House Committee on Veterans' Affairs

TESTIMONY OF

MICHAEL G. SULLIVAN

DEPUTY INSPECTOR GENERAL

DEPARTMENT OF VETERANS AFFAIRS

BEFORE

THE UNITED STATES HOUSE OF REPRESENTATIVES

COMMITTEE ON VETERANS AFFAIRS

SUBCOMMITTEE ON OVERSIGHT AND

INVESTIGATIONS

HEARING ON DEPARTMENT OF VETERANS AFFAIRS

DISABILITY CLAIMS PROCESSING

MAY 18, 2000

Mr. Chairman and Members of the Subcommittee, I am pleased to be here today to discuss the accuracy of data used by the Veterans Benefits Administration (VBA) in reporting on the timeliness of the processing of disability claims. As part of our continuing coverage of the Department of Veterans Affairs compensation and pension program, the Office of Inspector General conducted an audit to assess the accuracy of data used in the following VBA performance measures:

Average days to complete original disability compensation claims.

Average days to complete reopened compensation claims.

Average days to complete original disability pension claims.

This review was one of a series of audits assessing the accuracy of data used to measure the Department of Veterans Affairs’ (VA’s) performance in accordance with the Government Performance and Results Act (GPRA).

In this audit we compared data from VBA’s automated systems with source documents to determine whether the proper data was input. The audit found that data used to measure claims processing timeliness was not accurate. Comparisons of data from automated systems with source documents for three nation-wide random samples of claims completed in Fiscal Year (FY) 1997 disclosed significant discrepancies. VBA personnel claimed work measurement credit when credit was not warranted, claimed the wrong work measurement credit, and input data which did not reflect actual processing times. More than 30 percent of the records in each of our three samples contained inaccurate or misleading data, which affected measurement of processing times:

For Original Disability Compensation Claims, VBA reported 128.2 days. The audit found that the actual processing time was 150.8 days for a difference of 22.6 days.

For Reopened claims, VBA reported a processing time of 109 days. Our audit determined that the actual time was 145.6 days for a difference of 36.6 days.

For Original Disability Pension Claims, VBA reported 71.5 days. The audit determined the actual time was 80 days for a difference of 8.5 days.

VBA personnel input inaccurate data because they overlooked, or were not adequately familiar with, work measurement criteria. Also, in certain situations, compliance with criteria resulted in the input of misleading data.

By way of example, some of the common deficiencies noted that inflated the number of cases worked included:

VBA personnel improperly recorded reopened claims in conjunction with appeals or personal hearings. As a result, personnel received work measurement credit for reopened compensation claims in addition to credit for actions related to the appeals or hearings. Since all of the issues were related to the appeals or personal hearings, VBA’s criteria did not authorize personnel to record work measurement credit for reopened claims in these situations.

Claims were prematurely recorded as completed. VBA’s criteria state that all issues raised by a claim must be resolved before the claim is considered completed. However, in each instance, personnel input data indicating work on the claim was completed while they continued to work on issues raised by the claim. When work was actually completed, data was input indicating a second claim was completed.

VBA personnel input data indicating they completed work on claims when there actually were no claims and only correspondence was required.

Personnel improperly input data indicating they completed work on reopened claims when they only corrected prior errors. According to VBA criteria, correction of a prior error should not be recorded as a separate claim.

In the following examples VBA used the wrong establishment date to compute their timeliness. These types of errors understate the actual processing time.

When claims were transferred among VA facilities, VBA personnel input the date of receipt in the office processing the claim or a later date rather than the date of initial receipt in a VA facility. These claims were received by VA as many as 599 days earlier than the recorded date of claim.

Personnel input the date the claim was first recorded in the automated system as the date of claim. These claims were actually received in VA facilities 1 day to 134 days before they were recorded in the system.

The recorded date of claim was the date when an award or disallowance was prepared. Data from the automated systems erroneously indicated each of these claims was processed in 6 days or less. Actual processing times ranged from 40 to 731 days.

When a claim is received from a veteran whose claims folder has been stored in the VA Records Processing Center, VBA personnel must retrieve the claims folder before processing the claim. VBA personnel used the date the folder was received from the Records Processing Center as the date of claim rather than the date the claim was received in the VA Regional Office. These claims were actually received 8 to 90 days earlier than indicated by the recorded data.

Another error noted was that the recorded dates of disposition were not the dates when work on the claims was actually completed. This type of error resulted in computations of average processing times, which were shorter than actual processing times.

