Waste & Delays: Examining VA's Improper Payments in its Compensation and Pension Programs

1[House Hearing, 119 Congress]2[From the U.S. Government Publishing Office]34                     WASTE & DELAYS: EXAMINING VA'S5                        IMPROPER PAYMENTS IN ITS6                   COMPENSATION AND PENSION PROGRAMS78=======================================================================910                                HEARING1112                               BEFORE THE1314                      SUBCOMMITTEE ON DISABILITY15                    ASSISTANCE AND MEMORIAL AFFAIRS1617                                 OF THE1819                     COMMITTEE ON VETERANS' AFFAIRS2021                     U.S. HOUSE OF REPRESENTATIVES2223                    ONE HUNDRED NINETEENTH CONGRESS2425                             FIRST SESSION2627                               __________2829                        WEDNESDAY, MAY 14, 20253031                               __________3233                           Serial No. 119-203435                               __________3637       Printed for the use of the Committee on Veterans' Affairs3839[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]4041                    Available via http://govinfo.gov4243                                __________4445                   U.S. GOVERNMENT PUBLISHING OFFICE4661-153                 WASHINGTON : 20254748-----------------------------------------------------------------------------------4950                     COMMITTEE ON VETERANS' AFFAIRS5152                     MIKE BOST, Illinois, Chairman5354AUMUA AMATA COLEMAN RADEWAGEN,       MARK TAKANO, California, Ranking55    American Samoa, Vice-Chairwoman      Member56JACK BERGMAN, Michigan               JULIA BROWNLEY, California57NANCY MACE, South Carolina           CHRIS PAPPAS, New Hampshire58MARIANNETTE MILLER-MEEKS, Iowa       SHEILA CHERFILUS-MCCORMICK,59GREGORY F. MURPHY, North Carolina        Florida60DERRICK VAN ORDEN, Wisconsin         MORGAN MCGARVEY, Kentucky61MORGAN LUTTRELL, Texas               DELIA RAMIREZ, Illinois62JUAN CISCOMANI, Arizona              NIKKI BUDZINSKI, Illinois63KEITH SELF, Texas                    TIMOTHY M. KENNEDY, New York64JEN KIGGANS, Virginia                MAXINE DEXTER, Oregon65ABE HAMADEH, Arizona                 HERB CONAWAY, New Jersey66KIMBERLYN KING-HINDS, Northern       KELLY MORRISON, Minnesota67    Mariana Islands68TOM BARRETT, Michigan6970                       Jon Clark, Staff Director71                  Matt Reel, Democratic Staff Director7273       SUBCOMMITTEE ON DISABILITY ASSISTANCE AND MEMORIAL AFFAIRS7475                    MORGAN LUTTRELL, Texas, Chairman7677AUMUA AMATA COLEMAN RADEWAGEN,       MORGAN MCGARVEY, Kentucky, Ranking78    American Samoa                       Member79JACK BERGMAN, Michigan               CHRIS PAPPAS, New Hampshire80NANCY MACE, South Carolina           MAXINE DEXTER, Oregon81KEITH SELF, Texas                    KELLY MORRISON, Minnesota8283Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public84hearing records of the Committee on Veterans' Affairs are also85published in electronic form. The printed hearing record remains the86official version. Because electronic submissions are used to prepare87both printed and electronic versions of the hearing record, the process88of converting between various electronic formats may introduce89unintentional errors or omissions. Such occurrences are inherent in the90current publication process and should diminish as the process is91further refined.9293                         C  O  N  T  E  N  T  S9495                              ----------9697                        WEDNESDAY, MAY 14, 20259899                                                                   Page100101                           OPENING STATEMENTS102103The Honorable Morgan Luttrell, Chairman..........................     1104The Honorable Morgan McGarvey, Ranking Member....................     2105106                               WITNESSES107                                Panel I108109Ms. Nina Tann, Executive Director, Compensation Service, Veterans110  Benefits Administration, U.S. Department of Veterans Affairs...     4111112        Accompanied by:113114    Mr. Kevin Friel, Executive Director, Pension and Fiduciary115        Service, Compensation Service, Veterans Benefits116        Administration, U.S. Department of Veterans Affairs117118    Ms. Jeanine Gilson, Acting Chief Financial Officer, Veterans119        Benefits Administration, U.S. Department of Veterans120        Affairs121122Mr. Brent E. Arronte, Deputy Assistant Inspector General for123  Audits and Evaluations, Office of the Inspector General, U.S.124  Department of Veterans Affairs.................................     6125126                                APPENDIX127                    Prepared Statements Of Witnesses128129Ms. Nina Tann Prepared Statement.................................    23130Mr. Brent E. Arronte Prepared Statement..........................    27131132                       Statements For The Record133134Paralyzed Veterans of America Prepared Statement.................    39135Veterans of Foreign Wars of the United States Prepared Statement.    41136137                     WASTE & DELAYS: EXAMINING VA'S138                        IMPROPER PAYMENTS IN ITS139                   COMPENSATION AND PENSION PROGRAMS140141                              ----------142143                        WEDNESDAY, MAY 14, 2025144145   Subcommittee on Disability Assistance &146                          Memorial Affairs,147                    Committee on Veterans' Affairs,148                             U.S. House of Representatives,149                                                    Washington, DC.150    The subcommittee met, pursuant to notice, at 10:15 a.m., in151room 360, Cannon House Office Building, Hon. Morgan Luttrell152(chairman of the subcommittee) presiding.153    Present: Representatives Luttrell, Radewagen, Bergman,154Mace, Self, McGarvey, Pappas, Dexter, and Morrison.155156         OPENING STATEMENT OF MORGAN LUTTRELL, CHAIRMAN157158    Mr. Luttrell. The subcommittee will come to order. Thank159you to all the witnesses for being here today. We are going to160take a closer look at the U. S. Department of Veterans Affairs'161(VA) efforts to decrease improper payments for compensation and162pension benefits.163    Congress has appropriated over $150 billion to the VA each164year for the past few years. We must ensure the VA is a165responsible steward of the taxpayer's investments. This means166paying every veteran the correct amount of benefits they have167earned the first time. When the VA makes overpayments and they168are not returned, taxpayer dollars are obviously wasted.169Overpayments can result in VA establishing debts that veterans170owe back to the VA, which can obviously create a paperwork171nightmare for them and their families. Current law allows VA to172either cancel these overpayment debts or waive collection of173those debts.174    From Fiscal Year 2021 to 2024, VA has issued at least $5.1175billion in compensation and pension overpayments. VA collected176only a portion of those overpayment debts. This means that177during the last administration, VA spent $677 million in178taxpayer dollars roughly.179    For example, Veterans Service Organizations (VSOs) and some180of my colleagues in Congress have told me that VA overpaid181their constituents for dependents. Those veterans correctly and182immediately updated VA that they no longer had a dependent183child or spouse. VA did not update the benefit payment184obviously until months later. As a result, many of those185veterans owe VA debt and are dealing with the stress of186repaying that underneath the waiver of collection for that187debt. If the VA did not make these overpayments in the first188place, obviously there would be fewer wasted taxpayer dollars189resulting in fewer uncollected overpayments.190    I look forward to hearing from the VA witnesses today on191what the new administration plans to do to fix these192bureaucratic headaches and prevent delays in processing193dependent status updates. We have to streamline these things in194order to take the pressure off of our veterans.195    There are other causes for VA improper payments of196compensation and pensions. For example, the VA Office of197Inspector General (OIG) issued several reports on how198inaccurate effective dates resulted in improper payments during199the last administration. The effective date for a grant of a200claim determines the amount a veteran will receive in201disability compensation back pay. OIG has issued reports,202including one in April, that VA incorrectly assigned effective203dates when it granted certain types of claims, such as the204Sergeant First Class Heath Robinson Honoring our Promise to205Address Comprehensive Toxics (PACT) Act claims and claims for206total