Veterans Benefits Administration: Progress Encouraging, but Challenges
Still Remain (Testimony, 03/25/99, GAO/T-HEHS-99-77).

Pursuant to a congressional request, GAO discussed the long-standing
challenges facing the Department of Veterans Affairs in administering
programs that provide financial and other benefits to veterans, their
dependents, and survivors, focusing on: (1) recent progress the Veterans
Benefits Administration (VBA) has made; (2) areas in which progress is
lacking; and (3) changes in program design that could hold potential for
greater gains.

GAO noted that: (1) VBA implemented a new accuracy review system that
represents an important step forward in measuring the accuracy of the
regional offices' adjudication of disability claims and in providing
data to identify error-prone cases and correct the causes of errors; (2)
to improve the accountability of its service delivery networks and all
other VBA organizational units, VBA implemented, at the start of the
fiscal year 1999, a performance evaluation system called the balanced
scorecard; (3) VBA believes this new approach will drive organizational
change; provide feedback to employees on measures they can influence;
and link performance appraisal and reward systems to performance
measures, thereby providing incentives to managers to work as teams in
meeting performance measures; (4) VBA plans to identify the necessary
employee skills and work processes for every decisionmaking position,
implement skill certification or credentialing for these positions, and
implement performance-based training connected to measurable outcomes;
(5) VBA's goal is to develop data systems that enable forecasting and
are reliable, timely, accurate, honest, flexible, and integrated across
the organization; (6) toward this end, VBA has completed or has in
process a variety of actions, such as establishing an office to manage
the process of improving data systems, developing a system for capturing
detailed data on regional office disability rating decisions, acquiring
actuarial assistance in developing forecasting capabilities,
establishing a data inventory, and developing a data validation
methodology; (7) despite progress, VBA still has much to do in
addressing issues related to accuracy in adjudicating disability claims;
(8) even with the improvements provided by the new accuracy measurement
system, VBA's ability to identify error-prone cases and target
corrective actions is constrained by the limited data that it captures
on: (a) the medical characteristics of veterans whose claims are
processed incorrectly; and (b) why medical evidence is deficient; (9)
the Congressional Commission on Servicemembers and Veterans Transition
Assistance stated that some VBA regional offices may be so small that
their disproportionately large supervisory overhead unnecessarily
consumes personnel resources; (10) VBA needs to improve its success in
placing disabled veterans in jobs; and (11) GAO and others suggest that
making dramatic gains in some areas may require changes in the design of
the programs.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  T-HEHS-99-77
     TITLE:  Veterans Benefits Administration: Progress Encouraging, but 
             Challenges Still Remain
      DATE:  03/25/99
   SUBJECT:  Data integrity
             Management information systems
             Claims processing
             Veterans benefits
             Information resources management
             Human resources training
             Performance measures
             Internal controls
             Personnel evaluation

             
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HE99077t GAO

United States General Accounting Office

Testimony Before the Subcommittee on Benefits, Committee on
Veterans' Affairs, House of Representatives

For Release on Delivery Expected at 10:00 a.m. Thursday, March 25,
1999 VETERANS BENEFITS

ADMINISTRATION Progress Encouraging, but Challenges Still Remain

Statement of Cynthia A. Bascetta, Associate Director Veterans'
Affairs and Military Health Care Issues Health, Education, and
Human Services Division

GAO/T-HEHS-99-77

Page 1 GAO/HEHS-99-77

Veterans Benefits Administration: Progress Encouraging, but
Challenges Still Remain

Mr. Chairman and Members of the Subcommittee: We are pleased to be
here today to discuss long-standing challenges facing the
Department of Veterans Affairs (VA) in administering programs that
provide financial and other benefits to veterans, their
dependents, and survivors. These benefits programs, which are
administered by VA's Veterans Benefits Administration (VBA),
include disability compensation benefits, disability pension
benefits, education assistance, life insurance, housing loan
guaranty, and vocational rehabilitation and counseling services.
Among these programs, the disability compensation and pension
programs are the largest, accounting for about 90 percent of VBA's
cash outlays in fiscal year 1998 (about $20 billion out of about
$23 billion) and requiring about half of VBA's staff-years to
administer.

