[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]
IS VA ILLEGALLY SPENDING TAXPAYER
DOLLARS IN ITS COMPENSATION
AND PENSION PROGRAMS?
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON DISABILITY
ASSISTANCE AND MEMORIAL AFFAIRS
OF THE
COMMITTEE ON VETERANS' AFFAIRS
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTEENTH CONGRESS
SECOND SESSION
__________
WEDNESDAY, FEBRUARY 14, 2024
__________
Serial No. 118-50
__________
Printed for the use of the Committee on Veterans' Affairs
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via http://govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
55-078 WASHINGTON : 2025
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COMMITTEE ON VETERANS' AFFAIRS
MIKE BOST, Illinois, Chairman
AUMUA AMATA COLEMAN RADEWAGEN, MARK TAKANO, California, Ranking
American Samoa, Vice-Chairwoman Member
JACK BERGMAN, Michigan JULIA BROWNLEY, California
NANCY MACE, South Carolina MIKE LEVIN, California
MATTHEW M. ROSENDALE, SR., Montana CHRIS PAPPAS, New Hampshire
MARIANNETTE MILLER-MEEKS, Iowa FRANK J. MRVAN, Indiana
GREGORY F. MURPHY, North Carolina SHEILA CHERFILUS-MCCORMICK,
C. SCOTT FRANKLIN, Florida Florida
DERRICK VAN ORDEN, Wisconsin CHRISTOPHER R. DELUZIO,
MORGAN LUTTRELL, Texas Pennsylvania
JUAN CISCOMANI, Arizona MORGAN MCGARVEY, Kentucky
ELIJAH CRANE, Arizona DELIA C. RAMIREZ, Illinois
KEITH SELF, Texas GREG LANDSMAN, Ohio
JENNIFER A. KIGGANS, Virginia NIKKI BUDZINSKI, Illinois
Jon Clark, Staff Director
Matt Reel, Democratic Staff Director
SUBCOMMITTEE ON DISABILITY ASSISTANCE AND MEMORIAL AFFAIRS
MORGAN LUTTRELL, Texas, Chairman
C. SCOTT FRANKLIN, Florida CHRIS PAPPAS, New Hampshire,
JUAN CISCOMANI, Arizona Ranking Member
ELIJAH CRANE, Arizona CHRISTOPHER R. DELUZIO,
KEITH SELF, Texas Pennsylvania
MORGAN MCGARVEY, Kentucky
DELIA C. RAMIREZ, Illinois
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
published in electronic form. The printed hearing record remains the
official version. Because electronic submissions are used to prepare
both printed and electronic versions of the hearing record, the process
of converting between various electronic formats may introduce
unintentional errors or omissions. Such occurrences are inherent in the
current publication process and should diminish as the process is
further refined.
C O N T E N T S
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WEDNESDAY, FEBRUARY 14, 2024
Page
OPENING STATEMENTS
The Honorable Morgan Luttrell, Chairman.......................... 1
The Honorable Chris Pappas, Ranking Member....................... 2
WITNESSES
Mr. Ronald S. Burke Jr., Deputy Under Secretary for Policy and
Oversight, Veterans Benefits Administration, U.S. Department of
Veterans Affairs............................................... 3
Accompanied by:
Ms. Lasheeco Graham, Chief Financial Officer, Office of
Financial Management, Veterans Benefits Administration,
U.S. Department of Veterans Affairs
Mr. Brent E. Arronte, Deputy Assistant Inspector General for
Audits and Evaluations, Office of Inspector General, U.S.
Department of Veterans Affairs................................. 5
Accompanied by:
Ms. Dana Sullivan, Director of Claims and Appeals, Office of
Audits and Evaluations, Office of Inspector General, U.S.
Department of Veterans Affairs
APPENDIX
Prepared Statements Of Witnesses
Mr. Ronald S. Burke Jr. Prepared Statement....................... 23
Mr. Brent E. Arronte Prepared Statement.......................... 28
IS VA ILLEGALLY SPENDING TAXPAYER DOLLARS IN ITS COMPENSATION
AND PENSION PROGRAMS?
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WEDNESDAY, FEBRUARY 14, 2024
U.S. House of Representatives,
Subcommittee on Disability Assistance & Memorial
Affairs,
Committee on Veterans' Affairs,
Washington, D.C.
The subcommittee met, pursuant to notice, at 2:31 p.m., in
room 360, Cannon House Office Building, Hon. Morgan Luttrell
(chairman of the subcommittee) presiding.
Present: Representatives Luttrell, Ciscomani, Crane, Self,
Pappas, Deluzio, and Ramirez.
OPENING STATEMENT OF MORGAN LUTTRELL, CHAIRMAN
Mr. Luttrell. Please have a seat. Thank you. Forgive my
tardiness. Traffic was terrible. I am totally making that up.
The subcommittee will come to order. Good morning.
Today we are here to take a closer look at whether the
Veterans Benefits Administration (VBA) is responsible for
steward of the more than 100 billion taxpayer dollars that
Congress provides every year. In short, that means paying each
veteran the correct amount of benefits they have earned. When
VBA makes underpayments, veterans' budgets get stretched. When
VBA makes overpayments, taxpayer dollars are wasted and
veterans and their families get put into difficult positions of
owing debts to the VA simply because VBA makes a mistake.
Year after year, VBA leaders have failed to clean up their
policies, which they are most certainly working on, procedures,
and element improper payments in the pension programs. Over the
last year, the pension program issued over $1.3 billion in
improper payments. That is an error rate of over 10 percent.
Over $860 million were overpaid within VBA's control, usually
because they failed to properly use some of the data or
information that they have access to.
Much of the overpayments were due to the VBA's failing to
do their due diligence and veterans' benefits income
information from the Social Security Administration (SSA). That
income information was inaccurate for over a decade. When VBA
stopped relying on the Social Security income data, they
started depending on only veterans to self report any changes
in their income. This was a massive error. Many of the veterans
did not understand that they had to report or they were unable
to do so.
We appreciate that several senior VA leaders have stated
that the veterans will not be forced to repay the pension
overpayments, but this should have never happened in the first
place. If VBA has already implemented a reasonable, effective
policy at any point during the last decade, the improper
payments would have been reduced before they even go out.
The improper payment situation and the disability
compensation program is not very encouraging either. VA has
declared victory here, but the underlying data is a bit murky.
In 2021, someone at the VA determined the improper payments had
fallen below the reporting threshold, so they permanently
stopped reporting. They also stopped sampling and testing the
payment data. I understand they are still doing risk audits,
but that seems to involve reviewing policies and procedures,
not crunching the payments that are necessary. Meanwhile, we
are consistently encountering examples of incorrect
compensation payments.
Just two weeks ago, surviving spouses testified at the full
committee hearing that VBA's long delays in discontinuing
dependencies and indemnity compensation payments are creating
overpayments debt that surviving spouses have to repay. In
September, we had a subcommittee hearing where we examined
VBA's failure to process over 81,000 veterans' request to add
or remove dependents. We still do not know exactly how many
overpayments or underpayments that were created.
Again, I appreciate the assurance we have heard from the VA
that it will not claw back these debts from the veterans that
were caused by the VBA's mistakes. This is just another example
of how accounting problems cause serious problems.
I have looked forward to hearing from our witnesses about a
strategy to resolve the pension improper payments and a better
explanation about the disability compensation improper payments
thus far. Transparency is crucial so veterans can have
confidence in VA and the taxpayers can trust that their money
is being well spent on those that have earned it. Today we are
going to be hearing from VA and the Office of Inspector General
(OIG). I want to thank everybody for coming.
I yield to the ranking member for his opening remarks.
OPENING STATEMENT OF CHRIS PAPPAS, RANKING MEMBER
Mr. Pappas. Thank you, Mr. Chairman. Clearly, the issue of
improper payments, whether they be overpayments, underpayments,
or a result of waste, fraud, abuse, or simple human error, is a
concern that I share with my colleagues on both sides of the
aisle. We all want to ensure that VA is good stewards of
taxpayer money, that programs are efficiently and effectively
run, and that benefits are accruing to those we intend.
However, we must always remember that the programs designed by
Congress and implemented by the executive branch are by, for,
and about human beings and are subject to all the flaws and
frailties that humans have. Humans make mistakes despite their
best intentions, and so I think we must focus our attention on
ensuring that programs have strong internal controls and that
everything is being done to get it as right as possible.
I appreciate you, Chairman Luttrell, for holding this
hearing to examine improper payments at the Veterans Benefits
Administration. I will express some concern over the
unnecessarily provocative title of this hearing as it
presupposes malfeasance without this subcommittee having
received evidence of such.