ratings due to unemployability. OIG estimated those207incorrect effective dates resulted in at least $100 million in208improper compensation payments.209    OIG found that the cause was ineffective policy guidance,210job aids, and training when it comes to assigning effective211dates of awards. I understand that this can be very difficult212to determine. I understand this can be very difficult to213determine the effective date of the award. I look forward to214hearing from OIG today and how the VA should provide claims215processors with effective training and guidance on how to216assign correct effective dates for all types of compensation217and pension claims.218    Ultimately, when veterans owe VA a debt at no fault of219their own, why should taxpayers have to foot the bill? We must220ensure that VA makes every effort to prevent overpayments from221happening in the first place. I look forward to hearing from222our witnesses today on how we can cut down on wasteful spending223from improper payments and compensation and pension.224    With that, I yield to the ranking member for his opening225statement.226227      OPENING STATEMENT OF MORGAN MCGARVEY, RANKING MEMBER228229    Mr. McGarvey. Thank you, Mr. Chairman. Appreciate your230comments and thank you all for being here today.231    We have a responsibility to make sure that the VA uses232taxpayer money in an efficient and correct way. We also need to233guarantee that the VA pays each and every beneficiary what they234are due. Today I want to have a genuine conversation on what235works and what does not. I am not here to chastise the VA over236their supposed fiscal wrongdoing and then leave without ideas237for making the VA work better for the veteran.238    I am also not here to just defend the status quo because,239at the end of the day, everything we do on this committee must240be centered around the veteran. It must make things better for241the veteran.242    We are looking at massive programs here, complicated,243imperfect programs. I know we need to work to make them better.244To do that we are going to have to push for real efficiencies245and improvements. We absolutely need to make sure strong246payment controls are in place. Now that the VA is pushing out247more money than ever thanks to the PACT Act, we need to make248sure that the VA remains a good steward of taxpayer dollars,249but we must be precise. If we take an overly punitive and250difficult approach to compensation and pension payments, we run251the risk of leaving veterans out in the rain without the252benefits they have earned. I stress that they have earned.253These are the men and women who have put on the uniform for us.254They have earned these benefits. That does not mean it is an255anything goes policy with no guardrails. I believe this issue256deserves a bit more nuanced consideration than some of the257issues we deal with here.258    I would love to say this is an easy fix, that the over259130,000 PACT Act claims will go through without incorrect260effective dates, that every veteran who gets divorced will261immediately notify the VA before they incur debts, or their262grieving widow will catch an overpayment during a difficult and263confusing time. That is not the case. It is not reality. As I264said, these are large, complex systems, and not only are they265run by humans, they are used by humans. That means there will266be errors, and even with the best possible software, there is267going to be some mistakes. Our goal, and I believe it is the268VA's goal as well, is to work hard to fully minimize any of269those errors or mistakes, get the veterans what they need, and270be strong stewards of taxpayer money.271    I think we are all rowing the boat in that direction. I do272not suspect misconduct and incompetence around every corner. I273hope that today we can have a discussion with that nuance. I274also want to ensure that as we work to help the VA reduce the275errors in their payment systems, we are equally concerned about276what these errors mean to the beneficiaries on the other end.277That is our veterans.278    Committee staff visited the Debt Management Center in279February and heard a couple of firsthand accounts of veterans280being confused, angry, and even suicidal because they incurred281a debt they did not know about. That is what I want to avoid. I282want to make sure that the VA has processes in place to protect283veterans and other beneficiaries, as well as the call center284employees taking their calls.285    Mr. Chairman, I know it is both of our goals, that while we286look for ways to make the VA better, we do not forget the287veterans and the survivors and those serving them in the288process. I look forward to a productive discussion, and I yield289back.290    Mr. Luttrell. Thank you, Mr. McGarvey. Welcome, everyone,291and thank you for coming today. I am going to introduce our292witnesses.293    Our lead witness from the VA is Ms. Nina Tann, executive294director of compensation services at Veterans Benefits295Administration (VBA). Ms. Tann is joined by Mr. Kevin Friel,296executive director of pension and fiduciary services at VBA.297Ms. Tann is also joined by Ms. Jeanine Gilson, acting chief298financial officer for the VBA. Today's witness panel is also--299it also includes Mr. Brent Arronte, deputy assistant inspector300general for audits and evaluations at the VA Office of the301Inspector General.302    Mr. Arronte, do I understand it correctly, this will not be303the last time I am seeing you or are they putting you out to304graze?305    Mr. Arronte. By choice. I think 90 percent this will be my306last hearing.307    Mr. Luttrell. Well, if that is the case. It has been an308absolute pleasure working with you over these past few years.309    Mr. Arronte. Thank you, sir.310    Mr. Luttrell. Fair winds and following seas, my friend.311That is a Navy term. Hope you understand it.312    I ask the witnesses on the panel to please stand and raise313your right hand.314    [Witnesses sworn.]315    Mr. Luttrell. Thank you. Let the record reflect that the316witnesses have answered in the affirmative.317    Ms. Tann, you are now recognized for 5 minutes to deliver318your opening statement on behalf of the VA. Ms. Tann, is your319mic on?320321                     STATEMENT OF NINA TANN322323    Ms. Tann. I am sorry. Good morning. Chairman Luttrell,324Ranking Member McGarvey, and members of the subcommittee. Thank325you for the opportunity to appear before you today to discuss326the Department of Veteran Affairs' oversight of improper327payments within compensation and pension programs. With me328today from the Veterans Benefits Administration is Kevin Friel,329Executive Director, Pension and Fiduciary Service, and Jeanine330Gilson, active Chief Financial Officer.331    At VA, we take our mission to serve veterans, their332families, and survivors very seriously. We are committed to333being good stewards of taxpayer dollars and we recognize that334improper payments are problematic for all of our stakeholders.335An improper payment occurs when a payment is made in the wrong336amount, either too much or too little, paid to the wrong person337or paid without the required documentation. We want to assure338Congress, veterans, and the American taxpayers that VA is339working diligently to safeguard not only veterans' and340beneficiaries' financial entitlements, but also the funds341appropriated to VA to carry out our sacred and honorable342mission. VA is using a range of strategies to proactively343address and mitigate potential improper payment issues, which I344will discuss today.345    In Fiscal Year 2024, VA reduced improper payments by about346a billion dollars. Achieving this result was made possible by347leveraging data sharing agreements with multiple Federal348agencies. These provide critical information that inform the349propriety of payments, such as benefits related to military350duty status, benefit changes due to death, and income-related351information. Additionally, these partners provide information352that helps identify discrepancies or confirm information. These353agreements are used to establish or verify eligibility for354Federal benefits, verify compliance with Federal benefit355programs, recoup payments or delinquent funds, as well as356investigate potential fraud, waste, or abuse.357    For example, VA made several improvements to data matching358agreements for VA's income-based pension benefits. VA now uses359Federal tax information to verify an applicant's income upfront360and income matching with the Social Security Administration to361verify continued eligibility for income-based benefits. In362addition to these strategies, VA continuously examines our363systems and processes to improve timeliness and accuracy,364thereby reducing improper payments.365    In December 2024, VA modified its procedural guidance to366liberally interpret reevaluation