Poor Oversight Raises Veterans Benefit Cost by $1 Billion

Benefits for U.S. military veterans will cost an extra $1.14 billion in the next five years without management improvements in an agency already criticized for health-care delays, according to an inspector general’s report.

The Department of Veterans Affairs inaccurately processed about one-third of the benefit claims during a two-month review and failed to make a final decision on claims for almost 6,900 veterans, according to testimony from the VA’s Office of Inspector General.

The Veterans Benefits Administration, an arm of the VA that oversees $73 billion in annual claims, “continues to have notable weaknesses in financial stewardship,” Linda Halliday, assistant inspector general, said in testimony released today in advance of a House Veterans Affairs committee hearing in Washington.

Former VA Secretary Eric Shinseki resigned in May following the disclosure that some VA hospitals kept phony records to hide delays in treating veterans. As many as 35 veterans on a secret list in Phoenix died while awaiting health care, acting VA Secretary Sloan Gibson has said. The agency has a $160 billion budget.

Improving veterans’ health care has become the top legislative priority for Americans, according to a Gallup poll released June 13 that asked respondents about nine issues, including a minimum wage increase and immigration policy. Almost nine of 10 Americans said it was extremely important or very important to improve health care for military veterans.

VA Secretary

President Barack Obama has nominated former Procter & Gamble Co. Chief Executive Officer Bob McDonald to become VA secretary. It requires Senate confirmation.

In the six weeks since Shinseki stepped down, lawmakers haven’t been able to agree on legislation to reduce the long waits for veterans trying to schedule medical appointments.

Cost has emerged as the biggest hurdle for lawmakers. The Senate’s proposal will cost $35 billion over 10 years, according to a report by the Congressional Budget Office, a nonpartisan financial scorekeeper. The Senate plan would, among other things, expand veterans’ access to non-VA medical facilities.

Halliday’s prepared testimony said 81,000 veterans received VA benefits in 2012 while getting military reserve pay, which is prohibited under federal law. Improving controls over such payments would help the department recover $478.5 million over the next five years, according to her statement.

Inappropriate evaluation of veterans claiming to be fully disabled will cost the VA another $456 million over the same period, according to Halliday’s testimony. During that time, the VA will make about $205 million in inaccurate payments under the G.I. Bill, which provides college tuition benefits, according to her statement.

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