[House Hearing, 109 Congress]
[From the U.S. Government Printing Office]



 
                          DEVELOPMENT OF THE VETERANS
                        BENEFITS ADMINISTRATION'S ANNUAL
                                    BUDGET
---------------------------------------------------------------------

                                  HEARING

                                 BEFORE THE

                      COMMITTEE ON VETERAN'S AFFAIRS

                         HOUSE OF REPRESENTATIVES

                   SUBCOMMITTEE ON DISABILITY ASSISTANCE
                            AND MEMORIAL AFFAIRS

                        ONE HUNDRED NINTH CONGRESS

                                FIRST SESSION
                                  __________

                               NOVEMBER 3, 2005
                                   ---------

          Printed for the use of the Committee on Veterans' Affairs

                               Serial No. 109-27

                                  __________



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                           DEVELOPMENT OF THE VETERANS
                      BENEFITS ADMINISTRATION'S ANNUAL BUDGET
                                     REQUEST

                         Thursday, November 3, 2005

                        U.S. House of Representatives,
                        Subcommittee on Disability Assistance and
                        Memorial Affairs,
                        Committee on Veterans' Affairs,
                                              Washington, D.C.


The Subcommittee met, pursuant to call, at 2:00 p.m., in Room 334, 
Cannon House Office Building, Hon. Jeffrey Miller [Chairman of the 
Subcommittee] presiding. 
Present:  Representatives Miller, Berkley, Udall, and Evans. 
Mr. Miller.  Good afternoon, everybody.  This hearing will come to 
order.	I do want to open by saying I appreciate everybody reworking 
their schedules from the last scheduled time to be here with us.  
Today we are meeting to receive testimony on the development of 
VBA�s annual budget.  The Subcommittee is prepared to explore the 
process and the assumptions used by VBA to project the workload and 
the workforce trends that are then used to formulate the annual 
budget. 
	Earlier this year, in the context of the VA health care, we 
learned that given the limitations of the federal budget process and 
the dynamic nature of health care, VA�s budget projection models can 
and have failed.  When models fail in the context of health care, 
Congress must appropriate additional funds or VA may have to reduce 
services provided to our veterans. 
	It is important to note that the benefits provided by VBA in 
the form of compensation, pension, and other monetary benefits are 
entitlement programs which Congress is obligated to pay. 
	However, the administrative costs of claims adjudication 
are discretionary funds, which are subject to annual 
appropriations. 
	Therefore, the accurate projection of workforce and workload 
trends has a direct impact on the claims adjudication process.  
These projections are the basis for the discretionary appropriation 
request.  And if VBA's projections fail, VBA may not have the 
resources necessary to timely and accurately adjudicate claims. 
	The Claims Processing Task Force Report, which Admiral 
Cooper chaired, stated in October of 2001 that, quote, VBA's 
workload will continue to remain dynamic.  To expect the workload 
to return to some normalized, predictable level is not reasonable, 
end of quote. 
	Admiral Cooper, we hope to better understand how VBA in 
light of this dynamic nature projects its workload and workforce 
trends to formulate its budget to ensure that VBA accomplishes the 
mission.  I intend this to be the first in a series of such hearings. 
         [The statement of Mr. Miller appears on p. 20] 

	Mr. Miller.  I now recognize our Ranking Member, Ms. Berkley, 
for her opening statement. 
	Ms. Berkley.  Thank you, Mr. Chairman, for holding this 
hearing and thank you all for being here.  I appreciate it. 
	I have a number of questions and I am going to include a 
number of them in my testimony in case I get called to the floor. 
	Unlike the Veterans Health Administration, most of the 
Veterans Benefit Administration�s budget is mandatory rather than 
discretionary spending.  And I appreciate that you have little 
control over mandatory spending. 
	What I would like to do is focus on VBA's projections of 
new claims and staffing needs.  I am particularly concerned that VBA 
does not have the adequate number of staff to do the job that we are 
asking them to do. 
	In fact, the number of new claims involving eight or more 
issues has more than doubled in the last five years.  These are 
the most complex claims to decide, yet increases in staff have not 
kept up with the increase in the workload, particularly the 
complexity of it. 
	I am also concerned that the number of appeals has more 
than doubled in the past five years.  And I fear that we are pushing 
overworked staff to quickly decide claims which may result in errors 
and more staff and time in order to correct the mistakes. 
	VA's Inspector General recently reported that most rating 
specialists and decision review officers who consider appeals do 
not believe that the VA Regional Offices have sufficient rating 
staff.
	With the increase in claims, especially the more complex 
ones, and appeals compared to the current staffing levels, I have 
to agree with the Inspector General. 
	During our recent hearings on PTSD claims, the acting 
Inspector General indicated that VBA may only need to look at the 
2,100 cases under review rather than the proposed 72,000.  He said 
that issue is worthy of discussion. 
	At the same hearing, Mrs. Brown-Waite, who sits on this 
Subcommittee, raised concerns about the impact of the proposed 
72,000 review on claims currently in the pipeline.  I share her 
concerns and have questions regarding the process. 
	How many additional staff would VBA need to proceed on the 
proposed additional review of PTSD claims in 2006 without 
jeopardizing the accuracy and timeliness of claims currently in the 
system and future claims?  Has there been any estimate of the cost 
of conducting this review?  Will additional funds be needed?  Are 
these costs included in the budget for 2006? 
	The VBA failed to meet its projected target for pending 
claims at the end of fiscal year 2005 and the number of claims 
received was substantially higher than projected. 
	To what extent was the low-balling, and I do not say that 
in a derogatory sense, the low-ball projection for claim receipts 
and lack of staff responsible for the failure to meet projected 
targets for pending claims? 
	I would like to know what is being done to provide more 
accurate projections of workload and staffing needs. 
	For fiscal year 2005 and 2006, VBA was awarded one-time 
money to improve claims processing.  I believe that we are likely 
to fall even further behind if these funds are not included in the 
administration's budget for 2007.  What happens if those funds no 
longer exist? 
	I am almost done, Mr. Chairman. 
	Also the VA is currently working under a continuing 
resolution, so I assume the ability to add any additional staff or 
make other expenditures is quite limited. 
	I hope that you can discuss the impact on VBA's budget when 
fiscal year funding is delayed by months and months. 
	In addition, it appears for the past several years VA has 
 underestimated the amount of pay increase and when a higher amount 
is enacted, VA must adjust its spending.  For fiscal year 2006, an 
increase of 2.3 percent was projected, but 3.1 percent is now 
expected. 
	How does the VA project the annual pay adjustment provided 
to its employees?  How will the VBA be able to accommodate this 
increase?  Where does the money come from?  Is it from heaven or do 
we take it from equipment and travel and everything else? 
	We all know that this year, Congress had to provide 
supplemental funding for the VA due to inadequate budget projections 
for discretionary spending.  We need to be sure that funding for the 
administration of the Compensation and Pension Program and the 
staffing of regional offices is adequate to provide veterans with 
accurate and timely decisions. 
	Unfortunately, the prepared testimony that I had an 
opportunity to review in a very cursory manner lacks specificity 
needed for proper oversight.  I truly appreciate your willingness 
to provide additional data which I requested concerning claims 
receipts over the past five years.  I ask that to be included in 
the record. 
	[The information is found on pgs. 25-27.] 

