VA Student Financial Aid: Management Actions Needed to Reduce	 
Overlap in Approving Education and Training Programs and to	 
Assess State Approving Agencies (08-MAR-07, GAO-07-384).	 
                                                                 
In fiscal year 2006, the Department of Veterans Affairs (VA) paid
approximately $2.1 billion in education assistance benefits to	 
more than 470,000 beneficiaries and about $19 million to state	 
approving agencies (SAA) to assess whether schools and training  
programs offer education of sufficient quality for veterans to	 
receive VA education assistance benefits when attending them.	 
Qualified individuals--veterans, service persons, reservists, and
certain spouses and dependents--receive benefits through a number
of education assistance programs for the pursuit of various types
of programs, such as a degree program, vocational program,	 
apprenticeship, or on-the-job training. The Departments of	 
Education (Education) and Labor (Labor) also assess education and
training programs for various purposes, primarily for awarding	 
student aid and providing apprenticeship assistance. In 2006,	 
under Title IV of the Higher Education Act, Education provided	 
nearly $77 billion in student aid in the form of both grants and 
loans. The Department of Education assesses and certifies	 
postsecondary institutions for participation in Title IV programs
through various oversight functions to ensure that these schools 
meet federal administrative and financial requirements and that  
they are accredited and licensed. Similarly, under the National  
Apprenticeship Act of 1937, the Department of Labor is authorized
to formulate and promote the furtherance of labor standards to	 
safeguard the welfare of apprentices. Given each agency's role,  
the potential of duplicative efforts among federal agencies has  
been a congressional concern. In 1995, GAO reported on this	 
matter and concluded that there was a substantial amount of	 
overlap between the efforts of SAAs and the other federal	 
agencies. In light of continued congressional interest in this	 
issue, we have now answered the following questions: (1) What	 
changes have occurred in state approving agencies' duties and	 
functions since 1995? (2) To what extent does the SAA approval	 
process overlap with efforts by the Departments of Education and 
Labor? (3) What, if any, additional value do the SAA approval	 
activities bring to VA education benefit programs?		 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-07-384 					        
    ACCNO:   A66625						        
  TITLE:     VA Student Financial Aid: Management Actions Needed to   
Reduce Overlap in Approving Education and Training Programs and  
to Assess State Approving Agencies				 
     DATE:   03/08/2007 
  SUBJECT:   Aid for education					 
	     Education program evaluation			 
	     Federal aid programs				 
	     Federal/state relations				 
	     Financial management				 
	     Higher education					 
	     Interagency relations				 
	     Performance measures				 
	     Standards						 
	     Student financial aid				 
	     Veterans benefits					 
	     Veterans education 				 
	     Vocational education				 

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GAO-07-384

   

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Report to the Ranking Minority Member, Committee on Veterans' Affairs,
U.S. Senate

United States Government Accountability Office

GAO

March 2007

VA STUDENT FINANCIAL AID

Management Actions Needed to Reduce Overlap in Approving Education and
Training Programs and to Assess State Approving Agencies

GAO-07-384

Contents

Letter 1

Appendix I Briefing Slides 6
Appendix II Comments from the Department of Veterans Affairs 34
Appendix III GAO Contact and Staff Acknowledgments 36

Abbreviations

Education Department of Education
IHL institution of higher learning
Labor Department of Labor
NASAA National Association of State Approving Agencies
OJT on-the-job training
RPO regional processing office
SAA state approving agency
SAC state apprenticeship council
VA Department of Veterans Affairs

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separately.

United States Government Accountability Office

Washington, DC 20548

March 8, 2007

The Honorable Larry E. Craig
Ranking Minority Member
Committee on Veterans' Affairs
United States Senate

The Honorable Larry E. Craig
Ranking Minority Member
Committee on Veterans' Affairs
United States Senate

Dear Senator Craig: 

In fiscal year 2006, the Department of Veterans Affairs (VA) paid
approximately $2.1 billion in education assistance benefits to more than
470,000 beneficiaries and about $19 million to state approving agencies
(SAA) to assess whether schools and training programs offer education of
sufficient quality for veterans to receive VA education assistance
benefits when attending them. Qualified individuals--veterans, service
persons, reservists, and certain spouses and dependents--receive benefits
through a number of education assistance programs for the pursuit of
various types of programs, such as a degree program, vocational program,
apprenticeship, or on-the-job training. In general, these programs must be
approved by an SAA in order for qualified individuals to receive VA
education assistance benefits. Under contracts with the VA, SAAs ensure
that education and training programs meet federal VA standards through a
variety of approval activities, such as evaluating course quality,
assessing school financial stability, and monitoring student progress. In
fiscal year 2006, the Department of Veterans Affairs (VA) paid
approximately $2.1 billion in education assistance benefits to more than
470,000 beneficiaries and about $19 million to state approving agencies
(SAA) to assess whether schools and training programs offer education of
sufficient quality for veterans to receive VA education assistance
benefits when attending them. Qualified individuals--veterans, service
persons, reservists, and certain spouses and dependents--receive benefits
through a number of education assistance programs for the pursuit of
various types of programs, such as a degree program, vocational program,
apprenticeship, or on-the-job training. In general, these programs must be
approved by an SAA in order for qualified individuals to receive VA
education assistance benefits. Under contracts with the VA, SAAs ensure
that education and training programs meet federal VA standards through a
variety of approval activities, such as evaluating course quality,
assessing school financial stability, and monitoring student progress.

