    [House Hearing, 119 Congress]
    [From the U.S. Government Publishing Office]

                         WASTE & DELAYS: EXAMINING VA'S
                            IMPROPER PAYMENTS 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 NINETEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                            WEDNESDAY, MAY 14, 2025

                                   __________

                               Serial No. 119-20

                                   __________

           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
    61-153                 WASHINGTON : 2025

    -----------------------------------------------------------------------------------

                         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           CHRIS PAPPAS, New Hampshire
    MARIANNETTE MILLER-MEEKS, Iowa       SHEILA CHERFILUS-MCCORMICK,
    GREGORY F. MURPHY, North Carolina        Florida
    DERRICK VAN ORDEN, Wisconsin         MORGAN MCGARVEY, Kentucky
    MORGAN LUTTRELL, Texas               DELIA RAMIREZ, Illinois
    JUAN CISCOMANI, Arizona              NIKKI BUDZINSKI, Illinois
    KEITH SELF, Texas                    TIMOTHY M. KENNEDY, New York
    JEN KIGGANS, Virginia                MAXINE DEXTER, Oregon
    ABE HAMADEH, Arizona                 HERB CONAWAY, New Jersey
    KIMBERLYN KING-HINDS, Northern       KELLY MORRISON, Minnesota
        Mariana Islands
    TOM BARRETT, Michigan

                           Jon Clark, Staff Director
                      Matt Reel, Democratic Staff Director

           SUBCOMMITTEE ON DISABILITY ASSISTANCE AND MEMORIAL AFFAIRS

                        MORGAN LUTTRELL, Texas, Chairman

    AUMUA AMATA COLEMAN RADEWAGEN,       MORGAN MCGARVEY, Kentucky, Ranking
        American Samoa                       Member
    JACK BERGMAN, Michigan               CHRIS PAPPAS, New Hampshire
    NANCY MACE, South Carolina           MAXINE DEXTER, Oregon
    KEITH SELF, Texas                    KELLY MORRISON, Minnesota

    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

                                  ----------

                            WEDNESDAY, MAY 14, 2025

                                                                       Page

                               OPENING STATEMENTS

    The Honorable Morgan Luttrell, Chairman..........................     1
    The Honorable Morgan McGarvey, Ranking Member....................     2

                                   WITNESSES
                                    Panel I

    Ms. Nina Tann, Executive Director, Compensation Service, Veterans
      Benefits Administration, U.S. Department of Veterans Affairs...     4

            Accompanied by:

        Mr. Kevin Friel, Executive Director, Pension and Fiduciary
            Service, Compensation Service, Veterans Benefits
            Administration, U.S. Department of Veterans Affairs

        Ms. Jeanine Gilson, Acting Chief Financial Officer, Veterans
            Benefits Administration, U.S. Department of Veterans
            Affairs

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

                                    APPENDIX
                        Prepared Statements Of Witnesses

    Ms. Nina Tann Prepared Statement.................................    23
    Mr. Brent E. Arronte Prepared Statement..........................    27

                           Statements For The Record

    Paralyzed Veterans of America Prepared Statement.................    39
    Veterans of Foreign Wars of the United States Prepared Statement.    41

                         WASTE & DELAYS: EXAMINING VA'S
                            IMPROPER PAYMENTS IN ITS
                       COMPENSATION AND PENSION PROGRAMS

                                  ----------

                            WEDNESDAY, MAY 14, 2025

       Subcommittee on Disability Assistance &
                              Memorial Affairs,
                        Committee on Veterans' Affairs,
                                 U.S. House of Representatives,
                                                        Washington, DC.
        The subcommittee met, pursuant to notice, at 10:15 a.m., in
    room 360, Cannon House Office Building, Hon. Morgan Luttrell
    (chairman of the subcommittee) presiding.
        Present: Representatives Luttrell, Radewagen, Bergman,
    Mace, Self, McGarvey, Pappas, Dexter, and Morrison.

             OPENING STATEMENT OF MORGAN LUTTRELL, CHAIRMAN

        Mr. Luttrell. The subcommittee will come to order. Thank
    you to all the witnesses for being here today. We are going to
    take a closer look at the U. S. Department of Veterans Affairs'
    (VA) efforts to decrease improper payments for compensation and
    pension benefits.
        Congress has appropriated over $150 billion to the VA each
    year for the past few years. We must ensure the VA is a
    responsible steward of the taxpayer's investments. This means
    paying every veteran the correct amount of benefits they have
    earned the first time. When the VA makes overpayments and they
    are not returned, taxpayer dollars are obviously wasted.
    Overpayments can result in VA establishing debts that veterans
    owe back to the VA, which can obviously create a paperwork
    nightmare for them and their families. Current law allows VA to
    either cancel these overpayment debts or waive collection of
    those debts.
        From Fiscal Year 2021 to 2024, VA has issued at least $5.1
    billion in compensation and pension overpayments. VA collected
    only a portion of those overpayment debts. This means that
    during the last administration, VA spent $677 million in
    taxpayer dollars roughly.
        For example, Veterans Service Organizations (VSOs) and some
    of my colleagues in Congress have told me that VA overpaid
    their constituents for dependents. Those veterans correctly and
    immediately updated VA that they no longer had a dependent
    child or spouse. VA did not update the benefit payment
    obviously until months later. As a result, many of those
    veterans owe VA debt and are dealing with the stress of
    repaying that underneath the waiver of collection for that
    debt. If the VA did not make these overpayments in the first
    place, obviously there would be fewer wasted taxpayer dollars
    resulting in fewer uncollected overpayments.
        I look forward to hearing from the VA witnesses today on
    what the new administration plans to do to fix these
    bureaucratic headaches and prevent delays in processing
    dependent status updates. We have to streamline these things in
    order to take the pressure off of our veterans.
        There are other causes for VA improper payments of
    compensation and pensions. For example, the VA Office of
    Inspector General (OIG) issued several reports on how
    inaccurate effective dates resulted in improper payments during
    the last administration. The effective date for a grant of a
    claim determines the amount a veteran will receive in
    disability compensation back pay. OIG has issued reports,
    including one in April, that VA incorrectly assigned effective
    dates when it granted certain types of claims, such as the
    Sergeant First Class Heath Robinson Honoring our Promise to
    Address Comprehensive Toxics (PACT) Act claims and claims for
    total ratings due to unemployability. OIG estimated those
    incorrect effective dates resulted in at least $100 million in
    improper compensation payments.
        OIG found that the cause was ineffective policy guidance,
    job aids, and training when it comes to assigning effective
    dates of awards. I understand that this can be very difficult
    to determine. I understand this can be very difficult to
    determine the effective date of the award. I look forward to
    hearing from OIG today and how the VA should provide claims
    processors with effective training and guidance on how to
    assign correct effective dates for all types of compensation
    and pension claims.
        Ultimately, when veterans owe VA a debt at no fault of
    their own, why should taxpayers have to foot the bill? We must
    ensure that VA makes every effort to prevent overpayments from
    happening in the first place. I look forward to hearing from
    our witnesses today on how we can cut down on wasteful spending
    from improper payments and compensation and pension.
        With that, I yield to the ranking member for his opening
    statement.

          OPENING STATEMENT OF MORGAN MCGARVEY, RANKING MEMBER

        Mr. McGarvey. Thank you, Mr. Chairman. Appreciate your
    comments and thank you all for being here today.
        We have a responsibility to make sure that the VA uses
    taxpayer money in an efficient and correct way. We also need to
    guarantee that the VA pays each and every beneficiary what they
    are due. Today I want to have a genuine conversation on what
    works and what does not. I am not here to chastise the VA over
    their supposed fiscal wrongdoing and then leave without ideas
    for making the VA work better for the veteran.
        I am also not here to just defend the status quo because,
    at the end of the day, everything we do on this committee must
    be centered around the veteran. It must make things better for
    the veteran.
        We are looking at massive programs here, complicated,
    imperfect programs. I know we need to work to make them better.
    To do that we are going to have to push for real efficiencies
    and improvements. We absolutely need to make sure strong
    payment controls are in place. Now that the VA is pushing out
    more money than ever thanks to the PACT Act, we need to make
    sure that the VA remains a good steward of taxpayer dollars,
    but we must be precise. If we take an overly punitive and
    difficult approach to compensation and pension payments, we run
    the risk of leaving veterans out in the rain without the
    benefits they have earned. I stress that they have earned.
    These are the men and women who have put on the uniform for us.
    They have earned these benefits. That does not mean it is an
    anything goes policy with no guardrails. I believe this issue
    deserves a bit more nuanced consideration than some of the
    issues we deal with here.
        I would love to say this is an easy fix, that the over
    130,000 PACT Act claims will go through without incorrect
    effective dates, that every veteran who gets divorced will
    immediately notify the VA before they incur debts, or their
    grieving widow will catch an overpayment during a difficult and
    confusing time. That is not the case. It is not reality. As I
    said, these are large, complex systems, and not only are they
    run by humans, they are used by humans. That means there will
    be errors, and even with the best possible software, there is
    going to be some mistakes. Our goal, and I believe it is the
    VA's goal as well, is to work hard to fully minimize any of
    those errors or mistakes, get the veterans what they need, and
    be strong stewards of taxpayer money.
        I think we are all rowing the boat in that direction. I do
    not suspect misconduct and incompetence around every corner. I
    hope that today we can have a discussion with that nuance. I
    also want to ensure that as we work to help the VA reduce the
    errors in their payment systems, we are equally concerned about
    what these errors mean to the beneficiaries on the other end.
    That is our veterans.
        Committee staff visited the Debt Management Center in
    February and heard a couple of firsthand accounts of veterans
    being confused, angry, and even suicidal because they incurred
    a debt they did not know about. That is what I want to avoid. I
    want to make sure that the VA has processes in place to protect
    veterans and other beneficiaries, as well as the call center
    employees taking their calls.
        Mr. Chairman, I know it is both of our goals, that while we
    look for ways to make the VA better, we do not forget the
    veterans and the survivors and those serving them in the
    process. I look forward to a productive discussion, and I yield
    back.
        Mr. Luttrell. Thank you, Mr. McGarvey. Welcome, everyone,
    and thank you for coming today. I am going to introduce our
    witnesses.
        Our lead witness from the VA is Ms. Nina Tann, executive
    director of compensation services at Veterans Benefits
    Administration (VBA). Ms. Tann is joined by Mr. Kevin Friel,
    executive director of pension and fiduciary services at VBA.
    Ms. Tann is also joined by Ms. Jeanine Gilson, acting chief
    financial officer for the VBA. Today's witness panel is also--
    it also includes Mr. Brent Arronte, deputy assistant inspector
    general for audits and evaluations at the VA Office of the
    Inspector General.
        Mr. Arronte, do I understand it correctly, this will not be
    the last time I am seeing you or are they putting you out to
    graze?
        Mr. Arronte. By choice. I think 90 percent this will be my
    last hearing.
        Mr. Luttrell. Well, if that is the case. It has been an
    absolute pleasure working with you over these past few years.
        Mr. Arronte. Thank you, sir.
        Mr. Luttrell. Fair winds and following seas, my friend.
    That is a Navy term. Hope you understand it.
        I ask the witnesses on the panel to please stand and raise
    your right hand.
        [Witnesses sworn.]
        Mr. Luttrell. Thank you. Let the record reflect that the
    witnesses have answered in the affirmative.
        Ms. Tann, you are now recognized for 5 minutes to deliver
    your opening statement on behalf of the VA. Ms. Tann, is your
    mic on?