	And I want to thank you again for being here.  I know you do 
not have an easy job.  And I would like to be as helpful as possible 
in making your job easier. 
	Mr. Miller.  Without objection, your request will be added 
into the record. 
	[The statement of Ms. Berkley appears on p. 23] 
 
	Mr. Miller.  Mr. Evans. 
	Mr. Evans.  Thank you, Mr. Chairman.  I want to thank Ranking 
 Member Berkley as well.  I forgot to ask her how many veterans are 
in her district. 
	Ms. Berkley.  Funny you should ask.  Fastest-growing veterans 
population in the United States. 
	Mr. Evans.  Okay.  They all live in Illinois, I guess. 
	Ms. Berkley.  Two hundred thousand. 
	Mr. Evans.  Well, thank you. 
	I am concerned that the VA budgets have not matched the need 
for care and services for our veterans, that our veterans have. 
	As Veterans Day approaches, the administration seems more 
interested in reducing benefits to seriously disabled veterans than 
providing adequate staff to meet VBA�s growing workload. 
	More veterans are applying for benefits.  More veterans are 
appealing decisions that they believe are erroneous. Staff who will 
process these claims and appeals have not kept up with these 
increases. 
	VA employees perceive that the quantity not quality is 
recognized and rewarded.  VBA�s budget methodology must assure that 
adequate staff based upon real numbers, real needs, real problems, 
and real choices for veterans who have served their country. 
	I want to thank all the witnesses and look forward to your 
testimony. 
	Thank you, Mr. Chairman, for this opportunity to participate 
in this important hearing. 
	Mr. Miller.  Thank you, Mr. Evans. 
	I welcome the panel of witnesses today. 
	Admiral Cooper, I appreciate you being with us.  Most of the 
members of the Committee are well aware of his distinguished career, 
graduating from the Naval Academy in 1957, followed by a 33-year 
career in the Navy. 
	In April of 2001, Secretary Principi asked Admiral Cooper to 
head the Claims Processing Task Force to examine the benefits system 
at large and make recommendations the department could implement 
without Congressional action. 
	Subsequent to chairing that Task Force, President Bush 
nominated  Admiral Cooper to serve as Under Secretary of Benefits 
and he assumed that post April 2nd of 2002. 
	Admiral, we all look forward to your testimony.  Please 
proceed. 

STATEMENT OF DANIEL L. COOPER, UNDER SECRETARY 
	FOR BENEFITS, VETERANS BENEFITS ADMINISTRATION; 
	ACCOMPANIED BY JAMES W. BOHMBACH, CHIEF  
	FINANCIAL OFFICER, VETERANS BENEFITS ADMINISTRA- 
	TION; RENEE L. SZYBALA, DIRECTOR, COMPENSATION 
	AND PENSION SERVICES, VETERANS BENEFITS ADMINI- 
	STRATION; MICHAEL WALCOFF, ASSOCIATE DEPUTY  
	UNDER SECRETARY FOR FIELD OPERATIONS, VETERANS 
	BENEFITS ADMINISTRATION 

