Veterans' Benefits
Further Changes in VBA's Field Office Structure Could Help Improve Disability Claims Processing Gao ID: GAO-06-149 December 9, 2005The Chairman, former Chairman, and Ranking Minority Member, Senate Committee on Veterans' Affairs asked GAO to review the Veterans Benefits Administration's (VBA) efforts to realign its compensation and pension claims processing field structure to improve performance. This report (1) identifies the actions VBA has taken to realign its compensation and pension claims processing field structure to improve performance, and (2) examines whether further changes to its field structure could improve performance.
Since 2001, VBA has made a number of changes to its field structure and staff deployment in an effort to improve compensation and pension claims processing performance, in particular, to improve the timeliness of claims decisions and reduce inventories. VBA created a Tiger Team to complete very old claims, and claims from elderly veterans; created nine resource centers to decide claims developed at the regional offices of jurisdiction; consolidated pension maintenance work at three regional offices to free up staff at other offices to concentrate on other work; consolidated in-service dependency and indemnity compensation claims at one office; consolidated processing of appeals remanded from VA's Board of Veterans Appeals at one office; and is consolidating decision making on Benefits Delivery at Discharge (BDD) claims at two regional offices. While VBA has taken these steps to improve its claims processing performance through targeted realignments of its field structure and workload, VBA has not changed the basic field structure for processing claims for disability compensation and pension benefits, and it still faces performance challenges. VBA continues to process these claims at 57 regional offices, where large performance variations and questions about decision consistency persist. For example, in fiscal year 2004 the average time to decide a rating-related claim ranged from 99 days at one office to 237 days at another, and accuracy varied across regional offices. Furthermore, productivity improvements are necessary to maintain performance in the face of greater workloads and relatively constant staffing resources. VBA and others who have studied claims processing have suggested that consolidating claims processing into fewer regional offices could help improve claims processing efficiency, save overhead costs, and improve decision accuracy and consistency.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-06-149, Veterans' Benefits: Further Changes in VBA's Field Office Structure Could Help Improve Disability Claims Processing
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Report to Congressional Requesters:
United States Government Accountability Office:
GAO:
December 2005:
Veterans' Benefits:
Further Changes in VBA's Field Office Structure Could Help Improve
Disability Claims Processing:
GAO-06-149:
GAO Highlights:
Highlights of GAO-06-149, a report to congressional requesters:
Why GAO Did This Study:
The Chairman, former Chairman, and Ranking Minority Member, Senate
Committee on Veterans‘ Affairs asked GAO to review the Veterans
Benefits Administration‘s (VBA) efforts to realign its compensation and
pension claims processing field structure to improve performance. This
report (1) identifies the actions VBA has taken to realign its
compensation and pension claims processing field structure to improve
performance, and (2) examines whether further changes to its field
structure could improve performance.
What GAO Found:
Since 2001, VBA has made a number of changes to its field structure and
staff deployment in an effort to improve compensation and pension
claims processing performance, in particular, to improve the timeliness
of claims decisions and reduce inventories. VBA
* created a Tiger Team to complete very old claims, and claims from
elderly veterans,
* created nine resource centers to decide claims developed at the
regional offices of jurisdiction,
* consolidated pension maintenance work at three regional offices to
free up staff at other offices to concentrate on other work,
* consolidated in-service dependency and indemnity compensation claims
at one office,
* consolidated processing of appeals remanded from VA‘s Board of
Veterans Appeals at one office, and
* is consolidating decision making on Benefits Delivery at Discharge
(BDD) claims at two regional offices.
While VBA has taken these steps to improve its claims processing
performance through targeted realignments of its field structure and
workload, VBA has not changed the basic field structure for processing
claims for disability compensation and pension benefits, and it still
faces performance challenges. VBA continues to process these claims at
57 regional offices, where large performance variations and questions
about decision consistency persist. For example, in fiscal year 2004
the average time to decide a rating-related claim ranged from 99 days
at one office to 237 days at another, and accuracy varied across
regional offices. Furthermore, productivity improvements are necessary
to maintain performance in the face of greater workloads and relatively
constant staffing resources. VBA and others who have studied claims
processing have suggested that consolidating claims processing into
fewer regional offices could help improve claims processing efficiency,
save overhead costs, and improve decision accuracy and consistency.
VBA‘s 57 Regional Offices Process Disability Claims:
[See PDF for image]
[End of figure]
What GAO Recommends:
To help ensure more timely, accurate, and consistent decisions in a
cost-effective manner, we recommend that the Secretary of Veterans
Affairs (VA) direct the Under Secretary for Benefits to undertake a
comprehensive review of VBA‘s field structure for processing disability
compensation and pension claims. This review would address staff
deployment, opportunities for consolidating disability compensation and
pension claims processing, and human capital and real property issues.
