[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]


    1988 TO 2016: VETSNET TO VBMS; BILLIONS SPENT, BACKLOG GRINDS ON

=======================================================================

                                 HEARING

                               BEFORE THE

                     COMMITTEE ON VETERANS' AFFAIRS
                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

                       TUESDAY, JANUARY 12, 2016

                               __________

                           Serial No. 114-49

                               __________

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                     COMMITTEE ON VETERANS' AFFAIRS

                     JEFF MILLER, Florida, Chairman

DOUG LAMBORN, Colorado               CORRINE BROWN, Florida, Ranking 
GUS M. BILIRAKIS, Florida, Vice-         Member
    Chairman                         MARK TAKANO, California
DAVID P. ROE, Tennessee              JULIA BROWNLEY, California
DAN BENISHEK, Michigan               DINA TITUS, Nevada
TIM HUELSKAMP, Kansas                RAUL RUIZ, California
MIKE COFFMAN, Colorado               ANN M. KUSTER, New Hampshire
BRAD R. WENSTRUP, Ohio               BETO O'ROURKE, Texas
JACKIE WALORSKI, Indiana             KATHLEEN RICE, New York
RALPH ABRAHAM, Louisiana             TIMOTHY J. WALZ, Minnesota
LEE ZELDIN, New York                 JERRY McNERNEY, California
RYAN COSTELLO, Pennsylvania
AMATA COLEMAN RADEWAGEN, American 
    Samoa
MIKE BOST, Illinois
                       Jon Towers, Staff Director
                Don Phillips, Democratic Staff Director

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public 
hearing records of the Committee on Veterans' Affairs are also 
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                            C O N T E N T S

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                       Tuesday, January 12, 2016

                                                                   Page

1988 to 2016: VETSNET to VBMS; Billions Spent, Backlog Grinds On.     1

                           OPENING STATEMENTS

Honorable Jeff Miller, Chairman..................................     1
    Prepared Statement...........................................    31
Honorable Corrine Brown, Ranking Member..........................     3

                               WITNESSES

Ms. Beth McCoy, Deputy Under Secretary for Field Operations, U.S. 
  Department of Veterans Affairs.................................     4
    Prepared Statement...........................................    32

        Accompanied by:

    Ms. Dawn Bontempo, Director, Veterans Benefits Management 
        System Program Management Office, U.S. Department of 
        Veterans Affairs

    Mr. Steven Schliesman, Assistant Deputy Chief Information 
        Officer, Project Management, U.S. Department of Veterans 
        Affairs

    Mr. Thomas Murphy, Director, Compensation Service, Veterans 
        Benefits Administration, U.S. Department of Veterans 
        Affairs

Mr. Brent Arronte, Deputy Assistant Inspector General for Audits 
  and Evaluations, Office of Inspector General, U.S. Department 
  of Veterans Affairs............................................     6
    Prepared Statement...........................................    35

        Accompanied by:

    Mr. Michael Bowman, Director, Information Technology and 
        Security Audits Division, Office of Inspector General, 
        U.S. Department of Veterans Affairs

Ms. Valerie C. Melvin, Director, Information Technology, U.S. 
  Government Accountability Office...............................     7
    Prepared Statement...........................................    39

                       STATEMENTS FOR THE RECORD

The American Legion..............................................    52
Brentwood Village Business Improvement District..................    54

                  QUESTIONS AND ANSWERS FOR THE RECORD

Department of Veterans Affairs Pre-Hearing Questions.............    55
Chairman Miller to Steven Schliesman.............................    59

 
    1988 TO 2016: VETSNET TO VBMS; BILLIONS SPENT, BACKLOG GRINDS ON

                              ----------                              


                       Tuesday, January 12, 2016

            Committee on Veterans' Affairs,
                    U. S. House of Representatives,
                                                   Washington, D.C.
    The Committee met, pursuant to notice, at 10:30 a.m., in 
Room 334, Cannon House Office Building, Hon. Jeff Miller 
[Chairman of the Committee] presiding.
    Present: Representatives Miller, Lamborn, Bilirakis, Roe, 
Huelskamp, Coffman, Wenstrup, Zeldin, Costello, Bost, Brown, 
Takano, Brownley, Titus, Ruiz, Kuster, and Rice.

           OPENING STATEMENT OF JEFF MILLER, CHAIRMAN

    The Chairman. Good morning, everybody. This hearing will 
come to order. Happy New Year. We are here to discuss yet 
another VA project that is over budget and under achieving. 
Unfortunately, this is becoming a similar theme in hearings at 
this Committee.
    Today we are going to address the mismanagement of the 
Veterans Benefits Management System, called VBMS, which is VA's 
electronic claims processing system. VBMS is supposed to help 
expedite benefit claims decisions, eliminate rating 
inconsistencies and errors, and enable a more efficient claims 
processing work flow. Unfortunately, it is not working as it 
was intended.
    VA promised to eliminate the backlog in 2015. It is now 
2016 and while VA has made progress, the backlog does still 
exist. And similarly, VBMS is not yet completed, and VA has 
been unable to provide this Committee with a timeline as to 
when it will be completed.
    As of the first of this year, there were over 360,000 
disability claims pending, over 75,000 of which were pending 
more than 125 days which is what VA defines, as we all know, a 
backlog in the system. And I am going to address that 
definition in just a minute. This is despite Congress devoting 
substantial resources, including significantly increasing VBA's 
workforce by approximately 7,300 full-time employees between 
2007 and 2014, to help VA meet its goal of eliminating the 
claims backlog by the end of last year. Additionally, Congress 
has allocated more than $1 billion to VBMS even though VA's 
estimate in September of 2009 priced VBMS at $580 million. 
Since then, the projected cost of the program has jumped to 
$1.3 billion and there is no guarantee that VA will not need 
more money for the system in the future. So it looks like 
history may in fact be repeating itself again.
    The cost overruns for VBMS would be bad enough. But after 
six years in development it is still not able to fully support 
disability claims and pension applications. It only acts as a 
document repository for appeals. And that brings me to VA's 
definition of what constitutes a backlog.
    As of April 1st, 2013, VA had an appeals inventory of 
almost 250,000. But as of January the 1st of this year that 
number had ballooned to about 433,000 appeals, which are not 
counted by VA as apart of the backlog. With the large increase 
in the number of appeals, it makes no sense that VA has not 
ensured VBMS' ability to actually process appeals, as it did 
for initial claims work. In fact, I recently learned that the 
VA is projecting that it will certify almost 360,000 new 
appeals in fiscal year 2017. That is in comparison to almost 
70,000 certified appeals in fiscal year 2015.
    I am also alarmed that according to a GAO report between 
January of 2013 and May of 2015, VBMS suffered from multiple 
system crashes, and was offline for a total of 117 hours, which 
is almost three full work weeks. I expect VA to argue that any 
temporary disruptions caused by the implementation of the 
system have been outweighed by the program's benefits.
    Based on recent OIG and GAO investigations, I am not sure 
that I agree because of the many other factors in reducing VA's 
definition of the backlog. Moreover, both the OIG and GAO 
reports of September of 2015 criticized the department for not 
setting clear benchmarks for developing and implementing VBMS.
    Of course, without concrete deadlines for the VBMS roll 
out, it is impossible to hold VA management accountable, a word 
that we hear a lot here, for meeting deadlines and 
demonstrating progress. But even if the Veterans Benefits 
Management System was performing perfectly, there are still 
management issues that add to processing times. In a report 
issued just last week, the OIG found that the St. Petersburg 
Regional Office had a significant backlog of unprocessed 
veteran claims information at a scanning contractor facility. 
I, and I am sure the Ranking Member, are appalled that Florida 
veterans may have waited longer than any other veterans due to 
this delay in scanning.
    I would like to draw your attention to the image above, 
which demonstrates the extent of improperly stored and co-
mingled veteran information at the contractor site. And there 
is a photograph of it in your packet if you cannot see the 
screen. Everybody see it? Understandably, I am troubled that in 
addition to the scanning delays based on how this information 
was insecurely stored at the scanning facility, veterans' 
information was potentially vulnerable to loss, theft, and 
misuse. I am going to further explore this and other issues 
outlined in my statement during the course of this hearing.
    With that cheerful report, I yield to the Ranking Member 
for her opening statement. And again, wish her a Happy New Year 
as well.

    [The prepared statement of Jeff Miller appears in the 
Appendix]

       OPENING STATEMENT OF CORRINE BROWN, RANKING MEMBER

    Ms. Brown. Thank you, Mr. Chairman, and thank you for 
holding this hearing. I find the title of this hearing 
interesting. We have spent trillions of dollars on wars since 
1988. And as you would expect, with these wars has come an 
increase in veterans claims and backlogs. We need to remember 
taking care of the veteran is a cost of war. Let me repeat 
that. We need to remember taking care of veterans needs to be 
figured in as a cost of war.
    Since our engagement in Operation Iraqi Freedom, which I 
voted against, we have seen VA continue to be inundated with 
work. As Vietnam veterans grow older and become ill, and our 
newest servicemembers return home injured, VA's workload has 
risen to record highs year after year.
    At the height of the VA backlog the decision was made, and 
encouraged and funded by Congress, to eliminate the backlog by 
2015 by implementing a paperless transformation.
    The VA backlog has been significantly reduced from 611,073 
claims to 75,395 claims. In less than three years. VA has 
reduced the backlog by nearly 90%. While it is not mission 
complete, and the change has been significant, we need to 
continue to work to reduce the backlog.
    For our Florida veterans the average days pending at the 
height of the backlog was 248 days to 92 days.
    We look forward to hearing how much of this reduction is 
due to the investments that we have made in moving from an 
antiquated paper processing system and into an electronic one. 
What more is needs to be done to provide timely outcomes for 
our veterans that deserve decisions today, and not tomorrow?
    Like the Joint Strike Force or the Iraqi War, or the Select 
Committee on Benghazi, surely the Veterans Benefits Management 
System could and should cost less than it has.
    I hope to hear how VA plans to improve their costing, 
budgeting and execution of IT projects. We need accurate 
numbers in terms of the investment and sustainment of the 
Veterans Benefits Management System.
    I am also concerned about the IG's findings regarding 
Florida's backlog of veterans evidence in 2014. I hope to hear 
from the VA on their efforts to address both the GAO and the 
VAOIG recommendations. I hope to hear that in the report.
    Fighting for our veterans is a team effort and a cost of 
war. While VA has had remarkable progress on reducing the 
backlog, more needs to be done. So let us all get to work.
    I yield back the balance of my time.
    The Chairman. Thank you very much, Ms. Brown. I would ask 
that all Members would waive their opening statement as is 
customary with this Committee.
    Joining us on our first and only panel this morning are Ms. 
Beth McCoy, the Deputy Under Secretary for Field Operations at 
the Veterans Benefit Administration. She is accompanied by Ms. 
Dawn Bontempo, the Director of the Veterans Benefit Management 
System Program Office; Mr. Steven Schliesman, the Assistant 
Deputy Chief Information Officer for Program Management; and 
Mr. Thomas Murphy, the Director of Compensation Service. Also 
testifying for us today, Mr. Brent Arronte, the Deputy 
Assistant Inspector General for Audits and Evaluations with the 
Office of the IG. Mr. Arronte is accompanied by Mr. Michael 
Bowman, the Director of Information Technology and Security 
Audits Division of the Office of the Inspector General; and 
finally Valerie Melvin, the Director of Information Technology 
at the United States Government Accountability Office. Thank 
you all for being with us this morning. Your complete written 
statements will be entered into the record. Ms. McCoy, you are 
recognized for five minutes to present your opening testimony.

                    STATEMENT OF BETH MCCOY

    Ms. McCoy. Thank you. Good morning, Mr. Chairman, Chairman 
Miller, Ranking Member Brown, and Members of the Committee. 
Thank you for the opportunity to discuss the recent Department 
of Veterans Affairs Office of Inspector General and the 
Government Accountability Office reports dated September 14th 
and September 15th, 2015, respectively. Also, Chairman, thank 
you for recognizing those who have accompanied me today.
    The Veterans Benefits Management System, or VBMS, is a web-
based application primarily used by Veterans Benefits 
Administration employees to process disability claims. VBMS has 
supported more than 30,000 unique users, including those from 
the Veterans Health Administration and our veterans service 
organization partners. VBMS has a customized view of the 
electronic folder to support appeals processing at the Board of 
the Veterans Appeals also. VBMS enables us to receive service 
treatment records electronically from the Department of 
Defense, which is something that we could not do before VBMS.
    Historically, VBA claims processors used a paper intensive 
process to deliver disability benefits to America's veterans. 
At the end of fiscal year 2012 VBMS was at only five regional 
offices with a limited number of users and about 1,000 claims 
completed in it. By June, 2013, VBMS was rolled out to all 56 
regional offices and it was done six months ahead of schedule. 
In November, 2014 we had processed 1 million veterans claims in 
VBMS. And just ten months later in September 2015, we reached 
that milestone of 2 million veterans claims processed end to 
end in VBMS.
    The OIG and GAO reports both provided recommendations 
related to the scope and cost of VBMS. Scope and cost increases 
were planned, essential, and approved to move beyond just that 
initial electronic claims folder repository functionality to a 
point of an automation enhanced claims processing platform. 
VBMS has delivered 17 major software releases and 56 minor 
releases in just four years and has implemented thousands of 
business requirements. VBMS currently houses over 1.9 billion 
images.
    Through modern tools and improved processes for employees, 
VBMS enables VA to provide better service for veterans. One key 
element is that multiple users can view a veteran's electronic 
folder at the same time so that various claims actions can be 
done in parallel at the same time rather sequentially and 
eliminating delays waiting for that one paper claims folder. 
Additionally, there are broader telework opportunities 
available for our VBA employees in a paperless processing 
world. More veterans are receiving faster decisions because of 
the increase in both production and productivity that VBMS has 
enabled.
    As VBA's Deputy Under Secretary for Field Operations, from 
my perspective, VBMS was delivered to the field quickly, six 
months early; it worked; and functionality has been added every 
three months with each new release. When I go to regional 
offices to talk to employees and veterans service officers, 
they tell me they would not go back to a paper-based process. 
And they are constantly bringing up ideas and recommendations 
for more things to do in VBMS. We are working with our labor 
partners to make sure that we get all of those recommendations 
implemented as quickly as possible.
    I am incredibly proud of our VBA employees, 53 percent of 
whom are veterans themselves, for all of the changes they have 
adopted and all of the work they have completed for veterans 
and their families through VBA transformation efforts.
    So what have they accomplished? This past fiscal year, VA 
reached an historic milestone in delivery of benefits and 
services to America's veterans, their families, and survivors. 
VBA reduced the backlog of disability claims pending to a low 
of just over 71,000 claims at the end of fiscal year 2015, 
nearly a 90 percent reduction in the backlog as Ranking Member 
Brown pointed out, from its peak of more than 611,000 pending 
in March of 2013, and lowest in our history. In fiscal year 
2015, we provided disability rating claim decisions to nearly 
1.4 million veterans. That is a new record as well. And we did 
not sacrifice quality. In fact, we improved national accuracy 
scores from 83 percent in June of 2011 to nearly 91 percent in 
fiscal year 2015. And that is at the claim level. If you drill 
down to the individual contention, the individual issue level, 
we are at over 96 percent on our quality. At the same time, we 
reduced the veterans pension backlog by 93 percent from a peak 
of 15,000 claims to less than 1,000 currently. Also the number 
of appeals actions taken by VBA increased by 30 percent from 
2011 to 2015.
    These milestones were achieved through implementation of an 
aggressive and comprehensive information plan that included 
people, process, technology initiatives, and VBMS has been the 
cornerstone of our technology strategy. Our veterans deserve 
the best possible customer service and VBMS is the right tool 
to support that. While there is more work to be done, our 
efforts are generating positive and significant results. VBMS 
is poised to drive continued improvements to claims processing, 
accuracy, timeliness, and transparency.
    We want to thank the Chairman and the Members of the 
Committee for their support and resources. Mr. Chairman, this 
concludes my statement. We would be happy to answer questions. 
And thank you for allowing us to appear.

    [The prepared statement of Beth McCoy appears in the 
Appendix]

    The Chairman. Thank you, Ms. McCoy. Mr. Arronte?

                   STATEMENT OF BRENT ARRONTE

    Mr. Arronte. Chairman Miller, Ranking Member Brown, and 
Members of the Committee, thank you for the opportunity to 
discuss the Inspector General's recent reports on the 
implementation of VBMS. As indicated earlier, I am accompanied 
today by Mr. Michael Bowman, Director of the IG's IT and 
Security Audits Division.
    VA continues to face challenges in developing the IT 
systems it needs to support its current goals and overall 
mission. Since 2007, we have identified IT as a major 
management challenge for VA. Our audits in recent years have 
shown that IT system development and management at VA is a 
longstanding high risk challenge. Despite some advances, our 
reports indicate that VA IT programs are still often 
susceptible to cost overruns, schedule slippages, performance 
problems, and in some cases complete failure.
    In February 2013, we issued a report evaluating whether VA 
had performed sufficient testing of VBMS. This work assessed 
whether VA was positioned to meet its goal of eliminating the 
disability claims backlog and attaining a 98 percent accuracy 
rate for claims. However, we did note that the system had not 
been fully developed to process claims from the initial 
application to benefits delivery and as of today, in some 
instances, that is still the case.
    In our September 2015 follow-up report on VBMS, we focused 
on whether VA had improved its schedule, cost, and performance 
to support VBMS development. We reported that VA remained only 
partially effective in managing VBMS development. We noted that 
VA had stayed on schedule in deploying VBMS functionality to 
all of its regional offices in 2013. However, since September 
2009, total estimated program costs have increased 
significantly from $579 million to approximately $1.3 billion 
as of January 2015. This increase was due to inadequate cost 
controls, unplanned changes in system and business 
requirements, and inefficient contracting practices. At this 
point VA cannot ensure an effective return on its investment 
and the total actual system development costs still remain 
unknown.
    As recently as our January 2016 report, ``Review of Alleged 
Problems with VBMS and Claims Processing'', we substantiated an 
allegation regarding a significant backlog of unprocessed mail 
waiting to be scanned into VBMS. Specifically according to VBA 
personnel and our own observations, the St. Petersburg VA 
Regional Office had more than 41,000 mail packages and over 
1,600 boxes of evidence waiting to be scanned into VBMS at the 
scanning facility, and that was the picture that the Chairman 
alluded to.
    Visits to the scanning facility showed numerous pallets of 
boxes containing significant amounts of paper documents that 
had been waiting more than 30 days to be scanned into VBMS. 
This is contrary to VA's contract requiring the contractor to 
scan all evidence into VBMS within 5 days.
    Although VBA reports it has made progress in reducing the 
backlog and reported significant improvement in claims 
processing accuracy, we cannot attribute that improvement 
specifically to VBMS. VBMS was one of more than 40 initiatives 
VA has undertaken as part of its transformation plan. We have 
observed and attribute several factors leading to reducing the 
backlog. For example, VBA spent over $130 million in mandatory 
overtime in fiscal year 2015, and $125 million in fiscal year 
2014. VA also reallocated staff to process only those claims 
that affect the backlog while sacrificing other types of claims 
such as those on appeal and non-rating claims issues. And VBA 
has implemented the fully developed claims process which 
shortens claims processing times. As for VBA's improved claims 
processing accuracy rate, this could be related to a change in 
how they are calculating error rates overall and not 
specifically to the accuracy of those claims processed in VBMS.
    In conclusion, our recent work demonstrates that VA 
continues to face challenges in developing and managing its IT 
projects. We acknowledge that VA has taken some actions to 
address our outstanding report recommendations for enhanced 
discipline, oversight, and resource management in support of IT 
programs. However, it remains to be seen whether such actions 
will improve VA's ability to meet established cost, schedule, 
and performance goals. Given the changing business 
requirements, our observations indicate that VBMS costs will 
continue to spiral upward and final end-state costs still 
remain unknown.
    Mr. Chairman, this concludes my statement and we would be 
happy to answer any of your questions or those of the 
Committee.

    [The prepared statement of Brent Arronte appears in the 
Appendix]

    The Chairman. Thank you very much. Ms. Melvin, you are 
recognized for five minutes.

                  STATEMENT OF VALERIE MELVIN

    Ms. Melvin. Good morning, Chairman Miller, Ranking Member 
Brown, and Members of the Committee. Thank you for inviting me 
to discuss VA's efforts to develop and implement its veterans 
benefits management system, VBMS.
    In September, 2015 we issued a report to your Committee 
documenting our study of the system and my remarks today 
highlight key findings from that study which, one, assessed 
VA's progress toward completing VBMS, and two, determined the 
extent that users reported satisfaction with the system.
    VA began developing VBMS in 2009 with the intent of 
providing automated capabilities to support disability and 
pension claims processing and appeals. As of September, 2015 
the department reported having spent about $1 billion on its 
efforts. In this regard, an initial version of VBMS was 
deployed to all VBA regional offices by June, 2013, and since 
then, as has been noted, the department has continued 
developing and implementing additional system functionality and 
enhancements to support electronic claims processing.
    Nevertheless, several aspects of the ongoing efforts to 
develop and implement the system could be strengthened. 
Specifically, VBMS is not yet able to fully support disability 
and pension claims or appeals processing, as has been noted. 
While the Under Secretary for Benefits stated in March, 2013 
that the system was expected to be completed in 2015, 
implementation of functionality to fully support electronic 
claims processing has been delayed and the department has yet 
to produce a plan that identifies when VBMS will be completed. 
Thus the department lacks an effective means to hold management 
accountable for meeting a timeframe and demonstrating progress 
on completing the system.
    Further, as VA continues developing and implementing VBMS, 
three additional areas could benefit from increased management 
attention. First, the program lacks a reliable estimate of the 
costs for completing the system. Without such an estimate, 
management and stakeholders have a limited view of the system's 
future resource needs and the program risks not having 
sufficient funding to complete the system.
    Second, while VA has improved the system's availability to 
users, it has not established system response time goals. 
Without such goals, users do not have an expectation of the 
system response times they can anticipate and management does 
not have an indication of how well the system is performing 
relative to desired performance levels.
    Third, while the program was taking steps to manage system 
defects, a recent system release included unresolved defects 
that impacted system performance and users' experiences. 
Continuing to deploy releases with large numbers of defects 
that reduce system functionality could adversely affect users' 
ability to process disability claims in an efficient manner.
    Beyond these concerns, the department has not conducted a 
customer satisfaction survey to compile data on how users view 
the system's performance and, ultimately, to develop goals for 
improving the system. Our own survey of VBMS users found more 
than half of them were satisfied with the system, although 
decision review officers were considerably less satisfied. 
However, while our survey results provided important data about 
the use of VBMS, the absence of user satisfaction goals limits 
their utility. Specifically, without having established goals 
to define user satisfaction, VBA lacks a basis for gauging its 
success in promoting user acceptance of the system and for 
identifying areas where its efforts to complete development and 
implementation of the system might need attention.
    Our report recommended five actions for improving VA's 
efforts and the department concurred with all of our 
recommendations. We now look forward to following the 
department's actions to address them.
    Mr. Chairman, this concludes my oral statement and I would 
be pleased to respond to your questions.