provisions for dependency and367indemnity compensation (DIC) claims. These changes streamline368the decision-making process to mitigate the likelihood of369underpayments and ensure VA renders the correct decision the370first time. Additionally, these changes reduce requests for371unnecessary information and simplify the claim review process.372    An area of crucial importance in making accurate payments373is the correct application of effective dates by claims374processors. Training and oversight through quality assurance375(QA) and having proper internal controls in place are at the376core of this issue. VA has taken steps to enhance training and377oversight of effective dates through use of quality standdowns,378refresher training to include a release of PACT Act training379that focus heavily on effective dates, and publication of job380aids based on findings from Special Focus Review, which allow381tracking and trending of errors. We also welcome the review and382analysis of our Office of Inspector General partners to examine383our procedures and identify areas for improvement.384    For example, on April 15, OIG published a report on PACT385Act effective dates. In response to the OIG's six386recommendations, VBA is ensuring claims processors have the387guidance, training, and tools they need to assign the most388advantageous effective dates allowed by law for veterans389claims. VBA is also enhancing our collaboration with the Board390of Veterans Appeals and the Office of General Counsel (OFG) to391improve the quality, comprehensiveness, and legal accuracy of392its training programs in an effort to reduce delays, avoidable393errors, and rework.394    VBA internal controls play a key role in reduction of395improper payments and include a robust quality program to396monitor claim accuracy. VA cannot reduce improper payments397alone. We need help from our veterans and beneficiaries to398reduce avoidable improper payments through the timely reporting399of updated information. Any changes to information such as400marital status, income, or dependency status must be shared401with VA as quickly as possible to avoid overpayments and402underpayments.403    For example, if a veteran and their spouse divorce and VA404is not notified, this will result in an overpayment and405potentially a debt that the veteran will have to pay. It is406very important that veterans report any such changes to VA as407quickly as possible. To better support this, VA is working to408improve how it communicates the importance of reporting such409changes to veterans and beneficiaries and to make reporting410these changes as easily as possible. We are exploring411communication avenues to ensure veterans are aware of what412information we have and when they need to report a change.413    VA continues to make improvements on reducing improper414payments and acknowledges there is more to be done. We are415committed to working with Congress and our stakeholders to416further improve, correct, and avoid improper payments where417possible. We thank the committee for their continued support of418programs that serve our Nation's veterans and look forward to419working with you.420    Mr. Chairman, this concludes my statement. My colleagues421and I are prepared to respond to any questions from you and422members of the subcommittee.423424    [The Prepared Statement Of Nina Tann Appears In The425Appendix]426427    Mr. Luttrell. Thank you. The written statement of Ms. Tann428will be entered into the hearing record.429    Mr. Arronte, you are now recognized for 5 minutes to430deliver your opening statement on behalf of OIG.431432                   STATEMENT OF BRENT ARRONTE433434    Mr. Arronte. Chairman Luttrell, Ranking Member McGarvey,435and members of the subcommittee, thank you for the opportunity436to testify on the OIG's independent oversight of VBA's437Compensation and Benefits programs. We know that these programs438provide critical financial support to many veterans and other439beneficiaries who rely on their monthly benefit payments.440    Our oversight work has identified deficiencies in VBA's441processes, IT systems, training, and internal controls. As a442result of that oversight, we focus on recommendations that will443help VA find ways to deliver timely, accurate payments so444beneficiaries are not impacted by miscalculations and incorrect445payments. Taking corrective action on OIG recommendations could446also help VBA be good stewards of taxpayer dollars.447    In addition to our audit work, the OIG has a robust448criminal investigations program to combat bad actors who449fraudulently receive benefits. Improper payments are defined by450Office of Management and Budget (OMB) as ``Federal payments451that are for an incorrect amount, paid to an ineligible452recipient, or issued without adequate supporting453documentation.'' For the purposes of this hearing, we are454talking about underpayments and overpayments. My written455statement discusses several reports that identified improper456payments, but I want to focus on the importance of correctly457establishing the effective date of a claim.458    The effective date of a claim is paramount to ensuring that459a veteran's compensation claim is paid on the correct date most460advantageous for the veteran. The PACT Act significantly461complicated effective date determinations by adding locations,462dates, and new presumptive conditions that claims processors463must consider.464    VBA rolled out the majority of training for PACT Act claims465processors in December 2022 with a completion deadline of466January 2023. This was an accelerated training schedule to467facilitate implementation. VBA began processing PACT Act claims468for terminally ill veterans in December 2022 and processing all469other PACT Act claims in January 2023. In a report we released470last month, we found that in 24 percent of the cases we471reviewed, staff assigned incorrect effective dates that472resulted in $6.8 million in improper payments, including both473under and overpayments. Based on these projections, by August4742025 that amount will reach approximately $20 million.475    We determined that this was the result of VBA not476effectively preparing claims processors to incorporate PACT Act477significant changes. The training guidance lacked the478specificity needed for complex decisions and the two IT tools479that were to assist in determining correct effective dates were480unreliable.481    In our soon to be published report on VA's compliance with482the Payment Integrity Information Act, also known as PIIA, we483found VBA reported improper payments or VA reported improper484payments of approximately $2.2 billion in both over and485underpayment, which is down from $3.2 billion that was reported486in 2023. However, of that 2.2 billion, 1.1 billion is487considered a monetary loss and likely will not be recovered by488VA.489    While VA satisfied 5 of 6 PIIA requirements this year, it490continued to report an improper payment rate of more than 10491percent for two programs. Those programs are VBA's pension492program and Veterans Health Administration's (VHA) purchased493long-term care services. While VBA's compensation program is494not included in this report, it will be next year since VA495identified the compensation program as a high priority program496because it is susceptible to significant improper payments.497    The OIG is committed to continuing its independent498oversight work of claims processing activities and VBA499operations in order to create a better experience for veterans500and their beneficiaries.501    Chairman Luttrell, Ranking Member McGarvey, and members of502the subcommittee, this concludes my statement. I would be happy503to address any questions you may have.504505    [The Prepared Statement Of Brent Arronte Appears In The506Appendix]507508    Mr. Luttrell. The written statement of Mr. Arronte will be509entered into the hearing record. We will now move to510questioning.511    I recognize myself for 5 minutes.512    Okay. That was quite the suitcase you just unpacked, sir.513Ms. Tann, this is how I am going to start this. How do we fix514this problem? Ms. Tann, you said we are exploring our avenues515of communicating with our veterans because this is a pretty516long cast here. It starts inside the VA with our digital517infrastructure, our training, manning. equipping with software518and hardware. As it moves downstream and touches the veterans,519they have to be able to communicate back into the organization520to say, hey, look, my dependents are no longer here or--and I521have got a divorce, or my spouse has passed away.522    How do we--you mentioned Social Security earlier. How does523the VA--because in my district, people, they do not have524computers, they do not have phones. Our veterans like to dig in525and they are just kind of hidden. How do we track or help our526veterans track--how do we