                         STATEMENT OF NINA TANN

        Ms. Tann. I am sorry. Good morning. Chairman Luttrell,
    Ranking Member McGarvey, and members of the subcommittee. Thank
    you for the opportunity to appear before you today to discuss
    the Department of Veteran Affairs' oversight of improper
    payments within compensation and pension programs. With me
    today from the Veterans Benefits Administration is Kevin Friel,
    Executive Director, Pension and Fiduciary Service, and Jeanine
    Gilson, active Chief Financial Officer.
        At VA, we take our mission to serve veterans, their
    families, and survivors very seriously. We are committed to
    being good stewards of taxpayer dollars and we recognize that
    improper payments are problematic for all of our stakeholders.
    An improper payment occurs when a payment is made in the wrong
    amount, either too much or too little, paid to the wrong person
    or paid without the required documentation. We want to assure
    Congress, veterans, and the American taxpayers that VA is
    working diligently to safeguard not only veterans' and
    beneficiaries' financial entitlements, but also the funds
    appropriated to VA to carry out our sacred and honorable
    mission. VA is using a range of strategies to proactively
    address and mitigate potential improper payment issues, which I
    will discuss today.
        In Fiscal Year 2024, VA reduced improper payments by about
    a billion dollars. Achieving this result was made possible by
    leveraging data sharing agreements with multiple Federal
    agencies. These provide critical information that inform the
    propriety of payments, such as benefits related to military
    duty status, benefit changes due to death, and income-related
    information. Additionally, these partners provide information
    that helps identify discrepancies or confirm information. These
    agreements are used to establish or verify eligibility for
    Federal benefits, verify compliance with Federal benefit
    programs, recoup payments or delinquent funds, as well as
    investigate potential fraud, waste, or abuse.
        For example, VA made several improvements to data matching
    agreements for VA's income-based pension benefits. VA now uses
    Federal tax information to verify an applicant's income upfront
    and income matching with the Social Security Administration to
    verify continued eligibility for income-based benefits. In
    addition to these strategies, VA continuously examines our
    systems and processes to improve timeliness and accuracy,
    thereby reducing improper payments.
        In December 2024, VA modified its procedural guidance to
    liberally interpret reevaluation provisions for dependency and
    indemnity compensation (DIC) claims. These changes streamline
    the decision-making process to mitigate the likelihood of
    underpayments and ensure VA renders the correct decision the
    first time. Additionally, these changes reduce requests for
    unnecessary information and simplify the claim review process.
        An area of crucial importance in making accurate payments
    is the correct application of effective dates by claims
    processors. Training and oversight through quality assurance
    (QA) and having proper internal controls in place are at the
    core of this issue. VA has taken steps to enhance training and
    oversight of effective dates through use of quality standdowns,
    refresher training to include a release of PACT Act training
    that focus heavily on effective dates, and publication of job
    aids based on findings from Special Focus Review, which allow
    tracking and trending of errors. We also welcome the review and
    analysis of our Office of Inspector General partners to examine
    our procedures and identify areas for improvement.
        For example, on April 15, OIG published a report on PACT
    Act effective dates. In response to the OIG's six
    recommendations, VBA is ensuring claims processors have the
    guidance, training, and tools they need to assign the most
    advantageous effective dates allowed by law for veterans
    claims. VBA is also enhancing our collaboration with the Board
    of Veterans Appeals and the Office of General Counsel (OFG) to
    improve the quality, comprehensiveness, and legal accuracy of
    its training programs in an effort to reduce delays, avoidable
    errors, and rework.
        VBA internal controls play a key role in reduction of
    improper payments and include a robust quality program to
    monitor claim accuracy. VA cannot reduce improper payments
    alone. We need help from our veterans and beneficiaries to
    reduce avoidable improper payments through the timely reporting
    of updated information. Any changes to information such as
    marital status, income, or dependency status must be shared
    with VA as quickly as possible to avoid overpayments and
    underpayments.
        For example, if a veteran and their spouse divorce and VA
    is not notified, this will result in an overpayment and
    potentially a debt that the veteran will have to pay. It is
    very important that veterans report any such changes to VA as
    quickly as possible. To better support this, VA is working to
    improve how it communicates the importance of reporting such
    changes to veterans and beneficiaries and to make reporting
    these changes as easily as possible. We are exploring
    communication avenues to ensure veterans are aware of what
    information we have and when they need to report a change.
        VA continues to make improvements on reducing improper
    payments and acknowledges there is more to be done. We are
    committed to working with Congress and our stakeholders to
    further improve, correct, and avoid improper payments where
    possible. We thank the committee for their continued support of
    programs that serve our Nation's veterans and look forward to
    working with you.
        Mr. Chairman, this concludes my statement. My colleagues
    and I are prepared to respond to any questions from you and
    members of the subcommittee.

        [The Prepared Statement Of Nina Tann Appears In The
    Appendix]

        Mr. Luttrell. Thank you. The written statement of Ms. Tann
    will be entered into the hearing record.
        Mr. Arronte, you are now recognized for 5 minutes to
    deliver your opening statement on behalf of OIG.

                       STATEMENT OF BRENT ARRONTE

        Mr. Arronte. Chairman Luttrell, Ranking Member McGarvey,
    and members of the subcommittee, thank you for the opportunity
    to testify on the OIG's independent oversight of VBA's
    Compensation and Benefits programs. We know that these programs
    provide critical financial support to many veterans and other
    beneficiaries who rely on their monthly benefit payments.
        Our oversight work has identified deficiencies in VBA's
    processes, IT systems, training, and internal controls. As a
    result of that oversight, we focus on recommendations that will
    help VA find ways to deliver timely, accurate payments so
    beneficiaries are not impacted by miscalculations and incorrect
    payments. Taking corrective action on OIG recommendations could
    also help VBA be good stewards of taxpayer dollars.
        In addition to our audit work, the OIG has a robust
    criminal investigations program to combat bad actors who
    fraudulently receive benefits. Improper payments are defined by
    Office of Management and Budget (OMB) as ``Federal payments
    that are for an incorrect amount, paid to an ineligible
    recipient, or issued without adequate supporting
    documentation.'' For the purposes of this hearing, we are
    talking about underpayments and overpayments. My written
    statement discusses several reports that identified improper
    payments, but I want to focus on the importance of correctly
    establishing the effective date of a claim.
        The effective date of a claim is paramount to ensuring that
    a veteran's compensation claim is paid on the correct date most
    advantageous for the veteran. The PACT Act significantly
    complicated effective date determinations by adding locations,
    dates, and new presumptive conditions that claims processors
    must consider.
        VBA rolled out the majority of training for PACT Act claims
    processors in December 2022 with a completion deadline of
    January 2023. This was an accelerated training schedule to
    facilitate implementation. VBA began processing PACT Act claims
    for terminally ill veterans in December 2022 and processing all
    other PACT Act claims in January 2023. In a report we released
    last month, we found that in 24 percent of the cases we
    reviewed, staff assigned incorrect effective dates that
    resulted in $6.8 million in improper payments, including both
    under and overpayments. Based on these projections, by August
    2025 that amount will reach approximately $20 million.
        We determined that this was the result of VBA not
    effectively preparing claims processors to incorporate PACT Act
    significant changes. The training guidance lacked the
    specificity needed for complex decisions and the two IT tools
    that were to assist in determining correct effective dates were
    unreliable.
        In our soon to be published report on VA's compliance with
    the Payment Integrity Information Act, also known as PIIA, we
    found VBA reported improper payments or VA reported improper
    payments of approximately $2.2 billion in both over and
    underpayment, which is down from $3.2 billion that was reported
    in 2023. However, of that 2.2 billion, 1.1 billion is
    considered a monetary loss and likely will not be recovered by
    VA.
        While VA satisfied 5 of 6 PIIA requirements this year, it
    continued to report an improper payment rate of more than 10
    percent for two programs. Those programs are VBA's pension
    program and Veterans Health Administration's (VHA) purchased
    long-term care services. While VBA's compensation program is
    not included in this report, it will be next year since VA
    identified the compensation program as a high priority program
    because it is susceptible to significant improper payments.
        The OIG is committed to continuing its independent
    oversight work of claims processing activities and VBA
    operations in order to create a better experience for veterans
    and their beneficiaries.
        Chairman Luttrell, Ranking Member McGarvey, and members of
    the subcommittee, this concludes my statement. I would be happy
    to address any questions you may have.

