VA Vocational Rehabilitation and Employment Program: GAO Comments
on Key Task Force Findings and Recommendations (15-JUN-04,	 
GAO-04-853).							 
                                                                 
This report responds to a request by the Ranking Minority Member,
House Committee on Veterans' Affairs, for an analysis of the	 
findings and recommendations contained in the March 2004 report  
of the Department of Veterans Affairs (VA) Task Force on	 
Vocational Rehabilitation and Employment (VR&E). The mission of  
the VR&E program is to provide comprehensive services and	 
assistance necessary to enable veterans with service-connected	 
disabilities and employment handicaps to become employable, then 
obtain and maintain stable and suitable employment. We agreed to 
review and comment on the Task Force report's key findings and	 
recommendations and make general observations about these	 
findings and recommendations in light of our previous and ongoing
work in the area.						 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-04-853 					        
    ACCNO:   A10428						        
  TITLE:     VA Vocational Rehabilitation and Employment Program: GAO 
Comments on Key Task Force Findings and Recommendations 	 
     DATE:   06/15/2004 
  SUBJECT:   Persons with disabilities				 
	     Program evaluation 				 
	     Veterans benefits					 
	     Veterans employment programs			 
	     Vocational rehabilitation				 
	     VA Vocational Rehabilitation and			 
	     Employment Program 				 
                                                                 

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GAO-04-853

United States General Accounting Office

GAO Report to the Ranking Democratic Member, Committee on Veterans'
Affairs, House of Representatives

June 2004

VA VOCATIONAL REHABILITATION AND EMPLOYMENT PROGRAM

          GAO Comments on Key Task Force Findings and Recommendations

GAO-04-853

Contents

                                    Letter 1

              Appendix I Briefing Slides 4 Related GAO Products 31

Abbreviations

C&P Compensation and Pension
DOD Department of Defense
DOL Department of Labor
IT information technology
VA Department of Veterans Affairs
VBA Veterans Benefits Administration
VHA Veterans Health Administration
VR&E Vocational Rehabilitation and Employment

This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
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separately.

United States General Accounting Office Washington, DC 20548

June 15, 2004

The Honorable Lane Evans Ranking Democratic Member Committee on Veterans'
Affairs House of Representatives

Dear Mr. Evans:

This report responds to your request for an analysis of the findings and
recommendations contained in the March 2004 report of the Department of
Veterans Affairs (VA) Task Force on Vocational Rehabilitation and
Employment (VR&E).1 You requested this work as part of our ongoing review
of VA's VR&E program. The mission of the VR&E program is to provide
comprehensive services and assistance necessary to enable veterans with
service-connected disabilities and employment handicaps to become
employable, then obtain and maintain stable and suitable employment.

We agreed to review and comment on the Task Force report's key findings
and recommendations and make general observations about these findings and
recommendations in light of our previous and ongoing work in the area. To
meet these objectives, we attended Task Force public fact-finding
sessions, interviewed the Task Force chairman and VR&E central and
regional office staff, and reviewed and analyzed Task Force report
findings and recommendations. We conducted our work in accordance with
generally accepted government auditing standards.

On May 27, 2004, we briefed your office on the results of our work. This
report formally conveys the information provided during that briefing.
Appendix I contains the briefing slides.

In summary, we generally agree with the Task Force's three key findings.
We agree that VR&E has not been a Veterans Benefits Administration (VBA)
priority in terms of returning veterans with service-connected

1Department of Veterans Affairs. ReporttotheSecretary ofVeteransAfairs:The
Vocational RehabilitationandEmploymentProgramfor the21stCentury Veteran
(Washington, DC: March 2004).

disabilities to the workforce. GAO has reported that the VR&E program
emphasized education and not employment, and we have recommended that VBA
focus on obtaining suitable employment for disabled veterans. Although we
have not specifically reviewed VR&E's capacity to manage its workload, we
agree that many of the VR&E management systems identified by the Task
Force as needing improvement are fundamental to the proper functioning of
all federal programs. Finally, we agree that the VR&E program needs to be
modernized. We have reported that VA uses outmoded criteria for
establishing disability ratings, which are used to determine who is
eligible for VR&E. Furthermore, we have designated VA disability programs
as high risk in part because they use these outmoded criteria for
determining disability.