track our veterans if they lose a527spouse, so we are not providing--so the VA is not providing528overpayment? How do we fix that problem?529    At the end of the day, I am going to say this now and I am530going to say it in my closing remarks, if we are spending $3531billion in overpayment and underpayment, and from the last 10532years, if we are doing our homework correctly, those numbers533have increased. We are losing ground, which is money that can534be spent in other areas of the VA.535    I agree with my ranking member's opening statement. You536have--we have the ability to fix this and this is a problem.537Yes. When you are dealing with dollar bills, it is a big538problem considering the numbers. We have to be aggressive, we,539us, and the VA have to be aggressive on how to fix this. I540think it is absolutely possible in 2025.541    Ms. Tann, you can--I will start with you.542    Ms. Tann. Thank you for your question, Chairman. We are543looking at a number of avenues, but we also have a couple, a544lot of things currently in place. We are making sure to notify545veterans in our correspondence about when they need to report546changes to us, what we have of record, and how we are using547that information. We also have--they have the ability to report548to any of our public contact offices. They can make changes549through VA.gov as well as call our call center. We want to make550it as easy as possible for veterans to access and provide551updated information as much as is necessary.552    We also have capabilities in which we use matching553agreements. You mentioned Social Security. Some of that is for554income-based benefits and entitlements. We also do death555matches so that we are made aware. We have like a survivor's556assistance office now that can help veterans kind of navigate557some of these situations. Really for information that only they558have, like if there is a divorce, if there is the death of a559spouse or the need to remove or add a dependent, that is only560information that veterans know that they have to come to us. We561are trying to open all the doors and make sure that they know562that they have to inform us and what information we are using563at any given time.564    Mr. Luttrell. Do we have the exact, I am going to try to565say this right, do we have the exact number of how many566beneficiaries there are, how many we correspond with, and how567many respond back to the VA's requests? If we are pumping out568letters, Mr. Friel, to 100 veterans that we give--that are569beneficiaries and only 30 of them are responding back, but we570are still paying the other 70, do you have that number by571chance? Ms. Tann, I may be switching to Mr. Friel. I apologize.572    Mr. Friel. No, sir, I do not have that number readily573available, but we can take that back.574    Mr. Luttrell. Is that a question that is being asked in the575Department?576    Mr. Friel. It is. We are looking at, and specifically in577our area, in Pension and Fiduciary, we are looking at the rate578of return when we do development actions or we do request for579information, the rate of return that we get for a reply.580    Mr. Luttrell. Do you have like a projection or a window581that you can provide the committee today?582    Mr. Friel. No, sir, I would just be making up an arbitrary583number, and I do not want to do that. We will----584    Mr. Luttrell. I ask that you get that to us because, again,585just curiosity if we are in the billions in overpayments.586    Mr. Friel. Sir, if you do not mind, one thing I would like587to expand on Ms. Tann's answer is----588    Mr. Luttrell. Okay.589    Mr. Friel [continuing]. with the Social Security death590match, originally, that was just for beneficiaries. We have591expanded that out to dependents on an award. To your question592about how we would find out if a spouse passed away, we will do593that through the Social Security death match. We are--Social594Security has the same limitation we do that they are dependent595upon a third party to notify them of a death. Once we get it,596we can start action with the veteran to remove that dependent597from their award.598    Mr. Luttrell. Okay. I just am eager to know how many599beneficiaries there are, how many we send information to, and600how many are responding to that request, because the delta in601there, I would be curious to see what the number sign is and602how that is correlated.603    Mr. Friel. Yes, sir. From that perspective, so just for604clarity, we do correspond with almost all veterans every year605when we do the cost-of-living adjustments, to what Ms. Tann606spoke about in the letters, we identify. As far as the other607actions where we do development and like a due process, is that608more the area that you are looking at?609    Mr. Luttrell. Well, that might be where one of the misses610are----611    Mr. Friel. Okay.612    Mr. Luttrell [continuing]. that is causing the problem. I613mean, it is a lot. There is a lot of them, but that one I614make--I am sorry.615    Ranking Member, you are recognized for 5 minutes, sir.616    Mr. McGarvey. Thank you, Mr. Chairman. Thank you all for617being here again.618    Ms. Tann, I will start with you this morning. For Fiscal619Year 2024, what were the reported level of improper payments620for both the compensation and pension services as real dollar621numbers and as a percentage?622    Ms. Tann. Thank you for the question, sir. I am going to623ask our acting Chief Financial Officer if she will take that624question, please.625    Ms. Gilson. Good morning and thank you for that question.626For Fiscal Year 2024, for compensation overpayment debts we627established $1.14 billion in overpayment debts and that is out628of an outlay of $161.196 billion, which comes out to a fraction629of 1 percent of improper payments. It is .72 percent of outlays630were improper. The breakout for the pension service for 2024,631their overpayment debts were $227.4 million out of an outlay of632$3.743 billion, which is a percent of outlays of 6.1 percent.633In total, when you add both of those numbers together, the634total compensation and pension overpayment debts established635was $1.366 billion out of a total compensation and pension636outlay of $161.196 billion for, again, a below 1 percent-637percentage of compensation and pension outlays. It is .85638percent were improper.639    Mr. McGarvey. Got it. Of those improper payments, what640percentage were overpayments versus underpayments?641    Ms. Gilson. I can do the rough math here from the agency642financial report for 2024. Again, these are projections that643are given to us after a statistically valid sample of 300 cases644is evaluated. From the statistically valid sample, pensions,645improper payments were $404 million and the overpayments were646$381.78 million, so in the magnitude of 80-ish percent.647    Mr. McGarvey. Okay, run through that one more time for me.648The pensions were?649    Ms. Gilson. Certainly. Improper payments as a whole--well,650improper payments, not including unknown payments where we do651not know whether the payment is improper or not because the652individual--the payment may be going through due process, so653for improper payments that actually have been identified in a654projection as being improper, the total was $404 million and655the overpayments of that 404 were $381.78 million.656    Mr. McGarvey. Okay. Thank you. Do you think, do these657numbers show an increase or a decrease in improper payments for658these offices over prior years?659    Ms. Gilson. For pension service, this is an increase. The660projection is an increase from 2023 to 2024.661    Mr. McGarvey. Taking my own notes. Thank you for that.662    This for Ms. Tann, but, you know, whoever has the answers663for it. As I understand it, compensation service will be664subject to more in-depth supervision under the Payments665Integrity Information Act. Can you tell us why and what changed666at Comp Service to make that necessary?667    Ms. Tann. Sure. Thank you for the question. What it is is668that in Fiscal Year 2024 Compensation Service underwent a risk669assessment. Because of the pure scale of our program, as was670mentioned earlier, just the amount of outlays that we have, we671are susceptible to more improper payments. It is not672necessarily that anything wrong was done. We are in testing and673evaluation right now. That heightened awareness and risk674assessment as an internal control will lead us to reporting,675again, in 2025, after having being removed previously because676we met the PIIA requirements, and OIG concurred with that back677in April 2021, I believe.678    Mr. McGarvey. Okay. We have got just a little bit of time679left. Would you say this is a function of scale and not an680issue of lack of proper controls or how would you characterize681it?682    Ms. Tann. I think because of, as has been mentioned, just683the amount of beneficiaries