VA concurred fundamentally with GAO‘s recommendation and noted that
field restructuring is a complex process. It stated it will establish a
task force to thoroughly explore potential areas for consolidation.
www.gao.gov/cgi-bin/getrpt?GAO-06-149.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Cynthia A. Bascetta at
(202) 512-7215 or bascettac@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
VBA Has Used Limited Field Restructuring and Staff Redeployment to
Improve Compensation and Pension Performance:
VBA Continues to Face Challenges as It Realigns Its Compensation and
Pension Field Structure:
Conclusions:
Recommendation for Executive Action:
Agency Comments and Our Response:
Appendix I: Scope and Methodology:
Appendix II: Comments from the Department of Veterans Affairs:
Abbreviations:
BDD: Benefits Delivery at Discharge:
DOOR: Distribution of Operational Resources:
FTE: full-time equivalent:
NPRC: National Personnel Records Center:
PA&I: Office of Performance Analysis and Integrity:
STAR: Systematic Technical Accuracy Review:
VA: Department of Veterans Affairs:
VBA: Veterans Benefits Administration:
VSR: veterans service representative:
United States Government Accountability Office:
Washington, DC 20548:
December 9, 2005:
The Honorable Larry E. Craig:
Chairman:
The Honorable Daniel K. Akaka:
Ranking Minority Member:
Committee on Veterans' Affairs:
U.S. Senate:
The Honorable Arlen Specter:
United States Senate:
Providing veterans and their survivors with timely, accurate, and
consistent decisions on their claims for disability compensation and
pension benefits has been a long-standing challenge for the Department
of Veterans Affairs (VA). Veterans continue to experience lengthy waits
for decisions, and VA's Veterans Benefits Administration (VBA)
continues to experience excessive claims inventories and problems with
decision accuracy. These performance problems are one reason why we
designated VA and other federal disability programs as a High-Risk area
in January 2003.[Footnote 1] We have noted that to enable it to handle
an increasing claims workload without significant increases in staffing
resources, VBA needs to improve claims processing
productivity.[Footnote 2] Also, we have reported that VBA needs to
improve its ability to provide veterans with consistent decisions--that
is, comparable decisions on benefit entitlement and rating percentage
for comparable disabilities regardless of the regional offices making
the decisions.[Footnote 3] Improving VBA claims processing performance,
and positioning the agency to deal with future workload changes,
depends in part on VBA's ability to maintain a highly qualified and
productive claims processing workforce deployed where it can be
utilized most effectively.
At your request, we reviewed VBA's efforts to realign its compensation
and pension claims processing field structure to improve productivity,
timeliness, accuracy, and consistency, and to allow VBA to deal with
significant workload changes. Specifically, we (1) identified the
actions VBA has taken to realign its compensation and pension claims
processing field structure to improve performance and (2) examined
whether further changes to its field structure could improve
performance.
To develop the information for this report, we reviewed VBA's model for
allocating staff to its regional offices and discussed the allocation
model with VBA officials. We also analyzed VBA staffing data from
fiscal years 2001 through 2004 for VBA's regional offices. To determine
the range in workload and performance of VBA's regional offices, we
reviewed VBA workload, timeliness, and accuracy data. We assessed the
reliability of VBA's timeliness and workload data and found the data
sufficiently reliable for the purposes of this report. We also assessed
the reliability of VBA's fiscal year 2004 accuracy data and found that
the accuracy data were sufficiently reliable to show the differences
between VBA's most and least accurate offices (see app. I). To discuss
VBA initiatives and the impacts of changes in staffing levels, we
visited the VBA regional offices in Washington, D.C; Boston,
Massachusetts; Newark, New Jersey; Philadelphia, Pennsylvania; and Salt
Lake City, Utah. Also, while visiting the Salt Lake City regional
office, we interviewed by videoconference officials of the Anchorage,
Alaska, and Fort Harrison, Montana, regional offices, which are
operated by the Salt Lake City regional office. We conducted our review
from November 2004 through October 2005 in accordance with generally
accepted government auditing standards.
Results in Brief:
Since 2001, VBA has made several targeted changes to its field
structure and staff deployment in an effort to improve compensation and
pension claims processing performance, in particular to improve claims
processing timeliness and reduce rating-related claims inventories. VBA
established a Tiger Team in October 2001, including experienced rating
specialists, to complete very old claims and claims from elderly
veterans. At the same time, VBA established nine resource centers,
where teams of rating specialists decided claims developed at the
regional offices of jurisdiction. Further, VBA consolidated specific
types of work, including pension maintenance work (such as annual means
testing for VA pension beneficiaries) at three regional offices in
January 2002 in an effort to free up staff at other offices to
concentrate on rating-related claims. VBA also consolidated in-service
dependency and indemnity compensation claims at one office in August
2002, and appeals remanded from VA's Board of Veterans Appeals at one
office in July 2003. Finally, VBA is in the process of consolidating
decision-making on Benefits Delivery at Discharge (BDD) claims at two
regional offices.