The Departments of Education (Education) and Labor (Labor) also assess
education and training programs for various purposes, primarily for
awarding student aid and providing apprenticeship assistance. These
assessments are based, in part, on evaluations against standards set by
laws and regulations, such as those applicable to accrediting agencies. In
2006, under Title IV of the Higher Education Act, Education provided
nearly $77 billion in student aid in the form of both grants and loans.
The Department of Education assesses and certifies postsecondary
institutions for participation in Title IV programs through various
oversight functions to ensure that these schools meet federal
administrative and financial requirements and that they are accredited and
licensed. Similarly, under the National Apprenticeship Act of 1937, the
Department of Labor is authorized to formulate and promote the furtherance
of labor standards to safeguard the welfare of apprentices. To ensure
programs comply with federal standards, Labor directly registers and
oversees apprenticeship programs in less than half of the states and has
given state apprenticeship The Departments of Education (Education) and
Labor (Labor) also assess education and training programs for various
purposes, primarily for awarding student aid and providing apprenticeship
assistance. These assessments are based, in part, on evaluations against
standards set by laws and regulations, such as those applicable to
accrediting agencies. In 2006, under Title IV of the Higher Education Act,
Education provided nearly $77 billion in student aid in the form of both
grants and loans. The Department of Education assesses and certifies
postsecondary institutions for participation in Title IV programs through
various oversight functions to ensure that these schools meet federal
administrative and financial requirements and that they are accredited and
licensed. Similarly, under the National Apprenticeship Act of 1937, the
Department of Labor is authorized to formulate and promote the furtherance
of labor standards to safeguard the welfare of apprentices. To ensure
programs comply with federal standards, Labor directly registers and
oversees apprenticeship programs in less than half of the states and has
given state apprenticeship agencies or councils in the remaining states
such authority over their own programs.

Given each agency's role, the potential of duplicative efforts among
federal agencies has been a congressional concern. In 1995, GAO reported
on this matter and concluded that there was a substantial amount of
overlap between the efforts of SAAs and the other federal agencies.^1 In
light of continued congressional interest in this issue, we have now
answered the following questions: (1) What changes have occurred in state
approving agencies' duties and functions since 1995? (2) To what extent
does the SAA approval process overlap with efforts by the Departments of
Education and Labor? (3) What, if any, additional value do the SAA
approval activities bring to VA education benefit programs?

To address all three questions, we reviewed legislation, regulations,
federal guidance, and other documents relevant to the approval processes
for education and training programs. We also interviewed officials from
each of the entities involved in the approval processes of VA, Education
and Labor. Specifically, we interviewed federal officials from VA,
Education, and Labor as well as officials representing three SAAs, three
institutions of higher learning (IHL), and state apprenticeship councils
in Connecticut, Maryland, and Washington. We also interviewed officials
from one IHL that operates in multiple states and officials from the
National Association of State Approving Agencies (NASAA), an accrediting
agency (Accrediting Commission of Career Schools and Colleges of
Technology), the Connecticut state licensing agency, and three
apprenticeship programs (in Connecticut, Illinois, and Maryland). We
selected Connecticut, Washington, Illinois, and Maryland based on VA's
recommendation of knowledgeable SAA officials, to include both state and
federally monitored states for apprenticeship programs, and geographic
diversity. To identify the programs that were approved by the Departments
of Veterans Affairs, Education, and Labor, we compiled and analyzed data
on approved programs from each of the three agencies. To assess the
reliability of the data, we talked with knowledgeable officials in each of
the agencies, reviewed relevant documentation, and performed electronic
testing of files. We determined that the data we have included in this
briefing were sufficiently reliable for this purpose. We conducted our
work from October 2006 to January 2007 in accordance with generally
accepted government auditing standards.

^1GAO, VA Student Financial Aid: Opportunity to Reduce Overlap in
Approving Education and Training Programs, [9]GAO/HEHS-96-22 (Washington,
D.C.: Oct. 30, 1995).