    [The prepared statement of Valerie Melvin appears in the 
Appendix]

    The Chairman. Thank you very much for everybody being here 
and testifying. Real quickly Ms. McCoy, I want to go back to 
your testimony and specifically your written testimony where 
you said you closed fiscal year 2015 having provided claims 
decisions to nearly 1.4 million veterans, exceeding 1 million 
claims for the sixth year in a row. And first of all, I do not 
want my comments to be perceived in any way of bashing the good 
people that have been out there that have made a difference and 
made a dent. But we are trying to find out why the ball keeps 
moving, why the definition for a backlog claim keeps changing. 
And you know, while the focus has been on eliminating the 
backlog, we think that is great, there have been a tremendous 
amount of resources that have been given to VA in order to do 
that and we are going to discuss that in just a minute. But I 
think you said something about you set a record of delivering 
benefits to veterans. My question is, if a veterans has 
appealed the decision, is that veteran getting benefits or are 
they still waiting?
    Ms. McCoy. So Mr. Chairman, thank you for that question. 
The definition of our backlog has been disability rating claims 
pending more than 125 days. So that definition has not changed. 
And from that standpoint we did set a record of 1.4 million 
disability rating claims--
    The Chairman. But my question is, if the veteran appeals 
your claim and your rating, is that veteran getting their 
benefits? Or are they still waiting in a backlog position?
    Ms. McCoy. Mr. Chairman, we do have a number of appeals 
that need to be addressed and we are working on those every 
day. A--
    The Chairman. Over 200,000 more appeals. And that is the 
point. I mean, yes there has been progress made. But I think by 
saying that you have reduced the backlog the inference to the 
American public is that the veterans are receiving the 
benefits. And they are not receiving the benefit yet if they 
are in an appeals position.
    Ms. McCoy. I appreciate your question and your statement, 
sir. I would point out that 73 percent of those who have an 
appeal pending are receiving benefits and 56 percent of them 
are receiving 50 percent or more. And as--
    The Chairman. They are not receiving their entire benefit 
claim.
    Ms. McCoy [continued]. And it is important to us that we 
address those appeals and get them anything more that they are 
entitled to. And as we make incremental decisions along the way 
there are multiple decisions that are made in the appeals 
process. If we find that someone is entitled to a benefit, an 
increased benefit, an additional benefit, we do pay that along 
the way. I wanted to point that out.
    The Chairman. Mr. Schliesman, both the Inspector General 
and GAO found that one of the major reasons for the cost 
overruns associated with VBMS has been due to VBA expanding 
functionality requirements. And I understand some need to do 
that. But since 2009, how many times has VBA changed functional 
requirements?
    Mr. Schliesman. I apologize. I was working the mute button 
over here. Sir, I specifically do not have that answer in 
regards to the specific number. I think what is important to 
highlight though--
    The Chairman. Well, but I would like to have the number. So 
if you would take that for the record, and in addition to that, 
if you would, how much of the more than $1 billion that has 
been spent can be attributed to the programmatic changes?
    Mr. Schliesman. Absolutely. That sir is $610 million has 
been invested in the enhancements. I want to clarify--
    The Chairman. Because of the, excuse me, sir, sir--
    Mr. Schliesman. I am sorry?
    The Chairman [continued]. Because of the changes that were 
required it was a $610 million add?
    Mr. Schliesman. No, sir. Over the life cycle, the eight-
year development life cycle--
    The Chairman. I understand that.
    Mr. Schliesman. Yes, sir.
    The Chairman. What I want to know is, what changes were 
requested and how much of that $600 million was as a result of 
those changes? And if you do not have the answer today if you 
would for the record please provide it.
    Ms. Bontempo, in their September reports both the IG and 
the GAO criticized VA for rolling out new software updates 
without training employees on the new VBMS features. My 
question is did the department develop an integrated plan that 
included employee training with each software upgrade? And if 
not, why not?
    Ms. Bontempo. Absolutely. Thank you very much for the 
question, sir. We absolutely have a training plan. In advance 
of every release, and as Ms. McCoy pointed out we have software 
releases every three months, we employ a train the trainer 
model. And the trainers that we talk to in advance of that 
release are called super users.
    The Chairman. Okay, thank you very much for that. And I 
would like to ask the GAO and the IG to respond to that. 
Because in your reports you said there was not adequate 
training for the new software updates.
    Ms. Melvin. I am going to defer to the IG on that. I 
believe their report was more specific to that particular 
issue.
    The Chairman. Okay, thank you. Mr. Bowman?
    Mr. Bowman. During our field work in 2013 and 2014, we 
interviewed over 90 users of VBMS and we heard quite a few 
complaints about new releases, with an emphasis on pushing out 
functionality without the end users knowing how to use that 
functionality. There were a lot of complaints that there was 
inadequate training for the VAROs to be able to leverage that 
functionality to help process claims.
    The Chairman. Ms. Bontempo, my last question is the cost 
has risen from $580 million to $1.3 billion. Substantial 
investment has been made, and this Congress has provided those 
dollars. But it is still not functionally operational after six 
years. I am sure that can be argued, but there is going to be 
more money required. So my question is, what is the current 
life cycle cost estimate for VBMS?
    Ms. Bontempo. And I very much appreciate that question--
    The Chairman. And for the record, whether you appreciate 
the questions or not, you do not have to take the time to say 
that. We appreciate you answering the questions.
    Ms. Bontempo. Well I do appreciate that your staffers came 
over about a month ago. I think it was a very good 
conversation. And as part of that--
    The Chairman. If you would just answer the question.
    Ms. Bontempo [continued]. So as we submitted in our pre-
hearing questions, we will never stop looking for ways to 
improve our service to veterans. However--
    The Chairman. You will never start or stop?
    Ms. Bontempo [continued]. We will never stop.
    The Chairman. Okay. It sounded like you said start.
    Ms. Bontempo. Maybe it is that little bit of a southern 
accent, sir. I am sorry.
    The Chairman. I am from the South, too. I understand 
Southern dialect.
    Ms. Bontempo. So we will--
    The Chairman. The cost is? The life cycle cost is?
    Ms. Bontempo [continued]. So we will be turning our 
attention to new innovations as part of the fiscal year 2018 
budget.
    The Chairman. So it will cost more than $1.3 billion. Ms. 
Brown?
    Ms. Brown. Thank you, Mr. Chairman. Ms. McCoy, both of 
these reports are over a year. Can you tell me what you have 
done to address and how VA has implemented the recommendations 
that both agencies made?
    Ms. McCoy. I would be happy to share that, ma'am. There 
have been a number of different things that we have done. As 
far as training, back in 2013 and even early in 2014 when these 
reports were generated, when you get a new something, a new 
piece of technology, a new smart phone, I think there is that 
big learning curve that comes up front with that. It is brand 
new. You are getting used to it. And there is some change 
management that goes with that. So we did work with our 
employees to get through that change management and we had many 
different mechanisms to get feedback from our employees and the 
users about how that was going. Chat rooms, change management 
agents in every regional office, we had user, we always have 
users that are involved with testing and with requirements 
building. So there are many mechanisms. We also have minute 
videos that we put out for our employees over the past couple 
of years. I have done one myself. And there are videos that 
help people on their desktops see functionality. If there is 
something new they can see somebody using it. As far--yes, 
ma'am?
    Ms. Brown. Yes, ma'am. Let me get right to the question. We 
have a serious backlog--many veterans are not recieving health 
care. And of course once they get in the system it is one of 
two things. You give them a certain percentage or once you have 
cleared it you make it retroactive. But there are some cases 
that is more complicated and so can you give us, quickly give 
us a review of the overall process? Just like in 30 seconds?
    Ms. McCoy. Yes. Absolutely, ma'am. So as far as the 
backlog, you noted we were at 611,000 in March of 2013. We have 
reduced that 90 percent. Currently about 75,000, 80,000 claims. 
As far as time limits, we have improved it from over almost 300 
days, 280-some days, down to 92 days, 94 days. So those time 
limits and delivery improvements have been there. We also 
have--
    Ms. Brown. These are the backlogs.
    Ms. McCoy [continued]. We have also granted more benefits. 
Since 2009 and for decades before that, the average 
compensation paid to a veteran for disability claims was about 
30 percent. Just in the past few years it has risen to an 
average of 47 percent. So we are paying more veterans, we are 
paying a higher percentage of veterans claims. Some of this 
started when we added three new presumptive conditions back in 
2010 for Agent Orange exposed veterans. So that big extra work, 
those additional veterans, we were able to serve and pay 
benefits to. That was a fantastic thing and we were glad to do 
that. But it also bogged down the system, if you will, and we 
had to work through that work. And VBMS and other 
transformation initiatives have enabled us to do that from a 
people, process, and technology standpoint.
    Ms. Brown. One of the things, there are some, and the 
veterans come to me because once they put their application in, 
you are processing it. Some of these claims are simple and then 
some can be difficult because so many veterans have several 
different claims in the system, making it difficult to just go 
in and do a checklist. Can you explain that?
    Ms. McCoy. Absolutely. So there are, it is our goal to 
process every claim disability rating in 125 days. But we will 
not do that just for the sake of hitting a number. We want to 
make sure that every veteran gets everything they are entitled 
to. And there are sometimes, there are some cases that are more 
complex. Veterans living in foreign counties, veterans with 
radiation exposure, veterans who move around the country and 
are not able to appear for a VA examination, getting some 
treatment records, particularly National Guard and Reserve 
records from DoD. There are some things that are harder to do 
and we cannot do it within 125 days. Another big reason is, if 
you have filed a claim for a few conditions and midway you add 
another condition, we do not stop our clock. We continue to 
process and make sure you get everything you are entitled to. 
But it may take us longer than 125 days. And ma'am, those are 
the reasons that there are still about 70,000 claims pending in 
our backlog.
    Ms. Brown. Thank you. And I yield back the balance.
    The Chairman. Real quick, I think you said your claims, the 
number of claims that you processed appropriately was, what was 
the percentage? Ninety--
    Ms. McCoy. At the issue by issue level, 96 percent, over 96 
percent.
    The Chairman. Ninety-six percent? So for the 200,000-plus 
people who are now in appeals, how does that factor into that 
rating?
    Ms. McCoy. So we have not found a correlation between 
quality of the initial rating decision and the appeal. People 
are entitled to appeal anything that they choose. There are 
some folks who appeal things that they are not entitled to. But 
they are entitled to that due process. We go through every 
appeal very seriously and look for anything that they--
    The Chairman. So basically they are disagreeing with your 
four percent and they--
    Ms. McCoy [continued]. No, I would not say that, sir. They 
are disagreeing with the decision they got for whatever reason. 
It may be--
    The Chairman. But you are still saying that it was 96 
percent correct?
    Ms. McCoy [continued]. Absolutely.
    The Chairman. Okay. Very good. Mr. Bilirakis?
    Mr. Bilirakis. Thank you, Mr. Chairman. I appreciate it. 
And I thank the panel for their testimony as well.
    Ms. McCoy, when claims are processed in the absence of 
supporting evidence, what could potentially happen to a 
veteran's disability claim?
    Ms. McCoy. We do an exhaustive development process to get 
all of the evidence that is relevant to a claim. We do that up 
front. And we work with a veteran, their representative, and 
other service providers, other Federal records. We do an 
exhaustive search to get everything front.
    Mr. Bilirakis. But what could possibly happen--
    Ms. McCoy. If something--
    Mr. Bilirakis. --to veterans' claims if evidence is not 
submitted?
    Ms. McCoy [continued]. If evidence is not submitted we do 
not have to consider and we make a decision and weigh the 
evidence that we have. If subsequently we find that we missed 
something, a veteran submits something late, a doctor finds 
something late in a drawer and that is medical evidence to 
consider, we will revisit that claim.
    Mr. Bilirakis. How long would that take? And how long would 
a veteran have to wait for their claims--
    Ms. McCoy. It would be--
    Mr. Bilirakis [continued]. --because the evidence is not 
submitted due to the fault of the VA?
    Ms. McCoy. There might be many reasons for the reason that 
we do not have that evidence and that would be a case by case 
basis.
    Mr. Bilirakis. Thank you. Next question for Mr. Arronte. 
Based on your office's investigation, do you agree with the 
VBA's insistence that the St. Petersburg RO's mail backlog was 
not due to poor preparation of handling the documents?
    Mr. Arronte. I am sorry, could you repeat that?
    Mr. Bilirakis. Okay. Let me, based on your office's 
investigation, do you agree with VBA's insistence that the St. 
Petersburg RO, I am also from Florida, that the St. Petersburg 
RO's mail backlog was not due to poor preparation of handling 
of documents?
    Mr. Arronte. Sir, we think that it was due to poor 
management. And it did affect the timeliness of claims 
processing. I think it added, you cannot say just that alone, 
but from July or June 2014 to the end of December, their 
average time to process claims jumped about 29 points. So to 
say 18,000 documents did not affect claims processing 
timeliness, I do not think anybody could say that.
    Mr. Bilirakis. Are there any plans for the VBA to ensure 
that the claims in this RO backlog were not negatively affected 
resulting in denials or claims receiving lower ratings due to 
missing and unprocessed evidence of a claimant?
    Ms. McCoy. Congressman, we process all of our claims in the 
electronic system and we now have that centralized mail system, 
which was what we went into in July of 2015, in--
    Mr. Bilirakis. Thank you. Mr. Arronte, please, can you 
respond to that question?
    Mr. Arronte. I am sorry, could you repeat that?
    Mr. Bilirakis. Again, are there any plans for the VBA to 
ensure the claims in this RO backlog were not negatively 
affected resulting in denials or claims receiving lower ratings 
due to missing and unprocessed of a claimant? Do you have any 
information with regard to that?
    Mr. Arronte. I have no information.
    Mr. Bilirakis. This affects my constituents.
    Mr. Arronte. Right. I have no information. They are going 
to process the mail. Are they going to go back and make it 
right? That is a question for VBA. But I have no knowledge that 
they are or they are not.
    Mr. Bilirakis. Ms. McCoy?
    Ms. McCoy. Congressman, we make sure that to the extent 
possible we have all the evidence when we make a decision. The 
amount of mail that was in the mail portal at the time in July 
of 2014 was, this was a new process for us. We were learning 
from it and St. Petersburg was one of our earliest adopters. 
There were pieces of mail in the regional office that were what 
we call drop mail. They were not active mail, but they needed 
to be put with the folder. An example would be a copy of a 
letter we sent out. So it is not a piece of evidence, but it 
needs to be with the folder. So we had a clean up effort in St. 
Petersburg and other places where we had to get that drop mail 
associated. We--
    Mr. Bilirakis. How many of our heroes were negatively 
affected by this?
    Ms. McCoy. I would say that there was some time delay in 
the processing, but there was not a delay in making sure that 
the right decision was made for the veteran.
    Mr. Bilirakis. Thank you. Mr. Arronte, in the CACI scanning 
facility, would you say that the VA staff followed VBA's 
shipping standard operating procedure on veteran's intake 
program regulations?
    Mr. Arronte. Sir, no. I do not think that was followed. I 
do not know how, I guess if I found 100 pieces of mail I could 
say maybe that was a mistake or somebody did not manage that 
properly. But 18,000 pieces of mail? I do not know if there 
were any procedures being followed. I just do not know how that 
amount of mail accumulates.
    Mr. Bilirakis. Okay. Thank you. I yield back, Mr. Chairman.
    The Chairman. Ms. McCoy, one quick question before I 
recognize Ms. Brownley. Out of all the mail that was in St. 
Petersburg that was just shown in that photograph, has 
everything now been scanned and processed?
    Ms. McCoy. Everything has been scanned and--
    The Chairman. Okay. And what happened with that? Once it 
gets scanned, what happens with that material?
    Ms. McCoy [continued]. So the drop mail that we had 
scanned, it was associated with the folder. If there is no 
action that needs to be taken, it goes in there.
    The Chairman. No, no, no. No, no. The boxes that we saw?
    Ms. McCoy. Yes.
    The Chairman. Okay? You scanned it. Where are those boxes?
    Ms. McCoy. I do not believe all of those boxes that we saw 
on the page were St. Petersburg. That is not my understanding. 
Once they are scanned they go into the VBMS electronic claims 
folder. Currently in St. Petersburg--
    The Chairman. Okay. What were the boxes that we showed the 
picture of?
    Ms. McCoy. There was, it was my understanding there was a 
storeroom at that facility where they had training materials 
and other materials that were already scanned and ready to be 
sent.
    The Chairman. There were shipping, I think there were 
shipping labels on those as if they were shipped to be scanned. 
And so I guess my question is that information, where is it 
now?
    Ms. McCoy. The information that needed to be associated 
with a veteran's folder has been scanned and put in the folder.
    The Chairman. And where is, all those boxes, where are 
those boxes today?
    Ms. McCoy. So you are asking about the physical boxes 
themselves?
    The Chairman. And the material in the boxes.
    Ms. McCoy. That material would have been processed and sent 
to a long term storage facility that--
    The Chairman. So you still have the boxes of information 
that was scanned somewhere?
    Ms. McCoy. They exist somewhere. Yes, sir.
    The Chairman. Okay. Could you find them for us?
    Ms. McCoy. We--
    The Chairman. I am going to make an official request, 
because you are making out as if this is just junk mail.
    Ms. McCoy. No, sir.
    The Chairman. Okay. Yes, you are. And it is not junk mail. 
So this Committee would like to see what was in those boxes. I 
know it is going to be difficult and I know the Secretary is 
going to raise Cain. And I would rather not do it with a 
subpoena. I would rather do it because this Committee is asking 
in a good faith effort. You have got to hold some people 
accountable. I have yet to hear you say that because these 
people did not meet their contractual requirements that they 
are going to be held accountable.
    Ms. McCoy. We have had additional oversight at that 
facility.
    The Chairman. Accountability.
    Ms. McCoy. We have worked with the contractor and we have 
worked with that contractor to make sure that they understand 
what our expectations--
    The Chairman. And how were they held accountable for not 
meeting the terms of their contract?
    Ms. McCoy. I do not have that information. I would have to 
ask that and take it for the record.
    The Chairman. Will you take that for the record?
    Ms. McCoy. I will, sir.
    The Chairman. When can we expect an answer?
    Ms. McCoy. I will go back and work with the individuals in 
VBA that manage that contract and I will get an answer as soon 
as possible.
    The Chairman. In other words, I do not want to hear any of 
that stuff was shredded.
    Ms. McCoy. That was not shredded, sir.
    The Chairman. Okay. Ms. Brownley?
    Ms. Brownley. Thank you, Mr. Chairman. And thank you for 
having this hearing. It certainly in my opinion we have to 
continue to have these hearings until we get it absolutely 
right for our veterans.
    I will say, though, that I, back in November, I visited the 
Los Angeles Regional Office and met with VBA employees there, 
saw the process, and met with VBA employees without their 
managers there, met with them privately to get their feedback 
on how the transition was going. And I will say that they 
acknowledged that the process was rather rocky but they feel as 
though the processing now in a paperless fashion is much more 
efficient and more accurate. And they describe it as, you know, 
a night and day difference. So I do think that it is important 
that we acknowledge the progress that we have made. I do think 
that there is still more that needs to be done to make sure 
that we are processing these claims on a timely basis, you 
know, across the country. And that we get a better handle on 
the appeals process as well. So it is a, you know, a fail safe 
service that we can provide to our veterans. And obviously 
these benefits are very important to them and they have earned 
and deserved them.
    So in following up on Ms. Brown's questioning, just to ask 
a few more specific questions, I know on the implementation 
timeline, this question is to Ms. McCoy, one of the GAO's chief 
concerns was about the, is about the timeline for reaching 100 
percent implementation. Has the VA addressed that concern?
    Ms. McCoy. I will start that answer and I would turn to Ms. 
Bontempo to supplement my answer. From the original intended 
goal of VBMS, the idea was to create an electronic repository, 
an electronic file room if you will. And we have accomplished 
that. We rolled it out at the end of 2012 to the first five 
stations and by June of 2013 to all 56 regional offices so they 
had that functionality that was the original intent.
    We did not stop there. We went on to add in automation, 
because that made sense and that was the right thing to do for 
veterans and for our employees. And if Ms. Bontempo could add 
to that?
    Ms. Bontempo. Thank you. I appreciate the opportunity to be 
able to talk about why is VBMS different. VBMS is different 
because we use what we refer to agile methodology, and that 
means that we can release software every three months and bring 
high value functionality to the field as quickly as possible to 
serve our veterans. That is a little different than maybe you 
have seen before. And as a result, once we were able to deliver 
that electronic folder, a lot of folks were able to look around 
and say, wow, you could do so much more. So we turned our 
attention to what is the so much more that we could do?
    So let me give you an example of that. One of those is 
being able to receive the electronic service treatment records 
from DoD. Another one is the evaluation builders. The 
evaluation builders, they take over several hundred pages of 
documents that look at the nearly 800 diagnostic codes that are 
part of the rating schedule and they assist with that 
standardization and consistency across VBA to make sure that 
our veterans are served.
    Ms. Brownley. So what about those, and I appreciate your 
responses and those are important elements. But in terms of the 
timeline and reaching 100 percent implementation, when do you 
expect that to happen?
    Ms. Bontempo. So we have reached 100 percent of our 
original goal, and our original goal was the electronic folder.
    Ms. Brownley. Okay, so of your new goals? When is, you 
know, how are you monitoring your new goals now?
    Ms. Bontempo. Correct. And so as we submitted in our pre-
hearing questions, we do understand that there needs to be an 
end time. So we are looking at what a new investment would be 
and what that new innovation would be as part of the fiscal 
year 2018 budget process.
    Ms. Brownley. So you are working on a timeframe for new 
goals, new goals being important to full implementation and 
better operational procedures. You are working on that timeline 
and will have it by 2018?
    Ms. Bontempo. 2018 is when we would intend to start a new 
investment.
    Ms. Brownley. Thank you. I yield back.
    The Chairman. Also Members, for the record, there are two 
instances, and staff has just clarified with me. One is the 
installation in Georgia that we showed the picture of that had 
what we considered insecure information on veterans. That was 
the stacks of boxes, not the 45,000 claims I believe that were 
for St. Petersburg. Am I correct in that, Ms. McCoy?
    Ms. McCoy. That is--
    The Chairman. Okay. Very good.
    Ms. McCoy [continued]. Sorry, that is my understanding.
    The Chairman. Okay. Thank you. I still want those boxes. We 
want to see them. We do not want you to bring them here. We 
will go wherever they are. Mr. Costello?
    Mr. Costello. Thank you, Mr. Chairman. I have a question 
for Mr. Arronte. In fiscal year 2015 your office substantiated 
at least six allegations of data manipulation in VBA regional 
offices, two in Houston, one in Los Angeles, one in 
Philadelphia, one in Honolulu, one in Little Rock. Given these 
findings, how can we trust VA statistics indicating that the 
department has substantially reduced the disability claims 
backlog? Can you share with us what methodology you went 
through so that we can feel confident that the claims backlog 
has been reduced by the amount that in fact is indicated?
    Mr. Arronte. Yes, sir. The methodology that we used was--
let me back up. First of all in the two Houston situations, VBA 
actually reached out to us. They were aware of the data 
manipulation before we were. And we went out and then we 
obtained the data that was manipulated and we took a 
statistical sample and we tested those samples. And that was 
the case in all regional offices. And we determined that data 
manipulation did occur. And at three of the facilities the 
employees resigned. Our concern is when you manipulate data 
that is in a set. As long as that corrupt data stays in the 
system, you do not go back and fix that and fix the data, 
claims, or correct whatever manipulation happened, that data is 
corrupt. And it is going to remain corrupt until those claims 
are out of the system. So do we believe that this had an effect 
on the backlog to some degree? It did. We do not believe all 
the numbers are reliable.
    Mr. Costello. Okay. You do not believe all the numbers are 
reliable in relation to how much the claims backlog has been 
reduced?
    Mr. Arronte. Yes. And not just from the data manipulation. 
I mean, if you manipulate data--
    Mr. Costello. Right.
    Mr. Arronte [continued]. --and you do not clear the system 
of that corrupt data, that system stays corrupt. So if you 
manipulated 3,000 claims to show that they were either done 
early or not done at all, then that number reduces from the 
backlog, that is an incorrect number because the data was 
manipulated. And we also wrote a report on VBA's claims 
processing initiative to process claims over 2 years. And what 
we found was they were touting that they reduced or cleared all 
these claims, but in fact they just shifted. They shifted from 
the backlog to an end product that they used to track claims 
and that end product was not part of the backlog.
    Mr. Costello. So, and I appreciate your candor, two 
questions, two points. One, could it be then that the claims 
backlog is actually higher than is now indicated? Number two, 
moving forward, will the focus be on ensuring that new claims 
do not become part of the backlog while simultaneously 
conceding that those that have already been manipulated, it is 
very difficult to go back in and deal with data that has been 
manipulated because those claims, to your point a little while 
ago, those claims, it is impossible to sort of sift through 
some of that because the data has already been corrupted?
    Mr. Arronte. Okay. So for the second question, I think that 
is probably better asked of VBA, and how they are going to 
process these types of claims. And when they find instances 
where employees have manipulated data what are they going to do 
to ensure the data is correct. I can tell you we are going to 
start two reviews here shortly. One of those reviews is to look 
at the mail process and the scanning process, which is the 
front end of VBMS, and we are also going to look at data 
integrity of VBA's reporting mechanisms and how they capture 
information for their metrics. And we want to see how they 
count their numbers.
    Mr. Costello. Okay. So talking about the issue of data 
integrity, and you say you want to look at that, does that mean 
that there could be issues there?
    Mr. Arronte. Yes. We believe based on the six instances 
that we corroborated during fiscal year 2015, that there may be 
a systemic issue across the Nation. So we are going to test 
their data reliability.
    Mr. Costello. Again, I do appreciate your candor. And it 
seems that based on that testimony, you know, we are not out of 
the woods yet by any stretch of the measure.
    Mr. Arronte. I would say right now it would be safe to say 
we are not out of the woods.
    Mr. Costello. And I probably should not use metaphors, 
but--
    Mr. Arronte. Right. I am with you.
    Mr. Costello [continued]. --I appreciate it. Thank you. I 
yield back.
    The Chairman. Mr. Takano?
    Mr. Takano. Hi. Ms. McCoy, does any of your colleagues--you 
or any of your colleagues want to respond to some rather 
serious statements just made by Mr. Arronte?
    Ms. McCoy. Thank you very much for the chance to do that. 
So, a couple of points I would make, we have more robust and 
transparent data and reporting systems now with VBMS than we 
have ever had before. We have ways--every action that is taken 
in our systems, there is, I would call it an electronic 
fingerprint that is left, so we can go back and see who did 
what. We did not have that in a paper-based world, number one.
    Number two, I do not agree with Mr. Arronte's statement 
that all of those regional office that he mentioned had a data 
manipulation substantiated. One example I would give is Little 
Rock. So, very quickly, there was a Fast Letter that was 
released; it was Fast Letter 13-10 and it was instructing 
regional offices--it was a national policy to, if you found an 
old claim, to use a current date of claim to process it because 
we did not want to dissuade a claims processor who opened up a 
filed and said, oh, my goodness, there is a claim in here that 
somebody missed from 17 years ago.
    We did not--we wanted to encourage everybody to make sure 
veterans got everything that they were deserving, so we said we 
won't count that. You know, bring it forward. We want to make 
sure we capture that and we will use a current date of claim. 
It was a very minuscule number of claims that we did that, but 
it was intended to make sure veterans' missed claims were 
captured.
    At the Little Rock Regional Office, IG found that they 
changed some of these date of claims using the national policy, 
but they kept a very extensive log to go back and--they knew 
which ones they did. So I struggle because IG says they 
substantiated that these dates of claim were changed, but, yet, 
it was in line with the national policy. So that is a rock and 
a hard spot; did they not follow national policy or--so I 
disagree that there was data manipulation there. They were 
following the national policy.
    We can agree or disagree about whether or not the national 
policy was correct. It has since been rescinded. We do not do 
that anymore, but that is not a data manipulation situation.
    Mr. Takano. Ms. McCoy, an important takeaway I am getting 
from your testimony is the new capacity of an electronic system 
versus the previous paper system which existed in the previous 
administration, throughout the duration of that administration. 
