Follow-Up Audit of VBA's Internal Controls Over Disability Benefits Questionnaires

OIG conducted this audit to assess the Veterans Benefits Administration’s (VBA) implementation of our 2012 recommendations to strengthen internal controls over public-use Disability Benefit Questionnaires (DBQs) and determine whether VBA could use DBQs more effectively. We found VBA did not establish adequate controls to identify and minimize potential DBQ fraud or fully implement our prior recommendations to address control weaknesses. We estimated during the 6 months ending March 2014, claims processors did not identify approximately 23,100 of about 24,700 claims (93 percent) including DBQs. Specifically, we found they did not consistently and correctly record special issue indicators in VBA’s electronic systems to identify claims that included DBQs. VBA controls also did not electronically capture DBQ information, adequately ensure DBQs provide notification that information is subject to verification, confirm claims processors consistently and correctly identify claims including DBQs, or ensure DBQ clinician information was complete. Once VBA strengthens controls, VBA can use DBQs more effectively to improve claims processing. Control weaknesses existed because VBA did not evaluate options to capture DBQ information and revise DBQ forms promptly. VBA also lacked adequate policies and procedures and quality assurance reviews. As a result, VBA lacked reasonable assurance of detecting potential fraud when processing claims including DBQs. Further, unnecessary medical examinations caused veterans and VA to needlessly expend time and money and may have delayed veterans receiving benefits. If VBA does not use DBQs more effectively, we estimate VHA will spend at least $4.8 million annually and at least $24 million over the next 5 years for unnecessary examinations. We recommended the Acting Under Secretary for Benefits develop controls to electronically capture DBQ information, revise DBQ forms, establish and revise policies and procedures, and revise quality assurance reviews.