Regarding the Task Force recommendations, we observed that disabled
veterans might continue to use the program for education in the absence of
an equally beneficial alternative, even if VR&E adds employment tracks to
reflect veterans' diverse employment-related needs. Furthermore,
implementing the Task Force recommendations will be a major challenge for
VBA:

o  	Some recommended changes may require assistance from other agencies,
such as the Department of Defense and the Department of Labor.

o  	Other recommendations, such as changes to eligibility determination,
may require legislative changes.

o  	The large number of near-term recommendations will require
prioritizing to determine what can be done within the existing budget.

In providing oral comments on a draft of the briefing, VA generally
concurred with our comments and observations.

We are sending copies of this report to the Honorable
Christopher H. Smith, Chairman, House Committee on Veterans' Affairs,
and the Honorable Anthony J. Principi, Secretary of Veterans Affairs. We
will also make copies available to others upon request.

If you or your staff have any questions about this report, please contact
me
on (202) 512-7101 or Irene Chu, Assistant Director, Education, Workforce,
and Income Security Issues, on (202) 512-7102. Margaret Boeckmann,

Connie Peebles Barrow, and Joseph J. Natalicchio also made key
contributions to this report.

Sincerely yours,

Cynthia A. Bascetta Director, Education, Workforce, and Income Security
Issues

                          Appendix I: Briefing Slides

                  The Vocational Rehabilitation and Employment
                      Program for the 21st Century Veteran

                       Briefing for the Democratic Staff
                            Subcommittee on Benefits
                      House Committee on Veterans' Affairs

                                  May 27, 2004

GAO Briefing on VA VR&E Task Force Report Contents

1. Background

2. Scope and Methodology

3. Key Task Force Findings and GAO Comments

4. Key Program Design and Other Task Force Recommendations and GAO
Comments

5. GAO Observations

                                   Background

o 	On the basis of the Under Secretary for Benefits' recommendation, in
April 2003 Secretary Principi established the Task Force to independently
assess the Department of Veterans Affairs (VA) Vocational Rehabilitation
and Employment (VR&E) program.

o 	The VR&E program is designed to help veterans with service-connected
disabilities prepare for, find, and keep suitable employment.

o 	The Task Force discussed its report findings on April 1, 2004, at a
hearing held by the House Committee on Veterans' Affairs' Subcommittee on
Benefits.

o 	You asked GAO to review and comment on the Task Force findings and
recommendations.

                             Scope and Methodology

To do our work, we:

o  attended Task Force public fact-finding sessions;

o  interviewed

o  the Task Force chairman and

o  VR&E central and regional office staff;

o 	reviewed and analyzed the Task Force report findings and
recommendations in light of published GAO reports; and

o 	focused our analysis on key Task Force findings and recommendations.

                      Overview of Key Task Force Findings

o 	VR&E service has not been a Veterans Benefits Administration (VBA)
priority in terms of returning veterans with service-connected
disabilities to the workforce.

o 	The VR&E service has limited capacity to manage its growing workload.

o 	The VR&E system must be redesigned for the 21st century employment
environment.

Key Task Force Findings

Task Force Finding

VR&E service has not been a VBA priority in terms of returning veterans
with service-connected disabilities to the workforce.

GAO Comments
We agree that VR&E has not been a VBA priority.

o  GAO has reported that the VR&E program emphasized education and not
employment.

o  We recommended that VBA focus on obtaining suitable employment for
disabled veterans.

                            Key Task Force Findings

Task Force Finding

The VR&E service has limited capacity to manage its growing workload.