My understanding is we initiated, under this administration, 
the electronic system, and the initial cost estimates were 
lower. It cost--it has cost us a lot more to implement this 
system and to develop the system, but you might want to--can I 
ask you to comment on the advantages of moving forward with 
electronic system with all its flaws.
    Are we better off today than we were under the previous 
seven to eight years as we saw our veterans' claims rising for 
obvious reasons?
    Ms. McCoy. Thank you, sir.
    We are much better off and veterans are much better off 
because of the electronic system that we have built. We were 
behind the eight ball. We were outdated in our paper-based 
system. We should have done this years ago, so the cross of 
kind of catching up and doing that now has been that there has 
been a lot of change that our employees have had to go through. 
There has been a cost to do that catch-up.
    Mr. Takano. You mean to tell me for the entire duration of 
the previous administration, the seven to eight years when we 
started our conflicts, the intervening conflicts around the 
world, there was no attempt to establish an electronic claims 
system?
    Ms. McCoy. We had little bits and pieces of our claims that 
were paperless, but there was not a wholesale effort until the 
last few years--
    Mr. Takano. So the effort to automate and to bring in a 
complete electronic claim testimony into operation started in 
2009?
    Ms. McCoy. Foundationally, yes.
    Mr. Takano. Foundationally, okay.
    And we are far better off than under a paper-based system 
with all the flaws and hiccups and one would say, 
underestimated costs. Can you tell us--well, my time is running 
out. I hope my Members--my colleagues will ask what we can do 
to help further this along.
    Ms. McCoy. Well--okay.
    Mr. Takano. Sorry, my time is up, and I yield back.
    The Chairman. Yeah, no, you are welcome to answer the 
question.
    Ms. McCoy. Oh, thank you, sir.
    I would very quickly say that there are a number of things 
that we can do now with an electronic system that we never 
could before. We electronically receive service treatment 
records from DoD. We do not have to go hunting and waiting for 
those. We can move, work fluidly around our entire country, 
around the entire system and get the full capacity out of our 
employees. We could not do that before, except very inartfully 
with boxing up paper records and shipping them around.
    We are able to use automation to speed up and standardize 
the decisions that we make. We are--we bring over disability 
benefit questionnaire information electronically from VHA that 
pre-populates the system. There are key strokes that are saved. 
Our employees do not have to type every single key stroke that 
they used to have to. There are--
    The Chairman. Ms. McCoy, I gave you some extra time, but--
    Ms. McCoy [continued]. Okay.
    The Chairman [continued]. --I think the question is: What 
can we do to help?
    Ms. McCoy. I'm sorry, sir. I was so excited telling you 
about what we were getting from the system.
    The Chairman. Well, we are used to VA coming in--for the 
Committee, so thank you.
    Ms. McCoy. I would--I would say that the support we have 
received already has been phenomenal, and that we would ask for 
your continued support and the interaction that we have had 
with this Committee and your staffs for ideas and ways that we 
can improve the system.
    The Chairman. So following with Mr. Takano's tact, since I 
have been Chairman of this Committee, you have received great 
support; is that correct? Just like under the Obama 
Administration, you were talking about how the electronic 
medical record has gone on in the last few years, correct?
    Mr. Takano. Well, Mr. Chairman, I wanted to point out that 
we had a paper-based system--
    The Chairman. Under the previous administration.
    Mr. Takano [continued]. --under the previous 
administration. The electronic system we are trying to move to 
with VBMS has obviously had its share of problems, but my 
contention is that we are probably better off, even with all 
the problems we had and I would say unexpected costs, than we 
were, had we not attempted to do this.
    The Chairman. I concur. We are moving in the--
    Mr. Takano. And I am glad you are interested in talking 
about what can Congress do to continue the process of getting 
the system to work as it should.
    The Chairman. But it cannot be please pour more and more 
and more money with no cost controls, and I think that is what 
the Committee needs to focus on, is the fact that while Ms. 
Bontempo says, we cannot tell you how much it is going to cost, 
because we are going to continue to keep it changing.
    Well, you know, it has been 147 percent increase and become 
a huge increase in costs--and your time is expired--so, the one 
question I would ask Ms. McCoy is: Why was the Fast Letter 
rescinded?
    Ms. McCoy. There were a number of policy and procedural 
discussions and we thought it was best to rescind it.
    The Chairman. And why was that?
    Ms. McCoy. I was not involved in all of the discussions.
    The Chairman. Could it have been that there was some 
manipulation taking place because of the way the Fast Letter 
was designed?
    Ms. McCoy. I think it was the fact that we had a chance to 
see how it was utilized when we put it out. We learned from 
that and we made a decision to stop using it.
    The Chairman. Mr. Arronte, could you comment?
    Mr. Arronte. I agree with Ms. McCoy, that at Little Rock 
they found this information and they corrected the information. 
But the fact is that they followed the Fast Letter. It was the 
same Fast Letter that we had problems with in Philadelphia.
    And data manipulation, I am not sure if that is the right 
or wrong term. If you go in and change data, and regardless if 
your policy is good or bad, you still changed data and the data 
is now corrupt, and that is what that Fast Letter did. And I 
would suspect that the Fast Letter was rescinded--and I was 
part of this discussion related to the incidents that happened 
in the Philadelphia Regional Office when they were manipulating 
data there--because it was bad policy because data was being 
manipulated.
    The Chairman. Thank you.
    Mr. Huelskamp?
    Mr. Huelskamp. Thank you, Mr. Chairman.
    I appreciate the topic and the discussion and the reports 
here. I will remind the Committee, I think it was approximately 
two years ago we sat here and heard glowing reports of other 
parts of the VA right before a lot of data manipulation 
scandals did break, and I hope we are not going there.
    But I want to establish the facts here, as you understand 
them, Ms. McCoy. So, the backlog data, there is no question, 
you believe it is improved and the backlog is down to--how many 
veterans are awaiting claims?
    Ms. McCoy. The backlog has been greatly reduced and 
currently, we are about 88 percent reduced from what we were 
in--
    Mr. Huelskamp. And how many veterans are still waiting?
    Ms. McCoy. In the backlog, this morning it was just about 
80,000.
    Mr. Huelskamp. And they all have an electronic file 
attached to them; is that correct?
    Ms. McCoy. Ninety-nine point eight percent of our 
disability claims work is paperless.
    Mr. Huelskamp. So you should be able to generate a list of 
my constituents that are still waiting in the backlog, then?
    Ms. McCoy. We could provide that.
    Mr. Huelskamp. Would you do that?
    Thank you. The second thing is, if I understand correctly, 
we do not know what the cost is going to be. All we know is it 
has been overrun by $720 million, but we still do not know what 
the final cost will be for implementation; is that correct?
    Ms. McCoy. I would say that--I will turn to my colleagues 
to supplement--but I would say that from the beginning of where 
we started with electronic repository, check, and moving 
forward, continuing to build up the automation, the 
functionality, that is something we probably will never finish 
because we always want to make sure we are doing a better job 
and--
    Mr. Huelskamp. Is that what you told Congress when you 
requested the money, that you had no idea what it was going to 
cost?
    Ms. McCoy [continued]. The request--
    Mr. Huelskamp. No, you did not. So what I want to establish 
here and try to figure out is, you do not know what the final 
cost is going to be--
    Ms. McCoy. I will ask Ms. Bontempo to address that.
    Mr. Huelskamp [continued]. --and you are going to go to the 
appropriations process this year and say, we want more money, 
but we do not know when this will end and what the final cost 
will be for a very specific project; is that correct?
    Ms. Bontempo. So, let me take that in two parts. The first 
is in a traditional IT project that we would call a waterfall 
which is, essentially, we gather all those requirements 
upfront, then we turn them over to IT, then they build the 
system, and years later you have something delivered that may 
not be meeting your user needs; that is a traditional IT 
project. We did not go down that path.
    We used something called Agile, which allowed us to take 
and build requirements as we were going along. VBMS was not 
intended to be 100 percent complete on day one. We deliver 
every three months, that high-value functionality. As we are 
going through the process, the budgeting process that you are 
referencing, we will be looking at a new investment to look at 
new innovations as part of the fiscal year 2018 process.
    Mr. Huelskamp. So, what will the--how much are you going to 
ask for, on top of the 580 million that is now at 1.3 billion? 
And you need how much more--or you are just trying to tell us, 
we are going to tell you--we will let you know how much we will 
need.
    Ms. Bontempo. So the fiscal year 2017 budget has been--is 
working through the department, and as soon as it is released 
to Congress, we will be happy to talk to that more.
    Mr. Huelskamp. So--but 2018, is that when this particular 
project will be completed? You keep talking about 2018.
    Ms. Bontempo. 2018 is when we are looking at a new 
investment and a new investment will allow us to take advantage 
of what we have done so far and what other things could we 
bring into that.
    Mr. Huelskamp. And how do you hold your contractors 
accountable, particularly like the folks in the scanning 
facility in Georgia, and, by the way, were they held--did they 
lose any money over that? Did you punish them financially for 
all those records that were sitting there and presumably--and I 
am guessing some of them might have been lost.
    Ms. McCoy. I mentioned earlier that I would check on that 
to make sure we deliver that, anything that was done. But there 
were no records lost and there was not a wrongdoing.
    There was a cleanup effort that needed to be done and we 
have completed that.
    Mr. Huelskamp. The contractor was held accountable for--I 
mean this is from a year ago. That picture is from a year ago.
    Ms. McCoy. And it does not look like that any longer, sir.
    Mr. Huelskamp. Who was--what did the contractor--I mean, 
what, did you go to them and say, hey, sorry, let's fix this 
up. I don't understand.
    Can you describe how you held the contractor accountable? 
If I were you, I would be very embarrassed. This is the first 
time I have seen that picture. I mean, I assume this is going 
to show up in a lot of places across this country, and your 
explanation is we held them accountable how?
    Ms. McCoy. I do not have that information with me, sir. I 
am going to take that for the record and provide it.
    As far as--
    Mr. Huelskamp. And I appreciate that. I am about out of 
time.
    Mr. Chairman, again, this picture is a year old. You knew 
about this a year ago. Your staff knew about that from the 
folks right here at this table. We should have heard about it 
in the Committee a year ago. I am very disappointed that a year 
later, you cannot say, hey, this has been taken care of and 
this is why.
    You assured us it has been taken care of, but you cannot 
tell us what you did with the contractor that failed, and that 
is what I worry about when you say you have a never-ending 
project with a never-ending price tag that has moving goals and 
you tell us at the beginning it is only going to be 580 
million, but, magically, it is at 1.3 billion with no end in 
sight, no timeframe in sight; just, we will let you know in 
2018, which, by the way, will be under another administration.
    So, with that, Mr. Chairman, I yield back. Thank you for 
the topic at this hearing.
    The Chairman. Dr. Ruiz, you are recognized.
    Mr. Ruiz. Thank you, Mr. Chairman.
    Thank you for being here today. Thank you for all your 
efforts. I know your intentions are to serve our veterans with 
the utmost quality, and there are wins and there are losses and 
there is a lot of interrogation here from this Committee, I am 
sure.
    I think we need to take a step back and look at the big 
picture. This hearing is about backlog; backlog is a 
description of a metric definition saying that we do not have 
resolution on a veteran's application for their benefits after 
125 days. And we are even going even more specific away from 
the big picture when we focus on VBMS, as that is only one of 
several tools that we have to help reduce the backlog.
    However, after, you know, many conversations with our 
veterans, after many attempts and advocacy fighting the system 
and helping our veterans back home, and after visiting the LA 
Regional Office with Representative Brownley to hear from staff 
and many others, we must ask ourselves the simple question: 
What does backlog mean for our veterans, especially when we try 
to become a veteran-centered institution of excellence for 
them?
    So what does it mean for our veterans when we throw out 
these terms ``backlog''? One, is that the claims that they 
believe they have earned are not being answered. What does that 
do to a veteran? That means that they are waiting anxiously. 
There is more stress; stress affects their health. That means 
that they are not getting the resources or the services that 
they need.
    Two, that they are not getting the benefits that they 
believe that they deserve. Now, granted, some claims that they 
are applying for, they are not going to get because they do not 
qualify under the current requirements; however, the worst-case 
scenario is that we have a veteran who actually deserves the 
benefits and they have been waiting so long and they are 
suffering from morbidity or from whatever economic hardships 
that they are undergoing because they are not getting what they 
should, and it is a systematic problem that they are not 
getting that benefit that they should. And even worse, that 
they should get the benefit, but they have been denied and now 
they are in the appeals process. So what does it mean to a 
veteran? It means that their quality of life is not where it 
should be, and that is why all of this is important.
    Three, the appeals is part of a continuum of that process. 
So we talk about backlog, and we are focusing on backlog, and 
so we are looking at it one backlog metrics of the claims 
application, but then once they get an answer, we say, we 
reduced the backlog because we gave them an answer. Well, the 
answer is just a half of what the veteran is really looking 
for. So then they want to appeal and the actual outcome of this 
is that they want their benefit. So the appeals process should 
not be seen as a completely entirely separate set of metrics. 
If we are going to look at the veteran's experience, the 
appeals process should be seen as a continuum of that.
    The other thing I need to note is often times we are 
looking at cost and we would definitely love to reduce cost and 
make it efficient. Because cost is a part of efficiency that we 
want to produce the best outcome for the least amount of 
resources as possible, but cost is not stagnant; cost is 
dynamic. And the reason why we cannot predict what the cost is 
going to be next year or five years or ten years from now is 
because the veteran's needs change. Veterans' needs are 
dynamic. Our ability to improve our efficiencies are dynamic. 
Those are metrics that are out of our control.
    So when we have an influx of veterans coming back from the 
Middle East, when we have an increase in our efficiencies, 
therefore, we are able to reach out to more veterans and 
process their needs quicker--for example, in 2006, since then, 
we have had 191 percent increase in output, then we are moving 
the pieces so that we can get the veterans the answer and what 
they need.
    So having said that, looking at the big picture, how can we 
reform the metric system so that we can take the veteran's 
experience and look at, are the veterans getting resolutions to 
their answers and, two, are they getting the benefits that they 
earn and they deserve from day one when they fill their 
application to whatever end point it may be, whether it is the 
appeals process, as well.
    The Chairman. You have two seconds. Just kidding. Please 
answer the question.
    Ms. McCoy. Thank you, sir.
    I would like to make just a couple quick points. To your 
point, sir, that the number of cases that we resolved, I just 
want to share a couple of metrics and then I will move on. In 
fiscal year 2006, which is as far back as we can drill down to 
the issue, by issue level with our data, while we completed 
774,000 rating claims, in that, there were almost 2.2 million 
different issues. It was an average of 2.8 issues per claim.
    This last year in fiscal year 2015, while we really hit 
that big number, it was almost 1.4 rating claims completed, but 
within that, it was 6.3 million issues. So that, as you 
mentioned, has been 191 increase in the amount of work we have 
had to do to deliver those benefits; an average of 4.6 issues 
per claim. So, a claim is not a claim. We are doing more work 
per claim than we were in the past.
    As far as the appeals and the metrics, I agree with you 
that from the veteran's experience, those who appeal, see it as 
a continuum. I--we are--I struggle with how to make it one long 
continuum, because only 10 to 11 percent of veterans who 
receive a decision actually file an appeal, and only about 4 to 
5 percent go all the way through to file a formal appeal. So, 
it is the majority of those who get decisions do not appeal.
    So within the appeal process, we have more work--we have 
much more work than we can tackle. It is a broken appeal system 
and we have talked to stakeholders, our veterans service 
officer partners, Congress. We have--we are looking for 
solutions and we welcome any ideas and solutions. We have put 
forth--we need significant legislative reform for the appeals 
issue, including closing the record. The only other alternative 
that I can see is more people and that is not an efficient 
answer.
    Mr. Ruiz. How about using resolution as a metric; 
resolution, from day one to the final, final answer for our 
veterans and looking at that in the whole continuum?
    The Chairman. Did I hear--did I hear you say that the VA 
wants legislative approval to close a veteran's appeals 
process?
    Ms. McCoy. We have had that as a legislative proposal to 
close the record, yes, sir--
    The Chairman. And how far--
    Ms. McCoy [continued]. --on appeal.
    The Chairman [continued]. --did that go, legislatively?
    Ms. McCoy. We are still--we have introduced it several 
times was my understanding, and we are still working on that.
    The Chairman. Yeah, I don't know that you will get this 
Committee to allow the VA to close a veteran's appeal, just 
because you want to clean your books up.
    Ms. McCoy. That is not the intention.
    The Chairman. Mr. Coffman, you are recognized.
    Mr. Coffman. Thank you, Mr. Chairman.
    Ms. McCoy, I have heard from a lot of my constituents about 
the backlog problems in the Denver VA office, particularly on 
non-rating adjustment claims. VA's own Denver office numbers 
from last week peg the average days pending on non-rating 
claims at 384 days over a year, and that assumes that this data 
is reliable, something the IG is skeptical of, based on reviews 
in the Denver office and elsewhere, related to reports of data 
manipulation.
    One constituent was told the wait time may be two years 
simply to add dependents to her award, which means in the 
meantime, her children are not eligible for dependent education 
benefits.
    Can you explain why some of these simple non-rating 
adjustments can take so long? It seems more of a management 
issue, than an IT issue, given the simplicity of many of them.
    Ms. McCoy. Congressman, I will speak on the non-rating 
element to the dependency issue you mentioned. So, we have many 
different solutions for dependency, and it is our agency 
priority goal for fiscal year 2016 and 2017. So, we are putting 
in a more concentrated effort on resolving dependency claims.
    There is the Rules-Based Processing System called RBPS and 
veterans can file online and about 60--60--65 percent of those 
go through and are automatically processed within just a day or 
two, so that is one solution.
    Mr. Coffman. So where would this two-year wait come--that 
this individual was told--where would that come from?
    Ms. McCoy. So, there are some situations where we have 
tried to put those through the RBPS system multiple times. As 
we have added functionality, there are some instances where we 
are still looking for evidence or information. We are 
prioritizing--
    Mr. Coffman. Excuse me. I would like to go to the IG, if I 
could.
    Mr. Arronte, I wondered if you could comment on this issue?
    Mr. Arronte. Yes, sir.
    I would--I would suspect that this is a goal for VBA in 
fiscal year 2016 and 2017, because during the push to reduce 
the backlog, a lot of resources were moved to rate and process 
those claims. In my written statement--in my opening statement, 
we have seen, because of the shift in the reallocation of staff 
to work claims associated with the backlog, it created backlogs 
in other areas.
    Mr. Coffman. So this is more of a management issue than IT?
    Mr. Arronte. I absolutely believe so.
    Mr. Coffman. Okay. Thank you.
    According--Ms. McCoy, according to the September 14th, 2015 
OIG report, costs for the development of VBMS increased from 
nearly 579 million in September of 2009 to almost 1.3 billion 
in January of 2015, and the IG attributed the cost increases 
to, ``Inadequate cost controls, unplanned changes in system and 
business requirements, and inefficient contracting practices.''
    Those details sound an awful lot like the construction 
debacle we had in my district with the building of the hospital 
and the incredible cost overruns on that. Can you give us any 
specifics in terms of VA employees--first of all, who was in 
charge of the day-to-day oversight of the VBMS system, the 
development of the system?
    Ms. McCoy. So, I would ask Mr. Schliesman or Ms. Bontempo 
to speak to that since they are--
    Mr. Coffman. Who--who was in charge of it? That is why I 
just want the name of the individual who was in charge of it.
    Ms. Bontempo. So, I am the director--
    Mr. Coffman. Okay.
    Ms. Bontempo [continued]. --of the Veterans Benefits 
Management System Program Management Office. I work within the 
VBA chain of command.
    Mr. Coffman. Are you in charge--that is my question--are 
you in charge--
    Ms. Bontempo. In--in addition, I am--
    Mr. Coffman [continued]. --of the day-to-day--just tell me 
whether or not you are in charge of the day-to-day management 
of this--development of this system; that is all I want to 
know.
    Ms. Bontempo. On the business side.
    On the IT side, there are folks who are in charge of the 
day-to-day operations and I will defer to Mr. Schliesman to 
talk about the IT.
    Mr. Schliesman. Yes, sir.
    Sir, the scope changes we talk about, it is important to 
understand those are the deliberate decisions of the agency in 
support of the agency's priority goals. Those are determined by 
the secretary--
    Mr. Coffman. Okay--
    Mr. Schliesman [continued]. --on the needs of supporting 
the veteran.
    Mr. Coffman [continued]. --I am not going to get a clear 
answer here.
    Because has anybody been disciplined--let me put it this 
way: Can you tell me, has anybody been disciplined for what the 
IG has identified, in terms of this incredible cost overrun, 
and the mismanagement in the development of this system?
    Mr. Schliesman. So, again, sir, you know, the cost overruns 
alluded to here, again, were deliberate decisions--
    Mr. Coffman. Can you tell me, has anybody been disciplined? 
And I guess the answer is no; is that correct?
    The fact that we have got these incredible cost overruns, 
mismanagement has been identified by the IG, and what you are 
telling me is that nobody has been disciplined, which is--which 
is really reflective of VA's culture of, I think, in terms of 
just the bureaucratic incompetence.
    Let me--Ms. McCoy, as you know, there are--there are not 
only a claims backlog--
    Okay. Mr. Chairman, I yield back. Sorry.
    The Chairman. Dr. Roe?
    Mr. Roe. Thank you, Chairman.
    Just to clarify what Mr. Takano was saying, is that this 
progression to electronic records occurred in medicine; in 
about 2008 or 2009, about 30 to 40 percent of doctors' offices 
had EMRs. So this was a progression of all businesses. The 
private sector was just way ahead of the public sector in doing 
that; that is all. The public sector was actually behind the 
private sector. I wish you were here to clarify that.
    First of all, I have been here seven years, a little less 
than the Chairman has, and the claims backlog is better. There 
is no question that in 2009, we had a half million or maybe a 
million--it was a huge number of claims that needed to be 
looked at. So I think the VA is moving in the right direction 
and I thank you for that.
    Also, Mr. Arronte brought up some very interesting comments 
about bad data just creates bad decisions. I mean if you have 
corrupt data in your system, you cannot tell--that is the 
problem the VA has had with us now on the Committee is we have 
lost trust. We cannot believe the information we--we will hear 
one thing and then when we do an investigation, we will find 
that it was not exactly like it. Maybe there was no intent 
involved; it could just be bad information. I mean nobody 
intentionally did that, but it just happened because you gave 
us the corrupt data.
    So I know that what Mr. Coffman pointed out about the 500 
million to 1.3 billion, this does seem symptomatic and, I mean, 
when we look at--it is embarrassing to go home, back to East 
Tennessee where people do not make a lot of money, where the 
average incomes in some of my counties are less than $25,000 
for families of four. They are working just to get by, and then 
I hear we have a billion-dollar overrun at the hospital in 
Denver and we have a $700 million miscalculation here and 
really no explanation why.
    It is hard for me to go home, as their representative, and 
explain that to them when you have a veteran who is waiting on 
an answer for a claim that has been submitted. I have no answer 
for them. I just tell them, I cannot answer your question, I 
cannot. And they want to know why.
    And I think that is what we are asking, and I think what he 
was trying to get to was, who was the person responsible? You 
know, I knew every time I walked in the operating room who was 
responsible: me. It wasn't the anesthesiologist. It was not the 
scrub nurse. It was not the circulating nurse. It wasn't 
anybody in there, but me. It was not the assistant surgeon; it 
was me. I could answer it.
    And that is the problem. I think the Chairman has done 
this--done a very good job of this, of trying to pinpoint just 
who is responsible so we can have some accountability. I think 
that is all we are asking.
    Mr. Chairman, I think--and I appreciate you having this 
hearing because probably the things you hear and I hear when we 
go home are claims that people cannot--their claims are out 
there. These people are really--Dr. Ruiz was talking about it a 
minute ago--these folks are just waiting by the phone to hear 
this, because if they get this benefit, it changes how they 
live. And these are elderly veterans, widows, people who have 
lost their husbands.
    I have a friend of mine--one of my best friends in this 
world died less than a year ago and his wife is waiting now, 
still, to see if she has any benefits. So I think that is the 
thing we are--these are real people at the end of this 
electronic record and so forth.
    And I don't know where this happened, but this actually is 
a picture right here that looks worse than my garage. It is 
hard to believe that anything could, but that actually does, 
and that is embarrassing to actually--if veterans saw that at 
home, to think that their record was somewhere in that, they 
would be livid.
    And I think we can do better than we are, and with that, I 
yield back.
    The Chairman. Thank you very much, Dr. Roe.
    Actually, that is your garage. I was over there last week 
and took a picture.
    Mr. Roe. I can still park my car in there, though.
    The Chairman. I know that the folks at the department do 
not relish the opportunity to come testify before this 
Committee, but I think Dr. Roe said it well. I mean the idea 
is, if you are going to say something, do it. If you are going 
to do it, do it right. And if you screw up, admit that you made 
a mistake--and not necessarily today; I am just talking about 
VA in general.
    I believe that Bob McDonald and Sloan Gibson are 
outstanding leaders trying to move the department into the 21st 
Century. It is not going to be cheap. It is not going to be 
easy. The new buzzword is flexibility, and the problem is there 
has been so much misspending of dollars, inappropriately 
appropriated dollars, that this Congress is going to be very 
hard to move in a direction that allows the department 
flexibility because of mistakes that have been made, budgeting 
that has been done, lack of accountability.
    Again, we are asking one simple question on the contractor: 
Has anybody been held accountable? I mean a contract is written 
down and signed for specific reason, and that reason is to hold 
somebody accountable.
    The same thing with the employees at the department. And, 
yes, we may want to see a little more movement in some 
instances, but any movement is better than no movement.
    Yes, Mr. Takano was absolutely correct, and I appreciate 
Dr. Roe bringing it to our attention that health and medical 
records and electronic records have been a thing of the more 
recent future, and we are trying to get there, but it is very 
difficult when we have a finite amount of money that we are 
allowed to budget and provide to the agency. And I don't 
believe anybody at the Department of Veterans Affairs can 
quarrel with the money that has been given to the department 
over the last decade, a tremendous amount of money; I mean in 
the 70 percentile increases. Huge dollars.
    I appreciate you coming and testifying. I appreciate your 
knowledge in the areas in which you are working in and I 
appreciate right down to the person that may be a line clerical 
worker making the difference, but I hope you understand that as 
we sit here and we argue on what the backlog is--I think Dr. 
Ruiz said it right--the end outcome is the most important thing 
to the veteran. And while the media may focus on the backlog 
dropping, if that veteran hasn't gotten their benefits that 
they think that they have earned, they are still backlogged.
    And so, to watch this process evolve, we are going to 
continue the oversight responsibility. We want to be a partner, 
but when we ask a question, we would like a direct answer. And 
sometimes that is difficult to get--not necessarily out of the 
witnesses here today. We talked about the six areas this 
morning that the IG had found where there was data 
manipulation, and you immediately went directly to Little Rock. 
So you were ready for the answer to that question.
    Well, interestingly enough, Little Rock can be blamed on 
the Fast Letter which, in fact, did allow data manipulation 
within the system, but we did not talk about the other four or 
five issues that were raised. And interestingly enough, I had 
staff go check and the department concurred with what the IG 
had said as it related to the data manipulation in those areas.
    And so I say all that to say this Committee desires very 
much to work with the department, but we are going to continue 
the oversight responsibility that the constitution requires of 
us. And as Mr. Takano has asked before, tell us what you need. 
Sometimes the answer from us is going to be no, but sometimes 
it is going to be yes.
    And with that, I would ask that all Members would have five 
legislative days with which to revise and extend their remarks 
or add any extraneous material.
    Without objection, so ordered.
    With that, this hearing is adjourned. Thank you very much.