        [The Prepared Statement Of Brent Arronte Appears In The
    Appendix]

        Mr. Luttrell. 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.
        Okay. That was quite the suitcase you just unpacked, sir.
    Ms. Tann, this is how I am going to start this. How do we fix
    this problem? Ms. Tann, you said we are exploring our avenues
    of communicating with our veterans because this is a pretty
    long cast here. It starts inside the VA with our digital
    infrastructure, our training, manning. equipping with software
    and hardware. As it moves downstream and touches the veterans,
    they have to be able to communicate back into the organization
    to say, hey, look, my dependents are no longer here or--and I
    have got a divorce, or my spouse has passed away.
        How do we--you mentioned Social Security earlier. How does
    the VA--because in my district, people, they do not have
    computers, they do not have phones. Our veterans like to dig in
    and they are just kind of hidden. How do we track or help our
    veterans track--how do we track our veterans if they lose a
    spouse, so we are not providing--so the VA is not providing
    overpayment? How do we fix that problem?
        At the end of the day, I am going to say this now and I am
    going to say it in my closing remarks, if we are spending $3
    billion in overpayment and underpayment, and from the last 10
    years, if we are doing our homework correctly, those numbers
    have increased. We are losing ground, which is money that can
    be spent in other areas of the VA.
        I agree with my ranking member's opening statement. You
    have--we have the ability to fix this and this is a problem.
    Yes. When you are dealing with dollar bills, it is a big
    problem considering the numbers. We have to be aggressive, we,
    us, and the VA have to be aggressive on how to fix this. I
    think it is absolutely possible in 2025.
        Ms. Tann, you can--I will start with you.
        Ms. Tann. Thank you for your question, Chairman. We are
    looking at a number of avenues, but we also have a couple, a
    lot of things currently in place. We are making sure to notify
    veterans in our correspondence about when they need to report
    changes to us, what we have of record, and how we are using
    that information. We also have--they have the ability to report
    to any of our public contact offices. They can make changes
    through VA.gov as well as call our call center. We want to make
    it as easy as possible for veterans to access and provide
    updated information as much as is necessary.
        We also have capabilities in which we use matching
    agreements. You mentioned Social Security. Some of that is for
    income-based benefits and entitlements. We also do death
    matches so that we are made aware. We have like a survivor's
    assistance office now that can help veterans kind of navigate
    some of these situations. Really for information that only they
    have, like if there is a divorce, if there is the death of a
    spouse or the need to remove or add a dependent, that is only
    information that veterans know that they have to come to us. We
    are trying to open all the doors and make sure that they know
    that they have to inform us and what information we are using
    at any given time.
        Mr. Luttrell. Do we have the exact, I am going to try to
    say this right, do we have the exact number of how many
    beneficiaries there are, how many we correspond with, and how
    many respond back to the VA's requests? If we are pumping out
    letters, Mr. Friel, to 100 veterans that we give--that are
    beneficiaries and only 30 of them are responding back, but we
    are still paying the other 70, do you have that number by
    chance? Ms. Tann, I may be switching to Mr. Friel. I apologize.
        Mr. Friel. No, sir, I do not have that number readily
    available, but we can take that back.
        Mr. Luttrell. Is that a question that is being asked in the
    Department?
        Mr. Friel. It is. We are looking at, and specifically in
    our area, in Pension and Fiduciary, we are looking at the rate
    of return when we do development actions or we do request for
    information, the rate of return that we get for a reply.
        Mr. Luttrell. Do you have like a projection or a window
    that you can provide the committee today?
        Mr. Friel. No, sir, I would just be making up an arbitrary
    number, and I do not want to do that. We will----
        Mr. Luttrell. I ask that you get that to us because, again,
    just curiosity if we are in the billions in overpayments.
        Mr. Friel. Sir, if you do not mind, one thing I would like
    to expand on Ms. Tann's answer is----
        Mr. Luttrell. Okay.
        Mr. Friel [continuing]. with the Social Security death
    match, originally, that was just for beneficiaries. We have
    expanded that out to dependents on an award. To your question
    about how we would find out if a spouse passed away, we will do
    that through the Social Security death match. We are--Social
    Security has the same limitation we do that they are dependent
    upon a third party to notify them of a death. Once we get it,
    we can start action with the veteran to remove that dependent
    from their award.
        Mr. Luttrell. Okay. I just am eager to know how many
    beneficiaries there are, how many we send information to, and
    how many are responding to that request, because the delta in
    there, I would be curious to see what the number sign is and
    how that is correlated.
        Mr. Friel. Yes, sir. From that perspective, so just for
    clarity, we do correspond with almost all veterans every year
    when we do the cost-of-living adjustments, to what Ms. Tann
    spoke about in the letters, we identify. As far as the other
    actions where we do development and like a due process, is that
    more the area that you are looking at?
        Mr. Luttrell. Well, that might be where one of the misses
    are----
        Mr. Friel. Okay.
        Mr. Luttrell [continuing]. that is causing the problem. I
    mean, it is a lot. There is a lot of them, but that one I
    make--I am sorry.
        Ranking Member, you are recognized for 5 minutes, sir.
        Mr. McGarvey. Thank you, Mr. Chairman. Thank you all for
    being here again.
        Ms. Tann, I will start with you this morning. For Fiscal
    Year 2024, what were the reported level of improper payments
    for both the compensation and pension services as real dollar
    numbers and as a percentage?
        Ms. Tann. Thank you for the question, sir. I am going to
    ask our acting Chief Financial Officer if she will take that
    question, please.
        Ms. Gilson. Good morning and thank you for that question.
    For Fiscal Year 2024, for compensation overpayment debts we
    established $1.14 billion in overpayment debts and that is out
    of an outlay of $161.196 billion, which comes out to a fraction
    of 1 percent of improper payments. It is .72 percent of outlays
    were improper. The breakout for the pension service for 2024,
    their overpayment debts were $227.4 million out of an outlay of
    $3.743 billion, which is a percent of outlays of 6.1 percent.
    In total, when you add both of those numbers together, the
    total compensation and pension overpayment debts established
    was $1.366 billion out of a total compensation and pension
    outlay of $161.196 billion for, again, a below 1 percent-
    percentage of compensation and pension outlays. It is .85
    percent were improper.
        Mr. McGarvey. Got it. Of those improper payments, what
    percentage were overpayments versus underpayments?
        Ms. Gilson. I can do the rough math here from the agency
    financial report for 2024. Again, these are projections that
    are given to us after a statistically valid sample of 300 cases
    is evaluated. From the statistically valid sample, pensions,
    improper payments were $404 million and the overpayments were
    $381.78 million, so in the magnitude of 80-ish percent.
        Mr. McGarvey. Okay, run through that one more time for me.
    The pensions were?
        Ms. Gilson. Certainly. Improper payments as a whole--well,
    improper payments, not including unknown payments where we do
    not know whether the payment is improper or not because the
    individual--the payment may be going through due process, so
    for improper payments that actually have been identified in a
    projection as being improper, the total was $404 million and
    the overpayments of that 404 were $381.78 million.
        Mr. McGarvey. Okay. Thank you. Do you think, do these
    numbers show an increase or a decrease in improper payments for
    these offices over prior years?
        Ms. Gilson. For pension service, this is an increase. The
    projection is an increase from 2023 to 2024.
        Mr. McGarvey. Taking my own notes. Thank you for that.
        This for Ms. Tann, but, you know, whoever has the answers
    for it. As I understand it, compensation service will be
    subject to more in-depth supervision under the Payments
    Integrity Information Act. Can you tell us why and what changed
    at Comp Service to make that necessary?
        Ms. Tann. Sure. Thank you for the question. What it is is
    that in Fiscal Year 2024 Compensation Service underwent a risk
    assessment. Because of the pure scale of our program, as was
    mentioned earlier, just the amount of outlays that we have, we
    are susceptible to more improper payments. It is not
    necessarily that anything wrong was done. We are in testing and
    evaluation right now. That heightened awareness and risk
    assessment as an internal control will lead us to reporting,
    again, in 2025, after having being removed previously because
    we met the PIIA requirements, and OIG concurred with that back
    in April 2021, I believe.
        Mr. McGarvey. Okay. We have got just a little bit of time
    left. Would you say this is a function of scale and not an
    issue of lack of proper controls or how would you characterize
    it?
        Ms. Tann. I think because of, as has been mentioned, just
    the amount of beneficiaries and veterans that we are paying and
    the vast dollar amounts that we are paying, we just are at
    heightened risk. It is a combination of factors, again, that
    you mentioned. I believe we have strong internal controls in
    place and we are constantly working to improve those. I think
    it is just based off the risk assessment, we have a higher risk
    because of the amount of outlays that we have.
        Mr. McGarvey. We are out of time, so I yield back to you,
    Mr. Chairman.
        Mr. Luttrell. Thank you, Mr. McGarvey.
        Mr. Self, sir, you are recognized for 5 minutes.
        Mr. Self. Thank you, Mr. Chairman. These are a lot of
    numbers. Your last comment though, Ms. Tann, you are at a
    higher risk because you have larger payments. Why is that
    logical?
        Ms. Tann. Because of the scale of our program and the
    amount of beneficiaries and payments that we do make, we just
    have a heightened level of risk around the potential for
    improper payments, which could be under or overpayments.
        Mr. Self. Yes, I would disagree with that assertion. Mr.
    Friel, yes or no, did you fix the Social Security
    Administration matching problem?
        Mr. Friel. Yes, we did.
        Mr. Self. How did you do that?
        Mr. Friel. We did a testing with Social Security. We
    validated that we were getting good responses. We have now
    continued to run that match every quarter to ensure that we are
    capturing the debt as soon as possible.
        Mr. Self. Okay. This is one of my continuing comments about
    VA. We hear a lot about your inputs, what you have done. I am
    more interested in outputs. We just heard that improper
    payments increased from Fiscal Year 2023 to Fiscal Year 2024.
    When are we going to start seeing results to this fix to the
    problem?
        Mr. Friel. Sir, our projection right now is that the Fiscal
    Year 2027 testing will get us below the 10 percent that is
    required by PIIA. We are currently still doing the match--
    cleaning up the matches from the historical point and we
    believe that we will have a good force and--excuse me, we will
    be a good position in 2027. We are also investigating the
    opportunities for automation so that we can use automation to
    address these quicker than having to work them through the
    typical claims back--claims inventory.
        Mr. Self. Okay. Well, I suggest we do it quickly because in
    the 4 years under the Biden administration, we had almost $4
    billion in overpayment debts.
        Let us move to the veteran's child Chapter 35 education
    benefits. Ms. Tann, we are talking about over $200 million for
    this one small sector of what we are talking about. When did
    you first learn about these overpayments for the $200 million-
    plus?
        Ms. Tann. Thank you, sir. We were actually notified, I
    believe, in Compensation Service around--after the October 22
    date. That is when we started to work together to look for
    whatever solutions we can put in place. That information or
    that notification actually went through our Office of Financial
    Management (OFM) and then they passed the information to
    Compensation Service. I may not have those exact dates right,
    but the information flowed from our OFM office from our office
    of business.
        Mr. Self. Again, those are inputs. When do we see outputs?
        Ms. Tann. Actually, we have made changes so that we have a
    matching program through information between Compensation
    Service and Education Service. So we actually do a monthly
    match. We took--we started that in January 2025 to send notice.
    In March 2025, we made adjustments to those awards creating no
    overpayments for our beneficiaries. In April, we have started
    that, we are doing that monthly match, and that allows us to
    give veterans or beneficiaries due process of that prohibition
    from them receiving both of those benefits at the same time.
        Mr. Self. Okay. Mr. Arronte, you mentioned the PACT Act
    complexity. Can you delve into that a little bit more? The PACT
    Act has led to the largest increase in our payments to our
    veterans forever. Can you go into that a little bit more to
    include the incorrect dates? I would like to hear that. There
    are also six factors I think you mentioned in your written
    testimony. Can you go into the complexity of the PACT Act? My