I look forward to hearing testimony from VBA and VA's
Office of Inspector General today and learning about the extent
to which they are doing all they can to hold themselves
accountable and guard program integrity. We must remember that
the mistakes of human nature do not equal malice, and they
certainly do not present evidence of legal activity.
Thank you, Mr. Chairman. I yield back.
Mr. Luttrell. Our witnesses from VA today, Mr. Ronald
Burke, the deputy undersecretary for policy and oversight in
the Veterans Benefits Administration. Mr. Burke is joined by
Ms. Lasheeco Graham, Chief Financial Officer for the Veterans
Benefits Administration. Mr. Brent Arronte, the deputy
assistant inspector general for audits and evaluations, will
testify on behalf of VA's Office of Inspector General. Mr.
Arronte is joined by Ms. Dana Sullivan, director of claims and
appeals for OIG's Office of Audits and Evaluations.
I would like to swear in the panel, so please stand. Raise
your right hand.
[Witnesses sworn.]
Mr. Luttrell. Thank you, and let the record reflect that
the witnesses have answered in the affirmative.
Thank you for being here today, Mr. Burke. You are now
recognized for 5 minutes to deliver your opening statement.
STATEMENT OF RONALD BURKE
Mr. Burke. Chairman Luttrell, Ranking Member Pappas, and
other members of the subcommittee, thank you for inviting us
here today to discuss VA's financial management policies and
practices. Joining me today is Lasheeco Graham, the chief
financial officer for the Veterans Benefits Administration.
Mr. Chairman, at VA, we believe that veterans, their
families and survivors have served and sacrificed for our
country. We take our mission to serve veterans very seriously.
We also take our responsibility as stewards of taxpayer dollars
equally as seriously and want to assure Congress that VA is not
illegally spending taxpayer dollars.
VA works diligently to safeguard veterans and
beneficiaries' financial well-being by using a range of
strategies to proactively address and mitigate potential
improper payment issues as quickly as possible. Improper
payments, such as overpayments, occur in less than 7 percent of
award actions processed by VA. For example, in Fiscal Year
2023, VA processed over 4.2 million award actions, of which
improper payments occurred in 6.87 percent of those actions. We
are committed to reporting improper payments to Congress and
have made significant improvements to identify and prevent such
payments.
VBA began reporting improper payments to Congress in 2004
as required by the Improper Payment Information Act of 2002.
Since then, there have been a series of laws that aim to
identify, prevent, and recover improper payments in Federal
spending. The current law is the Payment Integrity Information
Act (PIIA) of 2019, signed into law March 2, 2020.
PIIA and Office of Management and Budget (OMB) require
programs determined to be at significant risk of improper
payments, either improper payment rates of both 1.5 percent of
program outlays and $10 million or $100 million, to produce
statistically valid estimates of improper payments through
sample testing.
Since 2004, VBA has made every effort to identify and
report improper payments in alignment with legislation and
implementation guidance provided by OMB. Currently, VBA pension
is the only program still required to report improper payments.
All other programs were removed from testing requirements with
concurrence from the Office of Inspector General.
VBA's disability compensation program demonstrated
commitment to improve payment integrity through the
implementation of effective corrective actions. On April 2,
2021, the program was removed from the testing and reporting
requirements of PIIA. However, VBA's disability compensation
program is still required to perform annual risk assessments
and recapture and recover activities.
VA has documented processes for collections, pre-and post-
payment reviews to identify and recover overpayments as
required by OMB. The VA also includes using quarterly payment
reviews to identify possible duplicates and overpayments.
Additionally, VA proactively reviews potential situations
for improper payments through various data matching agreements
with several Federal agencies. These data matching agreements
allow VA to receive information on a regular basis to determine
a beneficiary's original and continued entitlement to VA
benefits. This assists in identifying improper payments to
beneficiaries with the intent to reduce potential overpayments
that would otherwise be discovered based on information
reported by the beneficiary or their fiduciary. VA currently
has interagency data sharing programs with the Social Security
Administration, the Internal Revenue Service (IRS), the
Department of Justice, the Federal Bureau of Prisons, the
Defense Manpower Data Center, and the Department of Defense.
In addition to our commitment to reporting issues to
Congress under the law, VA also ensures transparency for issues
concerning improper payments discovered by VA. As an example,
in 2011, VA discovered a data quality issue with the results of
the Social Security income match, which is a computer matching
agreement with SSA used to validate SSA income for pension
recipients. From 2011 through 2017, VA continuously
collaborated with SSA to resolve this issue. On March 13 of
2021, VA and Social Security reestablished the SSA income
match, resulting in the creation of large beneficiary debts
going back several years.
Recognizing the hardship and distress that these debts may
have caused, on November 2, 2023, VA paused the collection of
all established debts and the establishment of new debts. VA
will not collect debts associated with the data quality issue
and will refund any payments made on these debts.
As of February 1, 2024, VA has determined that
approximately 12,369 beneficiaries have been affected due to
the SSA match data quality issue. This population is still
being assessed for a total overpayment amount. VA remains
committed to ensuring that claimants affected by VA delays in
processing overpayments due to the quality data issue with the
SSA matching program are not negatively impacted.
It is important to note that anytime VA is required to
establish a debt, such as when VA proposes to reduce or
terminate a benefit based on information or evidence from a
third party received by VA, all beneficiaries are afforded due
process rights under the Constitution. This means that before
we take any adverse action, VA provides a statement of our
proposed decision, including all of the details, in order for
the beneficiary to have ample understanding of VA's proposed
decision and then provides the beneficiary 60 days to respond.
In addition to due process rights, the beneficiaries also
afforded their right to present evidence, request a personal
hearing, and to have representation. This helps beneficiaries
by explaining the basis for a proposed adverse action and
provides ample time to submit evidence showing why the action
should not be taken.
However, anytime a debt does need to be established based
on evidence and after due process is afforded, beneficiaries
will have all existing debt relief opportunities, including
requesting extended payments, requesting a waiver, or disputing
the debt. Debt relief is available through VA's Debt Management
Center for all benefit debts to include a waiver, suspension,
compromise, or payment plan. All debtors may be eligible for
VA's financial relief options mentioned above, in addition to
filing a dispute or an appeal.
Across VA we are committed to providing the high-quality
care our veterans have earned and deserve. We continue to
improve services to meet the needs of our veterans and their
families. We are grateful for the resources that Congress has
provided to VA and pledge to do all that we can to ensure they
are used as effectively as possible.
Thank you for the opportunity to appear before you today.
Mr. Chairman, this concludes my statement. My colleague and I
are prepared to respond to any questions you or other members
of the committee may have. Thank you.
[The Prepared Statement Of Ronald Burke Appears In The
Appendix]
Mr. Luttrell. Thank you, sir. The written statement of Mr.
Burke will be entered into the hearing record.
Mr. Arronte, you are now recognized for 5 minutes to
deliver your opening statement.
STATEMENT OF BRENT ARRONTE
Mr. Arronte. Chairman Luttrell, Ranking Member Pappas, and
members of the subcommittee, thank you for the opportunity to
testify on the Office of Inspector General's oversight of the
Veteran Benefits Administration's compensation and pension
programs. These programs provide critical support to veterans,
their survivors, caregivers, and family members.
As you noted, I am accompanied by Ms. Dana Sullivan, who
has led many of our reviews of VBA programs.
The OIG focuses on illegal and improper payments of all
kinds, whether it is criminal fraudulent investigations, audits
that examine underpayments and overpayments, and reviews of
potential waste. Our independent oversight teams are dedicated
to making meaningful findings and recommendations that advance
VBA's efforts to provide prompt and accurate benefits and
services to eligible recipients while making efficient use of
its funds.
We know that many veterans and other beneficiaries rely on
their monthly benefit payments and that their well-being is at
risk when significant claims processing errors are made. Our
oversight work helps VBA identify deficiencies in their
processes, systems, and internal controls that can lead to
corrective action and make its leaders and personnel better
stewards of taxpayer dollars.
Despite the dedicated work of VBA personnel, the OIG's body
of work on VA's compensation and pension programs has found
that improper payments are often caused by ineffective internal
controls, inadequate technology, or human error resulting from
complicated and unclear policies and guidance. In my written
statement, I describe how VBA struggles with designing,
implementing, and monitoring its technological infrastructure
and processes.
We see areas that require continuous improvement, such as
strengthening an individual's email address who was responsible
for determining if benefit payments should continue or if they
should be suspended based on fleeing from a felony. This
created a single point of failure when that individual was out
of the office and missed the email. This type of incident is
mitigated with stronger VBA internal controls.
In another report, we found VBA continued to send payments
to veterans for up to 7 months after their deaths. VBA staff
did not realize this error in processing until the OIG
identified the mistake during our review of the Social Security
death match process. VBA officials did not provide sufficient
monitoring at that time to prevent or identify these types of
errors.
