Pursuant to a congressional request, GAO discussed the long-standing challenges facing the Department of Veterans Affairs in administering programs that provide financial and other benefits to veterans, their dependents, and survivors, focusing on: (1) recent progress the Veterans Benefits Administration (VBA) has made; (2) areas in which progress is lacking; and (3) changes in program design that could hold potential for greater gains.

GAO noted that: (1) VBA implemented a new accuracy review system that represents an important step forward in measuring the accuracy of the regional offices' adjudication of disability claims and in providing data to identify error-prone cases and correct the causes of errors; (2) to improve the accountability of its service delivery networks and all other VBA organizational units, VBA implemented, at the start of the fiscal year 1999, a performance evaluation system called the balanced scorecard; (3) VBA believes this new approach will drive organizational change; provide feedback to employees on measures they can influence; and link performance appraisal and reward systems to performance measures, thereby providing incentives to managers to work as teams in meeting performance measures; (4) VBA plans to identify the necessary employee skills and work processes for every decisionmaking position, implement skill certification or credentialing for these positions, and implement performance-based training connected to measurable outcomes; (5) VBA's goal is to develop data systems that enable forecasting and are reliable, timely, accurate, honest, flexible, and integrated across the organization; (6) toward this end, VBA has completed or has in process a variety of actions, such as establishing an office to manage the process of improving data systems, developing a system for capturing detailed data on regional office disability rating decisions, acquiring actuarial assistance in developing forecasting capabilities, establishing a data inventory, and developing a data validation methodology; (7) despite progress, VBA still has much to do in addressing issues related to accuracy in adjudicating disability claims; (8) even with the improvements provided by the new accuracy measurement system, VBA's ability to identify error-prone cases and target corrective actions is constrained by the limited data that it captures on: (a) the medical characteristics of veterans whose claims are processed incorrectly; and (b) why medical evidence is deficient; (9) the Congressional Commission on Servicemembers and Veterans Transition Assistance stated that some VBA regional offices may be so small that their disproportionately large supervisory overhead unnecessarily consumes personnel resources; (10) VBA needs to improve its success in placing disabled veterans in jobs; and (11) GAO and others suggest that making dramatic gains in some areas may require changes in the design of the programs.