STATEMENT OF DANIEL L. COOPER 

	Mr. Cooper.  Thank you, Mr. Chairman. 
	Mr. Chairman, members of the Subcommittee, thank you for 
the opportunity to appear before you today to discuss the budget 
formulation and the process we use in the Compensation and Pension 
Program. 
	I am pleased to be accompanied by Ms. Renee Szybala, who is 
the Director of the Compensation and Pension Service; Mr. James 
Bohmbach, our Chief Financial Officer; and Mr. Michael Walcoff, who 
is the Associate Deputy Under Secretary for Field Operations. 
	My opening remarks will be brief and I respectfully request 
that my full testimony be made a part of the record. 
	In fiscal year 2005, the total obligations for C&P were 
32.5 billion.  Of that amount, $1 billion was for discretionary 
funding or our general operating expenses, the vast majority of 
which is for personnel or FTE. 
	The 32.5 billion was for mandatory funding to pay the 
benefits that we administer to the veterans, their survivors, and 
their dependents. 
	Last fiscal year, VBA produced over two million award 
actions, 763,000 of which were disability rating determinations 
in connection with claims for disability benefits. 
	We handled over 6.3 million phone calls.  We conducted over 
a million interviews.  We provided nearly 8,200 briefings for more 
than  330,000 service personnel as they returned from OIF, OEF, and 
so on.  We conducted nearly 70,000 hours of outreach. 
	As these figures emphasize, VBA�s primary role is serving 
veterans.  That role is extensive and complex.  So our budget 
formulation process must take into account a myriad of factors in 
order to establish a found basis for projecting our resource needs. 
	Each factor has its own set of assumptions and several of 
the factors have great variance from one fiscal year to the next. 
	Projecting the incoming workload, that is primarily the 
number of new and resubmitted claims we can expect, is the starting 
point for developing the FTE requirements in our discretionary 
budget. 
	The number of claims receipts is projected based on 
historical trends and anticipated external factors.  Interestingly, 
despite the unprecedented level of claims that we have seen, the 
level of incoming each year still seems to increase. 
	FTE requirements dominate our discretionary funding needs. 
 To determine FTE levels, we analyze our current performance.  We 
try to establish performance goals and targets and we make 
assumptions relative to future performance. 
	Adjustments to the direct labor personnel requirements are 
made based upon those performance assumptions and goals as well as 
other factors, such as anticipated improvements, planned, process, 
and management efficiencies, various initiatives, mandatory training, 
and the experience levels of the employees. 
	There are also external influences which are less 
predictable, such as legislative changes, judicial decisions, and 
the guardianship and outreach activities that we must do. 
	We as all effective organizations must ensure that we fully 
consider a proper mix of management oversight, workforce training, 
and initiatives to improve our effectiveness and efficiencies in 
future years. 
	Over the past ten years, VA�s budget for the C&P mandatory 
benefits has increased by 83 percent to the current $32.5 billion.  
If we exclude additional annual COLAs, those obligations increase 
by 49 percent. 
	In the past ten years, the number of veterans on the 
compensation rolls has increased from 2.2 million to 2.6 million 
this year and the average annual payment for veteran has increased 
from $5.2 thousand to $9.4 thousand. 
	VBA has developed a benefits budget forecasting model based 
on detailed historical data and recent trends in workload and 
accession rate.  This model then projects both the number of veterans 
expected to receive benefits and the average amount of benefits to be 
paid in the next ten years. 
	We estimate, using a discretionary budget formulation 
process, the expected number of both new and reopened claims which 
will be completed each year, we estimate the percent of those claims 
that will be granted and then use this accession rate to project 
additions to the compensation rolls. 
	To forecast total mandatory obligations, we must also 
estimate the average value of payments to be paid to veterans and we 
have seen significant increases in veterans� degree of disability, 
the number of veterans receiving individual unemployability, and 
veterans receiving special monthly compensation. 
	The most recent ten-year plan projects a $21 billion 
increase in the annual veterans� compensation payment total by the 
year 2015, thus continuing the trend seen over the past decade. 
	As I have described, projections of incoming claims workload 
are key to the formulation to both our mandatory and our 
discretionary budget requests.  The number of veterans filing 
disability compensation claims has increased every year since 2000, 
growing by 36 percent between 2000 and 2005, this last fiscal year. 
	The ongoing hostilities in Afghanistan and Iraq are expected 
to continue to add to the compensation workload.  In 2004, original 
claims increased 17 percent.  In 2005, we saw an additional eight 
percent increase.  We believe these increases are directly related 
to our aggressive outreach programs for separating service members. 
	Interestingly, the numbers of claims resubmitted by veterans 
who were already service connected and on our rolls are also 
increasing each year.  Since 2000, the numbers have increased 42 
percent and that number makes up about 56 percent of our total 
rating claims workload each year. 
	Since the addition of diabetes mellitus type II to the list 
of Agent Orange presumptive conditions in 2001, about 200,000 
veterans have been compensated for diabetes. 
	The increased number of compensation recipients, many of 
whom suffer from chronic progressive disabilities, will continue to 
drive more claims for increased benefits in the coming years as 
veterans age and their conditions worsen. 
	There has also been a significant change in the processing 
procedures since the enactment of �Veterans Claims Assistance Act� 
of 2000. 
	VA's notification and development requirements increased, 
adding more steps to the claims process and the time that it takes 
to develop and properly adjudicate a claim. 
	The impact of all these factors and others, which may be 
more subtle and difficult to measure, must be considered as we 
attempt to formulate our budget. 
	As I have described, formulation is based on a complex 
combination of historical data, current experience, workload, 
performance assumptions, and independent variables. 
	Our budget evolves as these factors are refined, revised, 
and revisited.  It is mandatory that we estimate and project our 
budget needs to the best of our ability. 
	VBA�s mission is to serve deserving disabled veterans.  
That is the best mission we have in government today.  We are 
dedicated to doing it well. 
	Mr. Chairman, this concludes my statement.  We will be 
happy to answer any questions. 
	[The statement of Mr. Cooper appears on p. 28] 
 
