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Fiscal Year 2006 Performance and Accountability Report
Published November 15, 2006
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Veterans Benefits Administration Quality Assurance Program (Millennium Act)
VBA maintains a quality assurance program independent of the field stations responsible for processing claims and delivering benefits. The following information about our programs-including compensation and pension, education, vocational rehabilitation and employment, housing, and insurance-is provided in accordance with title 38, section 7734.
Cases Reviewed and Employees Assigned by Program
| Cases Reviewed |
Employees Assigned |
| Compensation and Pension (C&P) |
15,200 |
18 |
| Education |
1,189 |
4 |
| Vocational Rehabilitation and Employment |
4,669 |
5 |
| Loan Guaranty (Housing) |
4,530 |
14 |
| Insurance |
11,040 |
4 |
Accuracy reviews are accomplished through an outcome-based system, the Systematic Technical Accuracy Review (STAR). STAR reports are based on the month that a case was completed, not when reviewed. Cases are to be submitted for review no later than the end of the following month.
Reviews of rating-related work and authorization-related products have a specific focus:
- The benefit entitlement review ensures all issues were addressed, claims assistance was provided (under the Veterans Claims Assistance Act), and the resulting decision was correct, including effective dates.
- The decision documentation/notification review ensures adequate and correct decision documentation and proper decision notification.
Results for C&P rating and authorization reviews for the 12-month period ending May 31, 2006, are as follows:
| Rating Reviews |
Authorization Reviews |
| Reviewed |
Accuracy |
Reviewed |
Accuracy |
| Benefit Entitlement |
6,458 |
88% |
5,074 |
91% |
| Decision Documentation & Notification |
6,458 |
92% |
5,074 |
90% |
The third type of review pertains to fiduciary work. The fiduciary review for 2006 was based on 3,668 cases with an accuracy rate of 84 percent. Most of the errors were found in the area of protection. "Protection"" includes oversight of the fiduciary/beneficiary arrangement, analysis of accounting, adequacy of protective measures for the residual estate, and any measures taken to ensure that VA funds are used for the welfare and needs of the beneficiary and recognized dependents. If any of the individual components is in error, the entire case is in error.
Regional offices are required to certify corrective actions taken quarterly for errors documented by STAR. Reports on the corrective actions are submitted to VBA Headquarters, where they are reviewed to determine the adequacy of such actions. Reliability of the reports is monitored during cyclical management site visits. Area offices continue to provide oversight for regional offices, directing the development and implementation of wellness plans as needs arise.
Enhancements to the STAR database and improved procedures to maintain adequate sample size increase feedback provided to the field offices for training purposes. STAR maintains a national review database available though an Intranet Web site. Monthly data reports are provided on a 12-month cumulative basis.
The fiduciary STAR team uses a philosophy of consistency in review and a policy of assigning a dedicated STAR reviewer to specific field stations. Common STAR error findings are used for discussion and training during scheduled site visits and as agenda items for quarterly fiduciary program teleconference calls.
Training remains a priority and is conducted using a variety of mediums including satellite broadcasts, training letters, and computer-assisted training. C&P Training and STAR staffs collaborate on training based on error trend analysis. Particular effort is made to ensure high-quality centralized training for new Veterans Service Representatives (VSRs) and Rating Veterans Service Representatives (RVSRs).
VBA implemented national individual performance review plans with standardized review categories, sample size, and performance standards for all VSRs and RVSRs. VBA continues to work closely with VHA to improve the quality of examination requests and reports. Efforts include measuring request and report accuracy, developing CD-ROM and Web-based training materials, and sponsoring quality improvement training sessions for key medical center and regional office staff. The STAR staff, out-based/hospital liaison RVSRs, and C&P Examination Program employees perform examination quality reviews. Another collaborative VBA/VHA initiative in the examination improvement process is the creation of standardized computerized templates for all 57 VBA examination worksheets. VBA will complete a review and approval process of the content in all templates during fiscal year 2007. Revised templates have been and will continue to be distributed to all VHA examination facilities on targeted release dates.
Education Service reviewed 1,189 cases in 2006. Of these, there were 45 decisions with payment errors and 131 with service errors (note: some cases had more than 1 service error). Eligibility and entitlement determinations constituted approximately 3.1 percent of the service errors, while development and due process notification errors were 16.8 and 24.4 percent, respectively. From 2005 to 2006, payment accuracy declined slightly from 96.9 to 96.2 percent.