The OIG is committed to providing effective and independent
oversight of claims processing activities and VBA operations.
Further, we have developed training for all VA staff on how to
engage with the OIG. This training details for VBA and other
personnel how and when to report suspected wrongdoing,
including waste and illegal payments.
Additionally, we now send routine fraud alerts to all VA
staff and other stakeholders, alerting them to high-risk
processes and indicators of fraudulent activity.
Chairman Luttrell, Ranking Member Pappas, and members of
the subcommittee, this concludes my statement. We would be
happy to answer any questions that you may have. Thank you.
[The Prepared Statement Of Brent Arronte Appears In The
Appendix]
Mr. Luttrell. Thank you, sir. The written statement of Mr.
Arronte will be entered into the hearing record.
We will now move to questioning. I recognize myself for 5
minutes.
Mr. Burke, Ms. Graham, the ranking member, myself, and Mr.
Self expected a response on a letter that we sent you about
improper payments on Monday. We have not received it. Do you
have that letter on you right now?
Mr. Burke. Mr. Chairman, no, sir, I do not.
Mr. Luttrell. Now I am compelled to ask you why you would
come to our committee in front of us, the ranking member and
myself, and not have the answers to the questions that we are
requesting. Can you look me square in the face and tell me when
that is happening?
What I want you to understand is that he and I are taking
this very seriously. The whole committee is. All right? We just
do not sit down and write these letters to send out just so you
do not respond to it. I am going to wire brush you a little
bit, okay. You knew you were coming here whether or not you
expected me to ask you about this, or is it Ms. Graham? Either
one of you, I got both your names in front of me. Which one of
you? Is it you, sir?
Mr. Burke. It is me, sir.
Mr. Luttrell. Okay. Now, I would request that you have that
to me before you walk out of here, which I do not think you are
going to be able to do. If you could have that to me by the end
of the week, I would appreciate that.
Mr. Arronte, how long have you been in this position?
Mr. Arronte. I have been in this position since 2015, and I
have been with the OIG since 2008.
Mr. Luttrell. Okay. Are these reports that you are giving
us today, are there similarities from last year, the year
before, the last 5 years, and last 10 years to these particular
issues of overpayment?
Mr. Arronte. Yes, Sir. Every time we look at an area that
involves claims processing, without fail, we find underpayments
and over-payments.
Mr. Luttrell. How much money did we overpay? The fugitive
thing has got me kind of spun up a little bit. That is a bit
ridiculous, especially if it is just landing on one single
point of failure.
How much money did we in the VA spend that was overpayment,
waste, fraud, or abuse? What was the dollar amount, Mr. Burke?
Ms. Graham?
Ms. Graham. Sir, with regarding compensation and pension
for Fiscal Year 2023, we established $2.1 billion in debt for
veterans.
Mr. Luttrell. Last year?
Ms. Graham. Last year.
Mr. Luttrell. Last year, 2.1 billion?
Ms. Graham. Yes, sir.
Mr. Luttrell. Overpayment?
Ms. Graham. Yes, sir.
Mr. Luttrell. Okay. That seems like an obscene amount of
money, considering how much money that we could use. That we
could use that money in different areas, whether it is our
spouses, it is mental health. The list goes on and on. What was
the year previous to that?
Ms. Graham. In fiscal year 2022, it was 1.3 billion.
Mr. Luttrell. We are going the wrong way by a billion
dollars. Am I correct on that?
Ms. Graham. That is correct in terms of the numbers. We
also collected funding from the veterans for the debts that
have been reported as well. For fiscal year 2022, we collected
over $837 million.
Mr. Luttrell. What do you mean--I am sorry, you lost me on
that. What do you mean, collected? You went and took the money
back from them?
Ms. Graham. For debts that had been established, that were
properly established.
Mr. Luttrell. We have overspent by 2.1 billion.
Ms. Graham. In fiscal year 2023.
Mr. Luttrell. In 1923. How much did we collect back?
Ms. Graham. We collected $1.1 billion.
Mr. Luttrell. Okay. I am sure our veterans were not happy
about that. My point is, if Mr. Arronte has, over the past--you
said 2007? I am sorry, how long you been there?
Mr. Arronte. 2008.
Mr. Luttrell. 2008, has been feeding the same discrepancies
to the office over and over again, and the numbers are getting
worse. I am going to look to leadership and ask, why is this
problem continuing to exist if you have the answers and how to
solve it? Mr. Burke.
Mr. Burke. Mr. Chairman, thank you. That is a very fair
question. Let me just take a second to frame up that we are
serving more veterans, more decisions year over year than ever
before.
Mr. Luttrell. Mr. Burke, you can park that one. Okay? We
just got out of--that is just where you live. Your job is not
easy. Okay. You cannot give me, because we got more veterans
coming. Guess what? They are going to continue to do so. Okay.
I cannot go home and blame the veterans for being veterans.
Mr. Burke. Yes. Mr. Chairman, I am going to stand by my
comment because it is relevant to the question that you asked.
We are, as we do, 4.2 million award actions. It does increase
the amount of opportunity for either human error and the like.
What I do want to point out is, yes, we do appreciate the
oversight from the Office of Inspector General. We have learned
from those trends. We have closed out many of the
recommendations. We have implemented strategies, Standard
Operating Procedures (SOP)s, tools and technologies. I will say
we have got the most dedicated and talented workforce in the
Federal Government, and we do stand behind the record 4.2
million award actions in fiscal year 2023.
We are committed to reducing improper payments. We take
this very seriously, and we have work to do.
Mr. Luttrell. Yes, sir. I appreciate all the effort toward
the veterans, but if you went from 1.8 billion to 2.--I am
fudging these numbers a little bit, but an increase of a
billion, we are not hitting the nail on the head here.
My time is up. I yield to the ranking member.
Mr. Pappas. Thank you, Mr. Chairman. I do want to make sure
we are not ignoring the experience of the veterans, which is
really important in this equation. I have heard directly from
constituents that have received improper payments, then
unexpectedly get these debt collection letters. It can be a
significant source of fear, of anxiety for the beneficiary, and
it can also hurt their credit scores, potentially.
I want to know how VBA is minimizing the impact on
beneficiaries who either establish those debts or, you know,
how do they work to forgive those debts, especially when the
veteran has done nothing wrong. They provided everything they
need to, and through no fault of their own, they receive one of
these debt collection letters.
What recourse do they have? What support can you give them?
Mr. Burke. Yes, sir. Thank you for that question.
We are very sympathetic to the customer experience. In this
case, our customer are veterans and beneficiaries, obviously.
It is important to note that not only by the Constitution do we
serve appropriate due process rights, but in our proposed
decision letter, we are letting veterans and their
representatives know the rationale behind any proposed
adjustment. We have worked to soften the letter content to make
it a little bit more, you know, veteran friendly, beneficiary
friendly.
We do serve the due process period, and currently we are
taking full advantage of the provisions in the Cleland-Dole
passage that allow us to waive debts that are not the
responsibility of the beneficiary.
Mr. Pappas. Okay. How do you communicate that? Is it just
through the letter with the softened language to the veteran? I
know there are new authorities that came about from legislation
that we pushed in the last Congress. Can you talk a little bit
more about how you are using those authorities and how you
communicate that to veterans?
Mr. Burke. Yes, sir. Typically, in our average, you know,
day-to-day routine, it would be a proposed action with the
contents explaining the rationale. There would be a due process
letter that affords the rights for a hearing to submit new
evidence to have us reconsider all of that before an actual
decision to create a debt. When a debt is actually created,
then the debt management center provides debt relief options
again through correspondence.
We are in the midst of finalizing our procedures that will
allow us to implement the provisions of Cleland-Dole, and we
are very appreciative of the law that provides us avenues to
provide some of that debt relief.
When we do that, we will also be communicating to veterans'
beneficiaries the impact of any created debt. What part is
their responsibility, what part may be collected? In fact, in
some of the pension overpayments, we are refunding amounts that
have already been collected.
Mr. Pappas. Mr. Burke, I would like to turn to the internal
governance controls that OIG monitors, and one of the common
threads in their reporting is lack of sufficient program
supervision. It seems to flow from a decision on resource
allocation. What has VBA been doing to ensure that supervisors
are not stretched too thin and have the capacity to oversee
programs at a level of granularity necessary to catch problems
before they metastasize?
Mr. Burke. Yes, sir. Thank you. I want to start my response
by emphasizing that quality, accuracy of decision-making on
focus on improper payments is the responsibility of all VBA
employees, all VA employees.