	Mr. Miller.  Thank you very much, Admiral. 
	In fiscal year 2005, VBA estimated receiving 794,000 
rating-related claims, but actually received somewhere around 
788,000 and adjudicated 763,000-plus.  Given that VBA had 
approximately 7,500 direct FTEs to adjudicate those claims, it 
works out to about 101 claims per FTE. 
	At the current staffing levels, are you meeting your 
performance goals and is the 2006 production assumption of 109 
claims per FTE still realistic in your opinion? 
	Mr. Cooper.  First, no, sir, we are not meeting our goals.  
One of the things that happened in 2003, we worked very strongly on 
claims, initial claims and resubmitted claims.  As we did that, in 
fact the appeals went up quite dramatically. 
	As a result, I have made the decision over the last year or 
so that we need to attack across the board because we need to give 
service to all the veterans.  And as was mentioned, the appeals had 
gone up.  In fact, we have attacked appeals and we have attacked 
remands. 
	We did not meet our goals in initial claims or resubmitted 
claims, but we did do fairly well in appeals and remands in starting 
to move those down.  So in trying to attack across the board, we did 
that. 
	Secondly, we were not able to hire for a while, as you know, 
because of the continuing resolution.  We did hire in the middle of 
the year about 400 people and toward the end of the year, we hired 
about 500 additional.  All of those need to be trained and are not 
fully productive yet. 
	So my answer is, we are attempting to attack in several ways 
this thing.  We are trying to ensure that our training is proper and 
that takes time too.  So the first answer is no. 
	You asked me the question, did I think we had properly 
estimated for 2006, the answer is, yes, I think we are properly 
estimating.  I also think that if the budget decided by the Senate 
in the SAC is agreed to, if we get that budget, we will be covered 
properly. 
	Mr. Miller.  You talk about 400 new people.  How long does 
it take to actually train a new individual and consider them fully 
up to speed? 
	Mr. Cooper.  To be fully up to speed and essentially able 
to operate independently, it takes approximately two years.  We get 
them out and starting to help after about three or four months. 
	By having this central training, we at least know that we 
are training the people in the right way to do things as they then 
go back out to their various regional offices.  They then come back 
and we try to reinforce and then send them back out again. 
	So essentially they get about three to four weeks of central 
training and then the rest of it is done on the site of the regional 
offices. 
	Mr. Miller.  Why in the world does it take two years to 
train somebody to do this job? 
	Mr. Cooper.  This is a very complicated thing.  And part of 
it is how you get the records.  The records that we use to adjudicate 
are all paper records.  We are not looking at any electronic records. 
	And so as you look through each and every page and you want 
to make sure, because we have tried to push quality also, and you 
try to make sure we are looking to get even those disabilities that 
that person may not have claimed.  They may have put in for three 
issues on their claim. 
	We are training our people to look very thoroughly to ensure 
that, in fact, if there is anything else in there, that we are able 
to get it and work with the VSOs and the veteran.  We are trying to 
do everything as completely as we can. 
	But it is a complicated process and it is very difficult for 
me even after about three  --  maybe 25 years  --  but actually 
three and a half years in this job, it is difficult for me to 
understand everything that they are doing.  It is a complicated 
job.  It calls for people who are well-trained and it calls for 
people who will concentrate on doing the job properly. 
	Mr. Miller.  Can you tell me what the average length of 
service in the position is, how long they stay? 
	Mr. Cooper.  I will first say that we probably have better 
retention than the first figures I saw when I came in.  I would say 
that the average time  --  I am talking off the top of my head  --  
I would say the average time that a person stays in the VA when they 
come in is probably six to ten years. 
	Now, when we hired 400, you will find that even though we 
try to look very closely and interrogate them properly and make 
them understand what they are going to get into, you will find 
sometimes people will say the job is not what I expected.  I do not 
want to do that and it is too cumbersome.  
	And even though we try to push the importance of the 
mission, they may still decide that claim adjudication is not for 
them.  And that is fine.  If they decide, then they should go on 
somewhere else. 
	My guess is we retain in that first year maybe close to 80 
percent, a little bit more. 
	Mr. Miller.  Do you know  --  I am sure you do from exit 
interviews  --  the reasons for most people's departure?  Is it 
burnout, compensation, moving up in the system? 
	Mr. Cooper.  Part of it is moving up.  And I was just 
passed a note.  When we bring people in as veteran service 
representatives, and these are the people who first review the 
records, eventually they get promoted within our organization to 
what we call rating veterans service representatives or RVSRs. 
	Burnout, I do not think is necessarily it, but I do think if 
it is a degree of burnout to say this is not the job I want to do, 
I cannot take the pressure of doing so many claims and I am just 
unable to do this job for whatever reason, so the mutual decision 
is made by the RO director and the individual.  I think there are 
several reasons and those are a couple of them. 
	Mr. Miller.  Are there any performance-based measures in 
their job? 
	Mr. Cooper.  You bet.  After a certain amount of time, we 
have a requirement that they do so many ratings per rating period 
per day.  We look at that very closely, but we also look at quality 
too.  And we have gotten hit pretty hard that we were not paying 
