B-114329, DEC. 9, 1959

B-114329, DEC. 9, 1959

TO THE HONORABLE SUMNER G. WHITTIER, ADMINISTRATOR, VETERANS ADMINISTRATION:

REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 6, 1959, REQUESTING OUR DECISION RELATIVE TO THE PROCESSING OF CLAIMS SUBMITTED BY CORRESPONDENCE SCHOOLS FOR ADMINISTRATIVE ALLOWANCES AUTHORIZED TO BE PAID TO EACH INSTITUTION REQUIRED TO SUBMIT REPORTS AND CERTIFICATES TO THE ADMINISTRATOR UNDER TITLE II, SECTION 262 OF THE ACT OF JULY 16, 1952, P.L. 82-550, 66 STAT. 663, 678, AS CONSTRUED BY THE COURT OF CLAIMS JULY 16, 1958, IN RADIO-TELEVISION TRAINING ASSOCIATION V. UNITED STATES, 163 F.SUPP. 637, AND THE COURT'S SUPPLEMENTAL ORDER OF DECEMBER 3, 1958, AND COMPANION CASES.

IT IS STATED IN YOUR LETTER THAT THESE CLAIMS COVER THE PERIOD PRIOR TO JUNE 19, 1959, THE EFFECTIVE DATE THE REGULATIONS OF YOUR AGENCY PROHIBITING THE PAYMENT OF SUCH ALLOWANCES TO CORRESPONDENCE SCHOOLS WERE AMENDED TO PERMIT PAYMENT THEREOF PROSPECTIVELY ONLY, 38 C.F.R. 21.2303; THAT YOU HAVE RECEIVED SOME AND ARE EXPECTING TO RECEIVE ADDITIONAL CLAIMS FROM ALL CORRESPONDENCE SCHOOLS (INCLUDING THE SCHOOLS INVOLVED IN THE LITIGATION TO COVER PERIODS NOT INCLUDED IN THE JUDGMENTS RENDERED) FOR ALLOWANCES EXTENDING BACK TO 1952; AND THAT THE NUMBER OF SUCH CLAIMS MAY RUN AS HIGH AS ONE HUNDRED WITH AN AGGREGATE VALUE OF APPROXIMATELY $322,000. IT IS ALSO STATED IN YOUR LETTER THAT EACH OF YOUR REGIONAL OFFICES HAS BEEN REQUESTED TO FURNISH BILLING INSTRUCTIONS TO APPROVED CORRESPONDENCE SCHOOLS UNDER ITS JURISDICTION; THAT IN ACCORDANCE WITH THESE INSTRUCTIONS THE CLAIMS RECEIVED WILL BE GROUPED BY REGIONAL OFFICE, ITEMIZED AS TO NAME AND CLAIM NUMBER OF THE VETERAN, NAME OR NUMBER OF THE CERTIFICATION OR REPORT, AND THE DATE OF SUBMISSION TO THE VETERANS ADMINISTRATION, AND WILL BE FURTHER BROKEN DOWN TO SHOW THE AMOUNT OF THE OVERALL CLAIM APPLICABLE TO EACH REGIONAL OFFICE. IT IS ASSUMED THAT THIS ACTION HAS NOT BEEN TAKEN UNLESS CLAIMS WERE INITIATED BY THE INSTITUTIONS.

WE CONCUR WITH YOUR VIEW THAT UNDER THE EXISTING CIRCUMSTANCES THE PRINCIPLES ENUNCIATED IN THE COURT'S DECISION SHOULD BE APPLIED ADMINISTRATIVELY TO OTHER CORRESPONDENCE SCHOOLS SIMILARLY CIRCUMSTANCED WITHOUT REQUIRING ENFORCEMENT OF THEIR CLAIMS BY COURT ACTION. WE ALSO AGREE THAT THE SETTLEMENT OF THESE CLAIMS SHOULD BE ACCOMPLISHED AS EXPEDITIOUSLY AS POSSIBLE WITH A MINIMUM OF ADMINISTRATIVE EXPENSE.