The disability programs have been the subject of concern and
attention within VA and by the Congress and veterans' service
organizations for many years. The concerns have included outmoded
processes, long waits for disability decisions, and decisional
qualityall of which affect the quality of service provided to
veterans and the effective use of taxpayer dollars. As a result,
the Congress has sponsored three studies that focused heavily, if
not solely, on the disability programs. These studies were
conducted by the

 Veterans' Claims Adjudication Commission,  National Academy of
Public Administration, and  Congressional Commission on
Servicemembers and Veterans Transition

Assistance. Also, in recent years we have issued a number of
reports on some aspects of VBA's operations, including a report
issued earlier this month, at the request of Representative Evans,
on the accuracy of VBA's adjudication of disability claims. 1 As a
result of such studies and the requirements of the Government
Performance and Results Act of 1993 (the Results Act), 2 VBA
itself has established a framework for addressing issues raised by
the various study groups and has been exploring ways to reengineer
its business processes.

1 Veterans Benefit Claims: Further Improvements Needed in Claims-
Processing Accuracy (GAO/HEHS- 99-35, Mar. 1, 1999).

2 The Results Act requires agencies to clearly define their
missions, set goals, measure performance, and report
accomplishments.

Lett er

Veterans Benefits Administration: Progress Encouraging, but
Challenges Still Remain

Page 2 GAO/HEHS-99-77

Drawing on the studies sponsored by the Congress as well as our
own work, today I will highlight

 recent progress VBA has made,  areas in which progress is
lacking, and  changes in program design that could hold potential
for greater gains.

Background VA's compensation program pays monthly benefits to
veterans with service- connected disabilities (injuries or
diseases incurred or aggravated while on

active military duty). Veterans with service-connected
disabilities are entitled to compensation benefits even if they
are working and regardless of the amount they earn. In contrast,
the pension program pays monthly benefits to wartime veterans who
have low incomes and are permanently and totally disabled for
reasons not connected to their service. In compensation cases, the
payment varies according to the degree of disability; in pension
cases, the amount varies according to financial need.

The disability claims adjudication process begins when the veteran
submits a claim to one of VBA's 58 regional offices where
counselors are available to answer questions and assist in
completing forms (see fig. 1). VBA also maintains a nationwide
toll-free telephone number to answer questions concerning
application forms, and veterans' service organizations'
representatives are often colocated in regional offices to help
claimants prepare applications and to act as the claimants'
representatives. The majority of claims are submitted through the
mail to the 58 regional offices, which develop evidence and
adjudicate veterans' claims.

Lett er

Veterans Benefits Administration: Progress Encouraging, but
Challenges Still Remain

Page 3 GAO/HEHS-99-77

Figure 1: The Disability Claims Adjudication Process

Note: Cases can be concluded at any point after notification.
Source: National Academy of Public Administration, Management of
Compensation and Pension Benefits Claim Processes for Veterans
(Washington, D. C.: Aug. 1997).

The regional office develops each claim by obtaining records from
the military services and information from the veterans, such as
medical records and information on income and dependents. In order
to determine

Veterans Benefits Administration: Progress Encouraging, but
Challenges Still Remain

Page 4 GAO/HEHS-99-77

a veteran's degree of disability, regional offices often find that
they need additional medical evidence and request that the
Veterans Health Administration (VHA) conduct a physical or mental
examination of the veteran. On the basis of such evidence, the
regional office determines whether the veteran's disability is
service-connected and, using VBA's Schedule for Rating
Disabilities, rates (or evaluates) the degree of severity of the
disability. The degree of disability is expressed in 10-percent
increments up to 100-percent disability. For veterans with
multiple impairments, the regional office must rate each
impairment separately and then combine the ratings into a
composite rating. A veteran can also receive a zero-percent rating
for a condition that is service-connected but not severe enough to
qualify for benefits. If a veteran's condition later worsens, the
veteran may reapply for a higher disability rating.

After the regional office notifies the veteran of its decision,
the veteran, if dissatisfied, may ask for a hearing before a
regional hearing officer. The veteran may also file a notice of
disagreement with the regional office and then file an appeal
asking for a review of the decision by the Board of Veterans'
Appeals, which makes VA's final decisions on appeals on behalf of
the Secretary. If the veteran disagrees with the Board's decision,
he or she may appeal to the Court of Veterans Appeals, which was
established in 1989 and is independent of VA. Additionally, both
veterans and VA may appeal decisions of the Court of Veterans
Appeals to the Court of Appeals for the Federal Circuit.

VBA considers a disability claim to have been accurately processed
if basic eligibility has been determined correctly, the case file
contains all required medical and nonmedical documentary evidence,
the regional office's decision on whether the disability is
service-connected and the disability rating given to each medical
impairment are correct, the payment amount is correct, and the
regional office has properly notified the veteran of the outcome
of his or her claim.