With respect to your question about supervisors, we have
done quite a few things, whether it be the advancement of
dashboards, tools, and technologies to allow them to see the
workload at their level better, a constant review of employee
performance standards. We are constantly looking at the
employee-to-supervisor ratios to make sure that we are not
overburdening supervisors. We are also looking at the ratio of
quality review team personnel to ensure that we have an ample
number of folks reviewing the quality of work.
We are also making sure that the responsibility does not
solely fall on first line supervisors in our regional offices.
There are program offices. There are tools and technologies
that need to be done at the central office level to assist that
supervisory burden as well. We are committed to continuing that
approach.
Mr. Pappas. I am wondering in my remaining time if you can
comment on the production goals and quotas for frontline
employees and their ability to be able to maintain decision-
making. There is a lot of throughput happening. We are
continuing to ask VBA employees to do more and more in terms of
assisting our veterans.
It seems like you can realize more erroneous payments as a
result of that. Can you comment on how that plays out with
respect to some of the production goals?
Mr. Burke. Yes, sir. Thank you. I am proud to say I am here
representing the best workforce in the Federal Government. Our
employees in the field and central office are doing a fantastic
job. Room for improvement across the board.
With respect to our focus on production, I do want to let
the committee know that in our employee performance standards,
a critical element of performance is not only production, but
also high quality, and we continue to focus. We formed a VA
central office quality huddle. We had field advisory committees
to kind of help be that canary in the coal mine. I can assure
Congress that our focus is not just productivity, it is
producing accurate results as well.
Mr. Pappas. Well, thank you. I am over my time.
I yield back, Mr. Chair.
Mr. Luttrell. Thank you, Mr. Pappas.
Mr. Self, you are recognized for 5 minutes, sir.
Mr. Self. Thank you, Mr. Chairman. I want to start with the
fugitive felon referrals. I think I understood that it was
human error or process error that you did not process 2,000 of
those, is that correct? Which would you characterize it as,
process or human?
Mr. Arronte. It was human error.
Mr. Self. Human error.
Mr. Arronte. Right.
Mr. Self. Okay. It concerns me that you are not processing
felon referrals. 2,000 at least, 4,000 that I think it said the
OIG were actually identified. However, VA is processing into
the National Instant Criminal Background Check System (NICS)
data base veterans who simply need a fiduciary, which I
believe, and I think many on this committee believe, is not
protecting the constitutional rights of our veterans because
there is no judicial review, there is no judicial determination
that they lose their freedom to own guns, arms. VA, I know you
say you do not do it, but you do put them in the NICS data
base.
I think we have a discontinuity here between policy,
because you are paying money to thousands of felons who should
not be paid, and yet law-abiding veterans are getting put on
the NICS data base. I ask you to go back because it is all
under VBA, and readdress that.
Now, it looks to me like in the documents that we got,
there are like 13 different programs at least that have errors
in this. How many people, how many employees have been
disciplined for these human errors out of these 13 at least, I
count 13 different programs? What is your discipline when you
identify these improper payments?
Mr. Burke. Well, let me first address the question of what
we do. Not every error is malicious and worthy of discipline.
It helps us identify training needs. It helps us improve our
overall training program.
Mr. Self. That is a sanction. Go into training.
Mr. Burke. What I would say is that we have gotten better
with the tools, the tracking, the technology, the sharing of
trends, the looking down at the individual regional office
levels to find out what trends they see in their day-to-day,
because what happens in one office may not happen in another.
I do not have for you, sir, an answer to the number of
employees that were, you know, subject to progressive
discipline for the improper payment. I will assure you that it
is something that we are focusing on, that we take seriously.
In fact, out of all of our program delivery, benefits delivery,
only one is still required to report under the OMB.
We were under the reporting requirements in 2021.
Unfortunately, in 2022 and 2023, it increased. In 2022, the
improper payment rate went about 11-1/2 percent. It is gone
down to about 10-1/2 percent. We are optimistic that we will
get pension in line as well. Unfortunately, we did see a pickup
there. We are addressing it, sir.
Mr. Self. Okay, very good. I want to go back to the letter
that the chairman mentioned. Did you know about this letter? It
was not addressed to you personally. Did you know about this
letter? In our testimony this morning, we found out that
congressional letters may or may not be read in order to be
acted on.
Did you know about this letter? Again, you were not the
primary addressee.
Mr. Burke. Yes, sir, I did know about the letter.
Mr. Self. Okay, thank you.
With that I yield back, Mr. Chairman.
Mr. Luttrell. Thank you, Mr. Self.
Mr. Crane, you are recognized for 5 minutes, sir.
Mr. Crane. Thank you, Mr. Chairman. This seems like quite
the problem when we have a national debt like we do, $34
trillion, $200 billion deficit every single month. What is the
problem?
I am going to start with you, Mr. Arronte. In your opinion,
what is the problem?
Mr. Arronte. Yes, sir. I think the fundamental problem is
VBA does not prioritize the development and the following of
internal controls. I do not think it is the first thing that
comes to their mind when they develop a program or a process or
a technology. Strong internal controls mitigate what Mr. Self
was indicating, the human error. That is one purpose of the
internal control.
Mr. Crane. Why not? Why not, Mr. Arronte? Why do you think
they do not?
Mr. Arronte. Because I think they are--based on our work, I
see they put a lot of emphasis on processing claims, and I
understand that commitment. They have to make a business
decision, right? They are trying to get claims out and get
benefits to veterans as fast as they can. I think that there is
tension there between speed and quality.
Mr. Crane. Yes, absolutely.
Mr. Arronte. I think there is tension between speed and
internal controls. Sometimes, I do not think they test
processes to break them to find out where they need to have
internal controls. Instead, I think they implement a process or
they implement a program, and then as things break down the
road, they fix it. That is where I think----
Mr. Crane. You said you have been doing this for a long
time and this has been a longstanding problem. Is that correct?
Mr. Arronte. Yes, Sir.
Mr. Crane. Clearly, this problem is getting worse. Have you
ever seen anybody in the VA held accountable?
Mr. Arronte. Yes.
Mr. Crane. Can you give us some examples of that?
Mr. Arronte. Sure. Actually, this was Ms. Sullivan and I a
couple years ago, we received a tip from senior VBA leadership
that they were looking at one of their internal reports, and
they felt that there was fraud, ongoing fraud, at one of the
regional offices. Myself and one of Ms. Sullivan's staff, we
went down there and we investigated, and not only did we find
one staff committing fraud, we found two. Those folks were--we
referred those to our criminal investigators, they followed
their process, they determined there was fraud. They took it to
the U.S. Attorney, and both of those gentlemen were released
from----
Mr. Crane. Okay, but those are probably pretty small
examples of fraud. We are not talking to the tune of, you know,
$2.1 billion overpayments in Fiscal Year 2023. I am talking
about at the high level. Like you got Mr. Burke in here, Ms.
Graham in here. Have you ever seen anybody at high levels of
Veterans Affairs held accountable for this unbelievable amount
of waste and abuse with the American taxpayer money?
Mr. Arronte. I am not familiar with any instance, Sir.
Mr. Crane. Yes. That is why you continue to see this happen
over and over again, which is why, you know, so many people
want to see as few things put under the control of the Federal
Government as possible, because it is inherently known for
having such high rates of fraud, waste, and abuse. Nobody ever
gets held accountable, right?
Mr. Arronte. Not at the senior level, like you were
implying, sir. I have not seen that.
Mr. Crane. Yes. Ms. Graham, do you accept any of the
responsibility for this unbelievable amount of waste and abuse?
Ms. Graham. Sir, in the time that I have been in this
position as the chief financial officer, it is incredibly
important that we get this right and that we do all that we
can----
Mr. Crane. That is not what I asked you.
Ms. Graham [continuing]. to mitigate----
Mr. Crane. Do you take any accountability or any
responsibility, yes or no? If you do not, you do not, just let
me know. Do you, yes or no?
Ms. Graham. Yes, I take full responsibility because I am
the chief financial officer.
Mr. Crane. Okay. When we are talking sums of money like
that, when we are talking $1.3 billion in fiscal year 2022, and
now $2.1 billion overpayments in fiscal year 2023, why are you
still in that role, ma'am? If you are taking responsibility and
ownership, why are you still in that role?
Ms. Graham. Sir, I was just put in this role, like, 30 days
ago.
Mr. Crane. Well, that makes sense.
Ms. Graham. Exactly.
Mr. Crane. Okay.
Ms. Graham. Nonetheless, I am in the role, and I take
responsibility for being in this role. There is a lot that we
are trying to do going forward to try to mitigate any type of
overpayment for veterans in general. There is a lot that we are
doing to try to ensure that they receive due process and that
we correct it. We use all of the statutory obligations governed
to us about how we process debt to eliminate that and mitigate
that to the best of our abilities.