On February 1, 2007, we briefed your office on the results of our
analysis. This report formally conveys information provided during that
briefing, which is contained in appendix I. In summary, we reported the
following findings:

           o Since 1995, legislative changes effective in 2001 created
           additional responsibilities for SAAs, including promoting the
           development of apprenticeship and on-the-job training programs,
           providing outreach services, and approving tests for occupational
           licensing.^2 From fiscal years 2003 to 2006, SAA funding increased
           from $13 million to $19 million to expand services and support the
           additional responsibilities. However, funding is scheduled to
           decrease beginning in fiscal year 2008.
           o Many education and training programs approved by SAAs have also
           been approved by Education or Labor, and VA and SAAs have taken
           few steps to coordinate approval activities with these agencies.
           In addition, information is not available to determine the amount
           of resources spent on SAA duties and functions, including those
           that may overlap with other agencies and programs.
           o SAAs reportedly add value to the approval process for education
           and training programs through (1) a focus on student services for
           veterans and on the integrity of VA benefits, (2) more frequent
           on-site monitoring of education and training programs than
           provided by Education or Labor, and (3) assessments and approval
           of a small number of programs that are not reviewed by other
           agencies. However, VA's lack of outcome-oriented performance
           measures for evaluating SAAs makes it difficult to assess the
           significance of these efforts.

In conclusion, while VA spends $19 million (less than 1 percent of the
total benefit amount) to fund SAA duties and functions, it does not track
the amount it spends on specific SAA activities, especially those that may
also be performed by other agencies. Without knowing the amount of
resources spent on specific duties and functions, VA does not have all
relevant information for making resource allocation decisions and cannot
determine if it is spending its federal dollars efficiently and
effectively. In addition, VA, Education, and Labor have various standards
and processes in place, in part to ensure that federal funds are being
spent on quality education and training programs. While we have identified
some overlap in approval efforts across agencies, the full extent of the
overlap between SAA duties and other agencies' oversight efforts is
unknown. It is important that VA work with other federal agencies to
determine how the scope of the approval process could be streamlined to
reduce overlap and ensure that federal dollars are spent efficiently.
Finally, it is difficult to assess the effectiveness of SAA activities, in
part because VA does not have outcome measures in place to fully evaluate
SAA performance. Evaluating the effectiveness of VA's approval process is
vitally important in order to manage the program and improve program
results.

^2Veterans Benefits and Health Care Improvement Act of 2000, Pub. L. No.
106-419 (2000); and Veterans Education and Benefits Expansion Act of 2001,
Pub. L. No. 107-103 (2001).

To help ensure that federal dollars are spent efficiently and effectively,
we are recommending that the Secretary of the Department of Veterans
Affairs take steps to monitor SAA spending and identify whether any
resources are spent on activities that duplicate the efforts of other
agencies. The extent of these actions should be in proportion to the total
resources of the program. Specifically:

           o VA should require SAAs to track and report data on resources
           spent on approval activities such as site visits, catalog review,
           and outreach in a cost-efficient manner; and
           o VA should collaborate with other agencies to identify any
           duplicative efforts and use the agency's administrative and
           regulatory authority to streamline the approval process.

In addition, we are recommending that the Secretary establish
outcome-oriented performance measures to assess the effectiveness of SAA
efforts.

We provided a draft of this report to officials of the U.S. Department of
Veterans Affairs for review and comment. In addition, we provided a draft
of this report to officials of the U.S. Departments of Education and Labor
for their technical review. In written comments on a draft of this report,
VA agreed with our findings and recommendations and stated that it will
(1) establish a working group with the SAAs to create a reporting system
to track and report data for approval activities with a goal of
implementation in fiscal year 2008, (2) initiate contact with appropriate
officials at the Departments of Education and Labor to identify any
duplicative efforts, and (3) establish a working group with the SAAs to
develop outcome-oriented performance measures with a goal of
implementation in fiscal year 2008. While VA stated that it will initiate
contact with officials at Education and Labor to identify duplicative
efforts, it also noted that amending its administrative and regulatory
authority to streamline the approval process may be difficult due to
specific approval requirements of the law. We acknowledge these challenges
and continue to believe that collaboration with other federal agencies
could help VA reduce duplicative efforts. In addition, VA may wish to
examine and propose legislative changes needed to further streamline its
approval process.

Labor provided technical comments and we incorporated them into this
report where appropriate.

We are sending copies of this report to relevant congressional committees
and other interested parties and will make copies available to others upon
request. In addition, this report will be available at no charge on GAO's
Web site at www.gao.gov . If you or your staff have any questions
about this report, please contact me at (202) 512-7215 or
[email protected] . Contact points for our Offices of Congressional
Relations and Public Affairs may be found on the last page of this report.
GAO staff that made major contributions to this report are listed in
appendix III.

Sincerely,

George A. Scott
Acting Director Education, Workforce, and Income Security
Issues

Appendix I: Briefing Slides

Appendix II: Comments from the Department of Veterans Affairs

Appendix III: GAO Contact and Staff Acknowledgments

GAO Contact

George A. Scott (202) 512-7215 or [email protected]

Staff Acknowledgments

In addition to the contact named above, Heather McCallum Hahn, Assistant
Director, Tranchau T. Nguyen, Jacqueline Harpp, Cheri Harrington, Richard
Burkard, Susannah Compton, John Mingus, and Jim Rebbe made key
contributions to this report.

(130609)

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References

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9. http://www.gao.gov/cgi-bin/getrpt?GAO/HEHS-96-22

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