While VBA has taken these steps to improve its claims processing
performance through limited realignments of its field structure and
workload, VBA has not changed the basic field structure for processing
its key workload--claims for disability compensation and pension
benefits--and it still faces performance challenges such as improving
disability compensation and pension claims processing timeliness,
decision-making accuracy and consistency, and productivity. VBA
continues to process these claims at 57 regional offices, where large
performance variations and questions about decision consistency
persist. For example, in fiscal year 2004, the average time to decide a
rating-related claim ranged from 99 days at one office to 237 days at
another, while the accuracy of rating-related decisions ranged from 76
to 96 percent. In addition, we have noted that VBA faces continuing
questions about its ability to ensure that veterans receive consistent
decisions, regardless of which regional offices decide their claims.
Furthermore, our prior work found that productivity improvements are
necessary to maintain performance in the face of greater workloads and
relatively constant staffing resources. VBA and others who have studied
claims processing have identified various options for changing the
basic field structure in order to improve claims processing efficiency,
reduce overhead costs, and improve decision accuracy and consistency,
including consolidating claims processing into fewer than 57 regional
offices. No matter which alternative VBA chooses to pursue, a broad
array of human capital and real property issues would need to be
addressed.
This report contains a recommendation to the Secretary of Veterans
Affairs to have VBA extend its improvement efforts by undertaking a
comprehensive reexamination of its compensation and pension claims
processing field structure, including staff deployment, opportunities
to consolidate claims processing operations, and related human capital
and real property management issues. VA concurred fundamentally with
our recommendation and noted that field restructuring is a complex
process. It stated it will establish a task force to thoroughly explore
potential areas for consolidation.
Background:
VBA's disability compensation and pension claims processing is done in
its 57 regional offices. Each state, except Wyoming, has at least 1
regional office; California has 3, and New York, Pennsylvania, and
Texas have 2 each. VBA also has regional offices in Washington, D.C;
San Juan, Puerto Rico; and Manila, the Philippines. Also, VBA has 142
Benefits Delivery at Discharge sites, where VBA staff process claims
from newly separated service members. In fiscal year 2004, VBA spent
about $926 million to administer its disability compensation and
pension programs. This included support for about 9,100 full-time
equivalent (FTE) employees.
In fiscal year 2004, VBA received about 771,000 rating-related claims
from veterans and their families for disability benefits. This included
about 195,000 original claims for compensation of service-connected
disabilities (injuries or diseases incurred or aggravated while on
active military duty), and about 438,000 reopened compensation
claims.[Footnote 4] In addition, about 87,000 original and reopened
claims were filed for pensions for wartime veterans who have low
incomes and are permanently and totally disabled for reasons not
service-connected, and their survivors.[Footnote 5] In addition, VBA
received about 29,000 original claims for dependency and indemnity
compensation from deceased veterans' spouses, children, and parents and
to survivors of service members who died on active duty.
When a veteran or other claimant submits a claim for disability
compensation, pension, or dependency and indemnity compensation to a
VBA regional office, veterans service center staff process the claim in
accordance with VBA regulations, policies, procedures, and guidance. A
veterans service representative (VSR) in a predetermination team
develops the claim, that is, assists the claimant in obtaining
sufficient evidence to decide the claim. For rating-related claims, a
decision is made in a rating team by rating veterans service
representatives (also known as rating specialists). VSRs also perform a
number of other duties, including establishing claims files,
authorizing payments to beneficiaries and generating notification
letters to claimants, conducting in-person and telephone contacts with
veterans and other claimants, and assisting in the processing of
appeals of claims decisions.
For a number of years, VBA's regional offices have experienced problems
processing veterans' disability compensation and pension claims. As we
reported in May 2000, VBA's regional offices still experience problems
such as large backlogs of pending claims, lengthy processing times, and
questions about the consistency of its regional office
decisions.[Footnote 6] VBA has acknowledged the need to improve the
timeliness and accuracy of claims processing.
VBA Has Used Limited Field Restructuring and Staff Redeployment to
Improve Compensation and Pension Performance:
Since 2001, VBA has made a number of changes to its field structure and
staff deployment in an effort to provide veterans with faster decisions
and reduce its rating-related claims inventory. In October 2001, VBA
established a Tiger Team, including experienced rating specialists, to
complete very old claims and claims from elderly veterans. Also, to
supplement regional offices' claims processing capacity, VBA
established nine resource centers, where teams of rating specialists
decided claims developed at the regional offices of jurisdiction.