Mr. Crane. Well, ma'am, you definitely have your work cut
out for you. I apologize for not knowing that you just took the
job 30 days ago, but I hope you can straighten this out,
because at the end of the day, this money, it does not belong
to me, it does not belong to you. It belongs to the American
taxpayer. This happens all day, every day, up here, and nobody
ever gets held accountable. It is why we continue to see this
fraud, waste, and abuse continue to be out of control.
Thank you, Mr. Chairman. I yield back.
Mr. Luttrell. Thank you, Mr. Crane.
Ms. Graham, I do not envy the rucksack that you are going
to have to carry around for the next couple of years. You
decided that the VA does not have to sample and audit the
compensation payment data. Why?
Ms. Graham. Under the Payment and Integrity Act, for the
thresholds that are required, compensation had met those
thresholds and were not required to report to OMB or be
published in our agency financial report. However, they do
conduct annual risk assessments to determine if there are still
any overpayments being committed or obligated within that
ordinance.
Mr. Luttrell. They do not seem to be working. Is that a
fair statement?
Ms. Graham. Well, they are below the thresholds that are--
--
Mr. Luttrell. Okay, maybe--Okay. What is the threshold?
Ms. Graham. The thresholds are for significant payments, it
is 1-1/2 percent of program outlays and $10 million of
activity, or $100 million. The programs must report----
Mr. Luttrell. A hundred million dollars seems like a pretty
long stretch. Should not it be like--I got it. I know, I am
just saying, if we are in this hole that we are in, it seems to
be that the numbers may be skewed a bit.
Ms. Graham. This is the guidance that is put out by OMB
Circle at A123 and issued to----
Mr. Luttrell. I need to chat with OMB?
Ms. Graham. It is their guidance, sir. We follow their
guidance in terms of what we report and whether or not the
programs meet the threshold.
Mr. Luttrell. Okay. Thank you. Mr. Pappas?
Mr. Pappas. Thank you. Mr. Arronte, you mentioned some
information about training on how to interact with OIG and
fraud alerts that you send out. Could you tell me a little bit
more about how long that has been in place and the
effectiveness and your view of those communications to
employees?
Mr. Arronte. Good question, sir. I cannot tell you about
the effectiveness because this is fairly new for us.
Mr. Pappas. Okay.
Mr. Arronte [continuing]. as of last year for both. I can
tell you the last fraud alert that we sent to VA has to deal
with disability benefits questionnaires (DBQ). These are public
facing documents that veterans can take to their private
physician. Their private physician can delineate what they
think is wrong with the veteran. Then the veteran submits that
to VBA as medical evidence of a disability.
I can tell you our criminal investigators are working on
certain situations that we have become aware of and some of
those situations VBA has notified us about, where there may be
some bad actors out there who are trying to take advantage of
veterans.
These DBQs, what we are asking VA staff to look at is when
they are reviewing evidence to determine if a disability exists
and what the level of disability is, if they receive these
DBQs, to check them for possible indicators of fraud, such as
no signature, the physician being one that we have seen where
the physician was a chiropractor and he was providing a heart
diagnosis. Those are the types of indicators that we have asked
staff--and we are making staff aware of that across the VA,
please look at these indicators and help us.
Mr. Pappas. You are generating information both from VBA in
terms of what they are seeing on a day-to-day basis, and also
from your investigations and what they are finding?
Mr. Arronte. Absolutely.
Mr. Pappas. Now, how does that information stay relevant
with respect to trends in overpayments? Is that part of the
training that you are offering?
Mr. Arronte. Yes. How that affects the trends is if the DBQ
is fraudulent and you have this chiropractor giving somebody a
diagnosis for a heart condition and providing information, this
veteran could be given benefits that they are not entitled to.
That is where the overpayment begins.
Mr. Pappas. Okay. Mr. Burke, could you comment on how
effective you think this has been for VA employees?
Mr. Burke. Yes, sir. I actually I think it is been
effective to this point and will continue to be effective. You
know, VA has hired thousands of new employees that have no
prior interaction or involvement with how to respond and
interact with the Office of Inspector General.
I think the fact that we are taking the advantage of the
required training and now many more of our employees are
getting that, I think it is a good start to their career to
learn how to detect these fraudulent opportunities and interact
with the Inspector General (IG) appropriately. In the end, that
will help reduce things like overpayments and underpayments.
Mr. Pappas. Does this supplement other information that you
are putting out to employees internally that will help them
sort of, you know, work on best practices, find areas where
there are, you know, errors that, you know, can be generated
and help them learn from mistakes that are made?
Mr. Burke. Yes, sir. In fact, while we are sitting here
today, we have all of our division-level veteran service center
managers in Atlanta at a training symposium, and they are
learning about quality, trends, findings, and we are talking
about overpayments, underpayments, and things of that nature
and training opportunities.
We do take those best practices, we share those with one
another, and we do work and focus on reducing errors and
improving our quality.
Mr. Pappas. Well, thanks for giving me some background on
that. We have got to see that bear some fruit here as we move
forward, and I hope you will keep us updated on the progress
there.
I yield back.
Mr. Luttrell. Thank you, Mr. Pappas.
Mr. Self, would you care to go or do you want Mr. Ciscomani
to step in?
Mr. Self. Thank you, Mr. Chairman. I do have duties on the
floor soon, so I appreciate your indulgence.
Just three quick questions. Can you give me any Government
Accountability Office (GAO) recommendations that you have
closed recently? I know you always have outstanding GAO
recommendations, you know, quite a few.
Mr. Burke. Sir, I am more than happy to report back with
any GAO closures with relevance to this topic. Happy to do that
outside the hearing, sir.
Mr. Self. I would appreciate that. Ms. Graham, can you
share with us where your predecessor, I am following up on Mr.
Crane's questions, where did your predecessor, Mr. Tapp, get
assigned?
Ms. Graham. He works for Gartner. Gartner.
Mr. Self. Thank you.
Ms. Graham. He is retired.
Mr. Self. Mr. Burke, you started your testimony with saying
you do not illegally spend taxpayer dollars. The issues that we
are talking about here are still under the law, are legal under
the law. Is that what you are telling us? That is not the way I
would interpret what we are talking about here.
Mr. Burke. Yes, sir. With all due respect, I do not want
the term we are not spending it illegally to come across
flippant. What I mean by that is, I do want to emphasize a
record 4.23 million award actions at a less than 7 percent
improper rate. I am not saying 7 percent is what we are happy
with. We want to drive that lower, merely articulating where it
falls with reporting requirements. To just make sure that
Congress is aware that even though we are not reporting under
the PIIA requirements, we are doing special focused reviews,
quality assessments, risk assessments, random sampling.
My point, sir, is just, you know, please understand that we
are taking this seriously.
Mr. Self. Yes. My point is, the law is how we spend
taxpayer dollars is very clear. I appreciate your efforts, but
I am not sure that is a totally accurate statement.
With that, Mr. Chairman, I yield back.
Mr. Luttrell. Thank you, Mr. Self.
Mr. Crane, you are recognized for 5 minutes, sir.
Mr. Crane. Thanks again, Mr. Chairman. Also appreciate you
putting me on this side again. Thank you for that.
All right. Mr. Burke, how long have you been the deputy
secretary for policy and oversight?
Mr. Burke. I was appointed to this position in April 2021.
Mr. Crane. 2021? You have been there a little bit?
Mr. Burke. Yes, sir.
Mr. Crane. A couple of years?
Mr. Burke. Yes, sir.
Mr. Crane. Okay. Mr. Burke, who is accountable for ensuring
that effective internal controls are in place for mitigating
improper payments of compensations?
Mr. Burke. As I alluded to earlier, every VA employee is
responsible for accuracy. I have program operation
responsibility across VBA's business lines. If yours is, who is
responsible at that point----
Mr. Crane. Who is ultimately responsible? Is it you?
Mr. Burke. Well, ultimately responsible in our organization
is the undersecretary for benefits. However, most of what is
being talked about today falls under my umbrella. I am taking
responsibility and happy to work with Congress to continue
dialog on how we improve.
Mr. Crane. You are ultimately responsible then at the VA
for this?
Mr. Burke. Ultimately, the Secretary is responsible for all
things.
Mr. Crane. Okay. Ultimately the Secretary, but this falls
under, really, your jurisdiction. Okay, got you.
Mr. Burke, you keep touting this under 7 percent mistake
rate. Okay? I understand that when you look at 100 percent and
then you subtract 7 percent of it, it seems like a really small
number. We all get that.
What we are actually looking at, and what I think you
should be looking at is the amount of money that is being
overpaid. It would be one thing if this under 7 percent was
costing the American people, I do not know, a million dollars.