    [Whereupon, at 12:09 p.m., the Committee adjourned.]



                            A P P E N D I X

                              ----------                              

              Prepared Statement of Jeff Miller, Chairman
    Good morning, this hearing will come to order.
    We are here to discuss yet another VA project that is over budget 
and underachieving. Unfortunately, this is a familiar subject for the 
Committee.
    Today, we will address the mismanagement of the Veterans Benefits 
Management System, called VBMS, which is VA's electronic claims 
processing system.
    VBMS is supposed to help expedite benefit claims decisions, 
eliminate rating inconsistencies and errors, and enable a more 
efficient claims process workflow.
    Unfortunately, it isn't working as intended.
    VA promised to eliminate the backlog in 2015. It's now 2016 and 
while VA has made progress, the backlog still exists. Similarly, VBMS 
is not yet completed, and VA has been unable to provide this Committee 
with a timeline for when it will be done.
    As of January 1, 2016, there were over 360,000 disability claims 
pending, over 75,000 of which were pending more than 125 days, which is 
what VA defines as the "backlog," and I will address that definition in 
a moment. This is despite Congress devoting substantial taxpayer 
resources-including significantly increasing VBA's workforce by 
approximately 7,300 full-time employees between 2007 and 2014-to help 
VA meet its goal of eliminating the claims backlog by the end of 2015
    Additionally, Congress has allocated more than $1 billion to VBMS - 
even though VA's estimate in September 2009 priced VBMS at $580 
million. Since then, the projected cost of the program has jumped to 
$1.3 billion-and there is no guarantee that VA will not need more money 
for VBMS in the future.
    History seems to be repeating itself here. The cost overruns for 
VBMS would be bad enough but, after six years in development, VBMS is 
still not able to fully support disability claims and pension 
applications-and only acts as a document repository for appeals. That 
brings me to VA's definition of what constitutes a backlog.
    As of April 1, 2013, VA had an appeals inventory of almost 250,000; 
but, as of January 1, 2016, that number had ballooned to about 433,000 
appeals, which are not counted by VA as part of the backlog. With the 
large increase in the number of appeals, it makes no sense that VA has 
not ensured VBMS' ability to actually process appeals, as it did for 
initial claims.
    In fact, I recently learned that the VA is projecting that it will 
certify almost 360,000 new appeals in FY 17 - that's in comparison to 
almost 70,000 certified appeals in FY 15.
    I am also alarmed that according to a GAO report, between January 
2013 and May 2015, VBMS suffered from multiple system crashes, and was 
offline for a total of 117 hours-or almost three full work weeks.
    I expect VA to argue that any temporary disruptions caused by the 
implementation of VBMS have been outweighed by the program's benefits.
    Based on recent OIG and GAO investigations, I'm not sure that I 
agree because of the many other factors in reducing VA's definition of 
the backlog.
    Moreover, both the OIG and GAO reports of September 2015 criticize 
VA for not setting clear benchmarks for developing and implementing 
VBMS.
    Of course, without concrete deadlines for the VBMS rollout, it is 
impossible to hold VA management accountable for meeting deadlines and 
demonstrating progress. But even if VBMS was performing perfectly, 
there are still management issues that add to processing times.
    In a report issued just last week, the OIG found that the St. 
Petersburg Regional Office had a significant backlog of unprocessed 
veterans' claims information at a scanning contractor facility. I am 
appalled that Florida veterans may have waited longer than other 
veterans due to this scanning delay.
    Members, I'd like to draw your attention to the image above which 
demonstrates the extent of improperly stored and commingled veteran 
information at the contractor site.
    Understandably, I am troubled that, in addition to the scanning 
delays, based on how this information was insecurely stored at the 
scanning facility; veterans' information was potentially vulnerable to 
loss, theft, and misuse.
    I will further explore this and other issues outline in my 
statement during the course of this hearing.
    I now yield to the Ranking Member.

                                 
                    Prepared Statement of Beth McCoy

Introduction

    Good Morning Chairman Miller, Ranking Member Brown, and Members of 
the Committee. Thank you for the opportunity to discuss the recent 
Department of Veterans Affairs (VA) Office of Inspector General (OIG) 
and Government Accountability Office (GAO) reports, dated September 14, 
2015, and September 15, 2015, respectively.

Transforming to Meet the Needs of Our Veterans

    VA reached an historic milestone in its efforts to improve the 
delivery of benefits and services to America's Veterans, their 
families, and Survivors - reducing the backlog of disability claims 
(claims pending more than 125 days) to 75,444 - an 88 percent reduction 
from its peak of 611,000 claims in March 2013 and the lowest in our 
history. We closed fiscal year (FY) 2015 having provided claim 
decisions to nearly 1.4 million Veterans - exceeding one million claims 
for the sixth year in a row and setting a new record for claims 
production. These milestones were achieved through implementation of an 
aggressive and comprehensive transformation plan that included 
initiatives to retrain and reorganize our people, streamline our 
business processes, and build and implement new secure technology 
solutions. VBMS is and has been the cornerstone of our transformation 
strategy.

VBMS and the Electronic Folder

    Prior to 2011, claims processors used an extraordinarily 
inefficient, paper-intensive process to deliver disability benefits to 
America's Veterans. When VA received a Veteran's application, the paper 
folder had to be retrieved from storage, and it could take days or even 
weeks to arrive. Claims processors would route the paper claims folders 
through various processing points in the regional office (RO) a minimum 
of five times for each claim, and they diligently reviewed files that 
were often over 18 inches deep. When a Veteran needed a medical 
examination, the paper claims folder had to be shipped to the medical 
center so it could be available to the examining physician.
    All of this took time - and while the paper claims folder was in 
one location, subsequent actions were delayed until the paper folder 
was returned and again available. The opportunity was great to misplace 
files and documents - or to not have the file in the right place at the 
right time in order to deliver a timely decision.
    As Kelli from the Lincoln RO describes, "It was very cumbersome. We 
were limited by the physical paper file in that we had to have the 
paper file before we could take any further action. When the paper file 
was off station, the claim sat idle until the paper file was returned. 
The paper files in themselves were difficult to manage. Even the 
smallest files ran a high risk of lost documents due to the mechanics 
of the paper file setup. Additionally, the larger the files became, the 
heavier the files became, putting strain on employees lifting and 
carrying files."
    It was obvious that our benefits delivery processes were in need of 
major overhaul if VA was to provide Veterans with high quality 
decisions on their claims within 125 days. While the VBMS initiative 
initially focused on building an electronic claims folder to attack the 
inefficiencies of the paper folders and the problems of misplaced files 
and records, it was of necessity expanded to include streamlining and 
automating steps in the decision process.
    VBMS has delivered on the electronic claims folder - and currently 
houses over 260 million documents and 1.7 billion images. This has made 
a major difference for our employees, for Veterans, and for their 
representatives. Natalie from Indianapolis said, "With VBMS, VA 
employees now have a unified system of record, which allows for a more 
efficient and transparent claims process when assisting Veterans and 
beneficiaries with their claims. For example, if I receive a phone call 
from a Service Officer regarding a Veteran's claim, I can look inside 
the Veteran's electronic folder to review evidence and no longer would 
need to refer the question to the employee with the physical claims 
folder on their desk. This saves time and provides a superior level of 
customer service."
    VBMS provides a web-based application where multiple, 
geographically separated users can view the electronic folder 
simultaneously, minimizing the need for sequential processing and 
eliminating the delays our employees endured waiting for paper folders. 
Additionally, paperless claims processing technology enables telework 
opportunities for our employees. VBMS has an impressive list of 
accomplishments. At the end of FY 2012, VBMS was operational at five 
ROs with a limited number of users and fewer than 1,000 claims 
completed. By June 2013, VBMS was operational at all 56 ROs - six 
months ahead of schedule. Since then, VBMS has supported more than 
30,000 unique users at all VBA facilities, 148 Veterans Health 
Administration (VHA) facilities, Veterans Service Organizations (VSOs), 
and many other sites. VBMS also delivered a customized "Board of 
Veterans' Appeals (Board) View" of the electronic folder to support 
appeals processing at the Board. By February 2015, VBMS had completed 1 
million awards in VBMS. Demonstrating the growing momentum of the 
system, the 2 millionth award was completed just 6 months later. The 
most recent milestone, processing 2 million claims end-to-end in VBMS, 
was reached in September.

VBMS and the Employee Experience of Helping Veterans

    Veterans have benefited substantially from VBMS as a result of new 
capabilities at every step of the claims process. More Veterans are 
receiving faster decisions because of the increase in both production 
and productivity that VBMS has enabled. VBMS is removing 
administrative-type duties from users by automatically recording 
receipt of evidence, moving claims to the next decision status, and 
submitting service treatment record (STR) requests as soon as we 
receive Veterans' claims. In every step of the process from intake 
processing, to evidence gathering, to the rating decision, to awarding 
the benefit, VBMS continues to transform the way our claims processors 
work.
    For example, VBMS provides evidence-gathering capabilities that 
include a correspondence engine to automatically generate commonly used 
letters to Veterans and claimants using standard templates. It also 
integrates business-rules to route claims to specific users and 
provides secure connections with other internal and external 
applications and systems (including VHA, DoD, and VSO systems). Receipt 
of evidence, movement of claims to the next stage, and updates to the 
claims status are automated. In addition, embedded calculators provide 
decision-support tools that improve accuracy through standardization 
and consistency among all ROs. These improvements enable raters to 
spend their time applying their expertise to decisions for Veterans. 
The rules-based system in VBMS takes into consideration all factors to 
grant the Veteran the maximum benefits with improved quality, thus 
making the rating process more seamless. We have now completed over 3.7 
million rating decisions in VBMS.
    The VBMS Awards functionality saves up to ten minutes per claim 
when compared to the manual paper process, and enables a consistent and 
streamlined decision notification. Prior to VBMS, award notifications 
could vary greatly depending on who prepared them, creating the 
impression of variance in decision processes and inconsistency from RO 
to RO.

Agile Methodology and User Feedback

    VA's success with VBMS is attributed to using an iterative 
development methodology, known as Agile, to deliver functionality in 
three-month increments, along with an intense focus on collaboration 
between those that use the system, business representatives, and OI&T 
software development teams. Agile methodology has enabled VBMS to 
mitigate many of the challenges typical of complex, transformational 
software development efforts by rapidly delivering high-value 
functionality in short increments and involving users throughout the 
software design and development process.VBMS was never intended to 
deliver full end-to-end processing on "day one." Such an approach would 
have been high-risk and, due to the continuously evolving nature of the 
requirements, would have resulted in the system failing to meet real 
user requirements when finally delivered - a classic failure of large 
system development. Therefore, VA purposely chose to develop VBMS using 
Agile methodology in order to accelerate its implementation and ensure 
flexibility to changing business requirements. This decision enabled 
employees to begin using VBMS while the solution was still under 
construction, and has provided a mechanism for software development 
teams to continuously respond to user feedback and needs as the 
software product is being built. The Agile process for VBMS was 
tailored, but the foundational goals remained of faster delivery with 
more business value and user involvement throughout the process.
    A critical element of success is an intense focus on soliciting 
input from users at every step and providing many avenues for 
continuous feedback. VBA users from across the country frequently 
attend software design and testing sessions with system developers to 
provide essential input on the direction of VBMS development. This 
user-in-the-middle approach has resulted in a collaborative effort 
unprecedented in a project of this magnitude in federal government.

Training and Change Management

    Not only was user feedback critical to our progress, we took a very 
measured approach to change management that complemented the Agile 
methodology. Our employees are the key to success, and VBA made the 
investment of appointing Change Management Agents (CMAs) at every RO. 
VBMS was rolled out to ROs and stakeholders in a carefully planned 
sequence, allowing technology to be introduced as employees were 
trained to use the system.
    VBMS used a "Train-the-Trainer" model, ensuring availability of 
resources to support users at ROs. These local points of contact, 
called Superusers, provide local training and prepare employees to 
successfully use VBMS. Approximately 800 Superusers receive live 
virtual training every three months in advance of each VBMS major 
release. The training materials are made available to the Superusers to 
facilitate consistent and standardized training at the local level.

