Report Summary

Title: Audit of VBA’s Management of Concurrent VA and Military Drill Pay Compensation
Report Number: 13-02129-177
Issue Date: 6/3/2014
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 whether the Veterans Benefits Administration (VBA) timely processed VA benefit offsets when drill pay was earned concurrently. Federal regulations prohibit reservists and National Guard members from concurrently receiving VA compensation or pension benefits and military reserve pay, referred to in this report as “drill pay,” earned while training on weekends and during full-time training events. The audit focused on VA benefits offsets for beneficiaries who concurrently received drill pay during fiscal years (FYs) 2011 and 2012. This data represented the most current audit data available at the time we began our audit in August 2013. We determined VBA did not timely process VA benefits offsets when drill pay was earned concurrently. VBA did not timely offset 601 (86 percent) of 700 cases we reviewed for FYs 2011 and 2012. Of the 601 offsets not timely processed, 553 (79 percent) were not processed and the remaining 48 were not processed within VBA’s timeliness standard. According to VBA, higher priorities, such as processing compensation claims, took precedence over processing offsets. VBA also lacked an adequate tracking mechanism, a current cost-benefit analysis, and Systematic Analysis of Operations (SAO) reviews of the drill pay offset process. VBA’s unprocessed rate for FYs 2011 and 2012 is not significantly different from the 90 percent unprocessed rate reported in our 1997 audit. Therefore, it is likely VBA has not processed hundreds of millions of dollars in offsets since our previous report. We project VBA has not offset payments of approximately $48.9 million for FY 2011 and $95.7 million for FY 2012. If VBA improves controls over drill pay offset processing, we project VBA could recover approximately $478.5 million from FY 2013 through FY 2017 of additional payments. In total, VBA could recover approximately $623.1 million in improper payments.
We recommended the Under Secretary for Benefits implement measures to ensure drill pay offsets are timely processed, process all offsets for FYs 2011 and 2012, more effectively track and monitor offsets, update the cost-benefit analysis, and include drill pay offset processing in SAOs. The Under Secretary concurred with our recommendations and submitted a corrective action plan.