Maybe you could pat yourself on the back. When we are talking
about the amount of money that we are talking about a billion
dollars annually, and we already discussed, we went from, under
your tenure, from what I assume, from what you just told me, we
went from about $1 billion to over $2 billion. Is that correct?
Mr. Burke. Yes, sir.
Mr. Crane. Okay. If I were you, I would maybe ease off the
throttle on touting that under 7 percent mistake rate, because
that less than 7 percent mistake rate is costing the American
people about a billion dollars annually. That is completely
unsatisfactory, sir.
You know, if this does fall under your jurisdiction, and
the Secretary of Veterans Affairs, who was just in that chair
this morning, trusts you to do this job--in my estimation, you
are not doing your job. There is no doubt in my mind, sir, if
this were the private sector, you would be fired immediately
for that type of fraud, waste, and abuse.
Again, here we are in the Federal Government, and nobody
ever gets held accountable and it is bothersome.
Now, you do not strike me as the type of man that would,
you know, look at those type of numbers and think, oh, it is no
big deal. The numbers are what the numbers are, and it is
pretty despicable. It is, once again, one more reason why we
are $34 trillion in debt and nobody seems to care.
What do you have to say to that, sir?
Mr. Burke. Yes. First, as far as what kind of man I am, I
am happy to talk about that outside of a hearing.
In my professional capacity, I can tell you I am not going
to take my foot off the gas touting the amazing work that our
workforce does. You have heard me say that----
Mr. Crane. You think that is amazing? One costing the
American taxpayer over a billion dollars annually, you think
that is amazing?
Mr. Burke. We have room for improvement, certainly. I have
said that during this hearing. What I am touting is the
remarkable, amazing work of our VBA employees, which I do not
think anybody questions. We have improvements to make.
Mr. Crane. No, nobody in here is questioning it. That is
not why we are having this hearing, and you know it. You know
we are having this hearing because of the fraud, waste, and
abuse within the VA and how much it is costing the American
taxpayer. Nobody is talking about the services that you all
provide. I think that is very clear.
We are talking about the waste and abuse to the tune of a
billion dollars annually because of mistakes by the VA in
overpaying veterans. That is unsat and you keep saying amazing,
amazing, amazing. There seems to be a disconnect. Maybe that is
why we have gone from 1 billion annually to 2 billion annually.
Go ahead.
Mr. Burke. For the record, sir, when I say amazing, the
next thing comes after that is our employees. I am not saying
that 7 percent is an amazing number. In fact, I have said
during this hearing we have improvements to make, and we are
making those. We are not content with where that is. We are not
happy with that amount.
Simply answering why we do not report in some of the lanes,
I am proud to say that we only have one business line that
still meets that requirements, but we are not happy that we are
reporting even on one. It is not acceptable.
Mr. Crane. How can you say improvements, though, sir, if
you guys went from, in Fiscal Year 2022, 1 billion in
overpayments to, in Fiscal Year 2023, over 2 billion?
Mr. Burke. Well, again, I think part of what I am trying to
articulate, too, is that we are doing record setting numbers of
decisions that come with record setting numbers of
disbursements. Those numbers are elevating. Again, not making
excuses. I am trying to explain, but I will say we are not
going to leave this hearing content with 7 percent. I am merely
trying to put it in context. We have work to do, and we are
doing that work.
Mr. Crane. Thank you, Mr. Chairman. I yield back.
Mr. Luttrell. Thank you, Mr. Crane.
Mr. Ciscomani, you are recognized for 5 minutes, sir.
Mr. Ciscomani. Thank you, Mr. Chair. Thank you all for
coming before the committee to testify.
You know, the Office of Inspector General has identified
concerning practices, very concerning practices within the
Veteran Benefits Administration, particularly regarding delays
in processing proposals to reduce compensation benefits. It is
clear these delays not only result in inappropriate payments to
veterans, but also pose challenges for VBA managers tasked with
fiscal stewardship. My interest here today is in representing
the several thousands of veterans in my community in
southeastern Arizona.
With that, I will open up first question, Ms. Graham. Will
the VA report the amounts of improper compensation payments
resulting from VA's failure to process dependent updates in
VA.gov and e-Benefits?
Ms. Graham. Those payments and that information is
typically reported on paymentaccuracy.gov is where that
information would be. I am not exactly certain that it would be
on VA.gov.
Mr. Ciscomani. When would that be available?
Ms. Graham. That information is available yearly. The last
year for paymentaccuracy.gov information is out there.
Mr. Ciscomani. Yes. From 2011 to 2022, we have not seen the
entire figures on that. When will that be available?
Ms. Graham. Is that in reference to the pension
information?
Mr. Ciscomani. That is in the compensation payments from
the failure to process the depending updates.
Ms. Graham. I will have to take that back and get an answer
for you, sir.
Mr. Ciscomani. Now, Mr. Burke, my understanding is that the
VA canceled in-person disability compensation exams during the
COVID-19 pandemic to reduce overpayments resulting from delayed
processing of proposed reductions of compensation. Now that in-
person exams have resumed, what is the VA strategy to sustain
the decrease in overpayments?
Mr. Burke. Yes, sir. Thank you for that question.
Whether it be a combination of increasing our staffing,
which we have done over the past two years, or the improvement
as discussed and kind of pointed out by the IG in our workload
distribution, and so we now have better workload distribution
plans to assure that workload is being prioritized.
We have also increased our resources both in the veteran
service representative and our rating veteran service
representative positions to handle not just, you know, a
particular type of workload, but all workload relevant to
veterans and beneficiaries.
Mr. Ciscomani. Mr. Burke, you know, on the same line of
question as before, I understand that from 2011 to 2022, the VA
received an accurate income data from SSA, just as we were
discussing, and that, therefore, VA relied on veterans to self-
report changes in income. Did VA implement any reasonable
interim policy to verify income during that decade?
Mr. Burke. Yes, sir. Thanks for the opportunity to address
that because I want to make sure that Congress understands
there was not a lapse of 10 years with just taking self-
reported information.
We did, in 2011, discover the data quality issue, but in
2013 and 2014, new procedures were implemented, both an upfront
verification process that took not just Social Security
information, but Federal tax information from the IRS. We
reviewed that at the very beginning of a claim and also post
award audits, meaning after a benefit was provided, we did
samplings of cases to make sure that the benefit was granted
properly.
We also made throughout the years until we got to turning
the match back on improvements in the system requirements,
implemented special focus reviews to detect that workload, and
also ensured that our employees had access to an online portal
with the Social Security Administration.
A very manual, cumbersome process, but we did all those
things during that period.
Mr. Ciscomani. Now on that, how do we know that the
computer matching agreement with SSA is now fixed and that
further hundreds of millions of dollars of pension overpayments
will not be wasted and awarded anymore?
Mr. Burke. Great question. What we did, as we went through
building the requirements to upgrade and strengthen the
computer matching program, we also, I do not want to use the
term overdid it because we can never overdo the testing, but
tested and validated the accuracy of that data match. We have a
high level of confidence that data is accurate.
Then the other thing that we did is now we are going to
receive that data on a quarterly basis, which will allow the
actual overpayment period to shrink, lessening the overall
overpayments when a situation does arise.
Mr. Ciscomani. Thank you. I yield back, sir.
Mr. Luttrell. Thank you, sir. The VA is a remarkable
machine. You all are amazing individuals that burden a heavy
weight.
This is a silly problem to have. Everything that we try to
do for our veteran community, losing money is absolutely just
the silliest problem to have.
Ms. Graham, I do not envy your path forward. Expecting
great things out of you. Next time that you and your colleagues
are sitting in front of this committee, I have no doubt you are
going to do great things.
Mr. Burke, we have the list that Mr. Arronte and Ms.
Sullivan--Ms. Sullivan, thank you for joining us today--that
they provided for us. I can assure you, sir, next time that you
are in front of this committee, I will have that list in my
hand, and I want to see that some of those have been checked
off. Is that fair?
The ranking member and I will be eagerly awaiting the
letter. Thank you all for your service and coming here today.
Ranking member.
Mr. Pappas. Well, I will be brief. Just thank you very much
for your commitment here. I think we all agree that more can be
done and it can be done better and more efficiently, both in
terms of stewarding taxpayer dollars and making sure that
veterans are getting what they deserve. I know that is the
mission of the Department. You take that role very seriously.
We are grateful for it. We do want to see some progress here
over time. We want to know where we need to be providing the
right authorities and policy language to allow you to do the
work that we are asking you to do.
Thank you very much for that commitment and I yield back,
Mr. Chairman.
Mr. Luttrell. I ask unanimous consent that all members have
5 legislative days to revise and extend their remarks and
include extraneous material. Without objection, so ordered.