attention to quality while pushing productivity so much. 
	But I would say to you that in any organization, you have 
to ensure the people are doing the work.  If somebody does one claim 
in a year, it is going to be a perfect claim, but there are going 
to be a lot of disgruntled people out there.  So, yes, we do require 
that. 
	But we also have procedures set up for people who are not 
doing well, to mentor them, to try to help them do well.  Some of 
them recover and some of them decide this is not what they want to 
do.  But it is the same in any organization if you are going to be 
successful in my mind. 
	We are trying to look at quality and make sure that the 
quality is there.  We are doing lots of things in the training arena 
too. I think we have made pretty good improvements in overall 
training throughout the organization. 
	Mr. Miller.  You stated that VCAA has significantly 
increased the length and complexity of claims development.  And at 
the end of 2005, records show it took VBA on average 168.2 days to 
process a claim. 
	So my question is, how many processing days do you attribute 
to VCAA compliance? 
	Mr. Cooper.  Well, the VCAA was a total bill.  And let me 
first say  --  of course, it came before I came into this job  --  
in my opinion, it was a very important, positive bill because it 
made us, the VA, do the job helping the veteran rather than saying, 
Mr. Veteran, you did not give us enough information so we are 
turning you down. 
	And so from what I understand historically, it is a good 
bill.  It took us a while to understand the ins and outs of the bill 
because several judicial decisions were made that said, yeah, you 
are trying, but you are not quite doing it right.  So, therefore, 
you have to revisit this and you have to make changes. 
	I hope by the time I leave this job, whenever that is, 
that we will have finally got it just about right. 
	We even had to make a change last year in the letter that 
we send out.  One of the first times I came over here to testify, 
I got the question of, the letters you send out are so complicated. 
 And so I went back and I said let us make it less complicated. 
	But it is a difficult thing to do to make a less complicated 
letter that goes to the veteran and still fulfills the notification 
 requirements.  So the letters have presented us a problem.  There 
are also certain time elements there.  One of the major ones is 
that, as soon as we receive the claim, we send a letter that 
hopefully states exactly what we need from the veteran as well as 
what we ourselves are going to do.  The veteran is allowed 60 days 
to get that information back to us. 
	Prior to that, it was my understanding that we did it in 
about 30 days, but that is not germane.  The fact is that there is a 
set time.  And, in fact, today, it appears that it is taking 
somewhere between 50 and 60 days from the time we send our letter 
until we get a response.  So already you are at the 70-day point. 
	At that point then, you are trying to send the gentleman or 
the lady on to physical exams.  As the claims get more complicated, 
one physical exam will not do it.  You have to send them for a 
couple, two or three. 
	There are just complications that we have to understand.  
I think we are slowly getting there.  I am not sure that we are 
there a hundred percent yet. 
	Mr. Miller.  Ms. Berkley. 
	Ms. Berkley.  Thank you. 
	One of the areas of concern that I mentioned during my 
opening statement was the administration�s projection of the annual 
pay adjustment for federal employees and other increases in 
personnel services. 
	For 2006, the VA's budget is based upon an expected increase 
of 2.3 percent.  The actual increase is now expected to be 3.1.  
In previous years, VBA has needed to reduce staffing when annual 
pay adjustments exceeded projections. 
	How are you planning to pay for the increased costs in 
2006? 
	Mr. Cooper.  As you rightfully state, 71 percent of our 
budget is paying people.  And, in fact, that is where most of my 
flexibility is.  When I take the other percentages, about 15 percent 
of the 29 percent I have left, in fact, goes to headquarters or goes 
to things I am obligated to do.  Half again goes to other things 
over which I have nominal control. 
	So I have about six percent left.  Some of that, determines 
whether we have IT initiatives or other training or things.  I have 
to look across the whole board and decide.  And, yes, in fact, 
sometimes I have to do it by decreasing the number of FTE that we 
have. 
	Ms. Berkley.  Wouldn�t you agree that that is 
counterproductive given the fact that we do not have enough staffing 
as it is? 
	Mr. Cooper.  Yes, ma�am. 
	Ms. Berkley.  In response to one of the Chairman�s questions, 
you talked about as soon as the ban was lifted or whatever, you were 
able to hire 400 additional FTE. 
	Is that new hires or is it backfill because I know in 
2003  --  you probably know these numbers better than I do  --  in 
2002, you had over 7,000 FTE.  In 2003, it went down to 6,886.  In 
2004, 6,784.  And now 2005, 6,880. 
	For the regional offices, are you just replacing what has 
already been taken or are these truly additions? 
	Mr. Cooper.  Both.  You know, I have to make sure I stay 
within my budget.  We know that we attrite approximately 30 a month 
across the full range of employees.  So I try to look ahead and find 
out where we are and try to keep up with that. 
	But, in fact, we have had fewer people in the last couple 
years than we had in 2003.  And I have had to make sure I look 
across the board and that we are doing the whole job and not just 
stressing only one element. 
	Ms. Berkley.  So you have got more claims, more complicated 
claims, but less FTE to do the job? 
	Mr. Cooper.  Basically that is correct, but we are working on 
getting more FTE.  And, in fact, this year, we are hiring more. 
	Ms. Berkley.  In recent budgets, you have received one-year 
money.  VBA has received one-year money that is supposed to be used 