    bottom line question, and I have 1 minute, is does Congress
    need to do something to fix the complexity?
        Mr. Arronte. Great question, sir. Regarding effective
    dates, the laws have not changed regarding effective dates.
    What complicated the issue with PACT Act is that PACT Act added
    a lot of locations where veterans could serve for presumptive
    disabilities. They have added presumptive disabilities. All of
    those issues are considered liberalizing legislation. Any time
    that there is a liberalizing law, that is something that a
    claims processor must consider.
        An example of one of the most complicated issues is if a
    veteran has an intent to file, meaning he is going to notify VA
    or she is going to notify VA that they are going to file a
    claim within the next year, the date of that intent to file is
    one effective date. Then depending on what is being claimed,
    there could be two or three or four other effective dates. It
    could be the--the date when those disabilities, those
    presumptive disabilities became law. It could be when there is
    evidence that shows a veteran served in a specific location
    that was added due to liberalizing legislation. They have to
    consider all of those.
        Mr. Self. Okay.
        Mr. Arronte. At the speed they work, I think they missed
    that.
        Mr. Self. Is there any way we can cleanup those? Is there
    any way we can cleanup those different dates?
        Mr. Arronte. From a legislative standpoint, we have done
    the work in that. I mean, our experience is this is something
    that the Department has to fix. We have done some
    brainstorming. Okay. If you will bear with me and regarding
    effective dates----
        Mr. Self. I think we are going to have a second round. We
    may come back to this, Mr. Arronte.
        Mr. Chairman, I yield back.
        Mr. Luttrell. Mr. Arronte, continue on. That was going to
    be my line of questioning, so please continue.
        Mr. Arronte. Okay. Based on this recent work of effective
    dates, this is something that we have seen over years.
        Mr. Luttrell. When did you tell VBA that the improper
    effective dates were the number one issue?
        Mr. Arronte. In August 2022, I was invited to their rollout
    implementation conference in Houston and we were asked to
    provide the IG's concerns. Our very first talking point was
    effective dates. We were told that, yes, we are going to train
    effective dates. We know it is important and----
        Mr. Luttrell. This is one of the major causes of this blow
    up, I am going to assume.
        Mr. Arronte. Yes, yes.
        Mr. Luttrell. How do we fix this?
        Mr. Arronte. Three things that me and my directors have
    brainstormed. I am not advocating one or the other. It is a
    choice of the Department.
        The first is they could simplify the process of scenarios
    that govern effective dates. Instead of having all of these
    different levels of rules to govern effective dates, you could
    say the date you filed a claim and when a law changed. Right?
    You could simplify that. I think the pros to that, is you would
    see a better processing by VBA. The cons, I think you would get
    pushback from VSOs and veterans saying that just because it is
    complicated, does it mean we do not do it?
        The second is automation. I just created a division in the
    last year that looks solely at VBA's automation. I can tell you
    they are not there yet. One thing that we see with automation
    is the more complicated the business process is, the more
    difficult they are having to automate.
        The third is what we have recommended is more effective
    training and oversight. I know that sounds like a broken
    record, but as we have seen, training was not effective. It
    makes sense to have sound training. That when issues like the
    PACT Act come or new Agent Orange presumptives come or whenever
    somebody decides to change what benefit we are going to give
    veterans, that training has to be updated, it has to be
    adequate, and it has to be assessed.
        Mr. Luttrell. Training, yes, absolutely.
        Ms. Tann, how is the VA receiving that? I know, I
    understand there is a challenge with the digital signature
    inside the VA. We did not even have to walk down that road
    right now. The VA has received the Inspector General's (IG)
    report. Is there any adoption plan ahead of these effective
    dates?
        Ms. Tann. Absolutely. We have actually already implemented
    several of their recommendations, at least three of them. We
    worked to update our effective date builder tool in Veterans
    Benefits Management System (VBMS) so that----
        Mr. Luttrell. Did it solve that problem?
        Ms. Tann. Does it solve the problem?
        Mr. Luttrell. The PACT Act problem that we are running
    into.
        Ms. Tann. It does assist because it addresses things like
    the intent to file, the liberalizing law, and the terror
    activity. That was one of OIG's recommendations, which we did
    implement earlier this month. We are in the process of
    completing the job aid that they recommended. We also
    referenced the outdated evaluation tool builder that was on our
    internet page where all of our PACT Act resources are housed,
    so that it notes that that is historical, so people will not be
    using that. We are looking at the evaluation of our training as
    OIG----
        Mr. Luttrell. Inevitably the VA is going to make the
    decision on what the effective date is and the VSOs and
    everyone else is going to have to go with it, kicking and
    screaming.
        Ms. Tann. Yes, we are----
        Mr. Luttrell. There is going to have to be a decision made
    by the VA.
        Ms. Tann. Yes, sir. We consistently look at how do we
    improve and/or simplify our processes, as Mr. Arronte
    mentioned, based off feedback and things of that nature?
    Effective dates are complex. It is hard work and that is why we
    have humans in that process. If we could automate things end to
    end, we would. We cannot. We know we need subject matter
    experts and human intervention in this process. There is a lot
    to unpack for our claims processors. As Mr. Arronte said, PACT
    Act did not change how we apply effective dates. It is just new
    information and people applying them consistently to the most
    advantageous available to the veteran under the law.
        Mr. Luttrell. Okay. Ms. Gilson, did we do by--and this may
    be a Mr. Arronte question, but did we do like a forensic audit
    on the amount of money spent over the past 5, 10 years to make
    sure that we are not--again, we are trending in the wrong
    direction. Are we looking back on our numbers saying, hey,
    look, we are not making those exact same overpayment or
    underpayments and not replicating our mistakes? I understand
    the expansiveness of the VA, but as we know, we are missing
    something if we are still spending over a billion dollars in
    overpayments. What is the comparative analysis that we are
    doing in order to fix it? In next--and then how are we looking
    for 2025? Are we already projected to spend more than we did in
    2024? I just threw a lot at you, I apologize.
        Ms. Gilson. No, that is fine. Thank you. A couple answers
    to your question here.
        Regarding the individualized tracking and trending of
    errors and how do we correct those and make them better, the
    Office of Financial Management does not do each's reviews on
    the payments that go out. We take a review holistically at the
    summary level.
        Mr. Luttrell. I think we should.
        Ms. Gilson. Well, maybe that is the case. However, what we
    do within the Office of Financial Management is when we receive
    the payment information from our business lines, we are
    trusting, we are relying on the controls in place within that
    business line to make sure that payment is accurate. From the
    Office of Financial Management's perspective, we review the pay
    file to make sure that the accounting is correct, that the
    money is actually in the proper account to make those payments,
    that the time of the payment is right, that the program is
    correct. We are accountants and we do not have adjudicators on
    the staff. If we did, we would need to reopen every single
    claim that came through to validate that. And----
        Mr. Luttrell. Well----
        Ms. Gilson [continuing]. we do not----
        Mr. Luttrell [continuing]. we are a billion dollars in the
    hole. When are we going to start taking a look at that? I am
    not beating you up.
        Ms. Gilson. I understand.
        Mr. Luttrell. This is me talking about it, Okay?
        Ms. Gilson. Yes.
        Mr. Luttrell. I mean, I do not know how far down the track
    it has to go before somebody says, yes, that is probably a good
    idea, which I think it is past time.
        I am well over, Mr. McGarvey, I apologize. You alright with
    that? Okay. I am sorry.
        Ms. Gilson. Yes. No, no, thank you. I appreciate that.
    Again, from the accounting perspective, we review to make sure
    that everything is appropriate and interfaces to Treasury for
    payment.
        My office also does a review of fraud, waste, and abuse
    types of situations. We have a tremendous partnership with our
    colleagues within the Office of Inspector General. When we
    identify fraud around payments, to make sure that we rectify
    that-that veteran immediately, we make them whole. In many
    cases, we can reissue payments same day when we get a call
    saying, ``hey, I did not get my payment.'' When we identify
    that there is fraud within, you know, scammers who are changing
    bank accounts without veterans' knowledge, we do engage the
    Office of Inspector General to investigate those areas and
    identify, you know, further action taken.
        Mr. Luttrell. Well, that is when you see it. I mean, the
    event has already happened. We need to make--we are trying to
    stop it beforehand.
        Ms. Gilson. Correct. We do have some tools and techniques
    that we have available where we are getting more proactively
    involved in preventing fraud. We are using machine learning and
    artificial intelligence and detailed analytics to get to----
        Mr. Luttrell. This is where the Department needs to come to
    Congress and say we have to have the money to implement this
    type of software, this artificial intelligence, machine
    learning. You have to tell us that because right now we are
    just seeing the numbers and they are not, obviously, they are
    not good, but we are all in to help you. Again, this problem
    has been going on for, I mean, I am going to make the
    assumption, for decades and let us fix it right here. We are
    ready. Okay?
        I am well over, Mr. McGarvey. Okay. Go ahead, finish.
        Ms. Gilson. I think I am pretty much done.
        Mr. Luttrell. Okay. All right. Mr. McGarvey, I am sorry,
    sir. We recognize you.
        Ms. Gilson. Thank you.
        Mr. McGarvey. No, thank you, Mr. Chairman, and appreciate
    this conversation because we want to get this right. Right? We
    want to make sure that we are getting the money to our veterans
    that they need, that they deserve, and that we are being good
    stewards of taxpayer money.
        In my round of questioning, I will refresh everyone's
    memory because it was a second ago, I was talking with Ms. Tann
    about whether this was a function of scale, not an issue of
    lack of proper controls. She sort of said more, it is a
    function of scale. I just wanted a second opinion on that. Mr.
    Arronte, do you agree with that assessment?
        Mr. Arronte. To some degree, sir, I do. It is a matter of
    scale. If you look at the PIIA thresholds, those PIIA
    thresholds are across the government. Every agency has those
    same thresholds. If you are conducting a risk assessment of the
    National Science Foundation and their budget is like this, they
    mess one thing up and it is high risk. U.S. Department of
    Defense (DOD), U.S. Health and Human Services (HHS), VA, their
    budget is like this. They get this much more leeway to make
    mistakes or have acceptable mistakes.
        That is why I am a firm believer that as it relates to
    compensation, compensation has been on and off the PIIA program
    throughout the years. As the Chairman indicated in his opening
    statements, we have a body of work that shows constantly that
    there are improper payments. In the last nine reports I have
    issued, seven show incorrect effective dates that lead to
    improper payments. I think that is enough.
        Where compensation should be, I think they should make an
    exception. I think compensation should be on their high
    priority list until the numbers come down. The reason I say
    that, because if you look at some of the programs that are
    tested in the PIIA-communications, utilities and rent, those
    improper payments have dropped to .5 percent. Medical care
    contracts have dropped over 2 percent. VA community care has
    dropped from 5 percent to 1 percent. That tells me the process
    works. You got to keep those programs on whether they meet the
    threshold or not just because it is a form of function. There
    is just so much disparity in the budget that allows more
    mistakes with bigger organizations.
        Mr. McGarvey. Mr. Arronte, there is nothing that is
    stopping the VA, from complying with PIIA?
        Mr. Arronte. No.
        Mr. McGarvey. Okay. Voluntarily complying, I should say.
        Mr. Arronte. No. That is the--that is what our work is. I
    have mixed emotions about the effectiveness of PIIA. The good
    thing about PIIA is it is our oversight of the Department and
    its compliance. We test to make sure that the Department is
    following the rules. It is a strictly compliance audit. It does
    not get very deep, but they are following the rules.
        Mr. McGarvey. The Chairman said something that I echo and
    find interesting when talking with Ms. Gilson about tell us
    what you need, right? Tell us what you need so we can help fix
    this problem. We heard some suggestions from her, potentially.
    Just from a different point of view, Mr. Arronte, do you have
    any suggestions for what Congress can do to help make the
    situation better?
        Mr. Arronte. In regards to PIIA, other than the
    recommendations that we make, I have no other guidance or