OI&T Collaboration

    VBMS has been transformational not only because of the software 
capabilities delivered, but also because of the collaborative 
relationship between VBA and OI&T that is a large part of the VBMS 
success story. One of the keys to VBMS success is understanding 
business responsibilities in an IT project.
    In the early stages of VBMS development, the system experienced 
issues with latency, but great strides have been made to address and 
resolve VBMS application performance issues. VBMS system availability 
(i.e., the percentage of time that VBMS is available to users during 
work hours) was 99.2 percent in FY 2014 and 99.8 percent in FY 2015). 
From October 2013 to August 2015, the VBMS response times improved 36 
percent, while the number of daily system users increased 60 percent. 
OI&T has scrutinized every step of VBMS architecture, from desktop to 
database, to identify, analyze, and remediate the root causes of system 
"latency". For example, in 2013 OI&T conducted a series of on-site 
performance tests at ROs to observe VBMS performance as users worked in 
system. These tests identified opportunities for configuration and 
software modifications that have since been incorporated into major 
software releases and resulted in moderate-to-significant performance 
improvements in the user experience.
    As a result of performance testing and improvement efforts, and to 
mitigate the risks of downtime, OI&T monitors application performance 
through redundant end-to-end system monitoring software (Foglight, 
Introscope) and continuous monitoring of application servers by a 
production operations team. Twenty-four hours a day, seven days a week, 
there are monitoring tools that test system availability and end-to-end 
response times from every RO to ensure the best possible up-time and 
user experience.
    OI&T is supported by project management and engineering competency 
services provided through an Inter-Agency Agreement (IAA) with the 
Department of the Navy's Space and Naval Warfare Systems Center 
(SPAWAR). Since 2011, SPAWAR has served as the lead for engineering and 
developing the core VBMS application. When the VBMS program was 
launched, SPAWAR was supporting VA on the Chapter 33 Long Term Solution 
project and had established itself as an industry leader in information 
assurance, information management, and program management. At the time, 
SPAWAR was the only organization VA identified that could 
simultaneously provide technology services related to the development, 
implementation, operations, and maintenance of VBMS, thereby filling an 
engineering competency that VA lacked. The SPAWAR IAA has played a 
crucial role on this project, and continues to serve as the single 
integrator for implementing the VBMS solution. The SPAWAR team has 
served as both a major contributor to the success of VBMS and a 
champion for VA's efforts to improve overall benefits delivery to 
Veterans and their beneficiaries. SPAWAR's collaboration with VA is an 
outstanding example of how federal agencies can work together and 
leverage shared resources to better serve taxpayers.

The Vision for VBMS

    In FY 2016, VBA is implementing a national workload strategy 
through a phased rollout of the National Work Queue (NWQ). This 
initiative improves visibility and provides greater flexibility in 
management of our workload and performance by enabling automated 
distribution across VBA. NWQ prioritizes and distributes our claims 
inventory at a national level and further standardizes claims 
processing. This will give Veterans in every state in the country the 
same access to benefits and timely decisions.
    In FY 2016, VBMS will continue to reduce reliance on legacy 
systems. As part of planned improvements to the electronic folder for 
this fiscal year, Veterans will start to see a unique identifier (like 
a QR code or a barcode) on the letters they receive from us. When 
Veterans return the information we request along with that code, we 
will be able to automatically add the information to the electronic 
folder and quickly move the claim to the next step. Additionally, VBMS 
will implement functionality necessary to establish one authoritative 
source for Veteran contact information in FY 2016. The possibilities 
are great to further improve accuracy, timeliness, and standardization 
of claims processing, and to ultimately improve service to our 
Veterans.

Conclusion

    While we know there is more work to be done, our efforts are 
continually generating positive and significant results. VBMS is poised 
to capitalize on our achievements to date and drive continued 
improvements in claim processing timeliness, accuracy, and 
transparency. Realization of the long-term vision requires continued 
support and resources.
    The OIG and GAO reports both provide recommendations related to the 
scope and cost of VBMS. VBMS scope and cost increases were planned, 
essential, and approved to move beyond the initial electronic folder 
functionality to automated processing capabilities. VBMS has delivered 
17 major software releases and 56 minor releases in just four years, 
and has implemented thousands of business requirements.
    Through the momentum of each release, VBMS has enabled a successful 
transformation from a paper-based system to a streamlined digital 
system. That momentum has resulted in confidence in the system and the 
progression of the structure in place to successfully deliver modern 
technology.
    We have assembled the right team comprised of a multi-disciplinary 
group of individuals who understand the complex business requirements. 
They have the technical expertise to translate stakeholder needs into 
desired functionality. VBMS enables us to provide the best possible 
customer service to our Veterans. Since the electronic folder now 
provides simultaneous and searchable access to Veterans' records, VA 
continues to enhance VBMS' capabilities to further improve accuracy and 
timeliness throughout the claims lifecycle. We will continue to 
coordinate and integrate with strategic partners, such as the Board, 
VSOs, and DoD to to achieve the goals of interoperability.
    I look forward to your continued support and commitment on behalf 
of Veterans, their families, and Survivors. Thank you for allowing me 
to address the Committee today. Mr. Chairman, this concludes my 
statement. I would be pleased to answer any questions you or other 
Members of the Committee may have.

                                 
                  Prepared Statement of Brent Arronte
    Mr. Chairman and Members of the Committee, thank you for the 
opportunity to discuss the Office of Inspector General's (OIG) recent 
reports on the implementation of the Veterans Benefits Management 
System (VBMS), Follow-up Review of the Veterans Benefits Management 
System, and Review of Alleged Problems with Veterans Management System 
and Claims Processing. \1\ Our statement today focuses on our review of 
how effectively VA managed cost, performance, and schedule in VBMS 
development to meet its claims processing accuracy and backlog 
elimination goals. We will also discuss the results of work conducted 
at one regional office with regards to scanning the information 
supporting claims processing. We draw our conclusions from past and 
ongoing audits of the Department's information security program, 
oversight of information technology (IT) systems development 
activities, and benefits inspections of VA Regional Offices (VAROs). I 
am accompanied by Mr. Michael Bowman, Director, OIG's Information 
Technology and Security Audits Division.
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    \1\ Published on September 14, 2015, and January 6, 2016, 
respectively.

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BACKGROUND

    IT systems and networks are critical to VA in carrying out its 
mission of providing medical care and a range of benefits and services 
to veterans. Our audits in recent years also show that IT systems 
development at VA is a long standing high-risk challenge, susceptible 
to cost overruns, schedule slippages, performance problems, and in some 
cases, complete project failures. For fiscal year (FY) 2016, VA 
requested a total IT investment of about $4.1 billion to fund 
information system security, system development initiatives, and system 
operations and maintenance. To the extent that VA does not properly 
plan and manage these IT investments, they can become costly, risky, 
and do not consistently align with user requirements. Although IT 
investments may be managed by the Office of Information and Technology 
(OI&T), it is imperative to include input from VA business owners and 
other stakeholders throughout the incremental system development 
process. Project Management Accountability System (PMAS) is VA's 
principal means of holding IT project managers accountable for meeting 
cost, schedule, and performance targets. PMAS is designed to reduce 
project implementation risks, institute monitoring and controls, 
establish accountability, and create a reporting discipline. Despite 
PMAS objectives, we continue to identify deficiencies with VA's IT 
investment oversight processes that are discussed in our statement 
below.Effective January 1, 2016, OIT began transitioning from PMAS to a 
new capital planning investment model called the Veteran-focused 
Integration Process (VIP). VIP plans to further embrace the 
Department's Agile system development methodology into a single, 
unified, and streamlined release process that will focuses on 
delivering high-quality and secure IT capabilities to the veteran. 
Until system development projects have successfully transitioned to 
VIP, project managers will continue to follow PMAS guidelines. VA plans 
to complete the transition to VIP by the end of FY 2016. In the coming 
years, we plan to evaluate VIP to determine whether the framework 
successfully addresses the shortcomings associated with VA's IT 
investment oversight process.As early as 2000, the OIG has identified 
Information Management as a major management challenge because VA has a 
long standing history of not properly planning and managing its 
critical IT investments. Also, IT security remains a repeat material 
weakness in VA's Consolidated Financial Statement audit for FY 2015. 
During our financial statement audit, we noted a number of high risk 
security vulnerabilities affecting databases supporting VBMS to 
include:

      Users with the ability to access certain procedures 
allowing unauthorized escalation of database privileges
      Accounts that could escalate system privileges through 
well-known security vulnerabilities
      Missing security patches that could result in unresolved 
security vulnerabilities
      Inadequate passwords controls providing attackers with 
well-known security vulnerabilities that could result in unauthorized 
access.

Claims Backlog

    Although the Veterans Benefits Administration (VBA) reports it has 
made progress in reducing the backlog and reported significant 
improvement in claims processing accuracy, we cannot attribute that 
improvement specifically to VBMS, which was is one of the more than 40 
initiatives VA undertook as part of its transformation plan. Several 
factors have contributed to reducing the backlog:

      Using over $130 million in mandatory overtime
      Reallocating staff to process only claims that affect the 
backlog while sacrificing other types of claims such as those on appeal
      Implementing the Fully Developed Claim
      Using disability benefit questionnaires.

    Further, VBA's improved claims processing accuracy rate is related 
to a change in methodology regarding how they calculate error rates for 
claims processing accuracy and not specifically an aspect of VBMS. 
Also, in FY 2015, the OIG conducted 13 reviews at 11 VAROs related to 
data manipulation in response to allegations we received and requests 
from VBA leadership to review areas of particular concern. \2\ Based on 
the results of those reviews, we believe the data used to determine the 
claims backlog inventory and the number of claims completed is not 
consistently reliable.
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    \2\ VA Regional Offices: Baltimore, MD; Boston, MA; Denver, CO; 
Honolulu, HI; Houston, TX*; Little Rock, AR; Los Angeles, CA*; New 
York, NY; Oakland, CA; San Diego, CA; St. Paul, MN (*denotes two 
separate reviews).

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INFORMATION TECHNOLOGY SYSTEMS DEVELOPMENT LIFECYCLE

    VA continues to face challenges in developing the IT systems it 
needs to support VA's mission goals. Recent OIG reports disclose that 
some progress has been made in timely deploying system functionality 
because of the Agile system development methodology. The Agile 
methodology allows subject matter experts to validate requirements and 
functionality in increments of 6 months or fewer, while technology is 
developed and updated to meet user needs. Despite these advances, VA 
continues to struggle with cost overruns and performance shortfalls in 
its efforts to develop several major mission-critical systems. VA's 
procedures for overseeing IT program management has improved but has 
not been fully effective in controlling these IT investments.

Veterans Benefits Management System

    In February 2013, we issued a report, Review of Transition to a 
Paperless Claims Processing Environment, that evaluated whether VA had 
performed sufficient testing of VBMS and assessed whether VA was 
positioned to meet its goal of eliminating the disability claims 
backlog and increasing the accuracy rate of processing claims to 98 
percent by 2015. \3\ At that time, VBMS was still in the early stages 
of development. We also noted that, due to the use of VA's Agile 
incremental development approach, the system had not been fully 
developed to the extent that its capability to process claims from the 
initial application through benefits delivery could be sufficiently 
tested. We concluded VA would continue to face challenges in meeting 
its goal of eliminating the backlog of disability claims processing by 
2015. However, because the system was in an early stage of development 
and deployment, the number of claims processed using VBMS was 
considered too small to adequately examine whether VBMS was improving 
VBA's ability to process claims with 98 percent accuracy. We 
recommended that VA establish a plan with milestones for resolving 
system issues and develop a detailed approach to scanning and 
digitizing claims so that transformation efforts did not adversely 
affect claims processing and add to the existing backlog. VA concurred 
with our recommendations and provided plans that addressed the findings 
and recommendations for this report.
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    \3\ Review of Transition to a Paperless Claims Processing 
Environment, February 4, 2013.
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    In our September 2015 report, Follow-up Review of the Veterans 
Benefits Management System, we focused on whether VA had improved its 
schedule, cost, and performance supporting VBMS development to meet its 
claims processing accuracy and backlog elimination goals. \4\ We noted 
that VA remained partially effective in managing VBMS development to 
help meet claims processing accuracy and backlog elimination goals. We 
also found that VA stayed on schedule in deploying planned VBMS 
functionality to all VAROs in 2013. However, since September 2009, 
total estimated VBMS costs increased significantly from about $579.2 
million to approximately $1.3 billion in January 2015. The increases 
were due to inadequate cost control, unplanned changes in system and 
business requirements, and inefficient contracting practices. As a 
result, VA cannot ensure an effective return on its investment and 
total actual VBMS system development costs remained unknown. Further, 
VBA did not design performance metrics to assess the actual time saved 
by processing claims using the new system. We also noted that:
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    \4\ Follow-up Review of the Veterans Benefits Management System, 
September 14, 2015.

      VBMS did not fully provide the capability to process 
claims from initial application to benefits delivery.
      Users lacked training needed to leverage the enhanced 
functionality provided.
      System response-time issues resulted from rapid software 
enhancements while system disruptions were due to inadequate service 
continuity practices.

    Until these issues are addressed, VA will continue to lack 
reasonable assurance of meeting its claims processing accuracy and 
backlog elimination goals.We recommended the Executive in Charge for 
OI&T, in conjunction with the Under Secretary for Benefits, define and 
stabilize system and business requirements, address system performance 
problems, deploy required functionality to process claims end-to-end, 
and institute metrics needed to identify and ensure progress toward 
meeting stated goals. The Executive in Charge for OI&T, in conjunction 
with VBA, generally agreed with most of our findings and 
recommendations. \5\ As such, we will monitor implementation of 
corrective action plans to ensure that our findings and recommendations 
are fully addressed.
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    \5\ See the OIG response to Management's comments in the report.
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    We are currently reviewing allegations related to VBMS' security 
controls. We are examining whether VA failed to integrate VBMS security 
edits to prevent stations from inappropriately processing veteran 
employee claims at their assigned stations and if VA has not integrated 
exception logs into VBMS, which allows information security specialists 
to review, audit, and intervene in potential security violations. Our 
work in this area is ongoing and we plan to issue a final report in 
March 2016.
    In our January 2016 report, Review of Alleged Problems with 
Veterans Benefits Management System and Claims Processing, we 
substantiated the allegation regarding a significant backlog of 
unprocessed mail in December 2014 waiting to be scanned into VBMS. This 
resulted from inefficient preparation and handling of veteran provided 
documentation at a contractor operated facility. Specifically, at the 
time of the review, according to VBA personnel and VBA portal metrics, 
the St. Petersburg VARO had more than 41,900 mail packages of veterans' 
claims material that were backlogged and over 1,600 boxes awaiting 
processing at the scanning facility. Furthermore, while on site at the 
contractor facility in early 2015, we observed numerous pallets of 
boxes containing significant amounts of hard copy veterans' claims 
material that required processing and were more than 30 days old, 
according to pallet tracking labels. From a sample of this 
documentation, we determined that it took an average of 30 days to scan 
the material from these claims into VBMS after arriving at the scanning 
facility. VA's contract requires the contractor to scan hard copy 
veterans' claims evidence into VBMS within 5 calendar days of receipt. 
VBA personnel stated they were aware of this scanning delay but we did 
not find evidence of VBA prioritizing this issue and taking effective 
corrective action.

Program Management Accountability System

    In June 2009, VA launched PMAS to improve its IT development 
success rate. At the request of VA's Chief Information Officer, we 
conducted an audit to evaluate the effectiveness of PMAS planning and 
implementation. In August 2011, we reported that OI&T did not establish 
key management controls to ensure PMAS data reliability, verify project 
compliance, and track project costs. \6\ Additionally, we noted that 
OI&T did not put in place detailed guidance on how such controls will 
be used within the framework of PMAS to manage and oversee IT projects. 
Consequently, the PMAS framework was not providing a sound basis for 
future success.
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    \6\ Audit of the Project Management Accountability System 
Implementation, August 29, 2011.
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    We performed a follow-up audit to determine whether OI&T had 
addressed our previous PMAS recommendations. In January 2015, we 
reported that OI&T had taken some steps to improve PMAS performance. 
\7\ Although improvements were made, OI&T had not fully infused PMAS 
with the discipline and accountability necessary for effective 
oversight of IT development projects. The PMAS Business Office still 
had Federal employee vacancies and the PMAS Dashboard lacked a complete 
audit trail of baseline data. Project managers continued to struggle 
with capturing increment costs and project teams were not reporting 
costs related to enhancements on the PMAS Dashboard. Until these 
deficiencies are addressed, VA's portfolio of IT development projects 
will remain susceptible to cost overruns, schedule slippages, and poor 
performance.
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    \7\ Follow-Up Audit of the Information Technology Project 
Management Accountability System, January 22, 2015.

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CONCLUSION

    Our recent work demonstrated that VA continues to face challenges 
in managing its IT development projects. However, these challenges are 
affecting IT system development across Federal agencies. VA has taken 
some actions to address our outstanding report recommendations for 
enhanced discipline, oversight, and resources management to support IT 
development. However, it remains to be seen as to whether such actions 
will improve VA's ability to meet established cost, schedule, and 
performance goals in its mission critical system initiatives. Moreover, 
these IT shortfalls constitute poor financial stewardship and are 
counterproductive investments of taxpayer dollars. VA's use of Agile 
methodology is commended for adding value by allowing for iterative 
refinement of VBMS development amid frequent changing business 
requirements. However, the use of Agile does not preclude the need to 
work towards stabilizing functionality requirements that are aligned 
with meeting project cost and scheduling goals. Given the changing 
business requirements and competing priorities, VBMS costs continue to 
spiral upward and final end-state costs remain unknown.
    Although VBA has made strides in reducing the backlog of disability 
claims, we cannot state that VBMS significantly contributed to this 
reduction. As we have provided oversight of VBMS's development over the 
past several years, VBA did not put adequate performance metrics in 
place that could support the efficiencies gained from using the new 
system, such as the actual time it takes to process certain types of 
claims. Thus, when the costs of system development exceed a billion 
dollars or have high financial development costs, this type of 
information is important to ensure economies and efficiencies are being 
realized over time.
    Further, because of the 13 reviews we completed in FY 2015 related 
to data manipulation at 11 VAROs, we have concerns that the total 
number of claims processed and/or those counted in the inventory are 
not accurately reported.
    Mr. Chairman, this concludes my statement. We would be happy to 
answer any questions you or members of the Committee may have.

                                 
                Prepared Statement of Valerie C. Melvin
Ongoing Efforts Can Be Improved; Goals Are Needed To Promote Increased 
                           User Satisfaction
    Chairman Miller, Ranking Member Brown, and Members of the 
Committee:
    I am pleased to be here to testify at today's hearing on the 
Department of Veterans Affairs' (VA) efforts to develop and implement 
its Veterans Benefits Management System (VBMS). As you know, VA's 
disability claims process has been a subject of attention for many 
years, due in part to long waits for decisions and the large number of 
claims pending a decision. In February 2010, the Secretary of Veterans 
Affairs committed the department to eliminating the disability claims 
backlog and directed the Veterans Benefits Administration (VBA) to 
process all incoming claims within 125 days of their receipt and with 
at least 98 percent accuracy. This was to be accomplished by the end of 
fiscal year 2015. \1\
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    \1\ VA defines a backlogged claim as one that has been awaiting a 
decision for more than 125 days.
---------------------------------------------------------------------------
    To help reduce the backlog and meet these claims processing goals, 
VBA engaged in efforts to replace its paper-based claims process with 
VBMS-a system intended to streamline the disability claims process by 
providing claims processors with an electronic, paperless environment 
in which to maintain, review, and make rating decisions for veterans' 
claims. The agency took an incremental approach to developing and 
implementing VBMS and, as of June 2013, claims processors had begun 
using an initial version of the system at all 56 regional offices. 
Since that time, the agency has continued its efforts toward completing 
the system and, through fiscal year 2015, had received approximately $1 
billion in funding for the initiative.
    In September 2015, we issued a report documenting the results of a 
study of VBMS that we undertook at this committee's request. \2\ My 
remarks today summarize key findings from that study, which (1) 
assessed VA's progress toward completing the development and 
implementation of VBMS and (2) determined to what extent users reported 
satisfaction with the system.
---------------------------------------------------------------------------
    \2\ GAO, Veterans Benefits Management System: Ongoing Development 
and Implementation Can Be Improved; Goals Are Needed to Promote 
Increased User Satisfaction, GAO 15 582 (Washington, D.C.: September 
2015).
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    For the September 2015 report, we reviewed relevant program 
documentation and interviewed appropriate VA officials. We also 
administered a Web-based survey to a nationally representative 
stratified random sample of VBMS users. \3\ More detailed information 
on our objectives, scope, and methodology can be found in the issued 
report.
---------------------------------------------------------------------------
    \3\ These users (claims processors) included claims assistants, 
veteran service representatives, supervisory veteran service 
representatives, rating veterans service representatives, decision 
review officers, and others. We randomly sampled 3,475 VBA-eligible 
claims processors to create estimates about the population of all 
claims processors. Confidence intervals for estimates we reported from 
this survey were based on a confidence level of 95 percent and were 
calculated using methods appropriate for a stratified random sample. 
They were never wider than plus or minus 5 percentage points. At a 95 
percent confidence level, this means that, in about 95 out of 100 
instances, the sampling procedures we used would be expected to produce 
a confidence interval containing the true population value we estimate.
---------------------------------------------------------------------------
    The work on which this statement is based was conducted in 
accordance with generally accepted government auditing standards. Those 
standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe that 
the evidence obtained provides a reasonable basis for our findings and 
conclusions based on our audit objectives.

Background

    Throughout the disability compensation claims process, VBA staff 
have various roles and responsibilities.

      Claims assistants are primarily responsible for 
establishing the electronic claims folders to determine whether the 
dispositions of the claims and control actions have been appropriately 
identified.
      Veteran service representatives are responsible for 
providing veterans with explanations regarding the disability 
compensation benefits programs and entitlement criteria. They also are 
to conduct interviews, gather relevant evidence, adjudicate claims, 
authorize payments, and input the data necessary to generate the awards 
and notification letters to veterans describing the decisions and the 
reasons for them.
      Rating veterans service representatives are to make 
claims rating decisions and analyze claims by applying VBA's schedule 
for rating disabilities (rating schedule) against claims submissions; 
they also are to prepare rating decisions and the supporting 
justifications. Further, they are to inform the veteran service 
representative, who then notifies the claimant of the decision and the 
reasons for the decision.
      Supervisory veteran service representatives are to ensure 
that the quality and timeliness of service provided by VBA meets 
performance indicator goals. They are also responsible for the cost-
effective use of resources to accomplish assigned outcomes.
      Decision review officers are to examine claims decisions 
and perform an array of duties to resolve issues raised by veterans and 
their representatives. They may conduct a new review or complete a 
review of a claim without deference to the original decision; they also 
can revise that decision without new evidence or clear and obvious 
evidence of errors in the original evaluation.