Recent Progress in Major Areas Is Encouraging

VBA has taken steps to begin addressing several important issues,
including

 measurement of decision accuracy,  accountability for
performance,  training for decisionmakers,  reliability of data
systems, and  coordination with VHA on medical examination
adequacy.

Veterans Benefits Administration: Progress Encouraging, but
Challenges Still Remain

Page 5 GAO/HEHS-99-77

Measurement of Accuracy As we reported on March 1, 1999, VBA
recently implemented a new accuracy review system that represents
an important step forward in

measuring the accuracy of the regional offices' adjudication of
disability claims and in providing data to identify error-prone
cases and correct the causes of errors. 3 Compared with the
previous accuracy measurement system, the new system focuses more
on cases likely to contain claims- processing errors, uses a more
stringent method for computing accuracy rates, provides more data
on performance, collects more data on errors, and stores more
review results in a centralized database for review and analysis.

Accountability for Performance

In May 1998, VBA issued its Roadmap to Excellence, in which VBA
established a baseline for its current operational environment and
described a process for evolving into an agency that is customer-
focused, team-driven, cost-effective, and responsive to the needs
of its stakeholders. 4 In Roadmap to Excellence, VBA stated that
it lacked adequate employee accountability. As part of an effort
to improve service and accountability, VBA has grouped its 58
regional offices into nine service delivery networks. These
networks do not have their own centralized offices or staff.
Instead, the regional offices in each network are expected to
closely collaborate with one another, provide mutual support,
share resources, operate according to team-based principles, and
share collective responsibility and accountability for the
networks' overall performance of all work assigned to the regional
offices.

To improve the accountability of these networks and all other VBA
organizational units, VBA implemented, at the start of fiscal year
1999, a performance evaluation system called the balanced
scorecard. This system scores performance on the basis of five
factors: claims-adjudication accuracy, timeliness, unit cost,
customer satisfaction, and employee satisfaction and development.
VBA believes this new approach will drive organizational change;
provide feedback to employees on measures they can influence; and
link performance appraisal and reward systems to performance
measures, thereby providing incentives to managers to work as
teams in meeting performance measures.

3 GAO/HEHS-99-35, Mar. 1, 1999.

4 VA, VBA, Roadmap to Excellence--Planning the Journey
(Washington, D.C.: VA, May 1998).

Veterans Benefits Administration: Progress Encouraging, but
Challenges Still Remain

Page 6 GAO/HEHS-99-77

In March 1998, in testimony before this Subcommittee on VBA's
implementation of the Results Act, we stated that VBA was
developing goals and measures for its programs. 5 Since that time,
VBA has made progress in setting goals and performance measures
for the disability programs, and its success in meeting these
performance measures will be assessed as part of the balanced
scorecard process. For example, VBA had set a goal of achieving an
accuracy rate of 75 percent in the adjudication of disability
claims during fiscal year 1999 and a goal of increasing the
accuracy rate to 93 percent by fiscal year 2004. However, in VA's
fiscal year 2000 budget submission, VBA increased its accuracy
goal to 96 percent but did not specify a time frame for reaching
that goal. VBA's new accuracy measurement system will determine
the claims-adjudication accuracy rate and will feed the accuracy
data into the balanced scorecard for the disability programs. As
part of our continuing review of VBA's progress in implementing
the Results Act, we will be assessing VA's fiscal year 2000
performance plan.

Decisionmaker Training In its Roadmap to Excellence, VBA also
acknowledged that its training program had not prepared its
workforce adequately to produce accurate

disability decisions. VBA acknowledged the need for an effective,
centralized, and comprehensive training program. Such training is
important not only for current employees but also for the many new
employees that will be hired to replace the up to 30 percent of
the workforce that may retire by fiscal year 2003. VBA plans to
identify the necessary employee skills and work processes for
every decision-making position, implement skill certification or
credentialing for these positions, and implement performance-based
training connected to measurable outcomes. VBA has already
developed a computer-based training module for processing appeals
and is working on modules for original disability claims, service-
connected death indemnity benefits, and pensions. VBA also plans
to produce additional modules, including one for training new
regional office staff when they begin rating disabilities. VBA
estimates that it takes at least 2 to 3 years for a new
decisionmaker to be able to operate at a fully productive,
independent level.

5 Veterans Benefits Administration: Progress and Challenges in
Implementing the Results Act (GAO/T- HEHS-98-125, Mar. 26, 1998).