This hearing is adjourned.
[Whereupon, at 3:29 p.m., the subcommittee was adjourned.]
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A P P E N D I X
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Prepared Statements of Witnesses
----------
Prepared Statement of Ronald Burke
Good afternoon, Chairman Luttrell, Ranking Member Pappas, and
Members of the Subcommittee. Thank you for the opportunity to appear
before you today to discuss the Department of Veterans Affairs (VA)
financial management policies and procedures. With me today is Lasheeco
Graham, Chief Financial Officer, Veterans Benefits Administration
(VBA).
VA safeguards Veterans' and beneficiaries' financial well-being by
using a range of strategies to proactively address and mitigate
potential improper payment issues. An improper payment is a payment
that was made in an incorrect amount under statutory, contractual,
administrative, or other legally applicable requirements. These can
result from evidence that was not considered, either in VA's possession
or that VA was not aware of, or lack of a thorough understanding of the
law or errors in judgment on the part of VA employees. Improper
payments, such as overpayments, occur in less than 7 percent of claims
processed by VA. For example, in fiscal year (FY) 2023, VA processed
nearly 1.7 million claims \1\, of which overpayments occurred in 6.87
percent of claims. While any amount of improper payment is
unacceptable, VA continues to make progress in identifying and
preventing these from occurring.
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\1\ Rating and Non-Rating claims.
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VA has implemented several processes and procedures to provide
oversight and to ensure VA is providing accurate and timely benefits to
Veterans and their dependents. VA employs computer matching agreements
with several Federal agencies to proactively prevent improper payments.
VA also reports improper payments to Congress, and has taken many steps
to prevent, detect, and correct improper payments and mitigate fraud,
waste, and abuse. VA also recognizes the importance of providing
transparency to the beneficiary in situations where an improper payment
is created. VA beneficiaries are afforded due process rights, may
request a hearing, and, any time a final decision is made on a claim,
all beneficiaries receive appeals rights.
Payment Integrity Information Act of 2019
VBA began reporting programs which exceeded the thresholds for
improper payments to Congress in 2004 as required by the Improper
Payment Information Act of 2002 (P.L. 107-300; 116 Stat. 2350), which
was enacted on November 26, 2002. Since then, there have been a series
of laws that aim to identify, prevent, and recover improper payments in
Federal spending. The current law is the Payment Integrity Information
Act (PIIA) of 2019 (P.L. 116-117; 134 Stat. 113) of 2019, which was
enacted on March 2, 2020. PIIA requires agencies to review programs
that may be susceptible to significant improper payments, defined as
improper payments exceeding 1.5 percent and $10M or $100M. Throughout
this timespan (2004-present), VBA has made every effort to identify and
report improper payments in alignment with legislation and program
implementation guidance provided by the Office of Management and Budget
(OMB). VBA has reported improper payments on the following programs:
Compensation, Dependency and Indemnity Compensation, Education Chapters
33, 1606, and 1607, Loan Guaranty (Direct Loans), Pension, and Veterans
Readiness and Employment.
VBA's disability compensation program is committed to improved
payment integrity through the implementation of effective corrective
actions, including increased and targeted training, data match
agreements with other Federal agencies, executing special focused
reviews, and performing analysis of quality assurance data. These
activities help to ensure that improper payments are identified and
corrected, trends are remediated, and root causes addressed as quickly
as possible. An example of an implemented activity includes the
creation of a uniform Administrative Error Paid/Due Calculator which
was mandated for use by claims processors to ensure the proper
calculation of overpayment amounts involving administrative errors
greater than $25,000. This process ensures the correct calculations are
used and provides oversight and consistency prior to approving
administrative decisions. As a result of these activities, in FYs 2019
and 2020, PIIA testing results showed a significant reduction in error
rate from 0.55 percent in FY 2018 to 0.037 percent in FY 2020. Testing
results also fell below the $100M reporting threshold for 2 consecutive
years. On April 2, 2021, this program was removed from the testing and
reporting requirements of PIIA with concurrence from OIG.\2\
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\2\ In accordance with OMB Circular A-123, Appendix C, dated March
5, 2021.
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Similarly, VBA's pension program also committed to improved payment
integrity through the implementation of effective corrective actions.
These included increased oversight through site visits, special focused
reviews, and targeted training based on analysis of quality assurance
data. As a result, VBA's pension program was fully compliant with PIIA
FY 2019 through FY 2021, reflecting improper payment rates well below
the 10 percent reporting threshold (5.38 percent, 8.18 percent and 7.76
percent respectively). Unfortunately, in FYs 2022 and 2023, VBA's
pension program saw an increase in improper payments. The program
became non-compliant with PIIA as it reported $492.43M or 11.66 percent
and $419.27M or 10.86 percent in improper payment amounts/rates, both
being above the threshold. VA implemented additional corrective action
plans that doubled-down on quality oversight through increased special
focus reviews and implementation of a Social Security Administration
(SSA) quarterly income match. The income match allows SSA to disclose
data to VA allowing VA to update its records for those receiving
income-dependent benefits. As a result, VBA's pension program was able
to reduce the improper payment amount and expects to report a continued
reduction in FY 2024.
Inter-Agency Data Sharing
VA receives information regularly from several Federal agencies,
through the execution of data match agreements, to determine a
beneficiary's original and continued entitlement to VA benefits. The
data matches identify cases where there are apparent contradictions
between information contained in VA records and information furnished
by other Federal agencies that affect entitlement to benefits. These
matching programs assist in identifying improper payments to
beneficiaries with the intent to reduce potential overpayments that
would otherwise be discovered based on information reported by the
beneficiary or their fiduciary.
Benefit determinations based on income: Federal Tax Information
(FTI) is another matching program that includes specified return
information from the Internal Revenue Service and SSA. VA uses FTI for
upfront verification to view earned income from SSA and unearned income
from the IRS and compares it to income information provided by an
applicant seeking income-based benefits from VA such as pension. The
upfront verification allows VA to validate the proper income of a
beneficiary before awarding benefits.
The post award audit (PAA) is an income match with the IRS and SSA
that allows VA to ensure a beneficiary continues to be entitled to VA
benefits. The match is conducted only after a grant of benefits and
only if there is a current award, unlike upfront verification, without
the initiation of a claim from a Veteran or survivor. PAA is a random
sampling of 1,000 pension beneficiaries with active award payments that
is conducted three times per year.
Benefit changes due to incarceration. VA also has an agreement with
the Department of Justice and Federal Bureau of Prisons which discloses
information about incarcerated Veterans and other Veterans'
beneficiaries to VA. This provides VA with information to identify
those Veterans and other Veterans' beneficiaries who are confined for a
period exceeding 60 days due to conviction for a felony or a
misdemeanor and therefore may be ineligible to receive full VA
benefits.
Benefits related to military duty status. VA has an agreement with
the Defense Manpower Data Center (DMDC) of the Department of Defense
(DOD) which is used to verify the continuing eligibility of Uniformed
Services Members, including National Guard and Reserve personnel, for
VA benefits. This is done by identifying VA disability benefit
recipients who return to active duty and ensuring that VA benefits are
terminated when appropriate.
VA also maintains the VA-DOD Identity Repository (VADIR), a data
base used for benefits administration. DMDC provides identifying
information on active-duty personnel (including full-time members of
the National Guard and Reserve) in VADIR. VA provides identifying
information on disability compensation and pension recipients in VADIR.
VA will use the data in VADIR to identify Veterans who are receiving
pay on active duty concurrently while receiving VA compensation or
pension benefits, which is prohibited. This information will be used to
adjust or terminate benefits, when appropriate.
Benefit Changes Due To Death: VA uses SSA's death master file (DMF)
matching program, which compiles SSA death information into one system
of records. Upon receiving the DMF, VA records are matched with the DMF
every week. When a match is identified, the system will suspend the
beneficiary's award and any recurring payments and then generate and
mail a letter providing notice to the address of record that the award
is suspended. The suspended claim will be reviewed at the claims
processing stage to ensure the accuracy of the death match. When the
DMF match identifies a dependent on a beneficiary's award, the system
will generate a claim to be worked by field personnel, as due process
is required to remove the dependent since the match is considered
third-party information.
The Treasury Do Not Pay (DNP) Death Record Confidence Scoring Tool
(DRCST) is a monthly report that lists individuals who receive monthly
benefits and have been identified as deceased. Treasury consolidates
data for this listing from a variety of sources, and VBA uses
Treasury's DNP system to review, analyze, and adjudicate each matched
record--where the beneficiary has been identified as deceased--as
Proper, Improper, or False Positive. VBA identified 62 improper payment
cases totaling $766,000 in FY 2023 and 81 cases totaling $643,000 in FY
2024 as of January 16, 2024. VBA sends these cases to Treasury to
ensure they block any future submissions for payments.