and veterans that we are paying and684the vast dollar amounts that we are paying, we just are at685heightened risk. It is a combination of factors, again, that686you mentioned. I believe we have strong internal controls in687place and we are constantly working to improve those. I think688it is just based off the risk assessment, we have a higher risk689because of the amount of outlays that we have.690    Mr. McGarvey. We are out of time, so I yield back to you,691Mr. Chairman.692    Mr. Luttrell. Thank you, Mr. McGarvey.693    Mr. Self, sir, you are recognized for 5 minutes.694    Mr. Self. Thank you, Mr. Chairman. These are a lot of695numbers. Your last comment though, Ms. Tann, you are at a696higher risk because you have larger payments. Why is that697logical?698    Ms. Tann. Because of the scale of our program and the699amount of beneficiaries and payments that we do make, we just700have a heightened level of risk around the potential for701improper payments, which could be under or overpayments.702    Mr. Self. Yes, I would disagree with that assertion. Mr.703Friel, yes or no, did you fix the Social Security704Administration matching problem?705    Mr. Friel. Yes, we did.706    Mr. Self. How did you do that?707    Mr. Friel. We did a testing with Social Security. We708validated that we were getting good responses. We have now709continued to run that match every quarter to ensure that we are710capturing the debt as soon as possible.711    Mr. Self. Okay. This is one of my continuing comments about712VA. We hear a lot about your inputs, what you have done. I am713more interested in outputs. We just heard that improper714payments increased from Fiscal Year 2023 to Fiscal Year 2024.715When are we going to start seeing results to this fix to the716problem?717    Mr. Friel. Sir, our projection right now is that the Fiscal718Year 2027 testing will get us below the 10 percent that is719required by PIIA. We are currently still doing the match--720cleaning up the matches from the historical point and we721believe that we will have a good force and--excuse me, we will722be a good position in 2027. We are also investigating the723opportunities for automation so that we can use automation to724address these quicker than having to work them through the725typical claims back--claims inventory.726    Mr. Self. Okay. Well, I suggest we do it quickly because in727the 4 years under the Biden administration, we had almost $4728billion in overpayment debts.729    Let us move to the veteran's child Chapter 35 education730benefits. Ms. Tann, we are talking about over $200 million for731this one small sector of what we are talking about. When did732you first learn about these overpayments for the $200 million-733plus?734    Ms. Tann. Thank you, sir. We were actually notified, I735believe, in Compensation Service around--after the October 22736date. That is when we started to work together to look for737whatever solutions we can put in place. That information or738that notification actually went through our Office of Financial739Management (OFM) and then they passed the information to740Compensation Service. I may not have those exact dates right,741but the information flowed from our OFM office from our office742of business.743    Mr. Self. Again, those are inputs. When do we see outputs?744    Ms. Tann. Actually, we have made changes so that we have a745matching program through information between Compensation746Service and Education Service. So we actually do a monthly747match. We took--we started that in January 2025 to send notice.748In March 2025, we made adjustments to those awards creating no749overpayments for our beneficiaries. In April, we have started750that, we are doing that monthly match, and that allows us to751give veterans or beneficiaries due process of that prohibition752from them receiving both of those benefits at the same time.753    Mr. Self. Okay. Mr. Arronte, you mentioned the PACT Act754complexity. Can you delve into that a little bit more? The PACT755Act has led to the largest increase in our payments to our756veterans forever. Can you go into that a little bit more to757include the incorrect dates? I would like to hear that. There758are also six factors I think you mentioned in your written759testimony. Can you go into the complexity of the PACT Act? My760bottom line question, and I have 1 minute, is does Congress761need to do something to fix the complexity?762    Mr. Arronte. Great question, sir. Regarding effective763dates, the laws have not changed regarding effective dates.764What complicated the issue with PACT Act is that PACT Act added765a lot of locations where veterans could serve for presumptive766disabilities. They have added presumptive disabilities. All of767those issues are considered liberalizing legislation. Any time768that there is a liberalizing law, that is something that a769claims processor must consider.770    An example of one of the most complicated issues is if a771veteran has an intent to file, meaning he is going to notify VA772or she is going to notify VA that they are going to file a773claim within the next year, the date of that intent to file is774one effective date. Then depending on what is being claimed,775there could be two or three or four other effective dates. It776could be the--the date when those disabilities, those777presumptive disabilities became law. It could be when there is778evidence that shows a veteran served in a specific location779that was added due to liberalizing legislation. They have to780consider all of those.781    Mr. Self. Okay.782    Mr. Arronte. At the speed they work, I think they missed783that.784    Mr. Self. Is there any way we can cleanup those? Is there785any way we can cleanup those different dates?786    Mr. Arronte. From a legislative standpoint, we have done787the work in that. I mean, our experience is this is something788that the Department has to fix. We have done some789brainstorming. Okay. If you will bear with me and regarding790effective dates----791    Mr. Self. I think we are going to have a second round. We792may come back to this, Mr. Arronte.793    Mr. Chairman, I yield back.794    Mr. Luttrell. Mr. Arronte, continue on. That was going to795be my line of questioning, so please continue.796    Mr. Arronte. Okay. Based on this recent work of effective797dates, this is something that we have seen over years.798    Mr. Luttrell. When did you tell VBA that the improper799effective dates were the number one issue?800    Mr. Arronte. In August 2022, I was invited to their rollout801implementation conference in Houston and we were asked to802provide the IG's concerns. Our very first talking point was803effective dates. We were told that, yes, we are going to train804effective dates. We know it is important and----805    Mr. Luttrell. This is one of the major causes of this blow806up, I am going to assume.807    Mr. Arronte. Yes, yes.808    Mr. Luttrell. How do we fix this?809    Mr. Arronte. Three things that me and my directors have810brainstormed. I am not advocating one or the other. It is a811choice of the Department.812    The first is they could simplify the process of scenarios813that govern effective dates. Instead of having all of these814different levels of rules to govern effective dates, you could815say the date you filed a claim and when a law changed. Right?816You could simplify that. I think the pros to that, is you would817see a better processing by VBA. The cons, I think you would get818pushback from VSOs and veterans saying that just because it is819complicated, does it mean we do not do it?820    The second is automation. I just created a division in the821last year that looks solely at VBA's automation. I can tell you822they are not there yet. One thing that we see with automation823is the more complicated the business process is, the more824difficult they are having to automate.825    The third is what we have recommended is more effective826training and oversight. I know that sounds like a broken827record, but as we have seen, training was not effective. It828makes sense to have sound training. That when issues like the829PACT Act come or new Agent Orange presumptives come or whenever830somebody decides to change what benefit we are going to give831veterans, that training has to be updated, it has to be832adequate, and it has to be assessed.833    Mr. Luttrell. Training, yes, absolutely.834    Ms. Tann, how is the VA receiving that? I know, I835understand there is a challenge with the digital signature836inside the VA. We did not even have to walk down that road837right now. The VA has received the Inspector General's (IG)838report. Is there any adoption plan ahead of these effective839dates?840    Ms. Tann. Absolutely. We have actually already implemented841several of their recommendations, at least three of them. We842worked to update our effective date builder tool in Veterans843Benefits Management