As in previous years, the 2006 quarterly quality results identified error trends and causes that became topics for refresher training in regional processing offices. In addition, annual appraisal and assistance visits provided recommendations for improving specific quality areas.
Education Service is continuing to develop standardized training and certification for employees. The project is expected to have a significant impact in raising quality scores and maintaining them at high levels as the initiative is fully implemented over the next few years.
For 2006 VR&E completed quality assurance (QA) reviews on 4,669 cases. The reviews were conducted over a 12-month period, with each regional office having been reviewed twice during the fiscal year. The goal was to review at least 76 cases from each regional office.
| Accuracy Elements (As of July 2006) |
Target Score 2006 |
Actual Score 2006 |
| Accuracy of Entitlement Determinations |
96% |
97.4% |
| Accuracy of Evaluation, Planning, and Rehabilitation Services |
87% |
82.8% |
| Accuracy of Fiscal Decisions |
94% |
79.3% |
| Accuracy of Outcome Decisions |
92% |
94.8% |
In addition to review of cases from each regional office, the QA & Field Survey Team conducts site visits of regional offices. There were 15 offices surveyed this fiscal year.
The VR&E accuracy scores met or exceeded the target scores for FY 2006 in the following two elements: Accuracy of Entitlement Decisions and Accuracy of Outcome Decisions. These scores are attributed to the following initiatives implemented over the last 3 years:
Local QA reviews continue to be implemented in all regional offices. Each regional office conducts a review of 10 percent of its caseload each year. This ensures consistency in the QA review process and office procedures. The QA Reconsideration Review Board continues to provide resolutions on any station's request for reconsideration of decisions made during a review. This auxiliary review process clarifies implementation of VR&E policies and regulatory guidelines. The QA review results for national and local reviews have been made available through an Intranet Web site. These data enable regional offices to assess individual quality and to identify training needs. The redesign of the Site Survey Protocol now includes the review of contracting activities.
The Loan Guaranty housing program reviewed 4,530 cases under its statistical quality control program during 2006. The defect rate equaled 1.5 percent, with the current national accuracy index being 98.5 percent. This is an improvement of a 0.1 percentage point from 2005.
The housing quality assurance program includes elements beyond the review of cases. The VBA Lender Monitoring Unit performed 51 on-site audits and 44 in-house audits of lenders participating in VA's home loan program.
The Portfolio Loan Oversight Unit (PLOU) conducts two types of reviews: in-house and on-site. PLOU reviewed 83 billing invoices and completed 6,622 associated invoice reviews of the portfolio services contractor, as well as 18,579 non-invoice reviews related to contract compliance. PLOU also conducted special detailed analyses and research on 5,839 portfolio loans and Real Estate Owned properties, with a total of $203,545 in associated dollar adjustments. Additionally, PLOU conducted research and tracking on funds due the Department based on monies flowing through the Department of Justice to VA. The amount traced and recovered for VA to date exceeds $4.6 million.
Loan Guaranty staff conducted 10 on-site reviews of regional loan centers. On-site performance reviews are generally conducted in cooperation with VA's oversight review team, whose members include: Loan Guaranty Service (Loan Management); the Indianapolis regional office-based branch of Loan Management (PLOU); the Office of Inspector General (Financial Audit Division); the Office of Business Oversight (Management Quality Assurance Service and Systems Quality Assurance Service); and the Office of Resource Management (Finance and Administrative Services).
In 2006 the reviews by Loan Management/PLOU recovered excessive contractor charges in the amount of $12,694. PLOU identified additional amounts relating to real estate tax penalties on GI loan property conveyances of some $44,164 as of the end of 2006, and also identified or recovered taxes and penalties of approximately $25,975. PLOU also discovered approximately $295,200 of potentially recoverable amounts from GI lenders in connection with title issues. Additionally, PLOU has now identified in excess of $3 million in unwarranted costs resulting from delays or errors by the prior servicing contractor. Actions are being initiated to recover these monies. VA audits of lenders during 2006 amounted to approximately $3,200,000 in liability avoidance with 72 indemnifications.
