Financial Management:

DOD and VA Need to Improve Operation of the Montgomery GI Bill Reserve Program

AFMD-90-30: Published: Aug 8, 1990. Publicly Released: Aug 8, 1990.

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Pursuant to a congressional request, GAO reviewed the Montgomery GI Bill Reserve Program, focusing on: (1) the timeliness and accuracy of the eligibility data that the Department of Defense (DOD) submitted to the Department of Veterans Affairs (VA); (2) DOD plans for improving the timeliness and accuracy of eligibility data; (3) DOD accuracy in contributing to the Education Benefits Fund; and (4) DOD efforts to collect amounts that program participants owed the government.

GAO found that: (1) DOD did not submit timely and accurate eligibility data to VA; (2) DOD took an average of 91 to 351 days to submit eligibility data to VA, primarily due to system incompatibility and inadequate training; (3) DOD took actions to improve data accuracy, but due to system incompatibility, data timeliness continued to be a problem; (4) DOD established manpower population count and per-capita normal cost as the two elements for computing contributions to the fund, and assigned a board to define how the reserve components should determine the manpower population count and per-capita normal cost; (5) the military services' failure to properly apply the manpower population count and the board's inability to develop a reliable per-capita normal cost resulted in inaccurate monthly contributions to the fund; (6) DOD and VA did not ensure proper recordkeeping and collection of program participants' debts, and had not reached agreement on responsibility for such debts; and (7) DOD and VA data indicated that over 8,200 individuals owed the government about $6 million for breach of contract, and VA did not pursue collection of another $10 million owed by program participants for other reasons.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: The ASD Reserve Affairs asked the services to review their training and controls for the unit-level Selected Reserve Program administrators. DOD also asked the services' IG to add MGIB-related management and training to their inspection agenda. DOD revised its management data reports to include MGIB eligibility by personnel type, component, and applicant's benefit status.

    Recommendation: To improve the efficiency of the program, the Secretary of Defense should establish controls to ensure that accurate eligibility data are submitted to VA. At a minimum, such controls should include the training of individuals responsible for collecting, processing, and reporting eligibility data.

    Agency Affected: Department of Defense

  2. Status: Closed - Implemented

    Comments: DOD revised the procedures in DOD Instruction 1322.17 to increase the accuracy and efficiency of the system that processes the Manpower Population Count. This directive was approved and forwarded for printing on November 21, 1991, and distributed in January 1992. Data reporting requirements and internal controls are addressed.

    Recommendation: To improve the efficiency of the program, the Secretary of Defense should establish controls to ensure that the military departments compute the manpower population count in accordance with DOD instructions.

    Agency Affected: Department of Defense

  3. Status: Closed - Implemented

    Comments: In October 1990, DOD implemented a procedure and started collecting breach of contract debts, but DOD and VA have not agreed on which agency will collect the associated penalties. DOD closed out this recommendation on December 5, 1991, because DOD IG had made the same recommendation, which is still open. VA and DOD have reached an impasse as to which agency is responsible for collecting the funds.

    Recommendation: The Secretaries of Veterans Affairs and Defense should establish who will be responsible for collecting amounts owed by reservists who breach their contractual agreements.

    Agency Affected: Department of Defense

  4. Status: Closed - Implemented

    Comments: In October 1990, DOD implemented a procedure and started collecting breach of contract debts, but DOD and VA still have not agreed on which agency will collect the associated penalties. DOD closed out this recommendation on December 5, 1991, because DOD IG had made the same recommendation, which is still open.

    Recommendation: The Secretaries of Veterans Affairs and Defense should establish who will be responsible for collecting amounts owed by reservists who breach their contractual agreements.

    Agency Affected: Department of Veterans Affairs

  5. Status: Closed - Implemented

    Comments: The Office of the Assistant Secretary of Finance and Planning made changes to the VA Debt Collection Manual, VA Manual MP-4. The revision to the Debt Collection Manual was distributed on January 11, 1992.

    Recommendation: The Secretary of Veterans Affairs should direct VA debt collection personnel to: (1) pursue the collection of amounts owed the government by program participants through the use of debt collection tools outlined in VA collection standards; and (2) adhere to Internal Revenue Service regulations by referring the debtor to a credit bureau prior to submitting program debts to the Internal Revenue Service for offset.

    Agency Affected: Department of Veterans Affairs

 

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