    The disability compensation claims process starts when a veteran 
(or other designated individual) submits a claim to VA in paper or 
electronic form. \4\ If submitted electronically, a claim folder is 
created automatically.
---------------------------------------------------------------------------
    \4\ Veterans and their beneficiaries can submit claims 
electronically through the eBenefits portal, a Web-based system that 
combines data from the VBA and Department of Defense to provide 
veterans, active duty military, and their dependents with an alternate 
method to obtain assistance with a wide range of online benefits-
related tools and information. Additionally, they can apply for 
benefits electronically using the Veterans Online Application.
---------------------------------------------------------------------------
    When a paper claim is submitted, a claims assistant creates the 
electronic folder. Specifically, when a regional office receives a new 
paper claim, the receipt date is recorded electronically and the paper 
files (e.g., medical records and other supporting documents) are 
shipped to one of four document conversion locations so that the 
supporting documents can be scanned and converted into a digital image.
    n the processing of both electronic and paper claims, a veteran 
service representative reviews the information supporting the claim and 
helps identify any additional evidence that is needed to evaluate the 
claim, such as the veteran's military service records, medical 
examinations, and treatment records from medical facilities and private 
medical service providers. Also, if necessary to provide support to 
substantiate the claim, the department performs a medical examination 
on the veteran.
    Once all of the supporting evidence has been gathered, a rating 
veterans service representative evaluates the claim and determines 
whether the veteran is eligible for benefits. If so, the rating 
veterans service representative assigns a disability rating (expressed 
as a percentage). A veteran who submits a claim with multiple 
disabilities receives a single composite rating. If the veteran is due 
to receive compensation, an award is prepared and the veteran is 
notified of the decision.
    A veteran can reopen a claim for additional disability benefits if, 
for example, he or she experiences a new or worsening service-connected 
disability. If the veteran disagrees with the regional office's 
decision on the additional claim, a written notice of disagreement may 
be submitted to the regional office to appeal the decision, and the 
veteran may request to have the appeal processed at the regional office 
by a decision review officer or through the Board of Veterans' Appeals. 
\5\ Figure 1 presents a simplified view of VA's disability compensation 
claims process.
---------------------------------------------------------------------------
    \5\ The Board of Veterans' Appeals makes final decisions on behalf 
of the VA Secretary on appeals from decisions of local VA offices.
[GRAPHIC] [TIFF OMITTED] T5015.001


    VBA began the transformation of its paper-intensive claims process 
to a paperless environment in March 2009, and the effort became 
formally established as the Veterans Benefits Management System program 
in May 2010. VBA's initial plans for VBMS emphasized the development of 
a paperless claims platform to fully support the processing of 
disability compensation and pension benefits, as well as appeals.
    The program's primary focus was to convert existing paper-based 
claims folders into electronic claims folders (eFolders) \6\ to allow 
VBA staff to access claims information and evidence in an electronic 
format. Beyond the establishment of eFolders, VBMS is intended to 
streamline the entire disability claims process, from establishment 
through award, by automating rating decision recommendations, award and 
notification processes, and communications between VBA and the veteran 
throughout the claims life cycle. The system is also intended to assist 
in eliminating the claims backlog and serve as the enabling technology 
for quicker, more accurate, and integrated claims processing in the 
future. Moreover, it is to replace many of the key outdated legacy 
systems-which are still in use today-for managing the claims process, 
including:
---------------------------------------------------------------------------
    \6\ The eFolder is the electronic equivalent of a VBA paper claims 
folder. It contains all of the documents associated with a particular 
veteran and his or her claims.

      Share-used to establish claims; it records and updates 
basic information about veterans and dependents.
      Modern Award Processing-Development-used to manage the 
claims development process, including the collection of data to support 
the claims and tracking of them.
      Rating Board Automation 2000-provides information about 
laws and regulations pertaining to disabilities, which are used by 
rating specialists in evaluating and rating disability claims.
      Award-used to prepare and calculate the benefit award 
based on the rating specialist's determination of the claimant's 
percentage of disability. It is also used to authorize the claim for 
payment.

    VBMS is to consist of three modules:

      VBMS-Core is intended to provide the foundation for 
document processing and storage during the claims development process, 
including establishing claims; viewing and storing electronic documents 
in the eFolder; and tracking evidence requested from beneficiaries. The 
eFolder serves as a digital repository for all documents related to a 
claim, such as the veteran's military service records, medical 
examinations, and treatment records from VA and Department of Defense 
medical facilities, and from private medical service providers. Unlike 
with paper files, this evidence can be reviewed simultaneously by 
multiple VBA claims processors at any location.
      VBMS-Rating is to provide raters with Web-accessible 
tools, including rules-based rating calculators and the capability for 
automated decision recommendations. For example, the hearing loss 
calculator is to automate decisions using objective audiology data and 
rules-based functionality to provide the rater with a suggested rating 
decision. In addition, the module is expected to include stand-alone 
evaluation builders-essentially interactive disability rating 
schedules-for all parts of the human body. With this tool, the rater 
uses a series of check boxes to identify the veteran's symptoms and the 
evaluation builder identifies the proper diagnostic code and the level 
of compensation based on those symptoms.
      VBMS-Awards is to provide an automated award and 
notification process to improve award accuracy and reduce rework 
associated with manual development of awards. This module is intended 
to automate and standardize communications between VBA and the veteran 
at the final stages of the claims process.

    VBA is using an agile software development methodology to develop, 
test, and deliver the system's functionality to its users. An agile 
approach allows subject matter experts to validate requirements, 
processes, and system functionality in increments, and to deliver the 
functionality to users in shorter cycles. Accordingly, the strategic 
road map that the VBMS Program Management Office is using to guide the 
system development effort indicated that releases of system 
functionality were to occur every 6 months. \7\ In a March 2013 Senate 
Veterans Affairs Committee hearing, VA's Under Secretary for Benefits 
stated that VBMS development was expected to be completed in 2015.
---------------------------------------------------------------------------
    \7\ To help guide its system development efforts, the VBMS Program 
Management Office developed a strategic road map that identified the 
program's high-level objectives.

Development and Implementation of VBMS Is Ongoing; Activities Can 
---------------------------------------------------------------------------
    Benefit from Increased Management Attention

    Our September 2015 report noted that, since completing rollout of 
the initial version of VBMS at all regional offices in June 2013, VBA 
has continued developing and implementing additional system 
functionality and enhancements that support the electronic processing 
of disability compensation claims. As a result, 95 percent of records 
related to veterans' disability claims are electronic and reside in the 
system. However, while the Under Secretary for Benefits stated in March 
2013 that the development of the system was expected to be completed in 
2015, implementation of functionality to fully support electronic 
claims processing was delayed until beyond 2015.
    Specifically, even with the progress VBA has made toward developing 
and implementing the system, the timeline for initial deployment of a 
national workload management capability was delayed beyond the 
originally planned date of September 2014 to October 2015, with 
additional deployment to occur throughout fiscal year 2016. Efforts 
undertaken thus far have addressed the strategic road map's objective 
to deliver a national workload management capability and have entailed 
developing the technology and business processes needed to support the 
National Work Queue, which is intended to handle new disability claims 
in a centralized queue and assign claims to the next regional office 
with available capacity. \8\
---------------------------------------------------------------------------
    \8\ Traditionally, veterans have submitted disability claims-
typically via mail-to their local regional office, where the claims are 
usually processed. Under the previous paper-based model, claims folders 
were physically stored and processed at the regional office and 
material was often mailed between the veteran, the regional office, and 
the closest VA medical facility. This paper-based business process is 
no longer necessary, now that 95 percent of all disability claims are 
digital and all regional offices use VBMS.
---------------------------------------------------------------------------
    The Program Management Office began work for the National Work 
Queue in June 2014, and had intended to deploy the first phase of 
functionality to users in September 2014. However, in late May 2015, 
the Director of the office informed us that VBA had delayed the initial 
rollout of the National Work Queue until October 2015 so that the 
department could fully focus on meeting its goal to eliminate the 
claims backlog by the end of September 2015. Following the initial 
rollout, the Program Management Office intends to implement the 
National Work Queue at all regional offices through fiscal year 2016.
    Beyond this effort, VBMS program documentation identified 
additional work to be performed after fiscal year 2015 to fully 
automate disability claims processing. \9\ Specifically, the Program 
Management Office identified the need to automate steps associated with 
a veteran's request for an increase in disability benefits, such as 
when an existing medical condition worsens. In addition, the Director 
stated that the Program Management Office intends to develop a 
capability to automatically associate veterans' correspondence when a 
new piece of evidence to support a claim is received electronically or 
scanned into VBMS. The office also plans to integrate VBMS with VA's 
Integrated Disability Evaluation System, which contains the results of 
veterans' disability medical examinations, \10\ as well as with 
external systems that contain military service treatment records for 
veterans, including those at the National Personnel Records Center.
---------------------------------------------------------------------------
    \9\ As of June 2015, claims processors are directed to establish 
all initial and supplemental compensation claims in VBMS, with several 
exclusions including pension claims, dual compensation and pension 
claims, sensitive cases, and claims where the claimant is not the 
veteran.
    \10\ Managed by both VA and the Department of Defense, the 
Integrated Disability Evaluation System provides a single set of 
disability medical examinations designed for determining a service 
member's (1) fitness and ability to return to duty and (2) disability 
if the service member is inhibited from performing his or her assigned 
duties as a result of a service-connected injury or illness. The 
department's assessment of fitness for duty occurs concurrently with 
the VA disability determination process.
---------------------------------------------------------------------------
    Further, while VBMS was planned to support the processing of 
disability compensation and pension benefits, VBA has not yet developed 
and implemented end-to-end pension processing capabilities in the 
system. Without such capabilities, the agency must continue to rely on 
three legacy systems to process pension claims. Specifically, program 
officials stated that both the Modern Award Processing-Development and 
Award legacy systems contain functionality related to processing 
pensions and will need to remain operational until VBMS can process 
pension claims. In addition, the Share legacy system contains 
functionality that is still needed throughout the claims process. \11\
---------------------------------------------------------------------------
    \11\ These statements regarding the use of legacy systems are 
consistent with the results of our survey of VBMS claims processors. In 
addition to VBMS, an estimated 52 percent of users depend on Share, an 
estimated 37 percent depend on Modern Award Processing-Development, and 
an estimated 13 percent depend on Award Processing "a great deal" in 
order to process claims.
---------------------------------------------------------------------------
    Program documentation indicates that the first phase of pension-
related functionality is expected to be introduced in December 2015. 
However, VBA has not yet developed plans and schedules for retiring the 
legacy systems and for fully developing and implementing their 
functionality in VBMS.
    VBA's progress toward developing and implementing appeals 
processing capabilities in VBMS also has been limited. Specifically, 
although the information in a veteran's eFolder is available to appeals 
staff for review, the appeals process for disability claims is not 
managed using the new system. According to VA's fiscal year 2016 budget 
submission, the department is pursuing a separate effort to manage end-
to-end appeals modernization, and has requested $19.1 million in fiscal 
year 2016 funds to develop a system that will provide functionality not 
available in VBMS or other VA systems. The Director of the Program 
Management Office stated that VBA is currently analyzing commercial IT 
solutions that can meet the business requirements for appeals, such as 
providing document navigation capabilities. According to the Director, 
VBMS, nevertheless, is expected to be part of the appeals modernization 
solution because components of the system, such as the eFolder and 
certain workload management functionality, are planned to continue 
supporting appeals management.
    In the Director's view, the fact that VBMS requires additional 
development beyond 2015 does not reflect a delay in completing the 
system's development. Instead, the additional time is a consequence of 
decisions to enlarge the program's scope over time. The Director stated 
that the system's original purpose had been to serve primarily as an 
electronic document repository, and that the program has met this goal.
    In addition, the Director said that, as the program's mission has 
expanded to support the department's efforts to eliminate the 
disability claims backlog, the office has had to re-prioritize, add, 
and defer system requirements to accommodate broader departmental 
decisions and, in some cases, regulatory changes. For example, the 
office was tasked with developing functionality in VBMS to meet 
regulatory requirements for processing disability claims using 
mandatory forms. \12\ Officials in the office said they were made aware 
of this requirement well after system planning for the March 2015 
release had been completed, which had introduced significant complexity 
to their development work.
---------------------------------------------------------------------------
    \12\ Department of Veterans Affairs, Standard Claims and Appeals 
Forms, Final Rule, 79 Fed. Reg. 57660 (Sept. 25, 2014).The effective 
date for the Final Rule is March 2015.
---------------------------------------------------------------------------
    Finally, VBA included in its strategic road map a number of 
objectives related to VBMS that are planned to be addressed in fiscal 
year 2016. Officials in the Program Management Office stated that they 
intend to develop tactical plans that identify expected capabilities to 
be provided in future releases.
    Nevertheless, due to the department's incremental approach to 
developing and implementing VBMS, VBA has not yet produced a plan that 
identifies when VBMS will be completed and can be expected to fully 
support disability and pension claims processing and appeals. Thus, it 
will be difficult for the department to hold its managers accountable 
for meeting the time frame and for demonstrating progress. Accordingly, 
we recommended that the department develop an updated plan for VBMS 
that includes a schedule for when VBA intends to complete development 
and implementation of the system, including capabilities that fully 
support disability claims, pension claims, and appeals processing. VA 
agreed with our recommendation.

VBMS Development and Implementation Have Been Hindered by Lack of a 
    Reliable Cost Estimate

    Consistent with our guidance on estimating program costs, an 
important aspect of planning for IT projects, such as VBMS, involves 
developing a reliable cost estimate to help managers evaluate a 
program's affordability and performance against its plans, and provide 
estimates of the funding required to efficiently execute a program. 
\13\ In 2011, VBA submitted to the Office of Management and Budget a 
life-cycle cost estimate for VBMS of $934.8 million. This estimate was 
intended to capture costs for the system's development, deployment, 
sustainment, and general operating expenses through the end of fiscal 
year 2018. However, as of July 2015, the program's actual costs had 
exceeded the 2011 life-cycle cost estimate. Specifically, VBMS received 
approximately $1 billion in funding through the end of fiscal year 2015 
and the department has requested an additional $290 million for the 
program in fiscal year 2016. \14\
---------------------------------------------------------------------------
    \13\ GAO, GAO Cost Estimating and Assessment Guide: Best Practices 
for Developing and Managing Capital Program Costs, GAO 09 3SP 
(Washington, D.C.: March 2009).
    \14\ The $1 billion figure represents funding for VBMS IT 
development, sustainment, and general operating expenses for fiscal 
years 2009 through 2015. For fiscal year 2016, VA has requested $76 
million for IT development, $177 million for sustainment, and $37 
million for general operating expenses.
---------------------------------------------------------------------------
    A significant concern is that the Program Management Office has not 
reliably updated the VBMS life-cycle cost estimate to reflect the 
program's expanded scope and timelines for completion of the system. 
This is largely attributable to the fact that the office has developed 
cost estimates for 2-year project cycles that are used for VBMS 
milestone reviews under the Office of Information and Technology's 
Project Management Accountability System.
    When asked how the Program Management Office arrived at the cost 
estimates reported in the milestone reviews, program officials stated 
that they developed rough order of magnitude estimates for each 
business need based on expert knowledge of the system, past development 
and engineering experience, and lessons learned. However, while this 
approach may have provided adequate information for VBA to prioritize 
VBMS system requirements to be addressed in the next release, it has 
not produced estimates that could serve as a basis for identifying the 
system's funding needs. Because it is typically derived from limited 
data and in a short time, a rough order of magnitude analysis is not 
equivalent to a budget-quality cost estimate and may limit an agency's 
ability to identify the funding necessary to efficiently execute a 
program.
    In addition, the Program Management Office's annual operating plan, 
which is generally limited to high-level information about the 
program's organization, priorities, staffing, milestones, and 
performance measures for fiscal year 2015, also shows estimated costs 
totaling $512 million for VBMS development from fiscal years 2017 
through 2020. However, according to the Director of the Program 
Management Office, this estimate was also developed using rough order 
of magnitude analysis. Further, the estimate does not provide reliable 
information on life-cycle costs because it does not include estimated 
IT sustainment and general operating expenses.
    Thus, even though the Program Management Office developed rough 
order of magnitude cost estimates for VBMS, these estimates have not 
been sufficiently reliable to effectively identify the program's 
funding needs. Instead, during the last 3 fiscal years, the Director 
has had to request an additional $118 million in IT development funds 
to meet program demands and to ensure support for ongoing development 
contracts. \15\ Specifically, in May 2013, VA requested $13.3 million 
to support additional work on VBMS. Then, during fiscal year 2014, VA 
reprogrammed $73 million of unobligated IT sustainment funds to develop 
functionality to transfer service treatment records from the Department 
of Defense to VA, and to support development of VBMS-Core 
functionality. In December 2014, the Program Management Office 
identified the need for additional fiscal year 2015 funds for ongoing 
system development contracts for VBMS-Core and VBMS-Awards, and, in 
late April 2015, department leadership submitted a letter to Congress 
requesting permission to reprogram $31.7 million to support work on 
these contracts, the National Work Queue, and other VBMS efforts.
---------------------------------------------------------------------------
    \15\ In fiscal years 2013, 2014, and 2015, VA requested permission 
from Congress to reprogram Office of Information and Technology funds 
that had not been used in the prior year or had been identified for IT 
sustainment to support IT development.
---------------------------------------------------------------------------
    According to the Program Management Office Director, the need to 
request additional funding does not represent additional risk to the 
program, but is the result of VBMS's success. The Director further 
noted that, as the Program Management Office has identified 
opportunities to increase functionality to improve the electronic 
claims process, their funding needs have also increased. Nevertheless, 
evolution of the VBMS program illustrates the importance of continuous 
planning, including cost estimating, so that trade-offs between cost, 
schedule, and scope can be effectively managed. Further, without a 
reliable estimate of the total costs associated with completing work on 
VBMS, stakeholders will have a limited view of VBMS's future resource 
needs and the program is at risk of not being able to secure 
appropriate funding to fully develop and implement the system. 
Therefore, we recommended that VA develop an updated plan for VBMS that 
includes the estimated cost to complete development and implementation 
of the system. VA agreed with our recommendation.

VBA Has Made Progress toward Improving VBMS Operation, but Does Not 
    Have Key System Performance Goals

    Our and other federal IT guidance recognize the importance of 
defining program goals and related performance targets, and using such 
targets to assess progress in achieving the goals. \16\ System 
performance and response times have a large impact on whether staff 
successfully complete work tasks. If systems are not responding at 
agreed-upon levels for availability and performance, it can be 
difficult to ensure that staff will complete tasks in a timely manner. 
This is especially important in the VBA claims processing environment, 
where staff are evaluated on their ability to process claims in a 
timely manner.
---------------------------------------------------------------------------
    \16\ GAO, Information Technology Investment Management: A Framework 
for Assessing and Improving Process Maturity, GAO 04 394G (Washington, 
D.C.: March 2004) and Executive Office of the President, Office of 
Management and Budget, Evaluating Information Technology Investments, A 
Practical Guide (November 1995).
---------------------------------------------------------------------------
    VBA reported that, since its initial rollout in January 2013, VBMS 
has exceeded its 95 percent goal for availability. Specifically, the 
system was available at a rate of 98.9 percent in fiscal year 2013 and 
99.3 percent in fiscal year 2014. Through May of fiscal year 2015, it 
was available for 99.98 percent of the time.
    Nevertheless, while VBA has reported exceeding its availability 
goals for VBMS, the system has also experienced periods of 
unavailability, many times at a critical level affecting all users. 
Specifically, since January 2013, VBA reported 57 VBMS outages that 
totaled about 117 hours of system unavailability. The system 
experienced about 18 hours of outages in January 2014, which were 
almost entirely at the critical level and affected all users. It 
reported experiencing only 2 system outages since July 2014-a 30-minute 
critical outage in December 2014 and a 23-minute critical outage in May 
2015.
    In addition to system availability, VBA monitors system response 
times for each of the VBMS modules using an application that measures 
the amount of time taken for each transaction. From September 2013 
through April 2015, VBA reported a decrease in average response times 
for VBMS-Core and VBMS-Rating. It attributed the decrease in response 
times to continuous engineering improvements to system performance. 
Program officials also explained that the difference in response times 
between modules was due to the type of information that is being pulled 
into each module from various other VBA systems. For example, both 
VBMS-Core and VBMS-Rating require information from the VBA corporate 
database, but VBMS-Core is populated with data from multiple VBA 
systems in addition to the corporate database.
    Program officials told us that specific goals for mean transaction 
response times have not been established because they feel that 
adequate tools are in place to monitor system performance and provide 
alerts if there are response time issues. For example, VBMS performance 
is monitored in real time by dedicated staff at a contractor's 
facility, users have access to a live chat feature where they can 
provide feedback on any issues they are experiencing with the system, 
and the VBMS help desk offers another avenue for users to provide 
feedback on the system's performance. The officials also noted that, 
because transaction response times have decreased, which can be 
indicative of an improvement to system performance, they are focusing 
their resources on adding additional functionality instead of trying to 
get the system to achieve a specific average transaction response time.
    While VBA's monitoring of VBMS's performance is commendable and the 
system's performance and response times have improved over time, the 
system is still in development and there is no guarantee that 
performance will remain at current levels as the system evolves. 
Performance targets and goals for VBMS response times would provide 
users with an expectation of the system response times they should 
anticipate, and management with an indication of how well the system is 
performing relative to performance goals. To address this situation, we 
recommended that the department establish goals for system response 
time and use the goals as a basis for periodically reporting actual 
system performance. VA agreed with this recommendation.

A Recent VBMS Release Included Unresolved Defects that Adversely 
    Impacted System Implementation

    A key element of successful system testing is appropriately 
identifying and handling defects that are discovered during testing. 
Outstanding defects can delay the release of functionality to end 
users, denying them the benefit of features. Key aspects of a sound 
defect management process include the planning, identification and 
classification, tracking, and resolution of defects. Leading industry 
and government organizations consider defect management and resolution 
to be among the primary goals of testing. \17\
---------------------------------------------------------------------------
    \17\ The Project Management Institute, Inc., A Guide to the Project 
Management Body of Knowledge (PMBOKr Guide), Fifth Edition, (Newtown 
Square, Pa.: 2013); Institute of Electrical and Electronics Engineers, 
Software and systems engineering - Software testing, ISO/TEC/IEEE Std 
29119 (New York, N.Y.: Sept. 1, 2013); Institute of Electrical and 
Electronics Engineers, IEEE Standard for Software and System Test 
Documentation, IEEE Std 829-2008 (New York, N.Y.: July 10, 2008); 
Institute of Electrical and Electronics Engineers, IEEE Standard 
Classification for Software Anomalies, IEEE Std 1044-2009 (New York, 
N.Y.: Jan. 7, 2010); Software Engineering Institute, CMMIr for 
Acquisition, Version 1.3 (Pittsburgh, Pa.: November 2010); Software 
Engineering Institute, CMMIr for Development, Version 1.3 (Pittsburgh, 
Pa.: November 2010); GAO, Year 2000 Computing Crisis: A Testing Guide, 
GAO/AIMD 10.1.21 (Washington, D.C.: November 1998); GAO Cost Estimating 
and Assessment Guide: Best Practices for Developing and Managing 
Capital Program Costs, GAO 09 3SP (Washington, D.C.: March 2009); and 
GAO Schedule Assessment Guide: Best Practices for Project Schedules-
Exposure Draft, GAO 12 120G (Washington, D.C.: May 2012).
---------------------------------------------------------------------------
    The VBMS program has defect management policies in place and is 
actively performing defect management activities. Specifically, in 
October 2012, the department developed the VBMS Program Management and 
Technical Support Defect Management Plan, which describes the program's 
defect management process. The plan was updated in March 2015 and 
describes, among other things, the process for identifying, 
classifying, tracking, and resolving VBMS defects. For example, it 
provides criteria for assigning four different levels of severity for 
defects-critical, high, medium, and low. \18\
---------------------------------------------------------------------------
    \18\ In addition to the defect severity level, these four defect 
priority-level assignments are used to designate the immediacy of 
repair: (1) resolve immediately, (2) give high attention, (3) normal 
queue, and (4) low priority.
---------------------------------------------------------------------------
    According to the plan, critical severity defects are characterized 
by complete system or subsystem failure, complete loss of 
functionality, and compromised security or confidentiality. Critical 
defects also have extensive user impact and do not have workarounds. 
High severity defects can have major user impact, leading to 
significant loss of system functionality. Medium severity defects can 
have moderate user impact and lead to moderate loss of functionality. 
For high and medium severity defects, workarounds could exist. Low 
severity defects lead to minor loss of functionality with no workaround 
necessary. According to the Program Management Office, high, medium, 
and low severity defects do not need to be resolved prior to a system 
release.
    The Program Management Office uses an automated tool to monitor and 
track defects in the VBMS defect repository. It is used to produce a 
daily defect management report that is shared with VBMS leadership, and 
to provide the current status of all open defects identified in testing 
of a forthcoming VBMS release or identified during production of a 
previous release. \19\
---------------------------------------------------------------------------
    \19\ The daily defect management report consists of the following 
data: (1) total critical and high, priority one defects for resolution; 
(2) total number of critical defects; (3) total number of high, 
priority one defects; and (4) total defects for resolution.
---------------------------------------------------------------------------
    According to the defect management plan, defects can be resolved in 
a number of different ways, and, once a defect has been fixed, tested, 
and has passed testing, it is considered done or resolved. Defects that 
cannot be attributed to an existing requirement are reclassified as a 
system enhancement and considered resolved, as they do not affect a 
current system release requirement. A defect is also considered 
resolved if it is determined to work as designed, duplicate another 
defect, or if it is no longer evident in the system.
    From March 2014 through March 2015, the total number of VBMS 
defects declined as release dates approached for four releases (7.0, 
7.1, 8.0, and 8.1). Additionally, to the department's credit, no 
critical defects remained at the time of each of these releases.
    However, even with the department's efforts to resolve defects 
prior to a VBMS release, defects that affected system functionality 
remained open at the time of the releases. Specifically, of the 254 
open defects at the time of VBMS release 8.1, 76 were high severity, 99 
were medium severity, and 79 were low severity. Examples of medium and 
high level defects that remained open at the time of VBMS release 8.1 
included:

      E-mail addresses for dependents only occasionally allowed 
special characters (medium).
      The intent to file for compensation/pension had an active 
status for a deceased veteran (medium).
      Creating a claim in legacy or VBMS would remove the 
Homeless, POW, and/or Gulf War Registry Flash (high).
      Disability name appeared incorrectly in Issue and 
Decision text for amyotrophic lateral sclerosis (ALS) (high).
      VBMS-Core did not recognize updated rating decisions from 
VBMS-Rating (high).

