Veterans Received Inaccurate Disability Benefit Payments After Reserve or National Guard Drill Pay Adjustments

The OIG examined whether disability benefit adjustments were calculated accurately for veterans who served in the Reserve or National Guard. These veterans may have been eligible for military training pay, or “drill pay.” However, they are not entitled to receive drill pay and disability benefits in the same fiscal year. The Veterans Benefits Administration (VBA) asks veterans to choose between drill pay and disability benefits, and adjusts payment accordingly. VBA adjusts most payments using an automated process, except staff should manually adjust payments if the veterans have spent days in active duty status. This helps ensure they did not receive disability and drill pay benefits in the same fiscal year. The review team found that VBA inaccurately processed about 11 percent of adjustments in fiscal year (FY) 2016, resulting in an estimated $14.2 million in overpayments and underpayments to veterans. The team noted that VBA did not review the accuracy of automatically completed adjustments and that the automated system was not programmed to remove some cases that required manual processing. Staff in VBA’s Intake Processing Center were also unfamiliar with procedures to remove cases from the automated system when veterans responded to letters about proposed benefits. The review team found that training for VBA staff lacked detailed instructions on completing disability benefit adjustments. The OIG recommended that VBA review FY 2016 drill pay adjustments involving active duty periods and take corrective action as necessary. The OIG also recommended a review of FY 2016 adjustments that involved a veteran responding to VBA’s letter about proposed drill pay. Further, VBA should remind staff of their responsibilities for processing responses and implement a plan to ensure compliance. Finally, the OIG recommended that VBA implement a plan to provide detailed training for staff who process drill pay adjustments and monitor the training’s effectiveness.