The Treasury DNP Payment Adjudication Review is a monthly report
VBA uses to recapture payments or prevent and detect future improper
payments. This report is also derived from a variety of data sources,
and VBA uses Treasury's DNP system to review, analyze, and adjudicate
each matched record--where the beneficiary has been identified as
deceased--as Proper, Improper, or False Positive. VBA identified 43
cases totaling $1.5 million in FY 2023 and 91 cases totaling $2.7
million in FY 2024 as of January 16, 2024. VBA sends these cases to
Treasury to ensure they block any future submissions for payments.
The Death Match Initiative is a strategic ongoing project aimed at
identifying and rectifying erroneous or ineligible benefit payments to
Veterans as well as spouses and beneficiaries who are deceased. As part
of the Death Match Initiative, VBA conducts four ongoing reviews to
identify and adjudicate potential overpayments. These reviews include
the First Notice of Death (FNOD), VA medical center (VAMC) In-Patient
Death Listing, Treasury DNP DRCST, and Treasury DNP Payment
Adjudication Review. The Office of Financial Management reviews the
data from each report and submits a list to the Office of Field
Operations for corrective action.
FNOD identifies Veteran awards in authorized or suspended status
and no action has been taken to terminate the award. VBA identified 270
cases totaling over $1.2 million in FY 2022, 652 cases totaling over
$1.5 million in FY 2023, and 110 cases totaling $202,000 in FY 2024 as
of January 16, 2024.
The VAMC In-Patient Death Listing identifies Veterans who have an
active compensation or pension award, and VAMC records indicate the
Veteran passed away while receiving in-patient care. VBA identified 236
cases totaling $5.9 million in FY 2022; 773 cases totaling $8.5 million
in FY 2023, and 77 cases totaling $1 million in FY 2024 as of January
16, 2024.
Data Enhancements
In support of VBA's enterprise risk management goal to monitor and
reduce improper payments, in April 2022, VBA developed a data
monitoring script to detect improper payments that result from errors
when VA employees change beneficiaries' direct deposit information. VBA
has continuously enhanced this monitoring script and is now
successfully identifying errors before they result in an improper
payment. In FY 2023, the monitoring script detected 77 errors and
prevented over $320,000 from being paid to the wrong account. As of
January 18, 2024, the new script has identified a total of 62 errors
and prevented over $84,000 from being paid to the wrong account.
VBA also enhanced the existing death match query to proactively
find improper payments. These improvements included aggregating data
sources from the Veterans Health Administration and National Cemetery
Administration to cross-reference against VBA's corporate data
warehouse. This monthly query has been successful in identifying
running awards made to beneficiaries after their death. In FY 2022, the
match identified 891 recurring payments with a suspected death with
nearly $3.5 million in monthly improper payments. In FY 2023, the match
identified 2,418 recurring payments with a suspected death with over
$22.8 million in monthly improper payments. As of January 18, 2024, the
match identified 333 recurring payments with a suspected death with
nearly $2 million in monthly improper payments.
Education Audits
As stated in 38 U.S.C. Sec. 3684, schools are required to report
changes in student status within 30 days when a student interrupts or
withdraws from training. In accordance with 38 U.S.C. Sec. 3693, VA
conducts routine audits to ensure the institutions and their approved
programs follow all applicable provisions of the laws administered by
VA.
Additionally, students are required to certify their enrollment
status each month to continue to receive their monthly housing
allowance (MHA) under the Post-9/11 GI Bill or their monthly
educational assistance stipend under all other VA educational
assistance programs. VA withholds monthly payments, either MHA or
educational stipend until the student verifies enrollment. MHA payments
will continue to be released until two consecutive months have elapsed
without any verification from the student. Students are able to sign up
for text messages and email notifications. If signed up, VA sends the
student a verification reminder before the end of the month. If the
student has not verified by the end of the month, a follow-up reminder
text message or email is sent to the student telling the student their
monthly verification must be made or else their MHA will be held after
the second month. The text message and email include links that allow
the student to verify via the text message or email. MHA payments will
continue to be released until two consecutive months have elapsed
without any verification from the student. If, after being notified
twice and the student still fails to verify, VA will pause the payment
and contact the student and school to determine if the student is still
attending as previously indicated. Based on the information from the
school and/or the student, the monthly housing payments will resume, or
the benefits will be adjusted accordingly.
Fraud Prevention
VA has taken many steps to prevent, detect, and correct improper
payments and mitigate fraud, waste, and abuse. Veterans and their
beneficiaries are often targets of scams and financial fraud, and VA
has been working hard to prevent these from happening by educating
Veterans and their beneficiaries about fraud and helping them safeguard
their benefits. Specifically, VBA has taken a multi-pronged approach
focused on educating Veterans about fraud schemes and predatory
practices.
In FY 2023, VBA executed 12 fraud prevention and awareness
campaigns through multiple platforms such as emails to subscribers,
newsletters, GovDelivery communications, social media posts and blogs,
fact sheets and proactive media and speaking engagements to educate
Veterans and their families to improve awareness of potential financial
exploitation schemes, fraud, and prevention strategies. These efforts
resulted in more than 260 fraud prevention communication engagements,
reaching to over 47 million Veterans, beneficiaries, survivors, family
members and service members.
In June 2022, VA established the Veterans Scam and Fraud Evasion
(VSAFE) Integrated Project Team (IPT) to develop long-term solutions to
combat the exponential increase in and continuous evolution of
predatory activity and potential fraud we have seen. The IPT shares
knowledge and implements best practices across the enterprise, and VBA
is a proud member. Additionally, VSAFE aims to combat fraudulent
activities targeting Veterans, including identifying schemes that lead
to VA improper payments and implementing deterrents for bad actors;
these actions will protect both Veterans and the integrity of VA
payments.
Pension Debt Issue
In 2011, VA determined there was a data quality issue within its
matching system the SSA Income Match was discovered, which resulted in
the suspension of the match and VA's Under Secretary for Benefits
decided to suspend the feed. As a result, the interface between the
Veterans Benefits Administration (VBA) and SSA to share SSA Benefit
Income did not operate for several years. From 2011 through 2017, VA
continuously collaborated with SSA to resolve the issue. While the SSA
Income Match was inactive, VA verified SSA benefit income through other
means, including:
Comparison of FTI to the SSA benefit income reported by
the beneficiary.
Manual confirmation of a beneficiary's SSA benefits
through an online query when processing subsequent pension claims.
Random routine audits, quality reviews of claims, and
data matches against FTI which also required a manual check of SSA
records.
In 2014, VA implemented a project to expand the match to assist
with VA pension cost-of-living adjustment (COLA) processing. In 2017,
the VA redeveloped and expanded its interface to add certain SSA
Benefit Amounts for children and parents and payment information for
multiple SSA benefits. However, the VA determined that its pension
recipient data did not consider entitlement from multiple records for a
beneficiary, and therefore did not provide an accurate monthly benefit
amount. As such, VA determined that the match was unusable.
Additionally, the availability of SSA benefit income data did not align
with VA's COLA processing timeline. On March 13, 2021, VA and SSA re-
established the SSA Income Match and abandoned the pursuit to include
the match for COLA. Extensive review and testing without the COLA
processing confirmed no data quality issues existed. Following
successful testing, steps were taken to reintegrate the SSA Income
Match into claims processing. These efforts resulted in the re-
establishment of a quarterly match in June 2022. Processing the claims
resulting from the SSA Income Match resulted in the creation of large
beneficiary debts going back several years. Recognizing the hardship
and distress that these debts may cause, on November 2, 2023, VA paused
the collection of all established debts and the establishment of new
debts.
On December 22, 2023, the Secretary of Veterans Affairs signed a
Temporary Timeliness Instruction to address VA beneficiary debt and is
developing a timeliness standard through regulation, as required under
Section 252 of the Cleland-Dole Act. The timeliness standards allow VA
to move forward with debt relief options and provide additional clarity
during communication with the beneficiary. VA notes that the
Instruction will cease to be effective when VA publishes the regulation
required under section 252 of the Cleland-Dole Act.
As of January 16, 2024, VA has determined that approximately 12,228
beneficiaries have been overpaid because of the SSA Income Match data
quality issue. There are over 32,000 claims that still require review.
As directed in the Secretary's Temporary Timeliness Instruction, VA
will not collect debts associated with the data quality issue and will
refund any payments made on these debts.
Chairman Luttrell, Ranking Member Pappas, this concludes my
testimony. I am happy to respond to any questions you or the
Subcommittee may have.
______
Prepared Statement of Brent Arronte
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