    suggestions. Like I said, our review is strictly compliance. It
    does not dig in deep, does not look for what we would typically
    do in a normal audit. We do not look for-for the root cause. We
    just look at compliance as mandated by OMB.
        Mr. McGarvey. Ms. Tann, in a June 2024 report, the OIG
    found that VBA had not identified Vietnam veterans who were
    eligible for benefits and that resulted in an underpayment of
    $836.8 million. Another 2024 review looking at survivors showed
    33.1 million in underpayments. Both of those reports have open
    actions, including a full review of claims, better outreach
    letters, and monetary compensation. Do you know where those
    reviews stand at this time?
        Ms. Tann. Sir, for the one that you mentioned regarding
    survivor's payments, I will ask Mr. Friel to respond to that
    one. Can you repeat the first one that you mentioned? I am
    sorry, I did not----
        Mr. McGarvey. Sure. We were talking about the 2024 OIG
    report that Vietnam veterans who are eligible for benefits had
    not received them in payments of 836.8 million and another
    looking at survivors in 2024 showed 33.1 million underpayments.
    Both of those reports have open actions, including a full
    review of claims, better outreach letters, and monetary
    compensation. We are just seeing where those reviews stand
    right now and getting the veterans what they have earned.
        Ms. Tann. Certainly I will take back, if I can, that
    question about the Vietnam veterans report to see where those
    action items are. I will ask Mr. Friel if he has an update on
    the survivors.
        Mr. Friel. Sir, thank you for that question. As it relates
    to the survivors piece, we have adjusted our processes. One of
    the things that the IG called out was in the PACT Act required
    that survivors specifically asked for us to look back, right,
    to see if there was an earlier effective date. That was our
    initial training with--in concurrence with or coordination with
    the IG and OGC. We have amended our processes now to say that a
    reopened DIC is, in fact, a claim for us to look back. That
    will help close that gap.
        We are continuing to work. We have--I think we have under
    20 claims left to make the proper adjudication and adjust the
    rates to ensure the survivors get the right amount.
        Mr. McGarvey. Thank you, Mr. Friel. Mr. Chairman, I yield
    back.
        Mr. Luttrell. Thank you. Mr. Self, you are recognized for 5
    minutes.
        Mr. Self. Thank you, Mr. Chairman. We have heard a lot of
    Washington speak here today. Does anybody know what those
    ribbons up on the flags are?
        Mr. Arronte. Campaign ribbons.
        Mr. Self. They are battle streamers. Veterans that we are
    talking about, those represent the campaigns that our veterans
    fought in, were wounded in, died in. That is the veterans we
    are talking about here. I have heard a lot of Washington talk.
        Ms. Tann, in your testimony, written testimony, it talks
    about how critical it is that veterans and beneficiaries self-
    report changes. Now, I agree with that. What I have heard here
    is we have not fixed the problems so that our veterans have the
    education and the training to know when they are supposed to do
    things. You heard the chairman say that in his district some
    people do not have computers. We have heard this time and time
    and time again from my time on this committee. We have-our
    veterans do not know and we have made it so complex, Mr.
    Arronte's testimony, we have made it so complex for our
    veterans. Those battle streamers up there represent the
    veterans that we are talking about here in Washington speak.
        Ms. Tann, how many OIG, and two separate answers here, how
    many OIG recommendations do you have outstanding? How many
    Government Accountability Office (GAO) recommendations does the
    Department have outstanding? OIG and GAO. These are
    recommendations of people that are telling the Department
    things to improve your processes. How many do you have open?
        Ms. Tann. Sir, I do not have the total number of all of
    those pending.
        Mr. Self. I would like to know because we have got to do
    better. I mean, inputs are not outputs. I want to start hearing
    outputs about how we fix the problems.
        With that, Mr. Chairman, I yield back.
        Mr. Luttrell. Mrs. Radewagen is recognized for 5 minutes.
        Ms. Radewagen. Thank you, Mr. Chairman. Ms. Tann, during
    the last administration, VA informed us of plans to rely on the
    authority in Cleland-Dole to cancel overpayments of VA benefits
    resulting from administrative delay. When will VA begin using
    this authority?
        Ms. Tann. Thank you for the question, ma'am. We are still
    in the process of implementing Cleland-Dole Section 252. We
    have implemented one of the sections, but we are still working
    on implementing the one that will require us to create
    permanent timeliness standards around which to prohibit the
    overpayment or debt applied to individuals because of delays in
    VA processing.
        Ms. Radewagen. Ms. Tann, yes or no, was the April 2025 PACT
    Act effective date refresher training, was it mandatory?
        Ms. Tann. Yes, it was.
        Ms. Radewagen. Yes or no, have all compensation service
    employees completed that April 2025 effective date training?
        Ms. Tann. I would have to get back to you on that.
        Ms. Radewagen. Please do. Thank you.
        Mr. Friel, yes or no, has every employee who decides
    survivors DIC claims also completed that April 2025 training?
        Mr. Friel. Yes, they have.
        Ms. Radewagen. Ms. Tann, what exact processes for assigning
    correct effective dates is VA planning to automate and when
    will that automation technology be implemented?
        Ms. Tann. I am not aware of plans to automate effective
    dates just because of the complexity around it. I will speak to
    the work that we have done to update and enhance our system so
    that the tools that are available to claims processors address
    some of those problem areas and pain points that Mr. Arronte
    mentioned, such as intent to file, liberalizing law, and toxic
    exposure activities.
        Ms. Radewagen. Mr. Friel, does VA have the authorities,
    including all the computer matching agreements, that VA
    requires to ensure accurate payment of veterans pension and
    survivors pension?
        Mr. Friel. Yes, we do.
        Ms. Radewagen. Now, Mr. Arronte, what mistakes did the
    Biden administration VA make when initially rolling out
    training and guidance for PACT Act claims' effective dates?
        Mr. Arronte. Ma' am, based on our work and as I indicated
    in my opening remarks, the training was pushed out very
    quickly. They had 4 months to identify the type of training
    that needed to be done. They trained in December. It was very
    quick. What our recent report shows is they missed an
    opportunity. They did not evaluate the effectiveness of that
    training. I can tell you my reports are showing that the
    training could not have been that effective because we are
    seeing high error rates with effective dates.
        Ms. Radewagen. Sir, has VA done enough to fix those
    mistakes so that compensation overpayments will be
    significantly reduced in the future?
        Mr. Arronte. Ma'am, if you are looking for a yes or no, I
    am going to say no, just because of my body of work. However,
    as the VBA panel members have indicated, I think they are
    heading in the right direction. They are correcting these
    effective date tool builders. They are consolidating their
    policies, procedures, and the guidance so staff do not have to
    look through, 8 pages or 10 pages of FAQs on this site and 20
    pages of FAQs on this site. I think they are working toward the
    right direction.
        Ms. Radewagen. Mr. Arronte, do you believe that VA's
    quality assurance controls are adequate to ensure that VA
    claims processors assign correct effective dates for award of
    benefits?
        Mr. Arronte. No, ma'am. The reason I say that, again, I am
    basing it on our work. We see high error rates all the time. We
    looked at their QA program in 2021, we looked at five aspects
    of it, and issued reports on them. Since then, I think one
    thing that we would like to see with their QA is when they draw
    samples to determine accuracy and error rates, they sample
    across the board, the entire spectrum of claims. It could be a
    musculo-skeletal claim, it could be a claim to--a presumptive
    claim, it could be a whatever. Right? They know what their high
    priority areas are. They know effective dates is one. There is
    several others.
        I would like to see them, aside from a special focused
    review, because that is a one-time look, I would like to see
    them conduct a specific sample of those high-risk areas. Now,
    that might not bode well for their accuracy rate, but it will
    help them hone in on what the high-risk problems are.
        Ms. Radewagen. Thank you, Mr. Chairman. Yield back.
        Mr. Luttrell. Ms. Radewagen, do you have any more
    questions? We moved through the second panel. Do you have
    another question or are you good?
        Ms. Radewagen. Not at this point, Mr. Chairman.
        Mr. Luttrell. Thank you. I yield to the Ranking Member for
    closing remarks.
        Mr. McGarvey. Thank you, Mr. Chairman. Appreciate the
    testimony here today. Obviously, we appreciate you all being
    here. I know that each and every one of us wants to improve
    these programs. We want to make sure that we get it right for
    the veterans and we get it right for the taxpayers. We have got
    to do it in a holistic way. We have got to make sure that there
    are the fewest possible errors and that the personnel are well
    trained. We also want to see this done with care and
    compassion.
        I want us to find solutions. I want us to create efficient
    processes and to listen to the workers and union workers when
    they tell us how we can help them in their work. I want the
    call center workers at the Debt Management Center to have the
    ability to step back and breathe when a veteran calls in crisis
    because they do not see a way out of debt they did not even
    know they had. I want the veteran in crisis to have access to
    immediate mental healthcare at that moment. I want to see a VA
    that provides kindness and clarity in a payment program to help
    a veteran get out of the red.
        I do not want to hack away at the base. I do not want to
    needlessly attack people who are serving these folks while we
    make it harder to conduct research or provide life-saving care,
    and keep families together in burial plots.
        We want to make sure that the VA is working, that it is
    working for the people for whom it is intended to serve, the
    veterans. That they do so in a responsible way that has the
    fewest possible errors. I truly mean that. All errors, whether
    it is identifying the proper payments, the proper training,
    whether it is an improper use of funds. At the end of the day,
    if we do not get this right, who are we hurting? We are hurting
    our veterans. We are hurting the people who work at the VA,
    many of whom have served our country prior to their serving our
    country at the VA. We hurt the families, the caregivers, and
    the survivors of the brave men and women who put on a uniform
    to serve us.
        Mr. Chairman, I look forward to working with you together
    on this issue, to finding genuine solutions to these problems.
    I yield back.
        Mr. Luttrell. Thank you, sir. Thank you all for coming to
    the hearing today.
        The Ranking Member and I are in agreeance. It would be
    ideal if we could walk this problem all the way down to zero,
    dollar sign-wise. The system itself is so large, there is going
    to be a margin of error in there somewhere. Our heartache is
    the fact that it is trending in the wrong direction.
        To his point, we are serving the veterans. The veterans are
    always on the receiving end of everything that we do in this
    committee and everything that you wake up every morning, look
    yourself in the mirror, walk into the office, and say, why am I
    here? It is for our veterans.
        Taking what Mr. Arronte said, implementing those effects
    inside the VA will move us in the proper direction. Ms. Tann,
    you said you are implementing certain things the OIG has pushed
    out. Amazing. Ms. Gilson, when you reported the numbers, it
    is--I just do not like the fact that we are not--again, we are
    going in the wrong direction and there has to be a fix. I would
    like to meet with you in the antechamber. I have a couple
    questions I would like to ask you after the hearing.
        Making overpayments at this number, I think one of the
    worst things you can do--I mean, I am being dead 100 percent
    serious. The worst thing you can do is overpay a veteran and
    tell them you got to give it back. I mean, that is something
    that the U.S. Government is exceptional at. I know I get hit by
    the Internal Revenue Service (IRS) all the time. Hey, man, you
    owe us 25 cents.
        Our veterans live paycheck to paycheck. A lot of them are
    in a deep, deep, dark, black hole, and if you asked--if you are
    trying to take something from them that the U.S. Government
    gave to them, that is our fault. Okay? We have to fix that
    problem. Whether or not it is hardware, software, man tripping
    a coin--man, train, and equip, we have to be on it.
        I know again, every time you guys sit in front of us, you
    are telling us that, hey, that is happening inside the VA. I
    got it. Again, once again, we are a large organization and at
    scale, one of the largest. Okay. I will always say, remember,
    it is about our veterans 100 percent. We have to take care of
    those that took care of us. Okay?
        Thank you. Thank you for coming and testifying before us
    today on the important goal of reducing waste resulting from
    improper payments and compensations and pensions. I look
    forward to working with the administration and my colleagues
    that causes improper payments to ease the burden on our
    veterans and their families.
        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 11:17 a.m., the subcommittee was adjourned.]