System (VBMS) so that----844    Mr. Luttrell. Did it solve that problem?845    Ms. Tann. Does it solve the problem?846    Mr. Luttrell. The PACT Act problem that we are running847into.848    Ms. Tann. It does assist because it addresses things like849the intent to file, the liberalizing law, and the terror850activity. That was one of OIG's recommendations, which we did851implement earlier this month. We are in the process of852completing the job aid that they recommended. We also853referenced the outdated evaluation tool builder that was on our854internet page where all of our PACT Act resources are housed,855so that it notes that that is historical, so people will not be856using that. We are looking at the evaluation of our training as857OIG----858    Mr. Luttrell. Inevitably the VA is going to make the859decision on what the effective date is and the VSOs and860everyone else is going to have to go with it, kicking and861screaming.862    Ms. Tann. Yes, we are----863    Mr. Luttrell. There is going to have to be a decision made864by the VA.865    Ms. Tann. Yes, sir. We consistently look at how do we866improve and/or simplify our processes, as Mr. Arronte867mentioned, based off feedback and things of that nature?868Effective dates are complex. It is hard work and that is why we869have humans in that process. If we could automate things end to870end, we would. We cannot. We know we need subject matter871experts and human intervention in this process. There is a lot872to unpack for our claims processors. As Mr. Arronte said, PACT873Act did not change how we apply effective dates. It is just new874information and people applying them consistently to the most875advantageous available to the veteran under the law.876    Mr. Luttrell. Okay. Ms. Gilson, did we do by--and this may877be a Mr. Arronte question, but did we do like a forensic audit878on the amount of money spent over the past 5, 10 years to make879sure that we are not--again, we are trending in the wrong880direction. Are we looking back on our numbers saying, hey,881look, we are not making those exact same overpayment or882underpayments and not replicating our mistakes? I understand883the expansiveness of the VA, but as we know, we are missing884something if we are still spending over a billion dollars in885overpayments. What is the comparative analysis that we are886doing in order to fix it? In next--and then how are we looking887for 2025? Are we already projected to spend more than we did in8882024? I just threw a lot at you, I apologize.889    Ms. Gilson. No, that is fine. Thank you. A couple answers890to your question here.891    Regarding the individualized tracking and trending of892errors and how do we correct those and make them better, the893Office of Financial Management does not do each's reviews on894the payments that go out. We take a review holistically at the895summary level.896    Mr. Luttrell. I think we should.897    Ms. Gilson. Well, maybe that is the case. However, what we898do within the Office of Financial Management is when we receive899the payment information from our business lines, we are900trusting, we are relying on the controls in place within that901business line to make sure that payment is accurate. From the902Office of Financial Management's perspective, we review the pay903file to make sure that the accounting is correct, that the904money is actually in the proper account to make those payments,905that the time of the payment is right, that the program is906correct. We are accountants and we do not have adjudicators on907the staff. If we did, we would need to reopen every single908claim that came through to validate that. And----909    Mr. Luttrell. Well----910    Ms. Gilson [continuing]. we do not----911    Mr. Luttrell [continuing]. we are a billion dollars in the912hole. When are we going to start taking a look at that? I am913not beating you up.914    Ms. Gilson. I understand.915    Mr. Luttrell. This is me talking about it, Okay?916    Ms. Gilson. Yes.917    Mr. Luttrell. I mean, I do not know how far down the track918it has to go before somebody says, yes, that is probably a good919idea, which I think it is past time.920    I am well over, Mr. McGarvey, I apologize. You alright with921that? Okay. I am sorry.922    Ms. Gilson. Yes. No, no, thank you. I appreciate that.923Again, from the accounting perspective, we review to make sure924that everything is appropriate and interfaces to Treasury for925payment.926    My office also does a review of fraud, waste, and abuse927types of situations. We have a tremendous partnership with our928colleagues within the Office of Inspector General. When we929identify fraud around payments, to make sure that we rectify930that-that veteran immediately, we make them whole. In many931cases, we can reissue payments same day when we get a call932saying, ``hey, I did not get my payment.'' When we identify933that there is fraud within, you know, scammers who are changing934bank accounts without veterans' knowledge, we do engage the935Office of Inspector General to investigate those areas and936identify, you know, further action taken.937    Mr. Luttrell. Well, that is when you see it. I mean, the938event has already happened. We need to make--we are trying to939stop it beforehand.940    Ms. Gilson. Correct. We do have some tools and techniques941that we have available where we are getting more proactively942involved in preventing fraud. We are using machine learning and943artificial intelligence and detailed analytics to get to----944    Mr. Luttrell. This is where the Department needs to come to945Congress and say we have to have the money to implement this946type of software, this artificial intelligence, machine947learning. You have to tell us that because right now we are948just seeing the numbers and they are not, obviously, they are949not good, but we are all in to help you. Again, this problem950has been going on for, I mean, I am going to make the951assumption, for decades and let us fix it right here. We are952ready. Okay?953    I am well over, Mr. McGarvey. Okay. Go ahead, finish.954    Ms. Gilson. I think I am pretty much done.955    Mr. Luttrell. Okay. All right. Mr. McGarvey, I am sorry,956sir. We recognize you.957    Ms. Gilson. Thank you.958    Mr. McGarvey. No, thank you, Mr. Chairman, and appreciate959this conversation because we want to get this right. Right? We960want to make sure that we are getting the money to our veterans961that they need, that they deserve, and that we are being good962stewards of taxpayer money.963    In my round of questioning, I will refresh everyone's964memory because it was a second ago, I was talking with Ms. Tann965about whether this was a function of scale, not an issue of966lack of proper controls. She sort of said more, it is a967function of scale. I just wanted a second opinion on that. Mr.968Arronte, do you agree with that assessment?969    Mr. Arronte. To some degree, sir, I do. It is a matter of970scale. If you look at the PIIA thresholds, those PIIA971thresholds are across the government. Every agency has those972same thresholds. If you are conducting a risk assessment of the973National Science Foundation and their budget is like this, they974mess one thing up and it is high risk. U.S. Department of975Defense (DOD), U.S. Health and Human Services (HHS), VA, their976budget is like this. They get this much more leeway to make977mistakes or have acceptable mistakes.978    That is why I am a firm believer that as it relates to979compensation, compensation has been on and off the PIIA program980throughout the years. As the Chairman indicated in his opening981statements, we have a body of work that shows constantly that982there are improper payments. In the last nine reports I have983issued, seven show incorrect effective dates that lead to984improper payments. I think that is enough.985    Where compensation should be, I think they should make an986exception. I think compensation should be on their high987priority list until the numbers come down. The reason I say988that, because if you look at some of the programs that are989tested in the PIIA-communications, utilities and rent, those990improper payments have dropped to .5 percent. Medical care991contracts have dropped over 2 percent. VA community care has992dropped from 5 percent to 1 percent. That tells me the process993works. You got to keep those programs on whether they meet the994threshold or not just because it is a form of function. There995is just so much disparity in the budget that allows more996mistakes with bigger organizations.997    Mr. McGarvey. Mr. Arronte, there is nothing that is998stopping the VA, from complying with PIIA?999    Mr. Arronte. No.1000    Mr. McGarvey. Okay. Voluntarily complying, I should say.1001    Mr. Arronte. No. That is the--that is what our work is. I1002have mixed emotions about the effectiveness of PIIA. The good1003thing about PIIA is it is