    According to the Program Management Office, these defects were 
communicated to users and an appropriate workaround for each was 
established. Nevertheless, even with the workarounds, high and medium 
severity open defects, which by definition impact system functionality, 
degraded users' experiences with the system. Continuing to deploy 
system releases with defects that impact system functionality increases 
the risk that these defects will diminish users' ability to process 
disability claims in an efficient manner. Accordingly, we recommended 
that VA reduce the incidence of high and medium severity level defects 
that are present at the time of future VBMS releases. The department 
agreed with this recommendation.

VBA Had Not Conducted a Survey to Obtain Users' Feedback or Established 
    Related Goals; GAO Found that Satisfaction with the System Varied

    Our September 2015 report noted that, in addition to having defined 
program goals and related performance targets, leading practices 
identify continuous customer feedback as a crucial element of IT 
project success. \20\ Particularly for projects like VBMS, where 
development activities are iterative, customer and end user 
perspectives and insights can be solicited through various methods-user 
acceptance testing, interviews, complaint programs, and satisfaction 
surveys-to validate or raise questions about the project's 
implementation.
---------------------------------------------------------------------------
    \20\ GAO, Information Technology Investment Management: A Framework 
for Assessing and Improving Process Maturity, GAO 04 394G (Washington, 
D.C.: March 2004); and Executive Office of the President, Office of 
Management and Budget, Evaluating Information Technology Investments, A 
Practical Guide (November 1995).
---------------------------------------------------------------------------
    Further, leading practices emphasize that periodic customer 
satisfaction data should be proactively used to improve performance and 
demonstrate the level of satisfaction the project is delivering. The 
Office of Management and Budget has developed standards and guidelines 
in survey research that are generally consistent with best practices 
\21\ and call for statistically valid data collection efforts to be 
used in fulfilling agencies' customer service data collection. \22\ 
These leading practices also stress the importance of centrally 
integrating all customer feedback data in order to have more complete 
diagnostic information to guide improvement efforts. \23\
---------------------------------------------------------------------------
    \21\ For example, the American Association of Public Opinion 
Research (AAPOR) best practices (http://www.aapor.org/best--
practices1.htm), describe the manner in which to produce a quality 
survey when a need for information arises for which existing data 
appear to be insufficient. AAPOR describes features such as random 
selection that should be used when selecting samples in order to allow 
the results to be projectable to the population being studied.
    \22\ OMB, Standards and Guidelines for Statistical Surveys 
(September 2006). In part, this guidance directs that agency survey 
designs use generally accepted statistical methods, such as 
probabilistic methods that can provide estimates of sampling error. Any 
use of nonprobability sampling methods must be justified statistically 
and be able to measure estimation error. According to the OMB 
standards, the size and design of the sample must reflect the level of 
detail needed in tabulations and other data products, and the precision 
required of key estimates.
    \23\ GAO, Information Technology Investment Management: A Framework 
for Assessing and Improving Process Maturity, GAO 04 394G (Washington, 
D.C.: March 2004); Carnegie Mellon Software Engineering Institute, 
Capability Maturity Modelr Integration (CMMI) for Development, Version 
1.3 (Pittsburgh, Pa.: November 2010); M.S. Garver and R.L. Cook, "Best 
Practice Customer Value and Satisfaction Cultures," Mid-American 
Journal of Business, vol. 16, no. 1 (2001); M.S. Garver, "Modeling Best 
Practices for Government Agencies: Implementing Customer Satisfaction 
Programs" (Jan. 28, 2002); Best Practices, LLC, "Achieving World-Class 
Customer Service: An Integrated Approach" (copyright 1998-2001); 
Federal Benchmarking Consortium, "Serving the American Public: Best 
Practices in Customer-Driven Strategic Planning" (February 1997); and 
OMB, Evaluating Information Technology Investments, A Practical Guide 
(November 1995).
---------------------------------------------------------------------------
    VA has used a variety of methods for obtaining customer and end 
user feedback on the performance of VBMS. For example, the department 
solicits end user involvement and feedback in the iterative system 
development process based on user acceptance criteria. \24\ According 
to the Senior Project Manager for VBMS Development within the Office of 
Information and Technology, at the end of each development cycle and 
before a new version of VBMS is deployed, end users are involved in 
user acceptance testing and a final customer acceptance meeting. \25\
---------------------------------------------------------------------------
    \24\ User acceptance criteria are criteria that a deliverable must 
satisfy to be accepted by a user, customer, or other authorized entity.
    \25\ User acceptance testing is formal testing conducted to enable 
a user, customer, or other authorized entity to determine whether to 
accept a deliverable.
---------------------------------------------------------------------------
    The department also provides training to a subset of end users-
known as "superusers"-on the updated functionality introduced in a new 
version of VBMS. These superusers are expected to train the remaining 
users in the field on the new version's features. The department tracks 
the overall satisfaction level with training received after each VBMS 
major release. However, this tracking is limited to superusers' 
satisfaction with the training, rather than with their satisfaction 
with the system. \26\
---------------------------------------------------------------------------
    \26\ As of March 31, 2015, VA reported it had exceeded its target 
goal of 90 percent with a 94 percent satisfaction rate with VBMS 
superuser training.
---------------------------------------------------------------------------
    Further, the department solicits customer feedback about the system 
through interviews. For example, the Director of the Program Management 
Office stated that the Under Secretary for Benefits hosts a weekly 
phone call with bargaining unit employees as a "pulse check" on VBA 
transformation activities, including VBMS. According to this official, 
the VBA Office of Field Operations also offers an instant messaging 
chat service to all regional office employees to solicit feedback about 
the latest deployment of VBMS functionality.
    Another method in which the department obtains customer input is 
through a formal feedback process. For example, according to the 
Director, VA provides national service desk support to assist users in 
troubleshooting system issues and identifying system defects. In 
addition, VBMS applications include a built-in feature that enables 
users to provide feedback to the Program Management Office on problems 
with the system. According to the Director, the feedback received by 
the office also helps to identify user training issues.
    Nevertheless, while VA has taken these various steps to obtain 
feedback on the performance and implementation of VBMS, it has not 
established goals to define user satisfaction that can be used as a 
basis for gauging the success of its efforts to promote satisfaction 
with the system. Further, while the efforts that have been taken to 
solicit users' feedback provide VBA with useful insights about 
particular problems, data are not centrally compiled or sufficient for 
supporting overall conclusions about whether customers are satisfied. 
In addition, VBA has not employed a customer satisfaction survey of 
claims processing employees who use the system on a daily basis to 
process disability claims. Such a survey could provide a more 
comprehensive picture of overall customer satisfaction and help 
identify areas where the system's development and implementation 
efforts might need additional attention.
    According to the Director of the Program Management Office, VBA has 
not used a survey to solicit feedback because of concern that such a 
mechanism may negatively impact the efficiency of claims processors in 
completing disability compensation claims on behalf of veterans. 
Further, the Director believed that the office had the benefit of 
receiving ongoing end user input on VBMS by virtue of the intensive 
testing cycles, as well as several of the other mechanisms by which end 
users have provided ongoing feedback. Nevertheless, without 
establishing user satisfaction goals and collecting the comprehensive 
data that a statistically valid survey can provide, the Program 
Management Office limits its ability to obtain a comprehensive 
understanding of VBMS users' satisfaction with the system. Thus, VBA 
could miss opportunities to improve the efficiency of its claims 
process by increasing satisfaction with VBMS. Therefore, we recommended 
that VA develop and administer a statistically valid survey of VBMS 
users to determine the effectiveness of steps taken to make 
improvements in users' satisfaction. The department agreed with this 
recommendation.

Most Types of Users Reported Satisfaction with VBMS, but Decision 
    Review Officers Were Generally Dissatisfied

    In response to a statistical survey that we administered, most of 
the VBMS users reported that they were satisfied with the system that 
had been implemented at the time of the survey. \27\ These users 
(claims assistants, veteran service representatives, supervisory 
veteran service representatives, rating veterans service 
representatives, decision review officers, and others) \28\ were 
satisfied with the three modules of VBMS. \29\
---------------------------------------------------------------------------
    \27\ We received a response rate of 60 percent. We adjusted for 
characteristics that were associated with survey response propensity 
using standard weighting class adjustments defined by sampling strata. 
We assumed that nonresponse adjusted data are missing at random and 
therefore concluded the respondent analyses using the nonresponse 
adjusted weights are unbiased for the population of VBMS users sampled 
in the survey and the responses to be generalizable to all VBA claims 
processors at 56 VA regional offices. Confidence intervals for 
estimates we report from this survey are based on a confidence level of 
95 percent and are calculated using methods appropriate for a 
stratified random sample. Confidence intervals are never wider than 
plus or minus 5 percentage points. At a 95 percent confidence level, 
this means that in about 95 out of 100 instances, the sampling 
procedures we used would be expected to produce a confidence interval 
containing the true population value we estimate.
    \28\ Some survey respondents identified themselves as "other" when 
selecting their role (e.g., rating quality review specialist).
    \29\ Survey respondents were asked to rate their VBMS experience 
with various system usability statements and were given the option to 
select the following answer choices: "strongly agree," "agree," 
"neither agree nor disagree," "disagree," "strongly disagree," and "not 
applicable or no basis to judge." We defined satisfaction as a 
combination of the "strongly agree" and "agree" responses, and excluded 
those respondents who selected "not applicable or no basis to judge" 
for analysis of satisfaction, within the main report.
---------------------------------------------------------------------------
    Specifically, an estimated 59 percent of the claims processors were 
satisfied with VBMS-Core; an estimated 63 percent were satisfied with 
the Rating module, and an estimated 67 percent were satisfied with the 
Awards module.
    Nevertheless, while a majority of users were satisfied with the 
three modules, decision review officers expressed considerably less 
satisfaction than other users with VBMS-Core and VBMS-Rating. \30\ 
Specifically, for VBMS-Core, an estimated 27 percent of decision review 
officers were satisfied compared to an estimated 59 percent of all 
roles of claims processors (including decision review officers) who 
were satisfied. In addition, for VBMS-Rating, an estimated 38 percent 
of decision review officers were satisfied, compared to an estimated 63 
percent of all roles of claims processors.
---------------------------------------------------------------------------
    \30\ Decision review officers do not typically use VBMS-Awards. 
Therefore, decision review officers were not compared to other users 
for that module.
---------------------------------------------------------------------------
    Decision review officers were considerably less satisfied with VBMS 
in comparison to all roles of claims processors in additional areas. 
For example, an estimated 26 percent of decision review officers viewed 
VBMS-Core as an improvement over the previous legacy system or systems 
for establishing claims and storing and reviewing electronic documents 
related to a claim in an eFolder. In contrast, an estimated 58 percent 
of all users (including decision review officers) viewed the Core 
module as an improvement.
    In addition, an estimated 26 percent of decision review officers 
viewed VBMS-Rating as an improvement over the previous systems with 
respect to providing Web-accessible tools, including rules-based rating 
calculators, to assist in making claims rating decisions. In contrast, 
an estimated 55 percent of all roles of claims processors viewed the 
Rating module as an improvement. For VBMS-Awards, an estimated 61 
percent of all roles viewed this module as an improvement over the 
previous systems to automate the award and notification process.
    Similarly, in considering the three modules, a majority of users 
(including decision review officers) would have chosen VBMS over the 
legacy system or systems. However, decision review officers indicated 
that they were less likely to have chosen VBMS-Core and VBMS-Rating 
over legacy systems. Specifically, an estimated 27 percent of decision 
review officers would have chosen VBMS-Core compared to an estimated 60 
percent of all roles of claims processors. In addition, an estimated 27 
percent of decision review officers would have chosen VBMS-Rating 
compared to 61 percent of all roles that would have chosen the system 
over the legacy system or systems. For VBMS-Awards, an estimated 67 
percent of all roles would have chosen this module over the previous 
systems.
    Decision review officers perform an array of duties to resolve 
claims issues raised by veterans and their representatives. They may 
also conduct a new review or complete a review of a claim without 
deference to the original decision, and, in doing so, must click 
through all documents included in the e-Folder. Survey comments from 
decision review officers stated, for example, that reviews in the VBMS 
paperless environment take longer because of the length of time spent 
loading, scrolling, and viewing each document (particularly if the 
documents are large, such as a service medical record file). 
Additionally, multiple decision review officers commented that it is 
easier and faster to review documents in a paper file. Although such 
comments provide illustrative examples of individual decision review 
officers' views and are not representative, according to the Director 
of the Program Management Office, decision review officers' relative 
dissatisfaction is not surprising because the system does not yet 
include functionality that supports their work, which primarily relates 
to appeals processing. To improve this situation, we recommended that 
VA establish goals that define customer satisfaction with the system 
and report on actual performance toward achieving the goals based on 
the results of our survey of VBMS users and any future surveys VA 
conducts. The department concurred with this recommendation.
    In conclusion, while VA has made progress in developing and 
implementing VBMS, additional capabilities to fully process disability 
claims were delayed beyond when the system's completion was originally 
planned. Further, in the absence of a plan that identifies when and at 
what cost the system can be expected to fully support disability 
compensation and pension claims processing and appeals, holding VA 
management accountable for meeting a schedule, while ensuring 
sufficient program funding, will be difficult. Also, without goals for 
system response times, users do not have an expectation of the response 
times they can anticipate, and management lacks an indication of how 
well the system is performing. Furthermore, continuing to deploy system 
releases with defects that impact functionality increases the risk that 
these defects will diminish users' ability to process disability claims 
in an efficient manner. Lastly, although the results of our survey 
provide VBA with useful data about users' satisfaction with VBMS (e.g., 
the majority of users are satisfied), without having goals to define 
user satisfaction, VBA does not have a basis for gauging the success of 
its efforts to improve the system. As we stressed in our report, 
attention to these issues can improve VA's efforts to effectively 
complete the development and implementation of VBMS. Fully addressing 
our recommendations, as VA agreed to do, should help the department 
give appropriate attention to these issues.
    Chairman Miller, Ranking Member Brown, and Members of the 
Committee, this concludes my prepared statement. I would be pleased to 
respond to any questions that you may have.

Contacts and Staff Acknowledgments

    For further information about this testimony, contact Valerie C. 
Melvin at (202) 512-6304 or [email protected] Contact points for our 
offices of Congressional Relations and Public Affairs are listed on the 
last page of the testimony. Other key contributors to this testimony 
include Mark Bird (assistant director), Kavita Daitnarayan, Kelly 
Dodson, Nancy Glover, Brandon S. Pettis, and Eric Trout.

    This is a work of the U.S. government and is not subject to 
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if you wish to reproduce this material separately.

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Why GAO Did This Study

    VBA pays disability benefits for conditions incurred or aggravated 
while in military service, and pension benefits for low-income veterans 
who are either elderly or have disabilities unrelated to military 
service. In fiscal year 2014, the department paid about $58 billion in 
disability compensation and about $5 billion in pension claims.
    The disability claims process has been the subject of attention by 
Congress and others, due in part to long waits for processing claims 
and a large backlog of claims. To process disability and pension claims 
more efficiently, VA began development and implementation of an 
electronic, paperless system-VBMS-in 2009.
    This statement summarizes GAO's September 2015 report (GAO-15-582) 
on (1) VA's progress toward completing the development and 
implementation of VBMS and (2) the extent to which users report 
satisfaction with the system.

What GAO Recommends

    In its September 2015 report, GAO recommended that VA develop a 
plan with a time frame and a reliable cost estimate for completing 
VBMS, establish goals for system response time, minimize the incidence 
of high and medium severity system defects for future VBMS releases, 
assess user satisfaction, and establish satisfaction goals to promote 
improvement. VA concurred with GAO's recommendations.

What GAO Found

    As GAO reported in September 2015, the Veterans Benefits 
Administration (VBA) within the Department of Veterans Affairs (VA) has 
made progress in developing and implementing the Veterans Benefits 
Management System (VBMS), with deployment of the initial version of the 
system to all of its regional offices as of June 2013. Since then, VBA 
has continued developing and implementing additional system 
functionality and enhancements that support the electronic processing 
of disability compensation claims. As a result, 95 percent of records 
related to veterans' disability claims are electronic and reside in the 
system. However, VBMS is not yet able to fully support disability and 
pension claims, as well as appeals processing. Nevertheless, while the 
Under Secretary for Benefits stated in March 2013 that the development 
of VBMS was expected to be completed in 2015, implementation of 
functionality to fully support electronic claims processing has been 
delayed beyond 2015. In addition, VBA has not yet produced a plan that 
identifies when the system will be completed. Accordingly, holding VA 
management accountable for meeting a time frame and for demonstrating 
progress will be difficult.

    As VA continues its efforts to complete development and 
implementation of VBMS, three areas could benefit from increased 
management attention.
      Cost estimating: The program office does not have a 
reliable estimate of the cost for completing the system. Without such 
an estimate, VA management and the department's stakeholders have a 
limited view of the system's future resource needs, and the program 
risks not having sufficient funding to complete development and 
implementation of the system.
      System availability: Although VBA has improved its 
performance regarding system availability to users, it has not 
established system response time goals. Without such goals, users do 
not have an expectation of the system response times they can 
anticipate and management does not have an indication of how well the 
system is performing relative to performance goals.
      System defects: While the program has actively managed 
system defects, a recent system release included unresolved defects 
that impacted system performance and users' experiences. Continuing to 
deploy releases with large numbers of defects that reduce system 
functionality could adversely affect users' ability to process 
disability claims in an efficient manner.

      VA has not conducted a customer satisfaction survey that 
would allow the department to compile data on how users view the 
system's performance, and ultimately, to develop goals for improving 
the system. GAO's survey of VBMS users found that a majority of them 
were satisfied with the system, but decision review officers were 
considerably less satisfied. Although the results of GAO's survey 
provide VBA with data about users' satisfaction with VBMS, the absence 
of user satisfaction goals limits the utility of survey results. 
Specifically, without having established goals to define user 
satisfaction, VBA does not have a basis for gauging the success of its 
efforts to promote satisfaction with the system, or for identifying 
areas where its efforts to complete development and implementation of 
the system might need attention.

