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Veterans' Benefits: Improved Management Would Enhance VA's Pension Program

GAO-08-112 Published: Feb 14, 2008. Publicly Released: Feb 14, 2008.
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Highlights

In 2006, the Department of Veterans Affairs (VA) paid about $3.5 billion in means-tested pension benefits to over 500,000 veterans and survivors. GAO was asked to review the management of VA pension program. This report assesses (1) the characteristics and trends in size of the current pensioner population, (2) the policies and procedures VA has in place to ensure that initial pension eligibility decisions are well managed, and (3) the procedures VA has in place to ensure that pensioners continue to receive the proper benefit payments on an ongoing basis. Our study included reviews of agency policies, procedures, and internal controls; site visits to 4 of VA's 57 regional offices and all three of its pension maintenance centers; and a selected file review of new claims at three locations.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Veterans Affairs In order to enhance VA's management of the pension eligibility process, the Secretary of Veterans Affairs should direct the Under Secretary for Benefits to take steps to make more accurate and timely decisions about initial and ongoing pension eligibility and payment levels. Such actions might include requiring pensioners to submit supporting documentation of their income and assets, conducting a more robust independent verification with third parties, or maximizing process automation.
Closed – Implemented
VA took steps to implement this recommendation, particularly regarding more accurate decisions about eligibility and payment levels. The agency reported that matching income from the HHS National Directory of New Hires database would begin in August 2010. In January 2011, HHS and its Office of General Counsel reviewed the draft matching agreement and prepared responses. Authority under P.L. 110-157 for VA to obtain data from the HHS National Directory of New Hires databases was to expire on September 30, 2011 and VA did not anticipate completing the exchange of actual data before then. The matching was also delayed to accommodate other VBA information technology priorities. In May 2011, VA proposed legislation to Congress to extend through September 30, 2021, VA's authority to verify the eligibility of recipients of, or applicants for, VA needs-based benefits and services using income data from HHS. To help implement this matching agreement, VA and HHS entered into a Memorandum of Understanding regarding a pilot project to evaluate the results of a test match. VA supplied HHS with information regarding 8,500 beneficiaries receiving either pension or total disability compensation based upon individual unemployability and evaluated the results of this data match with HHS. The results indicated that the pilot did not yield significant matches or meaningful results in the context of the pension program. Congress did not extend VA's statutory authority regarding the new hires database. Although VA took action to begin addressing this recommendation, more needs to be done. GAO is conducting work on related topics and will continue to bring attention to these issues.
Department of Veterans Affairs In order to enhance VA's management of the pension eligibility process, the Secretary of Veterans Affairs should direct the Under Secretary for Benefits to take steps to improve its quality assurance review of initial claims, which could include reviewing a larger sample of pension claims.
Closed – Implemented
VA increased the number of reviews from 492 (out of 379,354 pension cases) in FY 2008 to 686 (out of 372,981 pension cases) in FY 2009. Although the relative percent of cases reviewed is low, VA has made progress in increasing the total number of cases reviewed.
Department of Veterans Affairs In order to enhance VA's management of the pension eligibility process, the Secretary of Veterans Affairs should direct the Under Secretary for Benefits to incorporate evaluative feedback more consistently into the planning, design, and implementation of its training efforts.
Closed – Implemented
VA has implemented its plans to include an evaluation component to its training for Veterans Service Representatives and Rating Veterans Service Representatives. The agency posted the general evaluation forms for its Compensation and Pension training to its Web site in June 2008.
Department of Veterans Affairs In order to enhance VA's management of the pension eligibility process, the Secretary of Veterans Affairs should direct the Under Secretary for Benefits to evaluate options for improving the effectiveness of its annual eligibility verification review. This effort could involve reformulating the Eligibility Verification Report process by (a) surveying every pensioner rather than a selected subset; (b) performing reviews on a rolling basis, such as on an individual's anniversary date, rather than diverting staff for this activity for a 3-month period; (c) reviewing pensioners' eligibility once every few years rather than every year; or (d) focusing on verifying pensioners' income and assets.
Closed – Implemented
In January 2011, VA reported that the outstanding pension claims were converted from BDN to VETSNET in April 2011. Additionally, Eligibility Verification Report (EVR) forms for beneficiaries who are not exempt from reporting their income under P.L. 103-271 were released on 12/21/10. The previously exempt beneficiaries, who have no income or only Social Security income, will not receive an EVR for the 2010 calendar year. HHS and its Office of General Counsel completed their review of the draft matching agreement and prepared responses. Authority for VA to obtain data from the HHS National Directory of New Hires databases expired on 9/30/11 and VA did not anticipate completing the exchange of actual data before that time. The matching was also delayed to accommodate other VBA information technology priorities. In April 2011, VBA established the Pension and Fiduciary (P&F) Service to improve administration of the pension program. In FY12, P&F Service evaluated options for improving the effectiveness of EVR processing. Based on an analysis of EVR information from FY 2011 indicating, among other things, that annual EVR processing identified approximately $120 million in necessary benefit adjustments, P&F Service concluded that EVR processing should remain unchanged in the near term since EVR submissions produce a significant number of benefit adjustments. They will continue monitoring the EVR process in the PMCs and adjust VBA policy as necessary to improve efficiency.
Department of Veterans Affairs In order to enhance VA's management of the pension eligibility process, the Secretary of Veterans Affairs should direct the Under Secretary for Benefits to update the Income Verification Match data match threshold level to be in line with the U.S. Census Bureau poverty threshold or a comparable measure.
Closed – Implemented
VA implemented an adjustment to the Income Verification Match (IVM) data match threshold level to conform to the updated setting of the U.S. Census Bureau poverty threshold level. VA management approved a request to increase the IVM Individual Unemployability data match threshold level to $10,294 based on the poverty level of 2006 for a single person. This threshold will be used in the 2009 match with IRS and SSA.
Department of Veterans Affairs In order to enhance VA's management of the pension eligibility process, the Secretary of Veterans Affairs should direct the Under Secretary for Benefits to evaluate the causes of improper payments and use the results to develop and implement an action plan to prevent them from occurring.
Closed – Implemented
VA indicated that it has taken steps to evaluate the causes of improper payments and implemented steps to prevent them. According to the provided documentation, VA has used its STAR quality assurance system to identify specific causes of improper pension payments. Although the data used for this analysis was limited, VA concluded that there was a downward trend in improper payments overall in FY 2009 when compared with FY 2008. VA expects that changes in its training program, increases in the number of quality assurance reviews, and increased oversight will drive further improvement.

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Topics

Data integrityEligibility criteriaEligibility determinationsFinancial recordsGovernment retirement benefitsMilitary disability retirement payPaymentsPension claimsPensionsPolicy evaluationProgram managementQuality assuranceRetirement benefitsVeterans benefitsVeterans disability compensationVeterans pensionsPolicies and procedures