Veterans Benefits Administration: Progress Encouraging, but
Challenges Still Remain

Page 7 GAO/HEHS-99-77

Data Systems Reliability Also in our testimony before this
Subcommittee last March, we noted VBA's lack of accurate, reliable
data to effectively measure and assess its

performance. In Roadmap to Excellence, VBA itself stated that its
ability to provide accurate and timely data on program activities
is compromised by, among other things, outdated computer systems
and databases, unvalidated data collection methodologies, and
limited data storage capacity. Because of such restrictions, VBA
management has limited access to the types of data needed to
adequately describe and analyze program activities and
participants, and the lack of data has hindered VBA's ability to
justify resource needs. In addition, the data systems do not have
adequate controls to ensure that performance data, such as
timeliness and production numbers, are valid.

According to its Roadmap to Excellence, VBA's goal is to develop
data systems that enable forecasting and are reliable, timely,
accurate, honest, flexible, and integrated across the
organization. VBA aims to accomplish this goal by about the year
2002. Toward this end, VBA has completed or has in process a
variety of actions, such as establishing an office to manage the
process of improving data systems, developing a system for
capturing detailed data on regional office disability rating
decisions, acquiring actuarial assistance in developing
forecasting capabilities, establishing a data inventory, and
developing a data validation methodology.

Coordination With VHA Our testimony last March also addressed the
need for VBA to coordinate its performance goals with VHA, which
performs the medical examinations

that are necessary for VBA to determine eligibility for disability
benefits. 6

At the time of our testimony, VBA was working with VHA to improve
the quality of these medical examinations because the lack of
adequate exams had been identified as a primary reason that
appealed disability decisions were remanded by the Board of
Veterans' Appeals to VBA regional offices. According to VBA
officials, VBA and VHA have taken several actions to improve the
quality of medical examinations. For example, VBA and VHA have
jointly designed improved worksheets for every body system to
guide physicians in performing examinations that meet
adjudicators' needs. Also, VBA has provided training to VHA
physicians.

6 VA is pilot testing the use of private medical providers to
perform examinations of veterans.

Veterans Benefits Administration: Progress Encouraging, but
Challenges Still Remain

Page 8 GAO/HEHS-99-77

Progress in Other Areas Is Still Lacking

Despite progress, VBA still has much to do in addressing issues
related to  accuracy in adjudicating disability claims,
timeliness in adjudicating disability claims,  organization and
infrastructure, and  rehabilitation of disabled veterans.

Accuracy in Claims Adjudication

As we reported on March 1, 1999, although VBA had been reporting
more than 95-percent accuracy under the previous accuracy
measurement system, the pilot test of the new system revealed an
accuracy rate of only 64 percent. A primary reason for this
difference is that the new system focuses on regional office work
products that require a disability rating, and these are the most
complex and error-prone work products. In contrast, the previous
system drew its sample of cases from the entire universe of
regional office work products, including those not requiring
disability rating decisions and, therefore, less error-prone. The
newly implemented accuracy measurement system continues to focus
on claims that involve disability ratings.

The new system also tends to produce lower, more realistic
accuracy rates because it uses a stricter accuracy rate
computation method. Under the previous system, VBA categorized
each error under one of three areas of the claims adjudication
process: case control and development, decision elements, or
notification to the veteran. Thus, if a case had one error, VBA
would record this error under the appropriate area and show the
two other areas as error-free. After reviewing all cases, VBA
computed separate accuracy rates for each of the three claims
adjudication areas and then determined an overall accuracy rate by
calculating the average of the three accuracy rates. In contrast,
under the new accuracy measurement system, if a case has an error
in any area of the claims adjudication process, the entire case is
counted as incorrect for accuracy rate computation purposes. This
method tends to result in a lower accuracy rate than under the
previous system.

Even with the improvements provided by the new accuracy
measurement system, VBA's ability to identify error-prone cases
and target corrective actions is constrained by the limited data
that it captures on (1) the medical characteristics of veterans
whose claims are processed incorrectly and (2) why medical
evidence is deficient. Capturing more detailed data on claimants'
medical characteristics could help pinpoint the specific types of

Veterans Benefits Administration: Progress Encouraging, but
Challenges Still Remain

Page 9 GAO/HEHS-99-77

claims in which errors occur. Also, capturing more detailed data
on why reviewers find medical evidence supporting regional office
decisions to be deficient could help identify the types of
corrective actions that need to be taken.

