Summary
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.
In 2006, most of the over 500,000 VA pensioners had nonpension incomes well below the federal poverty level, were beyond retirement age, and had multiple impairments, and the population has been decreasing in number. The average annual reported income of these pensioners, excluding their VA pensions, was less than $5,000. The average age of VA pensioners was 70. More than 80 percent had no spouse or dependent children. Three-fourths of veteran pensioners had multiple impairments. After reaching a peak of almost 2 million in 1978, the overall size of the pensioner population has gradually decreased, although the number of pensioners from more recent service periods has been increasing. VA policies and procedures are not sufficient to ensure sound decisions on new pension claims. Unlike other federal agencies with similar income-based programs, VA largely does not independently verify the accuracy of financial information provided by claimants to support initial pension program eligibility. In addition, the guidance used by staff to make pension eligibility decisions is not always current or clear. Further, VA's quality assurance review process for initial claims does not select a sufficient number of pension cases to ensure the accuracy of pension claims decisions. Finally, VA does not adequately evaluate training for pension staff. VA procedures for assessing whether pensioners continue to receive the proper benefits have significant limitations. Although the agency requires pensioners to report changes that might affect their pensions, VA does not require documentation such as bank or asset statements when pensioners report financial changes. Also, a key data match operation with the Internal Revenue Service is not conducted in a timely or efficient manner. Finally, despite millions of dollars in improper pension payments made each year, VA lacks a system to monitor and analyze their causes.
Recommendations
Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director:
Team:
Phone:
Daniel Bertoni
Government Accountability Office: Education, Workforce, and Income Security
(202) 512-5988
Recommendations for Executive Action
Recommendation: 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.
Agency Affected: Department of Veterans Affairs
Status: Open
Comments: VA has taken steps to improve the timeliness of pension claims processing. For example, VA increased resources dedicated to claims processing, consolidated pension claims to its three Pension Maintenance Centers, and released enhancements to its computer system to maximize efficiency in fiscal year 2008. However, as of August 2009, VA has not completed steps to improve the accuracy of pension claims, such as requiring pensioners to submit supporting documentation or implementing its recent data sharing arrangement with the National Directory of New Hires.
Recommendation: 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.
Agency Affected: Department of Veterans Affairs
Status: Open
Comments: VA has taken steps to improve its quality assurance review by doubling the number of rating related cases selected for quality reviews beginning in fiscal year 2009. However, because doubling the entire sample size does not significantly increase the number of pension cases, we have asked the agency to provide information on the actual numbers of pension claims selected for quality assurance review. That information is pending as of August 2009.
Recommendation: 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.
Agency Affected: Department of Veterans Affairs
Status: Closed - implemented
Comments: 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.
Recommendation: 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.
Agency Affected: Department of Veterans Affairs
Status: Open
Comments: VA has considered ways to improve the effectiveness of the eligibility verification review process. Two improvements currently under consideration are 1) transitioning the process to a new computer application that will automatically take steps previously done manually and 2) implementation of data matching agreement with the National Directory of New Hires.
Recommendation: 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.
Agency Affected: Department of Veterans Affairs
Status: Closed - implemented
Comments: 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.
Recommendation: 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.
Agency Affected: Department of Veterans Affairs
Status: Open
Comments: VA has delayed its analysis of its quality assurance (STAR) data to determine the causes of improper pension payments. Based on the outcome of this analysis, VA will identify and implement feasible system and/or process interventions to minimize improper payments. In addition, VA's Office of Finance has drafted a report format with instructions for the Veterans Health Administration to report the causes of errors for reporting in the Annual Performance and Accountability Report.
