VA Can Reduce Excess Disability Payments by Improving Pay Data Exchange With the Military Services

HRD-85-38: Published: May 29, 1985. Publicly Released: May 29, 1985.

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GAO conducted a review to determine whether the Veterans Administration (VA) and the Department of Defense (DOD) have adequate internal controls to prevent VA from paying veterans' disability benefits to: (1) disabled veterans who return to active duty; and (2) disabled veterans whose separation pay VA has not recouped.

GAO found that, while VA instructs veterans to contact a VA regional office if they return to active duty, it has not determined whether veterans comply with the reporting requirement. GAO compared data from the Defense Manpower Data Center (DMDC) with VA data and identified over 1,000 individuals who returned to active duty without notifying VA. In some cases, returning veterans did not mention their VA disability payments on reenlistment applications, but there were also cases where military recruiters did not notify VA. In addition, GAO found that VA does not always recoup separation payments before paying disability benefits because: (1) DOD separation processing offices do not always provide separation pay data to VA; and (2) VA staff either disregard separation data or do not realize that recoupment efforts have been unsuccessful. However, since VA can only withhold disability payments up to the amount of a veteran's monthly benefit, it may take years to recoup improperly paid funds.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: VA has been implementing action since June 1985.

    Recommendation: The Administrator of Veterans Affairs should require the Director, Department of Veterans Benefits, to enter quarterly separation pay data from DOD into its beneficiary record system and place a reminder on the disability award screen to show when the veteran received separation pay and alert regional staff about recoupment.

    Agency Affected: Veterans Administration

  2. Status: Closed - Implemented

    Comments: VA regional offices have completed their review of the cases identified by GAO and other cases, and have taken appropriate action on such cases.

    Recommendation: The Administrator of Veterans Affairs should require the Director, Department of Veterans Benefits, to continue recoupment on cases identified by GAO, review other cases in the 1983 DOD universes to detect errors, and initiate recoupment if it has not occurred.

    Agency Affected: Veterans Administration

  3. Status: Closed - Implemented

    Comments: DOD provided VA with separation pay data for 1984 through 1986. DOD will continue to provide such data to VA on a quarterly basis.

    Recommendation: The Secretary of Defense should require that all military finance centers send quarterly separation pay data to DMDC, starting with fiscal year 1984 data, and have DMDC provide the data to VA.

    Agency Affected: Department of Defense

  4. Status: Closed - Implemented

    Comments: VA gave its first quarterly update in December 1985. This data will be used by DOD during its quarterly April through June 1986 match.

    Recommendation: The Administrator of Veterans Affairs should require the Director, Department of Veterans Benefits, to submit to DMDC periodic updates of its disability tape that will identify all veterans added to the benefit rolls during the year.

    Agency Affected: Veterans Administration

  5. Status: Closed - Implemented

    Comments: The Administrator of Veterans Affairs indicated that cases identified on the 1984 match, as well as matches in future years, have been, or will be, forwarded to the regional offices for review and recoupment action.

    Recommendation: The Administrator of Veterans Affairs should require the Director, Department of Veterans Benefits, to follow agency appeal procedures and, as appropriate, suspend disability benefits and compute overpayments on veterans identified by DOD as receiving active duty and VA disability benefits concurrently on the 1984 and future year tape matches.

    Agency Affected: Veterans Administration

  6. Status: Closed - Implemented

    Comments: Over 1,000 cases were reviewed, and $2.7 million in overpayments were realized.

    Recommendation: The Administrator of Veterans Affairs should require the Director, Department of Veterans Benefits, to follow agency appeal procedures for all of the 1,060 cases GAO identified on the 1982 and 1983 tape matches and, as appropriate, suspend disability benefits and compute overpayments.

    Agency Affected: Veterans Administration

  7. Status: Closed - Implemented

    Comments: In June 1985, the Office of the Secretary of Defense notified the Secretaries of each service to issue corrective instructions.

    Recommendation: The Secretary of Defense should require military services to reinstruct recruiters on the procedures for notifying VA when disabled veterans reenlist.

    Agency Affected: Department of Defense

  8. Status: Closed - Implemented

    Comments: VA sent DMDC an extract of its master record. DMDC matched this with its active duty file. Such matches will be conducted quarterly in the future.

    Recommendation: The Secretary of Defense should require DMDC to perform an annual match of the active duty and VA disability files to identify persons who received active duty and VA disability benefits concurrently in 1984 and conduct periodic updates throughout the year. The results of these matches should be edited to remove inaccurate data before they are provided to VA.

    Agency Affected: Department of Defense

  9. Status: Closed - Implemented

    Comments: Thirty-three cases required no action, and in 29 cases award adjustments were made.

    Recommendation: The Administrator of Veterans Affairs should require the Director, Department of Veterans Benefits, to recoup the additional $385,000 on the 64 separation payment cases GAO identified where the recoupment balance was understated.

    Agency Affected: Veterans Administration

 

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