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

                             A  P  P  E  N  D  I  X

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

                        Prepared Statements of Witnesses

                                  ----------

                        Prepared Statement of Nina Tann

        Good morning, Chairman Luttrell, Ranking Member McGarvey, and
    Members of the Subcommittee. Thank you for the opportunity to appear
    before you today to discuss VA's improper payment oversight. Joining me
    today from VBA are Kevin Friel, Executive Director, Pension and
    Fiduciary Service, and Jeannie Gilson, Acting Chief Financial Officer.
        VA recognizes the importance of providing Congress, Veterans, and
    beneficiaries with transparency related to improper payments. Improper
    payments include incorrect payment amounts (too much or too little),
    payments to the wrong person, or disbursed payments without required
    documentation. VA pays the amount of benefit based on the evidence of
    record at the time of the disbursement, until VA receives notice of a
    change. For example, if a Veteran loses a dependent and does not report
    this change to VA, he or she may be paid too much, or in some cases,
    too little. To combat improper payments, VA supplements beneficiaries'
    self-reported changes with additional controls. VA has taken many steps
    to prevent, detect, and correct improper payments and mitigate fraud,
    waste, and abuse.
        VA safeguards beneficiaries' financial well-being and effectively
    oversees the use of appropriated funds by using a range of strategies
    to proactively address and mitigate potential improper payment issues.
    In Fiscal Year (FY) 2024, VA reported a reduction of about $1 billion
    in improper and unknown payments. The breakdown of the improper and
    unknown payments are as follows: $149.57 million for beneficiary
    travel; $13.27 million for Rent Communications, and Utilities; $28.25
    million for Medical Care contracts and agreements; $280.67 million for
    supplies and materials; $518.58 million for pension; $760.1 million for
    long-term services and support; and $416.63 million for VA Community
    Care, which reflects a reduction of 31.55 percent from Fiscal Year 2023
    results, despite increases in outlays of $4.43 billion, or 12.30
    percent. Since Fiscal Year 2018, VA has reduced improper and unknown
    payments by $12.57 billion, or 85.29 percent, and removed seven
    programs from reporting requirements by prioritizing corrective actions
    on the largest proportion of errors and noncompliance with laws and
    regulations.
        VA continues to strengthen its risk assessments, test plans, and
    collection of error data to ensure accurate projections and inform
    effective remediation strategies. While any amount of improper payment
    is unacceptable, VA continues to make progress in identifying and
    preventing these from occurring. VA acknowledges that improper payments
    are problematic and remains committed to process improvements that will
    ensure VA is providing accurate and timely benefits to Veterans and
    their dependents with effective oversight.
        As an example of recent VA efforts to reduce improper payments, on
    December 2, 2024, VA modified its procedural guidance to liberally
    interpret re-evaluation provisions for Dependency and Indemnity
    Compensation (DIC) claims. The changes streamlined the decision-making
    process to mitigate the likelihood of underpayments and ensure VA
    renders the correct decision the first time. Additionally, these
    changes reduced requests for unnecessary information and simplified the
    claim review process.
        In some cases, VA cannot adjust a Veteran's benefits in time to
    prevent an overpayment. Administrative or operational constraints
    within VA may cause processing delays. Congress and VA recognized the
    burden this placed on Veterans and beneficiaries, based on
    circumstances outside of their control. As a result, on December 29,
    2022, Congress enacted the Joseph Maxwell Cleland and Robert Joseph
    Dole Memorial Veterans Benefits and Healthcare Improvement Act of 2022,
    also known as the ``VA Beneficiary Debt Collection Improvement Act of
    2022'' or simply the ``Cleland-Dole Act'' (P.L. 117-328; 136 Stat.
    4459).
        Section 252 of this law amended 38 U.S.C. Ch. 53 by adding a new
    section 5302B, which establishes prohibitions on the creation of debts
    due to delays in VA processing. Unless a delay is directly attributable
    to a beneficiary's actions outside of his or her basic due process
    rights, the law requires that VA must issue an overpayment decision and
    associated notice within 1 year of receiving information that results
    in potential debt. Delays caused by a beneficiary's actions will extend
    the timeliness period for VA to issue a decision by the number of days
    equivalent to the length of the delay. When VA fails to issue a timely
    decision, the beneficiary is not responsible for repaying VA for the
    overpayment. Each issue that generates a potential overpayment is
    considered separately for purposes of applying these timeliness
    standards. It is important to note, however, that this guidance does
    not apply where there is evidence of fraud, misrepresentation, or bad
    faith on the part of a beneficiary, or to instances in which a
    beneficiary did not provide current and accurate information affecting
    his or her benefits in a timely manner.
        In another example of VA's efforts to reduce improper payments, in
    Fiscal Year 2024, VA identified an administrative error which resulted
    in duplicate dependency payments for Chapter 35 Dependency Education
    Assistance benefits. As of February 18, 2025, VA estimated the monthly
    average of overpayments in Fiscal Year 2025 for the Chapter 35 error at
    approximately $5.8 million. The total of overpayments from Fiscal Year
    2017 through 2025 is estimated at $211.3 million. VA's former Under
    Secretary for Benefits, under the previous administration, determined
    that the duplicate payments were an administrative error; therefore,
    impacted Veterans would not have debts established. VA worked to
    correct the point in the process leading to the administrative error
    and implemented a fix in January 2025. On January 10, 2025, VA issued
    due process letters to approximately 15,000 Veterans who receive
    disability compensation or pension benefits for a child while the child
    is concurrently being paid benefits pursuant to Chapter 35. The due
    process letters did not propose the creation of an overpayment. On
    March 17, 2025, following the due process period, VA notified Veterans
    that the child was being removed from their disability payment. No
    overpayments were created. VBA's Compensation Service and Education
    Service continue to partner to develop a solution to eliminate future
    overpayments for Chapter 35 dual entitlement.

    Inter-Agency Data Sharing

        To assist with preventing improper payments, VA regularly receives
    information from various Federal agencies through data matching
    agreements. VA partners with other Federal agencies to compare
    information between VA and each partner agency's records to identify
    discrepancies or confirm information through the computer matching
    agreement process governed by the Privacy Act (5 U.S.C. Sec.  552a).
    These agreements are used to establish or verify eligibility for
    Federal benefits, verify compliance with Federal benefit programs, and
    recoup payments or delinquent funds as well as investigate potential
    fraud, waste, or abuse. These data matching agreements include those
    that concern benefits related to military duty status, benefit changes
    due to death, and issues related to income. Additionally, VA has made
    several improvements related to data matching agreements for VA's
    income-based pension benefits, including using Federal tax information
    to verify an applicant's income upfront and income matching with the
    Social Security Administration (SSA) to verify continued eligibility
    for income-based benefits.
        Certain statutory requirements prohibit duplication of benefits
    during the same period, such as receiving both a disability
    compensation payment and regular active duty pay. VA conducts routine,
    monthly data matches with the Department of Defense (DoD) to identify
    Veterans who return to active duty. When the match occurs after a
    Veteran returns to active duty, this results in a duplicate payment
    from DoD and VA.
        Additionally, VA conducts an annual data match with DoD to identify
    Reservists and members of the National Guard receiving active duty for
    training pay, often referred to as drill pay. Both scenarios may
    identify an improper overpayment.