GAO Comments

Although we have not specifically reviewed VR&E's capacity to manage its
workload, we agree that many of the VR&E management systems identified by
the Task Force as needing improvement are fundamental to the proper
functioning of federal programs, regardless of workload.

                            Key Task Force Findings

Task Force Finding

The VR&E system must be redesigned for the 21st century employment
environment.

GAO Comments
We agree that the VR&E system needs to be modernized.

o  GAO reported that VA uses outmoded criteria for establishing disability
ratings, which are used to determine who is eligible for VR&E.

o  GAO has designated VA disability programs as high risk in part because
they use these outmoded criteria for determining disability.

           Overview of Key Task Force Program Design Recommendations

o 	Streamline eligibility and entitlement for those veterans in most
critical need.

o 	Replace the current VR&E process with a 5-track employment-driven
service delivery process.

o 	Expand counseling benefits to provide VR&E services to predischarge
service members and postdischarge veterans.

                 Key Task Force Program Design Recommendations

Task Force Recommendation

Streamline eligibility and entitlement for those veterans in most critical
need by giving automatic entitlement to:

o  service members who have been medically discharged or are pending
medical discharge;

o  veterans with a combined service-connected disability rating of 50
percent or greater; and

o  veterans receiving compensation for the loss, or loss of the use, of a
limb.

                 Key Task Force Program Design Recommendations

GAO Comments

o 	Service members being medically discharged and veterans who have lost,
or lost the use, of a limb could receive VR&E services more quickly
because they would no longer go through the Compensation and Pension (C&P)
benefits rating process or the VR&E employability assessment.

o 	Veterans with a combined service-connected disability rating of 50
percent or more would still go through the C&P rating process to establish
eligibility for VR&E, but would not have to be assessed for employability.

                 Key Task Force Program Design Recommendations

GAO Comments, cont.

o 	Because VA's outmoded disability criteria raise questions about the
validity of its disability decisions, the Task Force recommendations do
not ensure that the most seriously disabled veterans will receive priority
VR&E service.

o 	Since medical conditions alone are generally a poor predictor of work
incapacity, focusing on severity of disability rather than on
employability may result in placing veterans with severe employment
handicaps at a disadvantage in terms of VR&E services.

Key Task Force Program Design Recommendations

Task Force Recommendation

Replace the current VR&E process with a 5-track employment-driven service
delivery process.

Current service delivery process (3 tracks)

1. rehabilitation and employment services;

2. job ready services; and

3. independent living services.

                 Key Task Force Program Design Recommendations

Recommended service delivery process (5 tracks)

1. rapid access employment for veterans with skills who want immediate
employment;

2. self-employment;

3. re-employment in job held prior to military service;

4. traditional vocational rehabilitation services, including education and
training; and

5. independent living services with the possibility of employment.

                 Key Task Force Program Design Recommendations

GAO Comments

o 	The 5-track process could help focus on employment and provide
flexibility in the VR&E process.

o 	This new system will require a cultural shift from the program's
current emphasis on long-term education.

o 	As long as the education benefits available to disabled veterans
through VR&E remain more generous than those available through other VA
programs, eligible veterans will have strong incentives to continue to use
VR&E to pursue their education goals.

Key Task Force Program Design Recommendations

Task Force Recommendation

Expand counseling benefits to provide VR&E services to predischarge
service members and postdischarge veterans.

                 Key Task Force Program Design Recommendations

GAO Comments

o 	We agree that providing vocational and employment counseling prior to
military discharge is essential to enable disabled service members to
access VR&E services as quickly as possible after they are discharged.

o 	We have reported that early intervention efforts promote and facilitate
a return to the workforce.

Overview of Other Key Task Force Recommendations

o  Reorganize VR&E and increase staffing.

o 	Improve the capacity of the information technology (IT) systems.

o  Improve intra-and interagency coordination.

