This is the accessible text file for GAO report number GAO-03-906 
entitled 'Veterans Benefits Administration: Process for Preventing 
Improper Payments to Deceased Veterans Can Be Improved' which was 
released on July 24, 2003.

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Report to the Secretary of Veterans Affairs:

United States General Accounting Office:


July 2003:

Veterans Benefits Administration:

Process for Preventing Improper Payments to Deceased Veterans Can Be 

VBA Payments to Decreased Beneficiaries:




Results in Brief:


VBA's Death Match Process Does Not Identify All Veterans Receiving 
Improper Disability Payments:


Recommendations for Executive Action:

Agency Comments:


C&P: Compensation and Pension:

SSA: Social Security Administration:

VBA: Veterans Benefits Administration:

United States General Accounting Office:

Washington, DC 20548:

July 24, 2003:

The Honorable Anthony J. Principi 
Secretary of Veterans Affairs:

Dear Mr. Secretary:

In fiscal year 2002, the Veterans Benefits Administration (VBA) paid 
about $22.4 billion in disability compensation to over 2.6 million 
veterans and their survivors and about $3.3 billion in pension benefits 
to about 581,000 veterans and their survivors.[Footnote 1] To ensure 
that VBA makes proper payments under these programs, we reviewed the 
effectiveness of VBA efforts to prevent payments to deceased veterans 
by matching its Compensation and Pension (C&P) Master Records database 
of current beneficiaries with the Social Security Administration's 
(SSA) Death Master File.

To conduct our review, we matched VBA's C&P Master Records database of 
current beneficiaries[Footnote 2] with the entire SSA Death Master 
File, which contains information dating back to 1980 on deceased 
individuals.[Footnote 3] We matched name, address, and social security 
number of deceased persons with 857 veterans' or survivors' records. Of 
these, we reviewed 28 case files at four VBA regional offices where we 
were conducting other ongoing work.[Footnote 4] We interviewed VBA 
regional office and headquarters officials regarding the results of our 
database match. We also obtained background information, including a 
Department of Veterans Affairs, Office of the Inspector General, report 
on VBA efforts to discontinue improper payments made to deceased 
beneficiaries.[Footnote 5] We conducted this review from January 2003 
to May 2003 in accordance with generally accepted government auditing 

Results in Brief:

We found a vulnerability in VBA's interagency database matching process 
that results in improper payments to deceased veterans. Specifically, 
VBA's process does not identify veterans who died during the 
application process and were given improper benefit payments after 
their deaths. In addition, we found that VBA's compensation and pension 
program staff did not always follow internal control procedures and 
take action to suspend benefits and recover improper payments based on 
evidence that a beneficiary had died. We are making recommendations to 
address the problems we identified. VBA agreed with our findings and 
commented that it would undertake a review of the cases we identified 
to ensure a cost-effective solution to addressing the vulnerability in 
the current matching process.


Each month, VBA conducts a "death match" to compare its C&P Master 
Records database of current beneficiaries with individuals on SSA's 
Death Master File. VBA uses a database with information on all active 
disability beneficiaries and matches it with SSA data that contains 
information on deceased individuals only for the most recent month. In 
the event there are matches, VBA forwards the information to the 
appropriate regional offices for confirmation, and if the beneficiary 
is deceased, follow-up action is taken to stop payments and recover 
funds improperly paid after the beneficiary's death.[Footnote 6]

VBA's Death Match Process Does Not Identify All Veterans Receiving 
Improper Disability Payments:

VBA's death match process does not identify veterans who died while 
waiting for claims decisions and were improperly paid benefits after 
their deaths. This happens because information on a veteran who dies 
during the application process and is approved for benefits months 
later would not appear in both the VBA and SSA databases at the same 
time, thus precluding the possibility of a match.[Footnote 7] At the 
time of death, information on the applicant would be in the SSA 
database but not in the VBA database, which does not contain 
information on applicants.[Footnote 8] Should this veteran be approved 
for benefits months later, information on this beneficiary would be 
placed in the VBA database. However, subsequent death matches would not 
identify the veteran because VBA compares its database of beneficiaries 
only against the most recent month of information on SSA's Death Master 

We identified two claims for disability compensation benefits that 
illustrate our concerns. In one case, processed by the Phoenix Regional 
Office, a veteran who applied for benefits in February 1999, died in 
June 1999, and was approved to receive benefits 9 months after his 
death, was not identified in the death match. Moreover, at the time of 
our review, VBA was still making payments to the deceased veteran, 
although he had died about 3 years earlier and his benefit checks were 
being returned. Regional officials could not explain why no action was 
taken in this case.