for increased staffing. 
	What happens if the temporary funding dries up in 2007?  What 
do you do then? 
	Mr. Cooper.  We received one-year money, and I thank Congress 
for that, to help the Secretary do that.  And you are absolutely 
correct.  That gives me a type of problem wherein, when I present a 
budget and you go back to what the base budget was, there is no 
allowance for the fact that I was given some extra money to do the 
job.  It then suddenly appears if I am going to have a large increase 
in the total amount of money. 
	I think in the 2006 budget, I think we have properly 
accounted for that.  And certainly people have recognized the problem. 
	And where I needed the money was in my base.  It is good to 
get one-year money.  But as you properly state, that does not help me 
in the following years because the base is not where it should be.  
And I think that has been properly corrected. 
	Ms. Berkley.  Okay.  And for 2007? 
	Mr. Cooper.  If I may, going with the Senate mark, as they 
marked up the bill, I think everything has been properly accounted. 
	Ms. Berkley.  So they put the temporary money that you got 
in 2005 and 2006 as part of the base for 2007?  Did I miss that? 
	Mr. Cooper.  In 2006. 
	Ms. Berkley.  In 2006. 
	Mr. Cooper.  It looks like they have made the proper 
adjustments for 2006. 
	Ms. Berkley.  Great.  Okay.  Great.  Let me ask you 
something.  There were a few things in the last hearing when we 
were talking about PTSD that concerned me a lot. 
	And do you know what the projected cost would be for the 
administration's proposal to review 72,000 PTSD claims in 2006? 
	And let me add some other questions to that so you can give 
me an entire answer. 
	What additional staffing would be needed to complete this 
review without compromising the adjudication of current and expected 
workloads for 2006 and how are these kinds of contingencies taken 
into account in the budget process? 
	Mr. Cooper.  I honestly do not remember the money that we 
estimated.  I estimate that approximately 150 to 160 people would 
be needed for that review. 
	Ms. Berkley.  Where do those people come from and what 
happens to the claims they are already working on? 
	Mr. Cooper.  They come from whatever staffing we have 
available at the time.  Now, in the Senate mark, they take into 
account, I believe, 150 or so people that we would be using for that 
review.  I think that is one of the amounts that is in there.  
	Ms. Berkley.  Additional from what you already have? 
	Mr. Cooper.  Yes, that is correct. 
	Ms. Berkley.  What happens when they are done reviewing the 
72,000 PTSD?  Is it like a one-year mark or  -- 
	Mr. Cooper.  No.  No.  Quite frankly, I would hope that I 
retain those people and do what has to be done.  I fought pretty 
hard to try to ensure that whatever people are in the budget for 
that, if we make changes in how we are going to implement the 
review, that I be allowed to keep the money and the people. 
	Ms. Berkley.  Right.  Well, I hope you do not have to do 
it.  I hope you do get the people.  But what if you do not get the 
Senate mark? 
	Mr. Cooper.  Then I have got problems. 
	Ms. Berkley.  Earlier this year, I had asked VBA to review 
the hundred oldest pending claims, many of which involved remanded 
claims for PTSD. 
	How does VBA budget methodology identify staffing needs to 
comply with the requirement to expedite handling of remanded claims 
so that the veterans are not waiting a decade or more for a decision? 
	Mr. Cooper.  I cannot talk specifically to your question on 
the hundred remands.  But I will tell you this. 
	In the last year and a half, we have worked very closely with 
BVA as directed by the Deputy Secretary, I might add.  We have set 
up a special office called the Appeals Management Center in 
Washington.  We have also told our regional offices how they will 
submit the claims to BVA.  So at least we are fulfilling most of the 
requirements as far as we can tell. 
	We have then worked with BVA and any remand they send, we 
forward to our Appeals Management team and work it.  We have set up 
a system so that, when the board sends back a remand, the reason is 
stated in a much better fashion than it had been in the past.  They 
specify precisely what it is they want VBA to do.  We have set it up 
so it is not dictated that we have to do steps one through ten in 
order, which has helped us to an extent. 
	We have also taken a few people from separate regional 
offices to work on remands.  In fact, we have reduced remands, about 
8,000 in the last year or so.  That is one of the things we have 
tried to push very hard. 
	When I look at remands, when I look at a figure that I watch 
each month, out of every 100 claims decided in 2005, about 3.9  
claims are certified to the board.  The board decided in about 1.5 
cases per 100 to not allow the appeal.  About 1.5 are resolved 
through the remand process.  In the other one percent, the appeal is 
allowed by BVA. 
	All of those are improved figures.  Hopefully it means we 
are serving the veteran better and faster, but the important thing 
is we have worked together to try to make sure that we are doing 
this thing properly. 
	Ms. Berkley.  Between the years 2000 and 2005, the number of 
claims involving eight or more issues has more than doubled, I think 
from 21,000 plus to 43,000 plus. 
	VA projected increases in claims for 2005 fiscal year was 
much lower than actually received. 
	Was the failure to more accurately predict the number of 
claims received and necessary staffing responsible for VBA�s failure 
to meet its targeted pending caseload at the end of fiscal year 2005? 
	Mr. Cooper.  It may have been.  That is difficult to figure 
out exactly.  But the fact is, interestingly enough, one of the 
things that we have tried to do and we have pushed very hard is to 
have two BDD rating sites.  BDD is benefits delivery at discharge.  
And these are for people coming out of the service.  They may be 
retiring.  They may be coming out for another reason. 