Other Key Task Force Recommendations

Task Force Recommendation Reorganize VR&E and increase staffing:

o 	Redesign the VR&E central office to provide greater oversight over
field office operations.

o 	Increase staff in central and regional offices to reflect employment
focus.

                      Other Key Task Force Recommendations

GAO Comments

o 	We agree that the VR&E program needs more central office oversight and
accountability. In numerous reports over the past 3 years, the VA
Inspector General has identified VR&E programs at regional offices that do
not adhere to policies and procedures, sometimes in ways that circumvent
accountability mechanisms.

o 	We have not done sufficient work to comment on the need to increase
staffing.

Other Key Task Force Recommendations

Task Force Recommendation

Improve the capacity of the information technology (IT) systems.

                      Other Key Task Force Recommendations

GAO Comments

o 	Although we have not specifically reviewed VR&E's IT system, many of
the Task Force's recommendations in this area are consistent with GAO work
governmentwide, showing that agencies need to strengthen IT strategic
planning and investment management.

o 	We believe there needs to be a more systematic analysis of current IT
systems by IT experts before more investment is made in these systems.

                      Other Key Task Force Recommendations

Task Force Recommendation
Improve intra-and interagency coordination:

o 	within VA between VR&E and the Veterans Health Administration (VHA) and

o 	between VR&E and the Departments of Defense (DOD) and Labor (DOL).

                      Other Key Task Force Recommendations

GAO Comments

o 	We agree that improving coordination with agencies that have a role in
assisting disabled veterans make the transition to civilian employment
should help these agencies more efficiently use federal resources and
enhance the employment prospects of disabled veterans.

o 	Because of the poor performance of the DOL Veterans' Employment and
Training Program in terms of employment outcomes for disabled veterans,
more than improved coordination will be required to enhance the employment
prospects of disabled veterans.

                                GAO Observations

o 	The Task Force recognized the need to modernize the VR&E program and to
focus the program more on employment.

o 	Veterans may continue to use the program for education in the absence
of an equally beneficial alternative despite multiple employment tracks to
reflect the diverse employment-related needs of participants.

                                GAO Observations

Implementing the Task Force recommendations will be a major challenge for
VBA:

o 	Some recommended changes may require assistance from other agencies,
such as the Department of Defense and the Department of Labor.

o 	Other recommendations, such as changes to eligibility determination,
may require legislative changes.

o 	The many near-term recommendations will require prioritizing to
determine what can be done within the existing budget.

Related GAO Products

VA Benefts: FundamentalChangestoVA's DisabilityCriteria Need Careful
Consideration. GAO-03-1172T. Washington, D.C.: September 23, 2003.

High-Risk Series:An Update.GAO-03-119. Washington, D.C.: January 2003.

Major ManagementChallenges and ProgramRisks:Departmentof
VeteransAffairs.GAO-03-110. Washington, D.C.: January 2003.

SSA and VA DisabilityPrograms: Re-ExaminationofDisabilityCriteria Needed
to Help Ensure Program Integrity.GAO-02-597. Washington, D.C.: August 9,
2002.

VocationalRehabilitation: Opportunities toImprove Program
Effectiveness.GAO/T-HEHS-98-87. Washington, D.C.: February 4, 1998.

VeteransBenefitsAdministration: Focusing on ResultsinVocational
Rehabilitationand Education Programs.GAO/T-HEHS-97-148. Washington, D.C.:
June 5, 1997.

Vocational Rehabitaion: VA Continues to Place Few DisabledVeterans
inJobs.GAO/HEHS-96-155. Washington, D.C.: September 3, 1996.

Vocational Rehabitation: Better VAManagementNeeded to Help
DisabledVeterans Find Jobs.GAO/HRD-92-100. Washington, D.C.: September 4,
1992.

VA Can ProvideMoreEmploymentAssistancetoVeteransWho Complete
ItsVocationalRehabilitation Program.GAO/HRD-84-39. Washington, D.C.: May
23, 1984.

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