Further, VBA has consolidated specific types of work, including pension
maintenance work (such as annual means testing for VA pension
beneficiaries) at three regional offices, in an effort to free up staff
at other offices to concentrate on rating-related claims. VBA also
consolidated in-service dependency and indemnity compensation claims at
its Philadelphia regional office; created an Appeals Management Center
in Washington, D.C., to process appeals remanded from VA's Board of
Veterans Appeals; and is consolidating the rating of Benefits Delivery
at Discharge claims at the Salt Lake City and Winston-Salem, North
Carolina, regional offices. Further, VBA reduced the jurisdictions of
two regional offices with inadequate performance--Washington, D.C., and
Newark--to reduce their claims workloads.
In fiscal year 2002, VBA established special units to supplement
regional offices' claims processing capacity, as part of its effort to
achieve rating-related decision timeliness improvement and reduce its
pending claims inventory. The Tiger Team at the Cleveland, Ohio,
regional office was tasked to process very old claims (pending 1 year
or more), and claims by elderly veterans (aged 70 and older). The Tiger
Team was staffed with experienced rating specialists and with veterans
service representatives, primarily from the Cleveland office's staff,
to perform whatever additional development work was needed on the
claims they receive and to make rating decisions on these claims. To
help expedite development work, VBA obtained priority access for the
Tiger Team to obtain evidence from VA and other federal agencies. For
example, VA and the National Archives and Records Administration
completed a memorandum of understanding in October 2001 to expedite
Tiger Team requests for service records at the National Personnel
Records Center (NPRC) in St. Louis, Missouri. Also, VBA established
procedures and time frames for expediting Tiger Team requests for
medical evidence and examinations from the Veterans Health
Administration. In fiscal year 2004, the Tiger Team completed over
14,000 decisions. Since its creation in fiscal year 2002, the average
age of VBA's inventory of rating-related claims has declined from 182
days at the end of September 2001 to about 118 days at the end of
September 2004.
In addition, VBA supplemented regional offices' capacity to make claims
decisions by establishing resource centers at nine regional
offices.[Footnote 7] The resource centers, staffed with rating
specialists who were less experienced than the Tiger Team's, were to
decide "ready to rate" claims. These are claims where veterans service
representatives at the regional offices of jurisdiction had developed
the evidence needed to support decisions on the claims. In fiscal year
2004, the nine resource centers completed about 69,000 decisions. Since
their creation, the inventory of rating-related claims has declined
from about 421,000 to about 321,000 claims at the end of fiscal year
2004.
VBA has also consolidated some specific types of compensation and
pension work into specialized units. In January 2002, VBA consolidated
pension maintenance work at three regional offices--St. Paul,
Minnesota; Philadelphia; and Milwaukee, Wisconsin. This work involves,
for VBA's means-tested pension programs, conducting periodic income and
eligibility verifications for beneficiaries. In fiscal year 2004, the
Pension Maintenance Centers completed over 200,000 pension maintenance
actions. In addition to consolidating pension maintenance, VBA plans to
consolidate all pension claims processing at the three Pension
Maintenance Centers.
VBA also consolidated in-service dependency and indemnity compensation
claims at the Philadelphia regional office. These claims are filed by
survivors of service members who die while in military
service.[Footnote 8] VBA consolidated these claims as part of its
efforts to provide expedited service to these survivors, including
service members who died in Operations Enduring Freedom and Iraqi
Freedom.
VBA has also consolidated the processing of decisions remanded on
appeal by VA's Board of Veterans Appeals. Effective February 2002, VA
issued a new regulation to streamline and expedite the appeals process.
The new regulation allowed the board to process remanded decisions
without having to send them back to VBA regional offices. To implement
this regulation, the board established a unit to process remanded
appeals. However, in May 2003, the U.S. Court of Appeals for the
Federal Circuit held that the board could not, except in certain
statutorily authorized exceptions, decide appeals in cases in which the
board had developed evidence. As a result, VBA regained responsibility
for evidence development and adjudication work on remands, and chose to
establish a centralized Appeals Management Center at its Washington
regional office. According to VBA officials, remand processing was
consolidated because a consolidated unit, focusing only on remands,
could process them faster and more consistently, and with better
accountability, than the individual regional offices. VBA's Washington
regional office was chosen because of its proximity to the board's
headquarters. The Appeals Management Center was established in July
2003, and was, according to VBA officials, fully operational by
February 2004. According to a VBA official, it was staffed largely
through transfers from regional offices and with staff from the board's
former remand processing unit.
VBA continues to consolidate specific types of claims processing work.
VBA is in the process of consolidating decision making on Benefits
Delivery at Discharge claims, which are generally original claims for
disability compensation, at the Salt Lake City and Winston-Salem
regional offices. VBA established this program to expedite decisions on
disability compensation claims from newly separated service members. A
service member can file a BDD claim up to 180 days before separation;
VBA staff performs some development work on the claim before
separation. VBA actually decides the claim after the service member is
separated, and the official discharge form (DD Form 214) is received.