our oversight of the Department and1004its compliance. We test to make sure that the Department is1005following the rules. It is a strictly compliance audit. It does1006not get very deep, but they are following the rules.1007    Mr. McGarvey. The Chairman said something that I echo and1008find interesting when talking with Ms. Gilson about tell us1009what you need, right? Tell us what you need so we can help fix1010this problem. We heard some suggestions from her, potentially.1011Just from a different point of view, Mr. Arronte, do you have1012any suggestions for what Congress can do to help make the1013situation better?1014    Mr. Arronte. In regards to PIIA, other than the1015recommendations that we make, I have no other guidance or1016suggestions. Like I said, our review is strictly compliance. It1017does not dig in deep, does not look for what we would typically1018do in a normal audit. We do not look for-for the root cause. We1019just look at compliance as mandated by OMB.1020    Mr. McGarvey. Ms. Tann, in a June 2024 report, the OIG1021found that VBA had not identified Vietnam veterans who were1022eligible for benefits and that resulted in an underpayment of1023$836.8 million. Another 2024 review looking at survivors showed102433.1 million in underpayments. Both of those reports have open1025actions, including a full review of claims, better outreach1026letters, and monetary compensation. Do you know where those1027reviews stand at this time?1028    Ms. Tann. Sir, for the one that you mentioned regarding1029survivor's payments, I will ask Mr. Friel to respond to that1030one. Can you repeat the first one that you mentioned? I am1031sorry, I did not----1032    Mr. McGarvey. Sure. We were talking about the 2024 OIG1033report that Vietnam veterans who are eligible for benefits had1034not received them in payments of 836.8 million and another1035looking at survivors in 2024 showed 33.1 million underpayments.1036Both of those reports have open actions, including a full1037review of claims, better outreach letters, and monetary1038compensation. We are just seeing where those reviews stand1039right now and getting the veterans what they have earned.1040    Ms. Tann. Certainly I will take back, if I can, that1041question about the Vietnam veterans report to see where those1042action items are. I will ask Mr. Friel if he has an update on1043the survivors.1044    Mr. Friel. Sir, thank you for that question. As it relates1045to the survivors piece, we have adjusted our processes. One of1046the things that the IG called out was in the PACT Act required1047that survivors specifically asked for us to look back, right,1048to see if there was an earlier effective date. That was our1049initial training with--in concurrence with or coordination with1050the IG and OGC. We have amended our processes now to say that a1051reopened DIC is, in fact, a claim for us to look back. That1052will help close that gap.1053    We are continuing to work. We have--I think we have under105420 claims left to make the proper adjudication and adjust the1055rates to ensure the survivors get the right amount.1056    Mr. McGarvey. Thank you, Mr. Friel. Mr. Chairman, I yield1057back.1058    Mr. Luttrell. Thank you. Mr. Self, you are recognized for 51059minutes.1060    Mr. Self. Thank you, Mr. Chairman. We have heard a lot of1061Washington speak here today. Does anybody know what those1062ribbons up on the flags are?1063    Mr. Arronte. Campaign ribbons.1064    Mr. Self. They are battle streamers. Veterans that we are1065talking about, those represent the campaigns that our veterans1066fought in, were wounded in, died in. That is the veterans we1067are talking about here. I have heard a lot of Washington talk.1068    Ms. Tann, in your testimony, written testimony, it talks1069about how critical it is that veterans and beneficiaries self-1070report changes. Now, I agree with that. What I have heard here1071is we have not fixed the problems so that our veterans have the1072education and the training to know when they are supposed to do1073things. You heard the chairman say that in his district some1074people do not have computers. We have heard this time and time1075and time again from my time on this committee. We have-our1076veterans do not know and we have made it so complex, Mr.1077Arronte's testimony, we have made it so complex for our1078veterans. Those battle streamers up there represent the1079veterans that we are talking about here in Washington speak.1080    Ms. Tann, how many OIG, and two separate answers here, how1081many OIG recommendations do you have outstanding? How many1082Government Accountability Office (GAO) recommendations does the1083Department have outstanding? OIG and GAO. These are1084recommendations of people that are telling the Department1085things to improve your processes. How many do you have open?1086    Ms. Tann. Sir, I do not have the total number of all of1087those pending.1088    Mr. Self. I would like to know because we have got to do1089better. I mean, inputs are not outputs. I want to start hearing1090outputs about how we fix the problems.1091    With that, Mr. Chairman, I yield back.1092    Mr. Luttrell. Mrs. Radewagen is recognized for 5 minutes.1093    Ms. Radewagen. Thank you, Mr. Chairman. Ms. Tann, during1094the last administration, VA informed us of plans to rely on the1095authority in Cleland-Dole to cancel overpayments of VA benefits1096resulting from administrative delay. When will VA begin using1097this authority?1098    Ms. Tann. Thank you for the question, ma'am. We are still1099in the process of implementing Cleland-Dole Section 252. We1100have implemented one of the sections, but we are still working1101on implementing the one that will require us to create1102permanent timeliness standards around which to prohibit the1103overpayment or debt applied to individuals because of delays in1104VA processing.1105    Ms. Radewagen. Ms. Tann, yes or no, was the April 2025 PACT1106Act effective date refresher training, was it mandatory?1107    Ms. Tann. Yes, it was.1108    Ms. Radewagen. Yes or no, have all compensation service1109employees completed that April 2025 effective date training?1110    Ms. Tann. I would have to get back to you on that.1111    Ms. Radewagen. Please do. Thank you.1112    Mr. Friel, yes or no, has every employee who decides1113survivors DIC claims also completed that April 2025 training?1114    Mr. Friel. Yes, they have.1115    Ms. Radewagen. Ms. Tann, what exact processes for assigning1116correct effective dates is VA planning to automate and when1117will that automation technology be implemented?1118    Ms. Tann. I am not aware of plans to automate effective1119dates just because of the complexity around it. I will speak to1120the work that we have done to update and enhance our system so1121that the tools that are available to claims processors address1122some of those problem areas and pain points that Mr. Arronte1123mentioned, such as intent to file, liberalizing law, and toxic1124exposure activities.1125    Ms. Radewagen. Mr. Friel, does VA have the authorities,1126including all the computer matching agreements, that VA1127requires to ensure accurate payment of veterans pension and1128survivors pension?1129    Mr. Friel. Yes, we do.1130    Ms. Radewagen. Now, Mr. Arronte, what mistakes did the1131Biden administration VA make when initially rolling out1132training and guidance for PACT Act claims' effective dates?1133    Mr. Arronte. Ma' am, based on our work and as I indicated1134in my opening remarks, the training was pushed out very1135quickly. They had 4 months to identify the type of training1136that needed to be done. They trained in December. It was very1137quick. What our recent report shows is they missed an1138opportunity. They did not evaluate the effectiveness of that1139training. I can tell you my reports are showing that the1140training could not have been that effective because we are1141seeing high error rates with effective dates.1142    Ms. Radewagen. Sir, has VA done enough to fix those1143mistakes so that compensation overpayments will be1144significantly reduced in the future?1145    Mr. Arronte. Ma'am, if you are looking for a yes or no, I1146am going to say no, just because of my body of work. However,1147as the VBA panel members have indicated, I think they are1148heading in the right direction. They are correcting these1149effective date tool builders. They are consolidating their1150policies, procedures, and the guidance so staff do not have to1151look through, 8 pages or 10 pages of FAQs on this site and 201152pages of FAQs on this site. I think they are working toward the1153right direction.1154    Ms. Radewagen. Mr. Arronte, do you believe that VA's1155quality assurance controls are adequate to ensure that VA1156claims processors assign correct effective dates for award of1157benefits?1158    Mr. Arronte. No, ma'am. The reason I say that, again, I