Personnel completed necessary work but, for unknown reasons, failed to record completion of the work until a later date. Work on these claims was actually completed 1 day to 149 days earlier than the recorded date.

Misleading dates of claims disposition were recorded for claims that were transferred from one office to another for completion of certain processing steps. VBA personnel made decisions on these claims and notified the claimants of their decisions before the claims folders were returned to the offices of jurisdiction and the claims were recorded as completed. Work on each of these claims was completed 6 to 14 days earlier than indicated by the recorded date of disposition.

We determined that the cause of the conditions noted was that VA personnel either overlooked, or were not adequately familiar with, applicable criteria. We could not determine how many deficiencies resulted from clerical errors or whether personnel intentionally ignored criteria in specific instances. However, the frequency of errors involving classification of claims, appeals, and deferred issues indicated personnel did not know, or misinterpreted, the work measurement criteria.

Criteria in effect at the beginning of FY 1997 contributed to distorted computations of processing days. VBA claims processing criteria instructed personnel to input the date a claim was received in the office processing the claim as the start date of claim without regard for whether the claim was originally received at another VA facility. Thus, if a claim was transferred from one VA facility to another, any days in the first facility or in transit were not included in the computation of processing days.

Other criteria resulted in the input of misleading dates of disposition. When an office has a large backlog of pending claims, some of those claims may be sent to another office for assistance in completing the processing. VBA criteria state that, if the two offices are not served by the same data processing center, completion of work on the claims will be recorded after the claims folders are returned to the office of jurisdiction. In this situation, the recorded data will reflect more processing days than were actually required to complete work on the claims.

More accurate timeliness data would enhance the ability of VA managers and others to assess performance, make sound decisions, and enhance the credibility of VA information presented to interested parties.

VBA has revised criteria defining the date of claim to be recorded and has taken other steps, which should result in more accurate measurement of claims processing timeliness. Criteria were revised to define the date of claim as the earliest date that the claim was received by any VA facility. The Under Secretary for Benefits identified development and maintenance of accurate data systems as one of VBA’s major goals. To assist in reaching that goal, he established a Data Collection, Analysis, and Integrity Team. The Team’s initiatives include identifying data needs, establishing a data inventory, and developing data validation methodology.

Prior to the completion of our audit, the Deputy Under Secretary for Benefits issued a letter to all regional office directors stressing the need to improve the accuracy of data in VBA’s management reporting systems. After mentioning our preliminary audit findings, the letter stated VBA’s Compensation and Pension Service personnel would attempt to identify offices that appeared to be manipulating data. Also, the letter indicated onsite VBA surveys of regional offices would be resumed.

Compensation and Pension Service personnel analyzed transaction data concerning 103,000 claims recorded as completed in the first quarter of FY 1998 and identified transactions that appeared to be unusual. The Deputy Under Secretary for Benefits sent VBA Area Directors the results of that analysis with a letter indicating that questionable practices should be identified and eliminated.

While the revision of criteria defining the date of claim and other actions initiated should result in the input of more accurate data, we believe additional corrective actions were needed. Appropriate personnel should receive additional training concerning the identification and classification of claims, dates of claim, and dates of disposition. To ensure that procedures are clear and that compliance with instructions will result in accurate measurement of processing times, VBA officials need to review criteria related to the common deficiencies identified during our review and revise the criteria as needed. In addition, VBA officials need to regularly monitor the accuracy of classification codes, dates of claim, and dates of disposition to detect errors. The Under Secretary for Benefits has reported that all audit recommendations were implemented.

Conclusion

VBA personnel input data which significantly distorted computations of processing times of original disability compensation claims, reopened compensation claims, and original disability pension claims. Based on our sample results we concluded that the FY 1997 timeliness data was not accurate enough to provide a meaningful measure of VBA’s performance. To provide managers and other stakeholders with more useful timeliness data in the future, VBA officials needed to take action to improve the quality of data input and implement controls to detect inaccurate data.

The Under Secretary for Benefits concurred with our recommendations and provided acceptable implementation plans. According to his comments, VBA committed to an expanded emphasis on information quality and is actively developing a Data Management Office. The Data Management Office will be responsible for incorporating recommendations from recent reviews of VBA’s programs to improve the quality of all VBA data collecting, reporting, and analysis activities.

Mr. Chairman, this completes my testimony and I will be happy to answer any question you or the Members of the Committee may have.

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