In the second case, processed by the Boston Regional Office, a veteran 
who applied for benefits in April 2001, died in October 2001, and was 
approved for benefits in April 2002, was not identified in the death 
match. Moreover, at the time of our review, no action was taken to 
recover an improper payment made to this individual. Boston Regional 
Office officials informed us that once they have confirmed the death of 
a beneficiary, agency policy requires that steps be taken to identify 
whether any improper payments were made to the deceased beneficiary and 
recover these funds.[Footnote 9] Regional officials could not explain 
why the family was not contacted to request return of the funds 
improperly paid after the beneficiary's death.


The systemic vulnerability we identified raises concerns about the 
potential for VBA to improperly pay benefits to veterans who die during 
the application process. The examples we found illustrate that VBA is 
currently making improper payments as a result of this vulnerability. 
We do not know the full extent of this problem but, at the very least, 
our match identified an additional 829 beneficiaries who may be 
receiving improper payments that we did not examine. These examples 
also raise concerns about the extent to which VBA's compensation and 
pension program staff adhere to internal control procedures and act on 
evidence that beneficiaries may have died, such as checks that are 

Recommendations for Executive Action:

To improve the effectiveness of VBA's efforts to prevent improper 
payments to deceased veterans, we recommend that you instruct the Under 
Secretary for Benefits to:

* expand VBA's death match process beyond current disability program 
beneficiaries to include comparing its list of claimants against the 
individuals listed in SSA's Master Death File,

* review the 829 matched cases that were not included in our assessment 
to (1) determine whether and to what extent these beneficiaries 
received improper payments after having died and (2) recover improper 
payments when appropriate, and:

* issue guidance that restates the importance of following internal 
control procedures and acting on evidence that a beneficiary may have 
died to ensure that VBA's compensation and pension program staff are 
fully complying with the agency's internal control procedures.

Agency Comments:

We received oral comments on a draft of this report. VBA agreed with 
our findings and recommendation that the agency issue guidance 
restating the importance of following internal control procedures and 
acting on evidence that a beneficiary may have died. VBA also agreed in 
principle with our recommendation to reduce improper payments to 
deceased veterans. However, VBA stated that, before expanding the death 
match process to include claimants, the agency would prefer to review 
the 829 matched cases that were not included in our assessment in order 
to obtain a better understanding of the problem and assure that the 
agency deals with this problem in the most cost-effective manner. We 
support VBA's effort to seek a cost-effective process to address this 
vulnerability but emphasize that any systemic vulnerability could 
undermine program integrity.

We are sending copies of this report to the appropriate congressional 
committees and other interested parties. This report is also available 
on GAO's Web site at If you have questions, please 
contact me at (202) 512-7101 or Irene Chu at (202) 512-7102. Also 
contributing to this report were Joseph Natalicchio, Martin Scire, and 
Gregory Whitney.

Sincerely yours,

Cynthia Bascetta, 
Education, Workforce, and Income Security Issues:


[1] Disability compensation is made available to veterans with service-
connected disabilities. Pensions are made available to wartime veterans 
who have low incomes and are permanently and totally disabled for 
reasons that are not service related.

[2] As of January 2003, VBA's C&P database contained approximately 3.2 
million records on veterans and their survivors who receive such 

[3] As of January 2003, SSA's Master Death File database contained 
about 70 million records.

[4] These regional offices are located in Boston, Mass; Houston, Tex.; 
Phoenix, Ariz.; and St. Petersburg, Fla.

[5] The Department of Veterans Affairs Office of Inspector General on 
February 6, 1998, issued a report, entitled Audit of Veterans Benefits 
Administration SSA/VA Death Match Procedures (Report No. 8R4-B01-069), 
which found that VBA had made an estimated $3.96 million in improper 
payments to deceased beneficiaries. 

[6] Depending on when VBA establishes the onset of the disability, an 
applicant who dies before VBA rules on eligibility for benefits may be 
entitled to retroactive benefits for a period of time prior to his 
death. Such a payment would become property of the veteran's estate. 

[7] A veteran might appear in both databases simultaneously if VBA 
approves benefits very soon after death and the information is quickly 
reported to SSA.

[8] VBA does not rely entirely on the death match procedure to identify 
deceased beneficiaries of its disability compensation and pension 
benefits programs. Often, next-of-kin, guardians, or friends inform VBA 
of the death of the beneficiary.

[9] Generally, the Department of Veterans Affairs first seeks to 
recover the funds voluntarily. However, if voluntary recovery is not 
possible, the agency considers several factors in deciding whether to 
pursue legal action to make recovery. These include the total amount of 
the improper payments; the extent to which the individuals who received 
these payments sought to defraud the government (e.g., forged the 
deceased veteran's signature on official forms); and the age, health, 
and economic condition of the individual who received these payments. 

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