THE SERVICE DEPARTMENTS HAVE AGREED TO FURNISH VA WITH INFORMATION WHICH WILL ENABLE VA TO IDENTIFY VETERANS RECEIVING VA COMPENSATION OR PENSION WHO ARE ALSO RECEIVING RETIREMENT PAYMENTS FOR MILITARY SERVICE BECAUSE OF A PERMANENT OR TEMPORARY DISABILITY. HOWEVER, THIS AGREEMENT DOES NOT INCLUDE PERSONS WHO RETIRE FOR OTHER THAN DISABILITY.

WE BELIEVE THAT THE SERVICE DEPARTMENTS SHOULD FURNISH VA WITH A COMPLETE LIST OF ALL PERSONNEL RECEIVING RETIREMENT PAY. THIS LISTING SHOULD THEN BE COMPARED BY VA WITH ITS RECORDS TO IDENTIFY THOSE RETIRED PERSONNEL WHO ARE RECEIVING, CONCURRENTLY, COMPENSATION OR PENSION PAYMENTS FROM VA. AFTER THESE PERSONS HAVE BEEN SO IDENTIFIED, VA SHOULD FURNISH THE SERVICE DEPARTMENTS WITH A LIST OF ALL PERSONS RECEIVING CONCURRENT PAYMENTS TOGETHER WITH THE CORRECT AMOUNT OF COMPENSATION OR PENSION THAT SHOULD BE DEDUCTED BY THE SERVICE DEPARTMENTS FROM THE RETIREMENT PAYMENTS. THIS RECONCILIATION SHOULD DISCLOSE EXISTING ERRORS FOR CORRECTION AND FORM THE BASIS FOR THE VA'S ESTABLISHMENT AND MAINTENANCE OF CORRECT AND COMPLETE RECORDS NECESSARY FOR THE ACCURATE AND TIMELY NOTIFICATION OF CHANGES IN STATUS. YOUR COOPERATION WITH THE ADMINISTRATOR OF VETERANS AFFAIRS IN THIS MATTER WOULD BE MUTUALLY BENEFICIAL.

WE WILL APPRECIATE A REPLY OUTLINING THE CORRECTIVE ACTION TAKEN BY YOUR DEPARTMENT WITH RESPECT TO ASSISTING THE VA IN CORRECTING ITS RECORDS AND REQUIRING THE SERVICE DEPARTMENTS TO COLLECT OVERPAYMENTS MADE TO RETIRED SERVICE PERSONNEL.

REPRESENTATIVES OF THE GENERAL ACCOUNTING OFFICE WILL BE AVAILABLE, IF YOU SO DESIRE, FOR CONSULTATION AND DISCUSSION OF THIS CONSULTATION AND DISCUSSION OF THIS MATTER.