The Loan Guaranty Service disseminates the results of statistical quality control (SQC) reviews to field offices on a monthly basis. The Service prepares and releases trend reports that identify negative trends and action items found during surveys. The reports are published to assist field personnel in identifying frequent problems facing loan guaranty management. Additionally, summaries of best practices employed by individual field stations are disseminated to all field stations with loan guaranty activity.
National training is provided to enhance the quality of service provided to veterans and to increase lender compliance with VA policies. Lenders who significantly fail to comply with policies are either required to enter into indemnification agreements with VA or immediately repay the agency for its losses.
VA awarded a property management services contract to Ocwen Loan Servicing, LLC (Ocwen) in August 2003. Under this contract, Ocwen manages and sells all VA-acquired properties as a result of foreclosure or termination of GI and portfolio loans. These assets are currently worth over $1 billion. VA began transitioning properties to Ocwen in early December 2003. Loan Guaranty established the Property Management Oversight Unit (PMOU) in 2004 to monitor the management and marketing of the properties by Ocwen. The PMOU monitors Ocwen's performance by inspecting properties nationwide to ensure compliance with the contract requirements and performs on-site case reviews at Ocwen's operations center on a quarterly basis. The PMOU is also responsible for reviewing and certifying all payments made to Ocwen, including reimbursement of out-of-pocket expenses on VA properties as well as the service provider fee due when the property is sold. This requires quality assurance checks to ensure that Ocwen is entitled to the claimed reimbursement.
The Insurance program's principal quality assurance tool is the SQC review. It assesses the ongoing quality and timeliness of work products by reviewing a random sample of completed or pending work products. These work products are generally grouped into two broad categories based on the operating divisions in which they are performed - Policyholders Services or Insurance Claims Divisions.
Policyholders Services, whose work products deal with the maintenance of active insurance policies, had an overall accuracy rate of 97.5 percent for 2006. Work products included correspondence, applications, disbursements, record maintenance, refunds, and telephone inquiries. Insurance Claims Divisions are responsible for the payment of death and disability awards, the issuance of new coverage, and the processing of beneficiary designations. The accuracy rate for Insurance Claims work products was 99 percent. Work products included death claims, awards maintenance, beneficiary and option changes, disability claims, and medical applications. In total, 98.2 percent of all 2006 insurance work products were accurate.
Over 98 percent of the work measured in Policyholders Services and 97.5 percent in Insurance Claims was within accepted timeliness standards. In all, 97.8 percent of 2006 insurance work products were timely.
The insurance quality assurance program also includes internal control reviews and individual employee performance reviews. The internal control staff reviews 100 percent of all employee-prepared disbursements and also reviews insurance operations for fraud through a variety of reports. Reports are generated daily and identify death claims based on specific criteria that indicate possible fraud. Primary end products processed by employees in the operating divisions are evaluated based on the elements identified in the Individual Employee Performance Requirements. As a result of these controls, insurance disbursements are 98.4 percent accurate.
The Insurance Service uses SQC and employee performance review programs to measure quality and timeliness on an overall and individual basis. Both programs are valuable as training tools because they identify trends and problem areas. When a reviewer finds an error or discrepancy during a review, he or she prepares an exception sheet that clearly describes how the item was processed incorrectly. The noted item is then reviewed with the person who incorrectly processed the form.
SQC reviews are based on random samples of key work products and evaluate how well these work products are processed in terms of both quality and timeliness. Exceptions are brought to the attention of the insurance operations division chiefs, unit supervisors, and employees who worked the case.
VBA's Insurance Service evaluates the SQC programs periodically to determine if they are functioning as intended. The Insurance Service recently updated error and discrepancy codes to correspond with changing processes.
Individual performance reviews are conducted monthly. The performance levels - critical and non-critical elements - are identified in the Individual Employee Performance Requirements. These reviews are based on a random sampling of the primary end products turned out by employees in the operating divisions. Those items found to have errors are returned to the employee for correction. At the end of the month, supervisors inform employees of their error rates and timeliness percentages as compared to acceptable standards.
The Insurance program has successfully implemented a dozen job aids under the initiative called "Skills, Knowledge and Insurance Practices and Procedures Embedded in Systems." This program captures "best practices" for processing various work items and makes them available on each employee's desktop. It is expected that the job aids will further reduce error rates and improve timeliness.
In addition to the actions above, the Internal Control Staff records and returns work with any errors detected while conducting reviews. The records are continuously analyzed, and corrective training and other steps are taken to reduce/eliminate such errors.
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