Report Summary

Title: Audit of VBA's Pension Payments
Report Number: 12-00181-299
Issue Date: 9/4/2013
City/State: Milwaukee, WI
St. Paul, MN
Philadelphia, PA
VA Office: Veterans Benefits Administration (VBA)
Report Author: Office of Audits and Evaluations
Report Type: Audits, Reviews & Evaluations
Release Type: Unrestricted
Summary: We conducted this audit to determine if the Pension Management Centers (PMCs) processed pension payments accurately. VA paid nearly $5 billion in FY 2012 for pension benefits to over 500,000 low income veterans or their beneficiaries. Delayed or incorrect payments have the potential to affect the economic status of eligible veterans and beneficiaries. Veterans Benefits Administration (VBA) can improve the timeliness, and therefore the accuracy, of pension payment processing. During a 1-year period, an estimated 93,000, or 18% of 514,000 veterans and beneficiaries, experienced an average 15-month delay in receiving their new pension award or adjustments to their current payment. Delays resulted in $308 million in underpayments and $194 million in overpayments. This included retroactive adjustments as early as 2006. Once PMC staff processed the claims, they correctly calculated pension payments for new awards and adjustments 96% of the time. The delays occurred for two primary reasons. First, PMCs did not process new awards and adjustments timely because of an increased workload and a lack of clear communication of priorities. Second, PMCs did not receive timely notification of changes that affected current pension benefits, and did not have an effective plan to reduce the time to collect income, expense, or dependency changes. In addition, VBA systems contained a small rate of duplicate pension records. VBA was aware of the potential for creating duplicate records and began taking action to control them. To reduce notification delays, the Under Secretary for Benefits should ensure Pension and Fiduciary Service implement a plan to reduce under and overpayments due to changes in income and dependency, and establish and implement matching agreements. To reduce processing delays, the Under Secretary should ensure Pension and Fiduciary Service implement new triage and processing procedures at the PMCs. The Under Secretary should implement additional controls to identify and correct duplicate records. The Under Secretary concurred with our recommendations and provided plans for corrective actions.