Under the consolidation, regional offices and BDD sites will accept and
develop claims, but will send the developed claims to Salt Lake City or
Winston-Salem for decision. VBA expects this consolidation to help
improve decision efficiency and consistency. Consolidation began in
December 2004 and is expected to be completed by March 2006. According
to VBA officials, claims processing performance was one reason for
selecting these two regional offices. In the case of Salt Lake City,
the availability of space and the ability to recruit new claims
processing staff were also factors. The Salt Lake City office is in a
relatively new building on the campus of the Salt Lake City VA Medical
Center.
VBA has also made changes in the jurisdictions of some regional
offices. The Washington regional office has lost most of its
jurisdiction. Claims from veterans residing in Washington's Maryland
and Virginia suburbs were transferred to the Baltimore, Maryland, and
Roanoke, Virginia, regional offices, respectively. The Washington
regional office's staff declined by about 37 percent between fiscal
year 2001 and 2004. Also, jurisdiction over claims from veterans
residing outside the United States was transferred from Washington to
the Pittsburgh, Pennsylvania, regional office.[Footnote 9] Meanwhile,
the Newark regional office lost jurisdiction over claims from veterans
in seven southern New Jersey counties to the Philadelphia regional
office. The Newark regional office lost about 16 percent of its staff
between fiscal year 2001 and 2004. These shifts in jurisdiction were,
according to VBA officials, in response to poor performance by the
Washington and Newark regional offices, such as inadequate timeliness
and accuracy.
VBA Continues to Face Challenges as It Realigns Its Compensation and
Pension Field Structure:
While VBA has done limited field restructuring and claims processing
staff reallocation, it has not changed the basic field structure for
processing claims for disability compensation and pension benefits and
still faces challenges in improving performance. VBA continues to
process claims at 57 regional offices, which experience large
performance variations and questions about the consistency of their
decisions. In addition, we have reported that in order to improve long-
term performance in the face of increased workloads and without
significant staffing increases, VBA needs to improve its productivity.
Several studies by VA and outside groups have suggested that VBA could
improve claims processing efficiency and consistency by consolidating
claims processing into fewer offices as well as other strategic
changes. In taking on these broader changes, however, VBA would need to
consider an array of human capital and real property challenges, such
as optimizing its ability to recruit and retain staff and minimizing
the cost of office space.
VBA continues to struggle to improve nationwide performance, and
significant performance differences exist among its regional offices.
For example, in fiscal year 2004 the average time to complete rating-
related claims VBA-wide was 166 days, far from VBA's strategic goal of
125 days. Average completion times ranged from 99 days at the Salt Lake
City regional office to 237 days at the Honolulu, Hawaii, regional
office. To help struggling offices reduce their inventories of pending
claims, VBA has been brokering (that is, having a regional office send
a claim to another office to be decided) tens of thousands of rating-
related claims. In fiscal year 2004, regional offices brokered out
about 92,000 claims--about 90 percent to the Tiger Team and resource
centers. This action enabled some individual offices reduce the size
and age of their pending inventories. For example, the Providence,
Rhode Island regional office brokered out about two-thirds of its
rating-related decisions in fiscal year 2004. This helped Providence to
reduce its rating-related inventory by almost 30 percent, while the
nationwide inventory of pending claims grew by more than 25 percent.
Also, Providence was able to reduce its inventory's average age by
about 7 weeks, while the nationwide inventory's average age increased
by about 1 week.
VBA also experiences problems ensuring the accuracy and consistency of
its rating decisions. As measured by VBA's Systematic Technical
Accuracy Review (STAR) data for fiscal year 2004, the accuracy of
regional office decisions varied from a low of 76 percent at its Boston
regional office to 96 percent at its Fort Harrison regional office.
Moreover, as we recently testified and reported, VA still needs to
develop a plan for assessing variations in disability claims decisions
and whether they are within the bounds of reasonableness.[Footnote 10]
While some variation is inherent in the claims decision-making process,
we have reported in the past on wide variations in the state-to-state
average compensation payments per disabled veteran, and more recently,
VA's inspector general has found that inconsistency remains a problem.
In addition to the challenges VBA faces in improving claims processing
timeliness and consistency, VBA also faces productivity challenges. In
November 2004, we reported that to achieve its claims processing
performance goals in the face of increasing workloads and decreased
staffing levels, VBA would have to rely on productivity improvements.
VBA's fiscal year 2006 budget justification provided information on
actual and planned productivity, in terms of rating-related claims
decided per direct full-time equivalent employee, and identified a
number of initiatives that could improve claims processing performance.
These initiatives included technology initiatives such as Virtual VA,
involving the creation of electronic claims folders; consolidation of
the processing of Benefits Delivery at Discharge claims at 2 regional
offices; and collaboration with the Department of Defense to improve
VBA's ability to obtain evidence, such as evidence of in-service
stressors for veterans claiming service-connected post-traumatic stress
disorder. VBA's fiscal year 2006 budget justification assumed that it
would increase the number of rating-related claims completed per FTE
from 94 in fiscal year 2004 to 109 in fiscal year 2005 and 2006, a 16
percent increase. For fiscal year 2005, this level of productivity
translates into VBA completing almost 826,000 rating- related
decisions. VBA completed about 763,000 decisions in fiscal year 2005.
