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Witness Testimony of Mr. Keith M. Wilson, Veterans Benefits Administration, Director, Education Service, U.S. Department of Veterans Affairs

Good afternoon Chairwoman Herseth-Sandlin, Ranking Member Boozman, and members of the Subcommittee.  I appreciate the opportunity to appear before you today to discuss the Department of Veterans Affairs (VA) education benefit programs and the role of State Approving Agencies (SAAs).  My testimony will highlight the vital role of SAAs in ensuring that veterans receive the maximum benefit from their educational programs.  I will specifically address the program services, fraud prevention, oversight, and outreach functions of the SAAs, and the legislatively mandated funding decrease scheduled to take effect in fiscal year 2008.

VA and the SAAs work together to ensure the successful readjustment of veterans to civilian life through educational opportunities.  VA administers educational assistance, generally in the form of monthly benefits, to eligible veterans and dependents, while the SAAs ensure the quality of the educational and vocational programs pursued and monitor the institutions providing education and training to veterans.  Title 38 of the United States Code establishes the parameters for the relationship. 

Role of SAAs

38 U.S.C. § 3671(a) requests that each state create or designate a state department or agency as the “State Approving Agency.”  The SAAs are charged with approving courses in accordance with the provisions of chapters 34, 35 and 36 of title 38 U.S.C., including apprenticeship programs.  They also conduct outreach programs and provide outreach services to eligible servicemembers and veterans about education and training benefits available.  Our relationship is a cooperative one and we consider the SAAs to be vital partners in fulfilling our mission. 

Under contracts with 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 2001, the SAAs were also given responsibility to actively promote the development of apprenticeship and on-the-job training programs and to approve tests used for licensing and certification. 

The SAAs maintain regular contact with the educational institutions and other program facilities within their jurisdiction, keeping them informed of on-going activities and allowing them to monitor the institutions compliance with VA’s approval standards and enrollment restrictions.  VA and the SAAs exchange information on activities of education institutions, paying particular attention to enforcement of approval standards, enforcement of enrollment restrictions, and possible fraudulent or criminal activities on the part of persons connected with educational institutions where veterans are enrolled.  VA staff perform compliance site visits at participating institutions every three years, while SAA staff conduct site visits at many institutions annually.  They are a critical component in reducing the opportunities for fraud, waste and abuse in the veterans educational assistance program. 

While it is true that some of the programs monitored and approved by SAAs are also reviewed by the Departments of Education and Labor, SAAs approve a number of programs that are not reviewed by other agencies.  These programs include on-the-job training programs, cosmetology and massage training offered by unaccredited schools, and apprenticeship programs not approved by the Department of Labor.  SAAs tend to conduct more frequent on-site monitoring than other governmental entities and, for less-established institutions and programs, they provide more extensive review to ensure the quality and integrity of the veterans’ learning experiences. 

The SAAs also assist school certifying officials in understanding and complying with the law and regulations governing payment of VA educational assistance.

GAO Report

A recent GAO report, “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, March 2007), contained three major recommendations.  First, 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.  Second, 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.  Finally, VA should establish outcome-oriented performance measures to assess the effectiveness of SAA efforts.

VA generally agreed with all three recommendations.  We are taking action to implement the first and third recommendations (resources expenditures and outcome-oriented performance measures) in cooperation with the National Association of State Approving Agencies (NASAA). 

VA diligently tracks SAA activities.  SAAs report their activities to us quarterly including the number of programs approved, the number of programs disapproved, the number of supervisory visits conducted, and the number of outreach activities or visits conducted.  However, based on the report findings, VA will review current tracking mechanisms to further ensure that resource allocation decisions for SAA activities are made efficiently and effectively. 

Regarding the second recommendation to collaborate with other agencies, we have already met with Department of Labor staff to discuss how we can improve our communication processes and coordinate our respective activities.  We intend to hold similar discussions with the Department of Education in the near future.

SAA Performance Evaluation Process

Public Law 100-323 requires an annual Joint Peer Review Group (JPRG) to meet for the purpose of evaluating the performance of the individual State Approving Agencies during the preceding fiscal year.  The JPRG is composed of  eight members, four SAA representatives and four VA representatives.   The President of the National Association of State Approving Agencies selects the SAA representatives.  The VA representatives are the Chief Education Liaison Officers from the four Regional Processing Offices located in Buffalo, NY; Muskogee, OK; Atlanta, GA; and St. Louis, MO.   

For FY 2006, the JPRG reviewed self-evaluations from 59 SAAs and written assessment reports from 50 Education Liaison Representatives (ELRs) nationwide.  These reports were reviewed by the JPRG to determine each SAA’s annual performance rating.  There are three designated ratings: Satisfactory, Minimally Satisfactory or Unsatisfactory.  For 2006, the JPRG assigned the following ratings: two SAAs received an “unsatisfactory” rating, three received a “minimally satisfactory” rating, and 54 agencies received a “satisfactory” rating. 

All SAAs received notices of their ratings in writing.  SAAs with less than satisfactory ratings received written guidance on how to improve their job performance.  For one SAA that was rated unsatisfactory, a “mentoring” relationship was developed with a neighboring SAA to improve performance during the remainder of this contract year.

Funding for SAAs

In fiscal year 2006, VA paid approximately $2.1 billion in education assistance benefits to more than 470,000 beneficiaries.  In that year, VA also provided approximately $19 million in funding to the SAAs, and will pay a similar amount in fiscal year 2007.  For fiscal year 2008, the amount of funding for SAAs will decrease to approximately $13 million, per section 301 of Public Law 107-330.  SAA funding is not tied to the Consumer Price Index (CPI) which causes a continual erosion of funding for the SAAs. 

VA Actions to Mitigate the Impact of the SAA Funding Reduction

The outreach activities which were added to the SAA’s roles in 2001 may be impacted by the reduction in SAA funding.  However, we have taken steps to mitigate this impact.  Information concerning VA education benefits is mailed three times to servicemembers while they are on active duty and again at separation.  Information is also provided annually while veterans are using their education benefits.  VA’s Transition Assistance Program (TAP), as well as benefit briefings for demobilizing National Guard and Reserve members, provides information on education benefits available to these members.  VA has participated in the training of the newly created State Benefits Advisors.  State Benefits Advisors are Department of Defense (DoD) employees located within the Adjutant General’s office of each state.  They assist in the dissemination of benefits information to National Guard and Reserve units.  Despite these efforts, a reduction in SAA funding may negatively impact our efforts to promote the use of VA education benefits, particularly the promotion of OJT and apprenticeship programs with employers.  The extent to which these efforts would be impacted is difficult to predict.

We will continue to monitor the performance of SAAs in conducting program approvals, fraud prevention, oversight, and outreach.  If SAAs operating at the new funding levels are unable to perform these services, then the Department will reallocate existing VA staff and resources to cover the services previously provided by the SAAs.  Our ultimate concern is always for the effective administration of educational benefits to our veterans.  If it is determined that increased resources are required, appropriate budget requests will be made. 

Madame Chairwoman, this concludes my statement.  I would be pleased to answer any questions you or any of the other members of the committee may have.