    Effective Dates: Importance and Improvements

        VA acknowledges the crucial importance of claims processors
    understanding and assigning the proper effective dates as required by
    law in issuing accurate payments. Training is at the core of the issue,
    and VA has taken steps to enhance training on effective dates. Once
    hired, claims processors receive training on effective dates as part of
    their foundational core curriculum. Following their initial training,
    claims processors undergo annual assessments to evaluate their
    application of the rules and guidance on effective dates, as part of
    the Competency Based Training Systems assessment. If any knowledge gaps
    or inefficiencies are identified, claims processors receive targeted
    refresher training to address those specific areas.
        VBA is also enhancing its collaboration with the Board of Veterans'
    Appeals and the Office of General Counsel to improve the quality,
    comprehensiveness, and legal accuracy of its training programs, with a
    focus on improving claims development and decision-making through
    thorough data analysis, root cause identification, and targeted
    training for VA personnel. This approach aims to drive impactful
    change, ultimately benefiting Veterans by ensuring the accuracy of the
    benefits and payments they receive.
        The Sergeant First Class Heath Robinson Honoring our Promise to
    Address Comprehensive Toxics (PACT) Act, signed into law on August 10,
    2022, marked the largest and most significant expansion of Veterans'
    care and benefits in decades. While the original legislation was
    written with a phased-in approach for the effective dates of various
    exposure-related conditions, VA proactively determined that all
    conditions would instead be effective upon date of enactment, to not
    only benefit the Veteran, but to make implementation of the law less
    complex for claims processors. Additionally, VA took immediate action
    to ensure claims processors received guidance on processing PACT Act
    claims and, in December 2022, VBA provided the training needed to begin
    processing these claims as quickly as possible. This ensured all front-
    line claims processors who handle claims for disability compensation
    benefits based on toxic exposure were ready to process claims on
    January 1, 2023, and could accurately apply the provisions of the law.
        On April 1, 2025, VA also released PACT Act refresher training to
    claims processors, which specifically addressed effective dates. The
    content was created using data collected from the PACT Act Special
    Focused Review for Quarter 1 of Fiscal Year 2025. The leading error
    category was failure to apply or misapplication of effective dates
    under 38 C.F.R. Sec.  3.114, which governs effective dates of awards
    based on a liberalizing law or liberalizing VA issue. In these training
    updates, VA addressed effective date provisions that involve the
    general effective date rules, liberalizing laws, and presumptive
    conditions. VA also addressed the impact of intent to file and the date
    of receipt rule with such claims.
        VA also relies on our Office of Inspector General (OIG) and
    Government Accountability Office (GAO) partners to independently review
    our processes and procedures to identify issues. VA works
    collaboratively with OIG and GAO to address any issues discovered. For
    example, on April 15, 2025, OIG published its report titled ``The PACT
    Act Has Complicated Determining When Veterans' Benefits Payments Should
    Take Effect'' (Report Number: 24-01153-52). In their report, OIG
    estimated that about 31,400 of the 131,000 PACT Act-related claims (24
    percent) VA completed between August 10, 2022, and August 9, 2023, had
    errors in the assigned effective date. OIG determined an estimated
    26,100 of those claims resulted in at least $6.8 million in improper
    payments. Subsequently, OIG recommended that VA implement system
    enhancements to add functionality that applies liberalizing laws on
    claims when VA receives an intent to file or when service connection is
    based on a toxic exposure risk activity. These system enhancements are
    currently scheduled for implementation by the end of the 3d quarter of
    Fiscal Year 2025. Additionally, OIG recommended that VA create a job
    aid for claims processors on how to determine the correct effective
    date for PACT Act-related claims. The job aid is scheduled for
    implementation in July 2025.
        In addition to specific audit reviews, OIG annually reviews VA's
    improper payments as required by the Payment Integrity Information Act
    (PIIA) of 2019 (P.L. 116-117; 134 Stat. 113). PIIA specifically
    requires agencies to review programs that may be susceptible to
    significant improper payments exceeding either 1.5 percent of program
    outlays and $10 million, or $100 million in total. Since 2004, VA has
    made proactive efforts to identify and report improper payments by
    continuously examining the following programs: compensation, DIC,
    pension, and monetary burial benefits. VBA's pension program saw an
    increase in improper payments above the compliance threshold for Fiscal
    Year 2023 and Fiscal Year 2024 (10.86 percent [$419.27 million] and
    13.85 percent [$518.58 million], respectively). This increase primarily
    resulted from the pause in the SSA income data match, which was
    reinstated in Fiscal Year 2022. When the program resumed in June 2022,
    VA implemented a quarterly data match for additional oversight versus
    the prior annual match to mitigate errors under its corrective action.
    This frequency change will help to reduce improper payments resulting
    from unreported SSA income.
        OIG has recognized the corrective actions VBA put in place to help
    reduce improper pension payments, including increased oversight via
    site visits, special focused reviews, and targeted training based on
    analysis of quality assurance data. As an additional prevention
    measure, VBA's Pension and Fiduciary Service is investigating the
    potential implementation of an automation solution to utilize the data
    provided via the SSA income match to render timely award adjustments.
    This would minimize debt associated with unreported SSA income and
    prevent future improper payments.

    The Role of the Veteran

        It is critical that Veterans and beneficiaries self-report changes
    in their eligibility or status, including changes in income, net worth,
    medical expenses, marital status, dependency status, or death of a VA
    beneficiary. Timely reporting of these changes in beneficiary status
    significantly impacts VA's ability to deliver appropriate benefits and
    prevent improper payments. Generally, in the absence of data sharing
    agreements, VA relies on the information Veterans or beneficiaries
    report and pays the most accurate amount possible based on the
    information available at the time a claim is processed. Reporting
    changes to VA is crucial for maintaining accurate records and ensuring
    Veterans receive the most accurate benefits. Once VA receives a
    notification of change, payments VA already issued are considered
    improper even though VA had no knowledge of the information at the time
    of payment. This may result in an overpayment that the beneficiary will
    be responsible for repaying.
        When VA makes a decision on a benefits claim, VA sends a
    notification letter to the claimant. This letter includes detailed
    information about the decision and the factors affecting the
    compensation rate. It also explains how claimants can report any
    changes to VA to avoid disruptions to their benefits or the risk of
    overpayments. VA understands the negative impact overpayments can have
    on Veterans and beneficiaries and makes every effort to inform them up
    front and prevent overpayments. VA continues to expand access and
    streamline communications with Veterans and beneficiaries to make the
    exchange of information faster and less burdensome on our stakeholders.
        VA is committed to working with Veterans and beneficiaries to
    identify ways to assist them in keeping information updated and
    reporting any changes to dependency, income, or other benefits-related
    issues to avoid delays in payments, ensure eligibility for benefits,
    and receive timely communications from VA. VA offers easily accessible
    methods for Veterans to promptly report a change of status, such as
    online at va.gov, calling our VA benefits hotline, or in person at a VA
    benefits facility, in an effort to ensure Veterans and beneficiaries
    receive the correct benefits they are entitled to, avoid improper or
    discrepant payments, and maintain up-to-date information with VA.

    Conclusion

        VA strives to safeguard the financial well-being of Veterans and
    beneficiaries and is committed to working with Congress to proactively
    improve and mitigate potential improper payments. Chairman Luttrell,
    Ranking Member McGarvey, this concludes my testimony. We thank the
    Committee for your continued support of programs that serve the
    Nation's Veterans and look forward to working together to further
    enhance delivery of benefits and services. My colleagues and I are
    prepared to respond to any questions you or other Members of the
    Subcommittee may have.

                      Prepared Statement of Brent Arronte
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                           Statements for the Record

                                  ----------

              Prepared Statement of Paralyzed Veterans of America

        Chairman Luttrell, Ranking Member McGarvey, and members of the
    subcommittee, Paralyzed Veterans of America (PVA) would like to thank
    you for the opportunity to submit our views on how the Department of
    Veterans Affairs (VA) can improve the compensation benefits process to
    limit the amount of debt veterans' may incur from the improper payment
    of disability compensation or other benefits and reduce the additional
    workload on the VA to address such payments.
        Veterans with service-related medical conditions are entitled to
    compensation benefits under law. The Veterans Benefits Administration
    (VBA) administers these tax-free compensation benefits through their
    Compensation Service which determines the appropriate percentage
    rating, whether the veteran is entitled to dependency pay, and the date
    the veteran was entitled to start receiving this compensation.
    Generally, these benefits are designed to offset a veterans' loss of
    earning capacity that is caused or exacerbated by these conditions.
    Many veterans, especially those with catastrophic disabilities, like
    spinal cord injuries and disorders, rely on these payments for a
    substantial portion of their income.
        However, VBA too often has difficulty assigning correct effective
    dates for claims, both rating and non-rating.\1\ An improper effective
    date could result in lost compensation or, more detrimentally, create a
    debt that the veteran must repay. For many veterans, losing a portion
    of their benefits toward repayment of a debt can lead them to dire
    financial straits. PVA believes that the most common causes for
    incorrect effective dates and unnecessary overpayments are easily
    remedied.
    ---------------------------------------------------------------------------
        \1\ VA OIG, Accuracy of Claims Involving Service-Connected
    Amyotrophic Lateral Sclerosis, Report No. 18-00031-05, November 20,
    2018; VA OIG, Accuracy of Effective Dates for Reduced Evaluations Needs
    Improvement, Report No. 17-05244-226, August 29, 2018; VA OIG,
    Processing Inaccuracies Involving Veterans' Intent to File Submissions
    for Benefits, Report No. 17-04919-210, August 21, 2018.

    ---------------------------------------------------------------------------
    Removing Dependents

        According to PVA's National Service Officers (NSO), removal of
    dependents from a veteran's claim triggers the most problems with
    effective dates and improper payments. When veterans experience
    qualifying life events like divorce, marriage of a child, or death of a
    dependent and seek to halt payments for that dependent, they must fill
    out VA Form 21-686c, a rather lengthy and complicated form, and submit
    it to the VA or go online via VA.gov to submit the form and the needed
    documentation. Even when veterans submit their request in a timely
    manner, many wait several months or even longer to have VA remove the
    additional monetary amount for their dependent from the veteran's
    monthly compensation. Because of VA's inaction, the veteran accrues a
    debt totaling hundreds and sometimes thousands of dollars that the
    department will eventually be forced to try and recoup. The veteran has
    the option of asking for the debt to be waived, which is a process that
    PVA's NSOs assist with regularly. To seek a waiver, a different form
    must be completed and taxpayer dollars spent for VA employees to
    consider the veteran's request.