	We have decided to have the 140 intake sites at various 
military sites, then have the adjudication done at two specific 
sites.  And hopefully that will make us more efficient.  Hopefully 
that will give us more consistency. 
	But what I have come to realize is the people who are 
retiring, the people who are leaving the service from these sites, 
we have found that the number of issues are quite high.  The average 
number of issues on the claims coming in today is about 2.6, 2.7.  
The number of issues we have from people at BDD sites is about eight 
and a half to ten issues per claim.  And I have physically seen 
claims with 40 issues and more. 
	And when you have those issues, they may not be pertinent.  
But the point is you still have to take specific actions to address 
each issue. 
	Ms. Berkley.  Well, then here is my question then.  How many 
claims does VBA expect to be processed per FTE and what factors are 
taken into account?  Do we take into account the complexity of it? 
	If you have got a claim with 40 issues, I would imagine that 
takes a tremendous amount of time as opposed to a claim with one or 
two.  So how do you determine how much staffing you need? 
	Mr. Cooper.  Well, I would hope by having the adjudication 
done at two sites where you have people that are experienced in how 
to process multiple issue claims. 
	But as the number of issues increase, yes, that increases 
the complexity.  You hope that through training, through getting 
people on board that you take care of that, but it is an ongoing 
process.  We are working on it. 
	Ms. Berkley.  The last question I have is regarding the 
continuing resolution funding.  What is the impact on your ability 
to hire additional staff or make other expenditures and does the 
budget methodology take into account the possibility that the 
appropriation bills may not be enacted in a timely fashion?  I hope 
I am not giving you too bad a headache, Admiral. 
	Mr. Cooper.  The fact is we are hiring right now.  We are 
trying to hire, but I am still limited in what I can spend under 
the continuing resolution. 
	And so it will eventually impact me.  I am trying to hire 
right now so I can get the people on board, get them through 
training, and get a little bit ahead of the curve. 
	Ms. Berkley.  Thank you very much.  It was very helpful.  
Thanks. 
	Mr. Miller.  Mr. Udall. 
	Mr. Udall.  Thank you, Mr. Chairman. 
	Admiral, good to have you here today with us. 
	The 150 to 160 people you talked about  --  and I am 
following up on the PTSD testimony of yours  --  are those the 
individuals that would be needed to process all 72,000 claims review? 
	Mr. Cooper.  The processing, when we do it, will consist of 
first reviewing each one of those cases.  The initial review should 
take about an hour for each.  And then we estimate, predicated upon 
the review that the IG did of 2,100 claims, that approximately 
one-third of those will require further development.  That will take 
a longer amount of time. 
	So we took those figures together and that is how we came up 
with approximately 150 FTE.  And we expect about one-third of those 
cases to require some further development for whatever reason. 
	Mr. Udall.  One-third of the 72,000? 
	Mr. Cooper.  Yes, sir. 
	Mr. Udall.  And what is mandated as part of the further 
development?  What do you expect to happen there?  Is this the 
issue of stressors and  -- 
	Mr. Cooper.  That is correct. 
	Mr. Udall.   --  the documentation for stressors? 
	Mr. Cooper.  Primarily stressors, that is correct.  The IG 
reported that of the 2,100 that they reviewed that stressors were 
not properly stated in 25 percent of the cases. 
	And I use that term �not properly stated� carefully, by 
the way, because I think we have found some areas where we might 
disagree with what the IG said and we are looking very closely at 
that. 
	Mr. Udall.  So this estimate of 150 to 160 people would be 
for reviewing the 72,000 with this one-third additional attention 
that they needed. 
	And what period of time are we talking about for that review? 
	Mr. Cooper.  I think probably the initial review would be 
close to a year. 
	Mr. Udall.  So you are saying 150 to 160 people would be 
working on those cases for a year? 
	Mr. Cooper.  Yes, sir. 
	Mr. Udall.  Okay.  That is obviously a significant amount of 
manpower in terms of your operation; is it not? 
	Mr. Cooper.  Yes, sir. 
	Mr. Udall.  Now, you understand this whole issue of PTSD, I 
am sure, very well from your service.  Do you think it is wise to 
head down this course knowing the kinds of cases and reevaluating 
stressors that sometimes occurred many years ago? 
	Mr. Cooper.  I think it is a very difficult problem. 
	Mr. Udall.  Would you be in a position to recommend to us 
that the House do what the Senate did in terms of putting in 
language after the 2,100 to just terminate this review? 
	Mr. Cooper.  No.  I am not in a position to  -- 
	Mr. Udall.  That is above your pay grade? 
	Mr. Cooper.  I am in a position to talk to my boss, the 
Secretary, but  -- 
	Mr. Udall.  Okay.  But this issue is being discussed in 
the department, I hope? 
	Mr. Cooper.  Absolutely. 
	Mr. Udall.  Let me see here.  So your estimate is not that 
there is going to be additional staff needed to fully flesh out the 
stressor evidence? 
	Mr. Cooper.  One moment.  I am getting advice here. 
	Mr. Udall.  Yeah. 
	Mr. Cooper.  Yes.  The Senate mark gives me the authority to 
hire up to do the review as I understand it. 
	Mr. Udall.  And in the Senate mark, you believe it gives you 
enough to do that? 
	Mr. Cooper.  Yes, I do.  Yes, today, I do believe so. 
	Mr. Udall.  Great.  And just to summarize here, at least 
for this member of the Committee, I believe after meeting with 
veterans in my home state of New Mexico and hearing testimony before 
this Committee that we really should take the action to terminate 
further review on these PTSD claims.  It is causing a significant 
amount of anxiety in the veterans community and many veterans, I 
think, are feeling under attack as a result of this. 