It is not clear whether these measures will enable VBA to achieve its
planned improvements in productivity.
Organizations studying these challenges have suggested that they could
be addressed by more strategic, comprehensive restructuring than has
been done to date. For example, in a 1997 report, the National Academy
of Public Administration found that VA could achieve significant
savings in administrative overhead costs by closing a large number of
regional offices.[Footnote 11] Similarly, in its January 1999 report,
the Congressional Commission on Servicemembers and Veterans Transition
Assistance found that some regional offices are so small that their
disproportionately large supervisory overhead may unnecessarily consume
personnel resources.[Footnote 12] The commission highlighted a need to
consolidate disability claims processing into fewer locations. VBA has
consolidated its 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.
In its own 1995 study of field restructuring, VBA enumerated several
potential benefits of consolidating processing into fewer than 57
regional offices.[Footnote 13] These included 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 adjudicative 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.
Consolidating compensation and pension claims processing into fewer
offices would not necessarily mean that regional offices would be
closed. As the VA Claims Processing Task Force suggested, regional
offices that lose claims processing functions could still provide
public contact and outreach services. Also, VBA officials suggested
that these offices could continue to provide vocational rehabilitation
and employment services.
No matter which alternative VBA chooses to pursue in making further
changes to its field office structure, it will need to address an array
of human capital and real property issues. These include, for example,
(1) assessing what mix of incentives--such as buyouts, early
retirements, or retention bonuses--would be needed to accommodate
downsizing at some offices and workload increases at others, (2) what
additional training would be needed to ensure staff could take on new
responsibilities, and (3) how office space could be disposed of or
acquired as needed to accommodate workload shifts. At the same time,
given potential resistance to changes in field structure, VA would need
to find effective ways of communicating its plans while enhancing staff
morale and productivity.
Conclusions:
VBA has taken limited actions to realign its field structure and
redeploy staff resources as part of its effort to improve overall
claims processing performance. While targeted at specific types of work
and specific regional offices, these actions have not been in the
context of a comprehensive restructuring strategy. Rather, VBA has made
piecemeal changes, many in the context of short-term performance
improvements, particularly in claims processing efficiency. Unless more
comprehensive and strategic changes are made to its field structure,
VBA is likely to continue to miss opportunities to substantially
improve productivity, accuracy, and consistency in its disability
claims processing, especially in the face of future workload increases.
Recommendation for Executive Action:
To help ensure more timely, accurate, and consistent decisions in a
cost-effective manner, we recommend that the Secretary of Veterans
Affairs direct the Under Secretary for Benefits to undertake a
comprehensive review of VBA's field structure for processing disability
compensation and pension claims. This review would address staff
deployment, opportunities for consolidating disability compensation and
pension claims processing, and human capital and real property issues.
Agency Comments and Our Response:
In its written comments on a draft of this report (see app. II), VA
agreed with our conclusions and concurred fundamentally with our
recommendation that it undertake a comprehensive review of VBA's field
structure for processing disability compensation and pension claims. VA
stated that it will establish a task force to thoroughly explore
potential areas for further consolidation. VA also noted that field
restructuring is a complex process that involves, among other things,
obtaining input and support from service organizations, members of
Congress, and labor partners. We agree that field restructuring is a
complex process but urge VA to establish its task force expeditiously
to ensure that VA can achieve the potential benefits of field
restructuring as soon as possible. As VA noted in its comments, these
could include improved proficiency, greater accuracy, and consistency
in operations.
We will send copies of this report to the Secretary of Veterans
Affairs, appropriate congressional committees, and other interested
parties. The report will also be available at GAO's Web site at
http://www.gao.gov.
If you or your staff have any questions regarding this report, please
call me at (202) 512-7215. Carl Barden, Irene Chu, Martin Scire, Greg
Whitney, Vanessa Taylor, and Walter Vance also made key contributions
to this report.
Signed by:
Cynthia A. Bascetta:
Director, Education, Workforce, and Income Security Issues:
[End of section]
Appendix I: Scope and Methodology:
To develop the information for this report, we reviewed prior studies
on Veterans Benefits Administration (VBA) claims processing, including
the 1995 report of VBA's Field Restructuring Task Force, the National
Academy of Public Administration's 1997 report on management of
compensation and pension benefits claim processes for veterans, the
1999 report of the Congressional Commission on Servicemembers and
Veterans Transition Assistance, and the 2001 Department of Veterans
Affairs (VA) Claims Processing Task Force report. We reviewed VBA's
model for allocating staff to its regional offices and discussed the
allocation model with VBA officials. We also analyzed VBA staffing data
from fiscal years 2001 through 2004 for VBA's regional offices. To
determine the range in workload and performance of VBA's regional
offices, we reviewed VBA workload, timeliness, and accuracy data.