    Returning to Active Duty

        When a veteran returns to active duty, either due to being recalled
    as a reservist or a voluntary reenlistment, their benefits are
    generally not affected. However, ``[p]ension, compensation, or
    retirement pay on account of any person's own service shall not be paid
    to such person for any period for which such person receives active
    service pay.'' \2\ The veteran is obligated to inform the VA either via
    phone or by filing a VA Form 21-4138, ``Statement In Support of
    Claim,'' to inform the department of the veteran's intention to enter
    active duty and the need to pause any benefit payments. The issue then
    becomes how quickly the VA acts on the request. As with the removal of
    dependents off a veteran's award, it often takes the VA months to stop
    a veteran's compensation payments creating a debt totaling thousands of
    dollars that the veteran must repay. This debt can create a crippling
    financial situation for the veteran, especially if it occurs while the
    service member is deployed and there is little or no help on how to
    fight the decision. Any veteran who has chosen to return to duty to
    serve our country deserves better.
    ---------------------------------------------------------------------------
        \2\ 38 U.S.C.Sec.  5304(c).

    ---------------------------------------------------------------------------
    Automation

        PVA believes that increased investment in automation could
    significantly decrease the occurrence of needless overpayments, such as
    those described above. Our NSOs have access to VBA systems that have
    significantly reduced the waiting time for processes like filing claims
    and adding dependents. Unfortunately, the process does not work the
    same for what should be a relatively simple task like removing
    dependents off a veteran's claim. Currently, it's so burdensome that
    our service officers must warn clients of the almost certain impending
    debt that will be created. The same is true with veterans who seek to
    halt their disability compensation to return to active duty.
        VA should be required to develop an easier way for veterans to
    remove dependents or halt benefits through a system like VA.gov.
    Investing in such a system would save the department considerable
    funding in the long run by greatly reducing the number of waiver
    requests needed due to overpayments. It should be noted, however, that
    any new website or function must be accessible to all veterans,
    including those whose conditions require disability accommodations.
    Also, creating a specific form to halt VA payments for those who are
    returning to active duty would help the department manage these
    requests more quickly, and decrease the overall number of debts that
    are incurred.
        PVA would once again like to thank the subcommittee for the
    opportunity to submit our views on VA's improper payments and the
    impact they have on our Nation's veterans.

      Information Required by Rule XI 2(g) of the House of Representatives

    Pursuant to Rule XI 2(g) of the House of Representatives, the following
    information is provided regarding Federal grants and contracts.

                                Fiscal Year 2025

    Department of Veterans Affairs, Office of National Veterans Sports
    Programs & Special Events----Grant to support rehabilitation sports
    activities--$502,000.

                                Fiscal Year 2023

    Department of Veterans Affairs, Office of National Veterans Sports
    Programs & Special Events----Grant to support rehabilitation sports
    activities--$479,000.

                                Fiscal Year 2022

    Department of Veterans Affairs, Office of National Veterans Sports
    Programs & Special Events----Grant to support rehabilitation sports
    activities--$ 437,745.

                         Disclosure of Foreign Payments

    Paralyzed Veterans of America is largely supported by donations from
    the general public. However, in some very rare cases we receive direct
    donations from foreign nationals. In addition, we receive funding from
    corporations and foundations which in some cases are U.S. subsidiaries
    of non-U.S. companies.

      Prepared Statement of Veterans of Foreign Wars of the United States

        Chairman Luttrell, Ranking Member McGarvey, and members of the
    subcommittee, on behalf of the men and women of the Veterans of Foreign
    Wars of the United States (VFW) and its Auxiliary, thank you for the
    opportunity to provide testimony on this topic.
        The Department of Veterans Affairs (VA) may improperly pay
    beneficiaries for a variety of reasons. However, despite the cause,
    improper payments adversely affect beneficiaries either by overpayment
    and subsequent demands to immediately return the excess, or by
    underpayment that creates financial hardship. We limit our statement to
    four common causes of improper payments: incorrect effective dates,
    delayed notification of a life event, untimely VA action, and
    incarceration.

    Incorrect Effective Dates

        Assigning erroneous effective dates when a veteran's disability
    compensation begins has been a major Veterans Benefits Administration
    (VBA) deficiency in Office of the Inspector General (OIG) reports for
    the past several years. Additionally, it was one of the top three
    rating error categories since 2011, as noted in the April 15, 2025, VA
    OIG report 24-01153-52, The PACT Act Has Complicated Determining When
    Veterans' Benefits Should Take Effect.
        Claims processors must assign the most advantageous effective date
    for each grant, as an incorrect effective date can significantly
    financially penalize the claimant. Title 38, Code of Federal
    Regulations, Section 3.400 allows an effective date that is the date on
    which VA received the claim or the date on which the entitlement arose,
    whichever is later. Complicating this determination is the veteran's
    right to submit an ``intent to file'' establishing the effective date
    when VA receives the notice but allowing the veteran as long as 1 year
    from that date to actually file the claim.
        Of the more than 31,000 errors that comprise this OIG report's data
    sample, the two most prevalent were the assignment of incorrect
    effective dates and the potential applicability of more advantageous
    effective dates. According to the report, claims processors likely
    contributed to the latter error by failing to collect additional
    evidence that could have led to a more advantageous effective date.
        Enactment of the Honoring our PACT Act of 2022 (hereafter the
    ``PACT Act'') exacerbated the situation and magnified the problem.
    Before passage of the PACT Act, incorrect effective dates comprised 18
    percent of the errors the OIG catalogued. However, a combination of
    complex rules, a sudden influx of claims attributed to PACT Act
    enactment, and ineffective training for claims processors contributed
    to the error rate rising to 25 percent post-PACT Act.
        Additionally, the PACT Act is a liberalizing law since it
    substantially changed benefits derived from certain toxic exposures
    under specific conditions. A claimant may qualify for an effective date
    of service connection as early as the enactment of the law, which in
    this case is August 10, 2022. The OIG discovered that claims processors
    did not pursue all avenues for the most advantageous effective date,
    and the PACT Act's liberalizing law status could have contributed to
    these errors.

    Delayed Notification of a Life Event

        Beneficiaries must notify VA of major life events that could affect
    the amount of their disability compensation. For example, notification
    must be given to VA of remarriage or the loss of a spouse through death
    or divorce. Both situations would affect the amount of the veteran's
    disability compensation, and could result in either an underpayment or
    overpayment depending on the specific circumstances.
        A survivor's remarriage, under certain conditions, could cause a
    substantial overpayment that the beneficiary would have to return.
    Remarriage before age 55 prompts a discontinuance of Dependency and
    Indemnity Compensation (DIC). VA sends survivors a marital
    recertification letter every 8 years. If the survivor is nonresponsive,
    VA will send two more letters and then a ``due process'' letter to
    which the survivor must respond within 60 days. If the survivor still
    does not respond, VA will discontinue DIC and require the beneficiary
    to repay any unauthorized benefits back to the last valid
    recertification, sometimes as far back as 8 years prior, which could
    cause a substantial overpayment that the beneficiary would have to
    return. Consequently, the indebtedness of some survivors could reach
    hundreds of thousands of dollars. Also, reporting a life change that
    would result in removal of a dependent so close to the next scheduled
    benefits payment that VA is unable to react in time could cause an
    overpayment that the beneficiary would have to repay. Last, a VA error
    such as issuing a double payment would also cause an overpayment.

    Untimely VA Action

        Untimely VA action can also result in an overpayment. Even if the
    veteran conscientiously reports a change in status, if VA does not
    process the request quickly enough the beneficiary will receive an
    overpayment or underpayment appropriate to the situation. Our VFW
    Service Officers have provided the following examples as illustrations.
    In one case, the veteran petitioned VA to remove his dependent child
    from an educational program when she withdrew from school. VA took 217
    days from the time it received the request to remove her from the
    program, resulting in a $1653.00 debt to the veteran. In a second case,
    a veteran submitted a verification of dependents at the end of August
    2024 to remove a spouse due to a divorce earlier that same month. VA
    processed the action 4 months later in April 2025, causing a $1031
    debt. In each of these cases, overpayment would have been prevented if
    VA had processed the change request in a timely manner.

    Incarceration

        VA will reduce disability compensation for felonious beneficiaries
    incarcerated for more than 60 days and will discontinue pensions for
    veterans convicted of either a felony or misdemeanor. Upon release, the
    veteran's compensation and pension payments may resume. However, VA
    does not reduce payments for beneficiaries participating in work
    release programs, residing in halfway houses, or under community
    control. Similar to failing to inform VA of life events, failing to
    notify VA of incarceration could result in an improper payment.
    According to the June 28, 2016, VA OIG report 13-02255-276, Veterans
    Benefits Administration Audit of Compensation and Pension Benefit
    Payments to Incarcerated Veterans, VBA did not consistently adjust
    benefits for several years for veterans incarcerated in Federal
    institutions. Causative factors included insecure electronic data
    sharing methods, including a lapsed computer matching agreement with
    the Federal Bureau of Prisons intended to identify potential
    incarceration adjustments, and a lower prioritization of these
    adjustments compared with eliminating the disability claims backlog. As
    a result, between May 2008 and June 2015, VA did not adjust
    incarcerated veterans' compensation and pension benefits in an
    estimated 53 percent of cases, resulting in improper payments totaling
    approximately $59.9 million. OIG recommendations to remedy the
    situation included issuing bills of collection to recover improper
    payments, increasing the priority placed on making timely compensation
    and pension benefits adjustments, and monitoring data sharing
    agreements with the Federal Bureau of Prisons and extending them when
    needed. VA will have to continually monitor the incarcerated veteran
    population to prevent a recurrence.
        Chairman Luttrell and Ranking Member McGarvey, this concludes my
    statement. Again, thank you for the opportunity to offer comments on
    this issue.

    Information Required by Rule XI2(g)(4) of the House of Representatives

    Pursuant to Rule XI2(g)(4) of the House of Representatives, the VFW has
    not received any Federal grants in Fiscal Year 2025, nor has it
    received any Federal grants in the two previous Fiscal Years.

    The VFW has not received payments or contracts from any foreign
    governments in the current year or preceding two calendar years.

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