                                 
                       Statements For The Record

                          THE AMERICAN LEGION
    Information Technology (IT) systems are only as effective as the 
data they have to work with. There is a tremendous amount of promise in 
the Department of Veterans Affairs (VA) Veterans Benefits Management 
System (VBMS). VBMS represents something the veterans' community has 
been hoping for since 1988 and that VA has spent over a billion dollars 
working to implement. However, no matter what technological rewards 
this system promises, it will only be as strong as the data and if VA 
doesn't make substantial improvements to the scanning procedures that 
collect that data, the system will continue to deliver substandard 
results.
    Chairman Miller, Ranking Member Brown and distinguished Members of 
the Committee on Veterans' Affairs, on behalf of Commander Dale Barnett 
and the over 2 million members of The American Legion, we applaud you 
and your colleagues for conducting this hearing to examine the VBMS and 
how it ultimately impacts delivery of benefits to disabled veterans.
                               Background
    Although efforts to move to an electronic claims processing system 
date back to at least 1988, the current VA system, VBMS, was created 
through former VA Secretary Eric Shinseki's directive to modernize the 
claims processing system in 2009. VBMS was deployed with a mission of 
reducing claims processing times and improving accuracy in 
adjudications. Today, VBMS is utilized by Veterans Benefits 
Administration (VBA) and Board of Veterans' Appeals (BVA) personnel to 
adjudicate claims.
    In September 2009 VA's initial foray into electronic claims 
processing cost $579.2 million, and by January 2015 costs had exploded 
to approximately $1.3 billion \1\, according to a September 2015 VA 
Office of Inspector General (VAOIG) report. Within the same report, VA 
contends that VBMS is expected to meet VA's objective of eliminating 
the backlog with a 98 percent accuracy by the end of 2015.
---------------------------------------------------------------------------
    \1\ VAOIG Report: Follow-up of the Veterans Benefits Management 
System: Sept. 2015
---------------------------------------------------------------------------
    The key question is whether this represents a realistic prediction 
of the impact of the VBMS electronic claims processing system.
    According to the VA's final Monday Morning Workload Report (MMWR) 
for 2015, VBA had the following claims in its inventory \2\:
---------------------------------------------------------------------------
    \2\ VA Monday Morning Workload Report: December 28, 2015

    u  361,973 claims that were pending;
    u  74, 378 claims waiting in excess of 125 days for adjudication 
(20.5%);
    u  318,266 appeals; and
    u  214,154 dependency claims

    The first MMWR following the initial September 2009 investment in 
VBMS indicated VBA's inventory as \3\:
---------------------------------------------------------------------------
    \3\ VA Monday Morning Workload Report: October 5, 2009

    u  388,774 claims pending
    u  158,290 claims waiting in excess of 125 days for adjudication 
(35.6%)
    u  174,891 appeals
    u  50,790 dependency claims

    Though VA regularly assured the veteran community in Congressional 
testimonies that it would meet its stated goal of ending the backlog by 
the end of 2015, the December 2015 MMWR reflects a failure to meet the 
stated objective. Additionally, the same MMWR indicated VA's claims 
accuracy as 90.19 percent and issue based accuracy as 96.3 percent.
    The American Legion commends VA for its significant efforts in 
reducing the backlog - however, we continue to maintain our concerns 
and frustrations in which VA has approached this task. Since the 
inception of VBMS in September 2009 the appeals inventory has more than 
doubled - ballooning over 108 percent. Dependency claims awaiting 
adjudication have exploded by over 400 percent. Conveniently, VA fails 
to include these statistics in it backlog measure. With these startling 
numbers, The American Legion remains concerned that VA has largely 
focused upon adjudicating certain claims that comprise VA's chosen 
"backlog statistics" rather than addressing the root concern - that 
veterans must wait for justice for their service connected injuries. A 
veteran waiting on appeal is a veteran who is still waiting, and 
absolutely must be considered part of the real backlog.
                            Feedback on VBMS
    The American Legion has over 3,000 accredited representatives 
located throughout the nation. These dedicated advocates are employed 
in numerous capacities throughout the nation. Many of these employees 
are employed in VA facilities and utilize VBMS daily. While many 
acknowledge that VBMS has improved functions within VA, they will also 
point out the shortcomings of the system.
    In response to the September 2015 VAOIG and Government 
Accountability Reports, The American Legion collated information from 
our personnel located within the VA's facilities that utilize the VBMS 
system to provide feedback. Noted concerns pertaining to VBMS included:

    u  Inability to assist sensitive cases requiring accredited 
representatives to contact other VA regional offices (VAROs) to assist 
veterans employed by VA.
    u  Non-rating claims are not integrated completely within VBMS.
    u  Debt Management Center has not been integrated.
    u  Veterans On-Line Applications (VONAPPS) and documents reflecting 
E-benefits powers of attorney/Stakeholders Enterprise Portal (SEP) 
acceptances only appear in Virtual VA (a separate electronic system).
    u  Pension Management Center (PMC) claims only appear in Virtual 
VA.
    u  Correspondence sent to veteran's state that the power of 
attorney (POA) has received a copy; accredited representatives are not 
receiving these copies and no alert is provided by VA to the POA 
indicating correspondence has occurred.
    u  POAs are required to review a decision within 48 hours. If a 
claim is adjudicated and the POA is out of the office, it can put 
additional pressure on POAs to review the decisions.
    u  Rating decisions performed by adjudicators that telework are 
unable to be reviewed due to the manner VA has created the telework 
procedures.
    u  As the day progresses, the system becomes slower until 5 PM 
Eastern, when VAROs in the Eastern Time Zone end their duty days and 
reduces the number of users.
    u  Lack of search capability within VBMS
    u  Scanned documents are frequently improperly identified

    The American Legion conducts training biannually for our accredited 
representatives. The issue of VBMS and its limits in functionality were 
a topic of great concern in August 2015. Our representatives called for 
a resolution to address their concerns. In September 2015, The American 
Legion urged "VA to keep the veterans' accredited service organization 
representatives at the local VAROs informed of all decisions made on 
claims and/or appeals of claimants/appellants who have assigned the 
service organizations as their VA accredited representative \4\."
---------------------------------------------------------------------------
    \4\ Resolution No. 104: Local Accredited Representative Access to 
Veterans Benefits Management System Decisions: SEP 2015
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    Examining the concerns cited above, perhaps the key limiting factor 
revolves around the improperly identified scanned documents and lack of 
search capabilities. When VBMS was still in the development stage, the 
ability to rapidly search through data within a veteran's file for 
medical information relevant to their claim was consistently cited as 
the primary advantage of electronic over paper processing. However, 
this feature continues to fall short in VA's delivery of VBMS.
    The American Legion continues to find inconsistent scanning results 
nationwide. Finding improperly labeled folders in a veteran's file is 
not a rare occurrence, but an almost daily occurrence for those who 
work with claims files. This has been a consistent complaint from both 
service officers and the VA employees The American Legion has spoken 
with. While a mislabeled folder can be relabeled by initiating contact 
with appropriate personnel in VA offices, this is still a complicating 
factor that makes the VBMS files more difficult to work through. The 
mislabeling is clearly a result of substandard scanning, and making a 
stronger effort to improve the quality of scanning on the front end 
would help alleviate this problem.
    Further compounding efforts to utilize advantages of an electronic 
system is the lack of an effective search mechanism. Because the 
scanned documents have no Optical Character Recognition (OCR) - a 
promised feature from the early stage of VBMS planning - there is no 
way to search these documents for key words and phrases. It therefore 
offers little to no improvement over manually searching though paper 
files, with perhaps additional eye strain from staring at monitors.
    VA has included the veteran's service organizations (VSOs) while 
designing and implementing VBMS, and they have asked for input to 
improve functionality. However, this is where the conversation often 
ends. VA rarely, if ever, implements the requests, and it is 
particularly frustrating to repeatedly make requests or suggestions for 
improvement in the field or VA Central Office and fail to see them 
implemented.
    However, The American Legion applauds VA's efforts to modernize its 
claims processing system. As always, The American Legion is willing to 
assist VA to ensure that veterans are best served.
                               Conclusion
    In order to improve the VBMS system, it makes the most sense to 
start at the beginning, with the scanning of documents. If improvements 
can be made to the scanning process, adding nationwide consistency, 
properly labeled file folders, and improving the ability to 
electronically search documents, this system could begin to live up to 
its potential. Until then, with substandard product input in the 
system, we are virtually guaranteed substandard output.As always, The 
American Legion thanks this committee for the opportunity to explain 
the position of the more than 2 million veteran members of this 
organization. For additional information regarding this testimony, 
please contact Mr. Warren J. Goldstein at The American Legion's 
Legislative Division at (202) 861-2700 or [email protected]

                                 
            BRENTWOOD VILLAGE BUSINESS IMPROVEMENT DISTRICT
    Chairman Benishek, Ranking Member Brownley and distinguished 
members of the Subcommittee on Health, I appreciate the opportunity to 
present this testimony for the record on behalf of the Brentwood 
Village Business Improvement District (BID) and the Brentwood Village 
Chamber of Commerce (BVCC) a 501(c)(6) nonprofit.
    Collectively, the BID and BVCC work with over 100 businesses 
currently operating in Brentwood Village, an area on the north end of 
Zone 4 in the West Los Angeles VA Campus. While our storefronts operate 
adjacent to the VA property, our community is inextricably linked to 
the VA by our shared values and patronage.
    To this end, for the past 70 years, the VA has generously provided 
parking lots on the eastern edge of its campus that have helped service 
both Veterans, residents, employees and customers to Brentwood Village 
as well as the community at large. We believe that the continued shared 
used of the North Parking lot and Playing Field/South parking lot in 
Zone 4 is necessary to provide these continued services for veterans.
    Under the new VA Master Plan, the aforementioned parking lots in 
Zone 4 are to become green space and/or access roads, which would 
negatively impact both the businesses that utilize those parking lots 
and the Veterans who work there and frequent those establishments.
    Not only would this eliminate hundreds of parking spaces for 
Veterans, village businesses and park patrons, but it would cause 
additional adverse effects such as compounding traffic in an already 
over-populated and congested area of West Los Angeles. Unfortunately, 
there are no other parking alternatives in the immediate vicinity.
    We have submitted a number of ideas to the VA that would be 
beneficial to Veterans within the community and ameliorate the 
aforementioned issue with the parking. Please find some of our 
suggestions below for your consideration:

      1)  Promote health and wellness by working with the VA to 
implement a Food Donation Program for all West Los Angeles Veterans, 
especially homeless and disadvantaged Veterans - Participating 
Brentwood Village restaurants to provide unused/unsold food to 
Veterans.
      2)  Provide skill building and employment by working with the VA 
to change the Playing field/South parking lot to a Veteran's Park and 
potentially create licensing fee for people who bring dogs to the park 
- this will offer socialization, physical recreation and volunteerism.
      3)  Participating Brentwood Village Merchants to provide 
training/employment for Veterans through Mentorship/Internship 
programs. We will adopt a "Veterans First" hiring policy.
      4)  Work with the VA to update the ticketing hardware/software 
and pricing for both parking lots to ensure better access for Veterans 
and offer potential employment opportunities to elderly and service 
connected disabled veterans.
      5)  Participating Brentwood Village Merchants will offer Veterans 
discounts on goods/services to help promote health, wellness and 
socialization.
      6)  Raise funds for scholarship programs/housing and for Veterans 
currently housed at the Domiciliary who will be transitioning to their 
first year of independent living.

    Thank you for your consideration of our observations, suggestions 
and recommendations. Taking care of our nation's Veterans is a priority 
for all of us. As members of the BID and BVCC we take pride in our 
longstanding connection to the West Los Angeles VA and look forward to 
resolving this issue together. We welcome the opportunity to continue 
this dialogue, answer any questions, or provide you with any additional 
information that you may require.

                                 
                  Questions And Answers For The Record
         Department of Veterans Affairs Pre-Hearing Questions:
    Question a: As noted in the GAO report, Congress has provided VA 
with approximately $1.3 billion dollars in funding for the VBMS 
program. As part of the FY 2016 budget request, VBA asked for $253 
million in funding for various technology improvements and processes, 
and for sustainment of the existing components of VBMS. Provide the 
total projected cost of developing, implementing, and sustaining the 
VBMS.

    Response: Modernizing VBA systems is an essential part of VBA's 
overall transformation effort. Resources have already been invested in 
VBMS to enable VA to fulfill its ambitious goal to transition from 
paper-based claims to 21st century, electronic claims processing. 
Delivering the remaining VBMS requirements will allow VBA to capitalize 
on the investment with a comprehensive technical solution. Each VBMS 
release provides new or enhanced application functionality, and the 
system continues to evolve to meet end-user and organizational needs 
over time.
    The FY 2016 budget request includes $76 million for development 
efforts to enhance the capabilities of VBMS. This funding will deliver 
functionality such as appeals processing enhancements at the Agency of 
Original Jurisdiction level, pension automation, and enhancements to 
the National Work Queue (NWQ). Improvements to electronic 
communications and expanded access to Veteran information in the VBMS 
electronic folder (eFolder) are also scheduled for FY 2016. These 
capabilities have been identified as a high priority for VA 
stakeholders. Furthermore, FY 2016 funding will also allow VA to 
integrate with Department of Defense (DoD) information systems to 
improve evidence request suspense times, eliminate interagency 
duplication of efforts, and allow end-users to process benefit claims 
faster and more accurately.
    The remainder of the FY 2016 funding request will provide 
sustainment services to support continued system stability to the 
workforce through performance monitoring, defect and incident 
resolution, and routine maintenance procedures. Sustainment funding is 
critical to support the enterprise business capabilities that enable 
efficient claims processing.
    Planned enhancements for FY 2017 will allow end-users to process 
more claims end-to-end within a single system, further reducing the 
reliance on legacy systems. This transition will allow VBA to drive 
improvements on the timeliness and quality of benefits delivery and 
focus on the MyVA initiative, which outlines VA's transformation to a 
Veteran-centric organization. At that time, VA expects to achieve 
department-wide interoperability goals and will evaluate a new 
investment plan for FY 2018.

    Question b: Describe in detail how the Department distinguishes 
between what is considered "development" of VBMS, as compared to 
"sustainment" of VBMS.

    Response: Development funds are used to enhance and complete the 
functionality that will enable VA to electronically process disability 
compensation claims from end-to-end in VBMS. Development and 
integration efforts will deliver new functionality, such as support of 
pension and appeals business processes, which are currently supported 
primarily by legacy systems. Although VBMS now supports the full 
lifecycle of disability compensation claims, enhancement requests from 
end-users are considered valuable development opportunities to 
streamline business processes and increase productivity.
    Sustainment funds support all activities related to the operation 
and maintenance of the VBMS application in production at the current 
capability and performance level, including support for deployment 
resources and equipment. Sustainment costs do not support new 
functionality or enhancements, but rather the maintenance of existing 
information systems and applications. There are two types of 
sustainment funds: mandatory and marginal. Mandatory sustainment 
provides funding to keep production systems and applications running. 
Marginal sustainment supports new cost or increased cost to maintain a 
newly deployed application or system from the point of deployment until 
the end of the fiscal year.

    Question c: Describe in detail the features of VBMS that have been 
developed thus far, and which of those features are now considered to 
be in sustainment.

    Response: VBMS is a web-based application primarily used by VBA 
employees to electronically process disability compensation claims. 
Additional stakeholder groups, including the Veterans Health 
Administration (VHA), and Veterans Service Organizations (VSO), can 
access VBMS to aid in the claims process and execute their respective 
actions. The Board of Veterans' Appeals (the Board) also has access to 
VBMS to review the eFolder.
    A major feature of VBMS is the eFolder, which is used to 
electronically store claim-related documents and evidence. VBMS 
features developed to date enable VA to electronically intake and 
establish claims, develop and evaluate evidence, provide rating 
decisions, and generate awards. Rating functionality provides rules-
based tools and automated decision recommendations. Awards 
functionality automates award and notification processes.
    Sustainment funding is used to sustain all of the above deployed 
capabilities, along with the VBMS infrastructure. Development funding 
only supports the development of new features and system enhancements, 
along with integration work that enables VBMS to support the strategic 
partners of VBA. All features are considered in sustainment as soon as 
they are deployed to production.

    Question d: Provide the percentage of total VBMS development that 
has been completed, and the expected date of completion.

    Response: With the completion of the electronic eFolder, VBMS has 
reached its initial operating capability. Ongoing development efforts 
enhance existing functionality and application performance, as well as 
deploy new features to increase claims processing efficiency and help 
the VA workforce meet its strategic goals. VA recognizes the need to 
continue to invest in "next generation" VBMS. VBMS employs an Agile 
development methodology that allows solutions and requirements to 
evolve based on priority for each development cycle. Development plans 
are prioritized and tailored as new business requirements are 
identified. The long-term vision for the VBMS program will involve 
transitioning from an application-centric model to one focused on 
delivering enterprise business capabilities. VA expects to achieve 
Department-wide interoperability goals that support common access, 
stakeholder integration, and end-user satisfaction in FY 2018.

    Question e: Describe in detail the functionality VBMS currently 
contains to process paperless appeals.

    Response: Some appeals-specific functionality has been delivered 
for VBA and the Board. This functionality provides the Board's end-
users with a distinct eFolder view, the ability to bookmark, and 
restricted viewing of the Board's annotations and notes. These features 
support paperless appeals processing to view documents in the eFolder. 
VBMS is collaborating with appeals subject matter experts to include 
more Agency of Original Jurisdiction appeals-specific requirements for 
future development.

    Question f: Describe in detail the Department's plan to determine 
to what extent end-users are satisfied with the VBMS program.

    Response: The VBMS Program Management Office (PMO) has a strong 
desire to obtain customer satisfaction information from all end-users, 
to include claims processors, VHA clinicians, and other stakeholders. 
As stated in response to the recent GAO report (GAO-15-582), VBA is 
working with labor partners on distribution of a survey, as well as the 
specific items to be assessed by this survey. The VBMS PMO expects to 
release a survey in March 2016 to measure end-user satisfaction.
    However, a survey gives only a snapshot in time, while continuous 
feedback provides opportunity for the system to be adapted based on 
that feedback and realization of benefits offered by Agile methodology. 
The VBMS PMO has sought feedback from users since initial deployment 
and also relied on the subject-matter expertise of users to develop the 
system. The VBMS PMO provides various channels for customer feedback, 
including stakeholder reengagement, user acceptance testing (UAT), 
requirements and design sessions, a post-deployment command center, 
superuser training, change management agent calls, Under Secretary for 
Benefits (USB) pulse check calls, and the national Transformation Chat. 
These channels are in addition to the help desk report that captures 
and prioritizes all reported VBMS-related issues. Enhancement requests 
from end-users are frequently reviewed and considered for possible 
inclusion in a future release, as they offer insight to potential 
improvements to everyday processes. VBMS will continue this process of 
continual feedback.

    Question g: Provide the percentage of all decisions that were 
appealed through a Notice of Disagreement (NOD) in FY 2015. Please also 
provide the total number of NODs filed in FY 2015.

    Response: Five percent of the 1.4 million rating-related claim 
decisions made in FY 2015 had been appealed by the end of FY 2015. Most 
of the Veterans who received a decision in 2015 are still within their 
one-year appeal period. There were 169,069 NODs established in FY 2015. 
Approximately 91 percent of these NODs were filed on compensation and 
pension rating claim decisions. Within this 91 percent, approximately 
55 percent of the NODs were submitted on claims completed in FY 2015, 
with the remainder submitted on claims completed in earlier fiscal 
years.

    Question h: Provide the total number of Statements of the Case 
(SOCs) that were issued in FY 2015.

    Response: There were 100,018 SOCs issued in FY 2015. Many of these 
SOCs were issued for NODs submitted in earlier fiscal years. An 
additional 28,766 Supplemental SOCs (SSOCs) were issued in FY 2015.

    Question i: Provide the percentage of all Statements of the Case 
(SOCs) issued in FY 2015 that granted the claimed benefit(s) on appeal. 
Please also provide the percentage of all SOCs issued in FY 2015 that 
denied the claimed benefit(s) on appeal.

    Response: In FY 2015, VBA resolved 16,718 appeals through a full 
grant of the benefit sought; as a result, no SOC was issued on these 
NODs. VBA resolved an additional 2,193 appeals following issuance of an 
SOC, but prior to certification to the Board of Veterans' Appeals 
(Board). In addition, 54,468 appellants were satisfied with their SOC 
and chose not to pursue their appeal to the Board. Approximately 46 
percent of appellants who were issued an SOC in FY 2015 chose to 
continue their appeal to the Board.

    Question j: Provide the Average Days Pending (ADP) between the 
filing of a non-rating claim and the issuance of a decision in FY 2015.

    Response: The FY 2015 Average Days to Complete (ADC) non-rating 
claims data (from the date of filing to the issuance of a decision) is 
provided in the table below. Non-Rating Related End Products (EPs) 
represent that grouping of other than rating claims most likely to 
impact the benefit provided to a Veteran or Survivor.

                                  Other-Than-Rating End Product Activity FY2015
 
 
 
Other Than Rating EP Group                                                           Completes               ADC
----------------------------------------------------------------------------------------------------------------
Non-Rating Related EPs                                                      1,219,432                      94.6
----------------------------------------------------------------------------------------------------------------
Control End Products                                                        1,042,740                     179.9
----------------------------------------------------------------------------------------------------------------
Other C&P End Products                                                        850,213                     151.9
----------------------------------------------------------------------------------------------------------------
Total Other Than Rating                                                     3,112,385                     143.7
 


    Question k: Describe in detail what resources VBA has devoted to 
ensure that the functionality of VBMS remains responsive to needs of 
BVA employees working on appeals cases.

    Response: The primary focus of VBMS has been to deliver 
functionality supporting paperless compensation claims processing 
toward reducing the claims backlog. As a result, many appeals are 
available in a paperless environment, and the Board leverages many of 
the same features as VBA, including simultaneous access by multiple 
users, ability to search documents electronically, and reduction in the 
potential for lost mail or misplaced files. Functionality specific to 
the Board was added to the scope of Major Release 5.0, 6.0, and 7.0. 
The Board now has nearly 700 end-users in unique user roles for judges, 
attorneys, and administration of appeals work. In December 2013, VBMS 
Release 6.0 featured a customized "Board View" of the electronic 
folder. This distinct view of the electronic folder includes restricted 
viewing of Board annotations and notes, and bookmarking capabilities.

    VBA continues to work with the Board to identify and address areas 
of improvement in appeals processing. VBA is also collaborating with 
the Board-led Appeals Modernization effort, which is leveraging the 
U.S. Digital Services Team to integrate the electronic folder with the 
Department's legacy appeals database known as the Veterans Appeals 
Control and Locator System (VACOLS).

                                 
              For Steven Schliesman from Chairman Miller:
    The IG and GAO found that the major reason for cost overruns of 
VBMS is due to VA expanding functionality requirements.

    Question: Since 2009, how many times has VA changed functionality 
requirements?

    VA Response: The scope of VBMS functionality has changed six times 
since 2009 as part of a robust VA prioritization and Congressional 
approval process. The initial VBMS scope included requirements for 
converting paper claims documents into an electronic format, storing 
them in an electronic document repository, and allowing Veterans 
Benefits Administration (VBA) employees access to these documents to 
facilitate claims processing. In FY 2012, VBMS development priorities 
shifted to support the goals of the VBA Transformation Plan, including 
a new focus on processing electronic data and increasing automation of 
claim establishment, development, and rating. The initial scope 
capabilities were delivered by 2013. However, VBMS development 
continued as VA identified additional opportunities for improving the 
claims process electronically.
    The following six changes resulted from programmatic and business 
decisions aligned with the VA priority goal to end the claims backlog 
through implementation of VBMS capabilities:

      1.  In FY 2013, VA submitted a reprogramming request, which was 
approved by Congress, to develop and deliver functionality to support 
VA priority goals, including (but not limited to) Disability Benefits 
Questionnaires (DBQ) integration and rating evaluation builders.
      2.  In FY 2014, VA submitted a reprogramming request, which was 
approved by Congress, to develop and deliver functionality to support 
VA priority goals, including (but not limited to) Service Treatment 
Record integration with DoD, rating decision capabilities, Virtual VA 
integration, and workload management improvements.
      3.  In FY 2014, VA submitted a reprogramming request, which was 
approved by Congress, to accelerate automation of workflow and workload 
management functionality.
      4.  The FY 2015 Budget, which was approved by Congress, enabled 
the development and delivery of functionality to support VA priority 
goals, including (but not limited to) National Work Queue and rating 
capabilities.
      5.  In FY 2015, VA submitted a reprogramming request, which was 
approved by Congress, to develop and deliver Centralized Mail support, 
eFolder functionality, National Work Queue capabilities, and awards 
modernization.
      6.  The FY 2016 Budget, which was approved by Congress, enabled 
the development and delivery of functionality to support VA priority 
goals, including (but not limited to) National Work Queue, rating, and 
awards capabilities.

    Question: How much of the $600 million [stated by Steven Schliesman 
in his exchange with Chairman Miller] is a result of those changes?

    VA Response: Based on the information provided above regarding the 
reprogramming, of the $610.6M appropriated as VBMS Development, 
Modernization & Enhancement (DME) funding since 2009, $239.1M is a 
result of these changes and were managed through both VA Prioritization 
and Reprogramming processes.

                                 
                  For Beth McCoy from Rep. Huelskamp:
    Question: Please provide a list of my (Kansas First U.S. 
Congressional District) constituents [that have claims] that are in the 
backlog.

    Response: As of May 22, 2016, there were 111 claims in the rating 
backlog with zip codes located in the Kansas First U.S. Congressional 
District. A hard copy of the list of claimants is provided to HVAC 
committee staff by courier. Please note that VA is unable to determine 
if 7 of the claims with only a 5 digit zip code were definitively in 
the Kansas First U.S. Congressional District, because the zip code 
crosses into another congressional district. The 7 claims are on page 
10 of the hard copy list.

                                 [all]