To discuss VBA initiatives and the impacts of changes in staffing
levels, we visited the VBA regional offices in Washington, D.C; Boston,
Massachusetts; Newark, New Jersey; Philadelphia, Pennsylvania; and Salt
Lake City, Utah. Also, while visiting the Salt Lake City regional
office, we interviewed by videoconference officials of the Anchorage,
Alaska, and Fort Harrison, Montana, regional offices--which are
operated by the Salt Lake City regional office. We selected the
Philadelphia and Salt Lake City offices because they have added, or are
in the process of adding, workload through consolidations. The
Philadelphia regional office hosts one of the three Pension Maintenance
Centers; processes in-service dependency and indemnity claims; and has
taken jurisdiction for southern New Jersey from the Newark regional
office. The Salt Lake City regional office was in the process of
expanding its staffing as part of VBA's plan to consolidate Benefits
Delivery at Discharge (BDD) claims decision making, and in fiscal year
2004, it made almost 90 percent of the Anchorage regional office's
rating-related decisions. The Boston, Newark, and Washington regional
offices were chosen because they had lost a large percentage of their
staff since fiscal year 2001. Also, the Newark and Washington offices
had lost jurisdiction to other regional offices in recent years.
Finally, we visited the Washington office because it is the site of
VBA's Appeals Management Center.
We assessed the reliability of VBA's timeliness and workload data and
found that the data were sufficiently reliable for the purposes of this
report. For data at the VBA-wide level we relied on the assessment we
performed for our November 2004 report on VBA's fiscal year 2005 budget
request.[Footnote 14] For data on workload and timeliness at the
regional office level, we used data from VBA's Distribution of
Operational Resources (DOOR) reports. We were unable to directly assess
the reliability of the data contained in these reports because VBA
officials responsible for putting together the DOOR reports do not
receive claims-level data. For this reason, to corroborate the data in
the DOOR reports, we obtained claims-level data that had been archived
by VBA's Office of Performance Analysis and Integrity (PA&I). We
utilized PA&I's methodology and calculated workload and timeliness
numbers for September 2004 with minimal differences from those
contained in the DOOR reports. This gave us reasonable assurance that
the DOOR numbers accurately reflect VBA's workload and timeliness.
We assessed the reliability of VBA's claims brokering data and found
the data sufficiently reliable for the purposes of this report. We
discussed VBA's brokering data with VBA officials and reviewed guidance
on reporting brokering data. According to VBA, regional offices work
with VBA's area offices to ensure that brokered cases are properly
counted. The area offices, in turn, provide the data to VBA
headquarters. These data are updated monthly. According to VBA, the
Office of Performance Analysis and Integrity reviews and validates
brokering data.
We also assessed the reliability of VBA's fiscal year 2004 benefit
entitlement accuracy data and found that the data were sufficiently
reliable to show the range in accuracy between VBA's most and least
accurate offices, but not to make further distinctions in accuracy
among regional offices. We interviewed officials responsible for VBA's
Systematic Technical Accuracy Review (STAR) program and discussed their
procedures for requesting cases for review. We obtained data by
regional office on the number of cases requested and reviewed. We found
that VBA's STAR unit had requested, but never received or reviewed,
hundreds of sampled cases from its regional offices. This could have
affected regional office accuracy scores for fiscal year 2004. For
example, the Washington regional office's score was reported as 77
percent.[Footnote 15] However, because a large number of cases were
never received by the STAR unit, Washington's accuracy score could have
been as high as 87 percent or as low as 42 percent. According to VBA
officials, VBA is now tracking cases that it requests as part of its
STAR accuracy review sample and charges offices with errors if cases
are not sent in for review.
[End of section]
Appendix II: Comments from the Department of Veterans Affairs:
THE DEPUTY SECRETARY OF VETERANS AFFAIRS:
WASHINGTON:
November 21, 2005:
Ms. Cynthia A. Bascetta:
Director:
Education, Workforce, and Income Security Issues:
U. S. Government Accountability Office:
441 G Street, NW:
Washington, DC 20548:
Dear Ms. Bascetta:
The Department of Veterans Affairs (VA) has reviewed the Government
Accountability Office's (GAO) draft report, VETERANS' BENEFITS: Further
Changes in VBA's Field Office Structure Could Help Improve Disability
Claims Processing, (GAO 06-149). The Department agrees with GAO's
conclusions and concurs fundamentally with its recommendations. The
enclosure provides additional discussion on the recommendation.
VA appreciates the opportunity to comment on your draft report.