VBA also needs to address vulnerabilities in the integrity of
performance data produced by the new accuracy measurement system.
The new system does not adhere fully to internal control standards
that call for separation of key duties or to standards for
performance audits that call for those who review and evaluate a
program's performance to be organizationally independent of the
program's managers. Under the new system, the regional office
staff who review the accuracy of regional office decisions are
themselves responsible for making such decisions, and they report
to regional office managers responsible for claims adjudication.
Both the regional office reviewers and their managers have an
inherent self-interest in having as high an accuracy rate as
possible. This self-interest derives from the fact that accuracy
is one of the five factors that determine regional office
performance scores under the balanced scorecard approach. The
potential effect of impaired objectivity on performance data is
exemplified by findings reported by VA's Inspector General in
1998. The Inspector General found that regional office staff had
manipulated data on the timeliness of claims processing to make
performance appear better than it actually was. The Inspector
General concluded that weaknesses in internal controls had
contributed to lack of integrity in timeliness data.

While VBA needs to collect additional data to pinpoint causes of
errors and to address vulnerabilities in accuracy data integrity,
these improvements alone will not be sufficient for VBA to meet
its goal of improving the accuracy rate from 64 percent to 96
percent. To do this, VBA must meet the two key management
challenges mentioned earlier: establish stricter accountability
and develop more effective training. In its Roadmap to Excellence,
VBA acknowledged that lack of employee accountability and
inadequate training were root causes contributing to quality
problems in the adjudication of disability claims. As mentioned,
VBA has begun taking action to address these issues; however, at
this point, it is too early to determine the extent to which VBA
will be successful in improving accountability and training or the
extent to which these actions will enable VBA to meet its goal for
improving accuracy.

Veterans Benefits Administration: Progress Encouraging, but
Challenges Still Remain

Page 10 GAO/HEHS-99-77

Timeliness in Claims Adjudication

Slow claims processing has long been a concern. 7 In 1994,
processing original claims took about 7 months on average, and
currently, it takes about 5- months. However, even this
improvement is far from the goal of about 2 months that VBA set in
1997 as part of a business process reengineering effort to
redesign the system for processing original disability claims. VBA
envisioned a reengineered system that would use advanced
technologies to expedite the development of claims and also
envisioned it would eliminate unnecessary tasks, reduce the number
of hand-offs in the process, make information technology changes,
and provide additional training for rating specialists.

However, the National Academy of Public Administration observed in
its report that VBA's reengineering program needed better planning
and management. Among other things, the report found that VBA had
neither documented nor evaluated regional office initiatives, had
neither prioritized reengineering initiatives nor developed a
master plan for addressing specific problems, had not tested
reengineering initiatives before proposing large reductions in
staff, and had not tested assumptions on which its budget and
process improvement decisions were based. As a result, VBA
reexamined its reengineering strategy and plans. VBA is testing
some new approaches, such as case management of claims, but the
extent to which reengineering efforts will improve claims-
processing timeliness is still unclear.

Organization and Infrastructure

In its January 1999 report, the Congressional Commission on
Servicemembers and Veterans Transition Assistance stated that some
VBA regional offices may be so small that their disproportionately
large supervisory overhead unnecessarily consumes personnel
resources. Excluding stations with insurance functions, the
staffing in VBA's regional offices ranges from as many as 524 to
as few as 18. Similarly, in its 1997 report, the National Academy
of Public Administration stated VBA should be able to close a
large number of regional offices and achieve significant savings
in administrative overhead costs associated with supporting 58
regional office directors and their staffs. The Commission stated
that VBA must develop streamlined and efficient processes to
replace business practices that are merely adaptations of
traditional paper-based processes

7 Department of Veterans Affairs: Programmatic and Management
Challenges Facing the Department (GAO/T-HEHS-97-97, Mar. 18,
1997).

Veterans Benefits Administration: Progress Encouraging, but
Challenges Still Remain

Page 11 GAO/HEHS-99-77

implemented through aged computer systems and applications and
administered through a network of disability claims-processing
offices at 58 sites across the nation.

Apart from the issue of closing regional offices, the Commission
also highlighted a need to consolidate disability program claims
adjudication into fewer locations. VBA has consolidated the
education assistance and housing loan guaranty programs into fewer
than 10 locations, and the Commission encouraged VBA to take
similar action in the disability programs. VBA itself had proposed
such a consolidation in 1995 and in that proposal enumerated
several potential benefits, such as allowing VBA to assign the
most experienced and productive adjudication officers and
directors to the consolidated offices; facilitating increased
specialization and as-needed expert consultation in deciding
complex cases; improving the completeness of claims development,
the accuracy and consistency of rating decisions, and the clarity
of decision explanations; improving overall adjudication quality
by increasing the pool of experience and expertise in critical
technical areas; and facilitating consistency in decision-making
through fewer consolidated claims-processing centers.