	And I just hope that you continue the analysis and make a 
speedy decision on this rather than go forward with this really 
protracted review. 
	Thank you, Mr. Chairman, and  -- 
	Mr. Cooper.  Could I make one statement? 
	Mr. Udall.  Please.  Please do. 
	Mr. Cooper.  As you know, one of the things that we have 
done as the first step before we do anything further is to look at 
the 2,100 that the IG used to come up with their recommendation.  
And we have reviewed these very carefully, by first bringing all 
of those records to Washington.  And in general, we agreed that the 
stressors had not been properly annotated in about 25 percent. 
	There are seven regional offices that are concerned with 
this right now.  I have specifically gone to each one of them with 
a personal letter that said I want to make sure we do this in the 
most sensitive way possible. 
	And I want to do everything we can to clear it without even 
talking to the veteran.  And if we do, in fact, have to do some more 
development, then I want them to work very closely with the veteran 
and the VSO to make sure we do not do something dumb. 
	So I am merely pointing out I am trying to carry this out in 
the most sensitive way possible.  The fact that the IG made this 
very strong recommendation at the time, that presents the problem.  
But we are discussing it.  We are discussing it thoroughly and if 
not on a daily basis, certainly on an every third day basis. 
	Mr. Udall.  Thank you, Admiral, and we very much appreciate 
your sensitivity to the issue.  And we hope that all of your 
personnel all the way down to the lowest level carry it out with 
the same sensitivity that you have just described. 
	Thank you very much, Mr. Chairman. 
	Mr. Miller.  Admiral, are you prepared possibly to disclose 
to this Committee how many FTEs you have requested for 2007? 
	Mr. Cooper.  I would rather not. 
	Mr. Miller.  Okay.  Thought I would ask.  Thank you. 
	Ms. Berkley, anything else? 
	Ms. Berkley.  Is that in an open hearing or just in 
general? 
	Mr. Cooper.  In fact, we are still in the discussion, as 
you know, with OMB in the ongoing budget process.  But I have to 
tell you, I think they are trying to support me to a very great 
extent. 
	I do not know if I am allowed to say that or not, but I 
feel that they are quite supportive.  And we made pretty strong 
representation in talking about some of the same stuff with a lot 
of facts behind it. 
	Ms. Berkley.  If I could recommend, and you certainly know 
your job better than I, but given the protracted length of the war 
and it does not look like it is going to end any time soon, we are 
going to have a lot of veterans coming back and they are going to 
need a lot of services, so go to the mat.  And I can promise you at 
least this Congresswoman will be on that mat with you. 
	Mr. Cooper.  I would like to make a statement on that, if I 
may.  One of the wonderful things in my mind that VA has done is set 
up the seamless transition.  And we have worked very closely with 
the young men and women coming back to Walter Reed, to Bethesda, to 
the six or seven other service hospitals, so that we have people as 
soon as those young men and women are ready to talk about benefits 
to try to explain to them all the benefits that will be available 
when they are discharged. 
	And then, as you know, when they leave, their record is sent 
to the VA hospital closest to where we think they are going.  And 
sometimes that is a problem.  They do not go there. 
	Plus we try to make it so the day they are discharged that 
the disability claim that they have put in is either absolutely 
decided or very close to decision so they can start accruing the 
compensation payment and 30 to 60 days later start getting paid. 
	So we have set up a process that can adjudicate immediately 
and, therefore, I feel very confident that the decisions we see, 
the disabilities we adjudicate are rightful decisions and we can 
move on. 
	Mr. Miller.  Thank you, Admiral. 
	Mr. Udall, do you have anything else? 
	Mr. Udall.  Mr. Chairman, just one additional question here. 
	Last week, the IG seemed to indicate that the 72,000 review 
may not be needed.  Do you have any thoughts on that? 
	Mr. Cooper.  Yes.  I have a thought that there was no doubt 
in my mind when the IG made that recommendation, it was not up for a 
vote.  Now, if the IG now feels it might not be necessary, that is 
a decision or a statement that he has made. 
	Right now I will tell you I felt when that recommendation 
was made  --  you know, the IG, the way the IG law is set up, he 
answers to the secretary, but he also answers to Congress.  And so 
the way it was stated and the way it was stated to me in the meeting, 
there was no doubt in my mind that I was going to be required to do 
a 72,000 review.  But we are talking about it and I think that 
eventually we will come to an understanding. 
	Mr. Udall.  Thank you, Admiral. 
	Thank you, Mr. Chairman. 
	Mr. Miller.  Thank you very much. 
	We all know that each and every year, hundreds of thousands 
of veterans and VA beneficiaries ask for new benefits or increased 
benefits.  And it is important that VBA be prepared to be able to 
accurately fulfill that role and responsibility with which you have 
been charged. 
	I would say personally and on behalf of this Committee as 
well, we are all counting on you, Admiral, as well as the veterans 
community, to keep us and the staff informed of the needs your 
organization has so that we can ensure that VBA�s beneficiaries 
receive the timely and accurate service that they have earned. 
	I look forward to working with you, the staff that you 
brought with you, and the rest of your staff in the future as you 
continue your service to the veterans of our nation. 
	Without objection, a statement from the Government 
Accountability Office will be entered into the record. 
	With nothing further, this hearing is adjourned.
	[The attachment appears on p. 38] 
 
	[Whereupon, at 2:58 p.m., the Subcommittee was adjourned.]