A COPY OF MEMORANDUM INSTRUCTIONS DATED DECEMBER 31, 1958, TO THE MANAGERS OF ALL VA REGIONAL OFFICES AND THE VETERANS BENEFITS OFFICE SETTING OUT THE AUDIT CRITERIA AND PROCEDURE PRESCRIBED FOR THE CONSIDERATION OF CORRESPONDENCE SCHOOL CLAIMS FOR ADMINISTRATIVE ALLOWANCES UNDER PUBLIC LAW 550 WAS FORWARDED WITH YOUR LETTER TOGETHER WITH A COPY OF SUPPLEMENTAL MEMORANDUM DATED FEBRUARY 27, 1959. INDICATED AT A CONFERENCE ON DECEMBER 1, 1959, BETWEEN OUR RESPECTIVE REPRESENTATIVES IT IS UNDERSTOOD THAT THIS CRITERIA AND PROCEDURE WHICH RELATES TO CLAIMS SUBMITTED BY INSTITUTIONS ON THE BASIS OF JUDGMENTS OBTAINED FROM THE COURT OF CLAIMS, WILL BE REVISED FOR APPLICATION TO CLAIMS BY OTHER CORRESPONDENCE SCHOOLS SIMILARLY SITUATED.

IT IS STATED IN YOUR LETTER THAT IF ONE HUNDRED PERCENT AUDIT OF THE CLAIMS BY THE VETERANS ADMINISTRATION IS REQUIRED CONSIDERABLE DIFFICULTY AND EXPENSE ARE ANTICIPATED DUE PRIMARILY TO THE FACT THAT THE RECORDS OF THE VETERANS CONCERNED ARE SCATTERED BETWEEN 67 DIFFERENT OFFICES, REQUIRING A BREAK-DOWN OF THE CLAIMS RECEIVED FROM EACH CORRESPONDENCE SCHOOL FOR REFERRAL TO THE APPROPRIATE OFFICE FOR AUDIT. YOU ALSO POINT OUT THAT THE PROBLEM IS FURTHER COMPLICATED BY VIRTUE OF NUMEROUS TRANSFERS OF RECORDS BETWEEN OFFICES DURING THE SEVEN-YEAR PERIOD INVOLVED; THAT THE OFFICE HAVING JURISDICTION OF THE RECORDS AT THE TIME THE VETERAN WAS PURSUING A CORRESPONDENCE COURSE MAY, OR MAY NOT, BE THE OFFICE HAVING CURRENT JURISDICTION OF THE RECORDS, AND THEREFORE, THE PROCESSING OF CLAIMS TO THE CURRENT OFFICE OF JURISDICTION FOR EXAMINATION AND AUDIT WOULD CONSEQUENTLY BECOME A TIME CONSUMING TASK. ADDITIONALLY, YOU STATE THE AUDIT ITSELF IS EXTREMELY COSTLY AS IT IS GENERALLY NECESSARY TO SECURE THE INDIVIDUAL FILE MAINTAINED FOR EACH VETERAN BEFORE THE ACTUAL RECEIPT OF A REPORT CAN BE VERIFIED.

UNDER THE THIRD ALTERNATIVE METHOD SUGGESTED IN YOUR LETTER IN LIEU OF A HUNDRED PERCENT AUDIT, IT IS PROPOSED TO AUDIT ALL INDIVIDUAL CLAIMS RELATING TO VETERANS WHOSE RECORDS ARE AVAILABLE AT THE OFFICE HAVING JURISDICTION AT THE TIME TRAINING BY CORRESPONDENCE WAS FURNISHED, AND TO PROJECT THE ERROR RATE FOUND ON THE AUDITED CASES TO THOSE CASES TRANSFERRED TO OTHER OFFICES. IT IS OUR OPINION THAT THIS METHOD IS REASONABLE UNDER THE CIRCUMSTANCES AND THAT ALL OF THE CLAIMS SHOULD BE SO VERIFIED.

THE CLAIMS IN QUESTION WILL COVER CHARGES FOR SERVICES RENDERED FOR THE PERIOD 1952 THROUGH JUNE 18, 1959. THE AMOUNTS FOUND DUE THEREUNDER ARE PROPERLY CHARGEABLE TO THE FISCAL YEAR IN WHICH THE OBLIGATIONS WERE INCURRED, THAT IS, THE FISCAL YEAR IN WHICH THE REPORTS WERE RECEIVED BY YOUR AGENCY, AND MAY BE PAID ADMINISTRATIVELY FROM FUNDS AVAILABLE FROM THE UNOBLIGATED BALANCES FOR THE FISCAL YEARS 1958 AND 1959, AND THE "M" APPROPRIATION FOR PRIOR YEARS.