While VBA has not consolidated the disability claims-adjudication
function, it has, as mentioned, grouped its 58 regional offices
into nine service delivery networks. Nevertheless, greater
efficiency and effectiveness could potentially be gained from
adjudicating disability claims in fewer locations.

Rehabilitation Program In February 1998, we testified before this
Subcommittee regarding VBA's vocational rehabilitation program. 8
As we stated then, VBA needs to

improve its success in placing disabled veterans in jobs. On the
basis of our review of the records for about 74,000 veterans found
eligible for the vocational rehabilitation program during fiscal
years 1992-95, we found that only 8 percent had successfully
completed the vocational rehabilitation process by finding a
suitable job and holding it for 60 days. We found that VBA did not
focus on finding jobs for participants, even though the law
requires that VBA base its rehabilitation program on finding
suitable employment for disabled veterans. Instead, VBA focused on
sending veterans to training, particularly to higher education
programs. Similarly, in its January 1999 report, the Commission on
Servicemembers and Veterans Transition Assistance reported that
the rehabilitation

8 Vocational Rehabilitation: Opportunities to Improve
Effectiveness (GAO/T-HEHS-98-87, Feb. 4, 1998).

Veterans Benefits Administration: Progress Encouraging, but
Challenges Still Remain

Page 12 GAO/HEHS-99-77

program continues to concentrate its efforts on sending veterans
to training, with about 87 percent of program participants
pursuing college- level training in 1997. The Commission concluded
that VBA is not achieving its statutory purpose of assisting
disabled veterans to become employable and to obtain and maintain
suitable employment. According to VBA, it is making progress in
this area, but we have not yet evaluated its progress.

Program Design Changes Could Hold Potential for Greater Gains

Our work and the work of others suggest that making dramatic gains
in some areas may require changes in the current design of the
programs. For example, a large portion of VBA's workload in the
disability programs consists of repeat claims from veterans who
have previously filed claims. According to the Veterans' Claims
Adjudication Commission, repeat customers typically outnumber
those filing initial claims by about three to one, and as of late
1995, 69 percent of repeat claimants with pending compensation
claims were already receiving disability benefits. Over half of
the repeat customers were previously rated as 30-percent or less
disabled. The Commission questioned whether concentrating claims
processing resources on veterans already receiving benefits for
relatively minor disabilities instead of more severely disabled
veterans is consistent with program intent. The Commission
suggested that perhaps the program should be modified to make lump
sum compensation payments to minimally disabled veterans (defined
as those with 10-percent disability) upon separation from military
service. This, according to the Commission, would considerably
reduce the volume of repeat claims, allowing concentration of VBA
processing efforts on claims from more seriously disabled
veterans, and, over time, would potentially save taxpayer dollars
by reducing administrative and program costs. This course of
action would require legislative change.

In another instance, the Veterans' Claims Adjudication Commission
recommended simplifying the disability pension program to reduce
resource requirements as well as confusion and burdensome
reporting requirements for veterans. According to the Commission,
only one in four disability recipients is a pension beneficiary,
and total compensation payments are almost seven times greater
than pension payments. Nevertheless, maintaining recipients'
accounts in the pension program requires almost twice as many
staff resources as maintaining compensation recipients' accounts.
Under complex and time-consuming pension program rules, VBA
evaluates a claimant's need on the basis of income and assets
available to the claimant's basic family unit. The Commission

Veterans Benefits Administration: Progress Encouraging, but
Challenges Still Remain

Page 13 GAO/HEHS-99-77

recommended pension program simplification to reduce confusion and
burdensome reporting requirements for veterans and to improve
VBA's administrative efficiency. While VBA may be able to
accomplish some simplification through regulatory changes, some
measures might require legislative action.

We support further evaluation of the issues we and others have
raised, and we recommend that the Congress consider taking
legislative action if necessary to achieve efficiency and
effectiveness in VBA's programs. Without the option of altering
the current programmatic framework, VBA may not be able to find
solutions to provide the full measure of effectiveness,
efficiency, and service that veterans and the taxpayers deserve.

Mr. Chairman, this concludes my prepared remarks. I would be
pleased to respond to any questions you or Members of the
Subcommittee may have.

(105772)

Veterans Benefits Administration: Progress Encouraging, but
Challenges Still Remain

Page 14 GAO/HEHS-99-77

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