Sincerely yours,
Signed by:
Gordon H. Mansfield:
Enclosure:
Department of Veterans Affairs (VA) Comments to Government
Accountability Office (GAO) Draft Report, VETERANS' BENEFITS: Future
changes In VBA's Field Office Structure Could Help Improve Disability
Claims Processing (GAO-06-149):
To help ensure more timely, accurate, and consistent decisions In a
cost-effective manner, we recommend that the Secretary of Veterans
Affairs direct the Under Secretary for Benefits to undertake a
comprehensive review of VBA's field structure for processing disability
compensation and pension claims. This review would address staff
deployment, opportunities for consolidating disability compensation and
pension claims processing, and human capital and real property issues.
Concur - As the report indicates, VBA has successfully consolidated
various portions of our Compensation and Pension (C&P) workload over
the last several years. This restructuring has resulted in several
positive outcomes including improved proficiency, greater accuracy, and
consistency in operations. This report recommends VBA study further
consolidation of claims processing within the C&P business line. VBA
agrees with the need to continually examine areas which can be
potentially consolidated; however, additional factors beyond human
capital and real estate must be considered when exploring field
restructuring. As past experience has proven, consolidation is not
simply a shift in human resources and real estate, but rather a complex
process which often involves changes in procedures and policies, as
well as input and support from service organizations, Members of
Congress, and our labor partners. External stakeholders have
historically exhibited a parochial interest in VBA processing
activities remaining in their jurisdiction. Additionally, maintaining a
presence in each geographical region allows VBA to meet the unique
needs of veterans in a particular area. It is also imperative when
considering consolidation that appropriate studies take place to ensure
that a positive impact on performance occurs. Field restructuring
oftentimes results in a short-term negative impact before performance
improvements are realized.
VBA fundamentally agrees with the findings in this report and the
recommendation to reexamine our C&P processing structure. We will
establish a task force to thoroughly explore potential areas for
further consolidation.
[End of section]
FOOTNOTES
[1] GAO, High-Risk Series: An Update, GAO-03-119 (Washington, D.C.:
January 2003).
[2] For example, see GAO, Veterans' Disability Benefits: Claims
Processing Problems Persist and Major Performance Improvements May Be
Difficult, GAO-05-749T (Washington, D.C.: May 26, 2005).
[3] For example, see GAO, VA Disability Benefits: Board of Veterans'
Appeals Has Made Improvements in Quality Assurance, but Challenges
Remain for VA in Assuring Consistency, GAO-05-655T (Washington, D.C.:
May 5, 2005).
[4] A reopened compensation claim could be filed by a veteran seeking
an increase in disability rating based on the worsening of a service-
connected disability, or by a veteran seeking compensation for a
previously unclaimed disability.
[5] Veterans age 65 and older do not have to be permanently and totally
disabled to become eligible for pension benefits, as long as they meet
the other requirements for income and military service. VBA also pays
pensions to surviving spouses and unmarried children of deceased
wartime veterans.
[6] GAO, Veterans Benefits Administration: Problems and Challenges
Facing Disability Claims Processing, GAO/T-HEHS/AIMD-00-146
(Washington, D.C.: May 18, 2000).
[7] The resource centers are located at the regional offices in San
Diego, California; St. Petersburg, Florida; Togus, Maine; St. Louis,
Missouri; Muskogee, Oklahoma; Philadelphia, Pennsylvania; Columbia,
South Carolina; Seattle, Washington; and Huntington, West Virginia.
[8] VBA also provides dependency and indemnity compensation to
survivors of certain deceased disability compensation beneficiaries.
[9] Other regional offices have jurisdiction for claims from veterans
residing outside the United States. Veterans residing in Canada can
file claims with VBA's White River Junction, Vermont, regional office;
veterans residing in Mexico, Central and South America, and the
Caribbean can file claims at the Houston, Texas, regional office.
[10] GAO-05-655T and GAO, Veterans Benefits: VA Needs Plan for
Assessing Consistency of Decisions, GAO-05-99 (Washington, D.C.: Nov.
19, 2004).
[11] National Academy of Public Administration, Management of
Compensation and Pension Benefits Claims Processes for Veterans
(Washington, D.C.: August 1997).
[12] Report of the Congressional Commission on Servicemembers and
Veterans Transition Assistance (Washington, D.C.: Jan. 14, 1999).
[13] Veterans Benefits Administration, Field Restructuring: Progress
Report and Transition Year Recommendations (Washington, D.C.: December
1995).
[14] GAO, Veterans' Benefits: More Transparency Needed to Improve
Oversight of VBA's Compensation and Pension Staffing Levels, GAO-05-47
(Washington, D.C.: Nov. 15, 2004).
[15] Since the STAR rating accuracy scores are estimates for each
office based on a sample of cases, these scores have margins of error
associated with them. The Washington regional office's accuracy figure
of 77 percent has a margin of error of no more than 7.6 percent at the
95 percent level of confidence.
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