am1159basing it on our work. We see high error rates all the time. We1160looked at their QA program in 2021, we looked at five aspects1161of it, and issued reports on them. Since then, I think one1162thing that we would like to see with their QA is when they draw1163samples to determine accuracy and error rates, they sample1164across the board, the entire spectrum of claims. It could be a1165musculo-skeletal claim, it could be a claim to--a presumptive1166claim, it could be a whatever. Right? They know what their high1167priority areas are. They know effective dates is one. There is1168several others.1169    I would like to see them, aside from a special focused1170review, because that is a one-time look, I would like to see1171them conduct a specific sample of those high-risk areas. Now,1172that might not bode well for their accuracy rate, but it will1173help them hone in on what the high-risk problems are.1174    Ms. Radewagen. Thank you, Mr. Chairman. Yield back.1175    Mr. Luttrell. Ms. Radewagen, do you have any more1176questions? We moved through the second panel. Do you have1177another question or are you good?1178    Ms. Radewagen. Not at this point, Mr. Chairman.1179    Mr. Luttrell. Thank you. I yield to the Ranking Member for1180closing remarks.1181    Mr. McGarvey. Thank you, Mr. Chairman. Appreciate the1182testimony here today. Obviously, we appreciate you all being1183here. I know that each and every one of us wants to improve1184these programs. We want to make sure that we get it right for1185the veterans and we get it right for the taxpayers. We have got1186to do it in a holistic way. We have got to make sure that there1187are the fewest possible errors and that the personnel are well1188trained. We also want to see this done with care and1189compassion.1190    I want us to find solutions. I want us to create efficient1191processes and to listen to the workers and union workers when1192they tell us how we can help them in their work. I want the1193call center workers at the Debt Management Center to have the1194ability to step back and breathe when a veteran calls in crisis1195because they do not see a way out of debt they did not even1196know they had. I want the veteran in crisis to have access to1197immediate mental healthcare at that moment. I want to see a VA1198that provides kindness and clarity in a payment program to help1199a veteran get out of the red.1200    I do not want to hack away at the base. I do not want to1201needlessly attack people who are serving these folks while we1202make it harder to conduct research or provide life-saving care,1203and keep families together in burial plots.1204    We want to make sure that the VA is working, that it is1205working for the people for whom it is intended to serve, the1206veterans. That they do so in a responsible way that has the1207fewest possible errors. I truly mean that. All errors, whether1208it is identifying the proper payments, the proper training,1209whether it is an improper use of funds. At the end of the day,1210if we do not get this right, who are we hurting? We are hurting1211our veterans. We are hurting the people who work at the VA,1212many of whom have served our country prior to their serving our1213country at the VA. We hurt the families, the caregivers, and1214the survivors of the brave men and women who put on a uniform1215to serve us.1216    Mr. Chairman, I look forward to working with you together1217on this issue, to finding genuine solutions to these problems.1218I yield back.1219    Mr. Luttrell. Thank you, sir. Thank you all for coming to1220the hearing today.1221    The Ranking Member and I are in agreeance. It would be1222ideal if we could walk this problem all the way down to zero,1223dollar sign-wise. The system itself is so large, there is going1224to be a margin of error in there somewhere. Our heartache is1225the fact that it is trending in the wrong direction.1226    To his point, we are serving the veterans. The veterans are1227always on the receiving end of everything that we do in this1228committee and everything that you wake up every morning, look1229yourself in the mirror, walk into the office, and say, why am I1230here? It is for our veterans.1231    Taking what Mr. Arronte said, implementing those effects1232inside the VA will move us in the proper direction. Ms. Tann,1233you said you are implementing certain things the OIG has pushed1234out. Amazing. Ms. Gilson, when you reported the numbers, it1235is--I just do not like the fact that we are not--again, we are1236going in the wrong direction and there has to be a fix. I would1237like to meet with you in the antechamber. I have a couple1238questions I would like to ask you after the hearing.1239    Making overpayments at this number, I think one of the1240worst things you can do--I mean, I am being dead 100 percent1241serious. The worst thing you can do is overpay a veteran and1242tell them you got to give it back. I mean, that is something1243that the U.S. Government is exceptional at. I know I get hit by1244the Internal Revenue Service (IRS) all the time. Hey, man, you1245owe us 25 cents.1246    Our veterans live paycheck to paycheck. A lot of them are1247in a deep, deep, dark, black hole, and if you asked--if you are1248trying to take something from them that the U.S. Government1249gave to them, that is our fault. Okay? We have to fix that1250problem. Whether or not it is hardware, software, man tripping1251a coin--man, train, and equip, we have to be on it.1252    I know again, every time you guys sit in front of us, you1253are telling us that, hey, that is happening inside the VA. I1254got it. Again, once again, we are a large organization and at1255scale, one of the largest. Okay. I will always say, remember,1256it is about our veterans 100 percent. We have to take care of1257those that took care of us. Okay?1258    Thank you. Thank you for coming and testifying before us1259today on the important goal of reducing waste resulting from1260improper payments and compensations and pensions. I look1261forward to working with the administration and my colleagues1262that causes improper payments to ease the burden on our1263veterans and their families.1264    I ask unanimous consent that all members have 5 legislative1265days to revise and extend their remarks and include extraneous1266material. Without objection, so ordered.1267    This hearing is adjourned.1268    [Whereupon, at 11:17 a.m., the subcommittee was adjourned.]12691270=======================================================================12711272                         A  P  P  E  N  D  I  X12731274=======================================================================12751276                    Prepared Statements of Witnesses12771278                              ----------12791280                    Prepared Statement of Nina Tann12811282    Good morning, Chairman Luttrell, Ranking Member McGarvey, and1283Members of the Subcommittee. Thank you for the opportunity to appear1284before you today to discuss VA's improper payment oversight. Joining me1285today from VBA are Kevin Friel, Executive Director, Pension and1286Fiduciary Service, and Jeannie Gilson, Acting Chief Financial Officer.1287    VA recognizes the importance of providing Congress, Veterans, and1288beneficiaries with transparency related to improper payments. Improper1289payments include incorrect payment amounts (too much or too little),1290payments to the wrong person, or disbursed payments without required1291documentation. VA pays the amount of benefit based on the evidence of1292record at the time of the disbursement, until VA receives notice of a1293change. For example, if a Veteran loses a dependent and does not report1294this change to VA, he or she may be paid too much, or in some cases,1295too little. To combat improper payments, VA supplements beneficiaries'1296self-reported changes with additional controls. VA has taken many steps1297to prevent, detect, and correct improper payments and mitigate fraud,1298waste, and abuse.1299    VA safeguards beneficiaries' financial well-being and effectively1300oversees the use of appropriated funds by using a range of strategies1301to proactively address and mitigate potential improper payment issues.1302In Fiscal Year (FY) 2024, VA reported a reduction of about $1 billion1303in improper and unknown payments. The breakdown of the improper and1304unknown payments are as follows: $149.57 million for beneficiary1305travel; $13.27 million for Rent Communications, and Utilities; $28.251306million for Medical Care contracts and agreements; $280.67 million for1307supplies and materials; $518.58 million for pension; $760.1 million for1308long-term services and support; and $416.63 million for VA Community1309Care, which reflects a reduction of 31.55 percent from Fiscal Year 20231310results, despite increases in outlays of $4.43 billion, or 12.301311percent. Since Fiscal Year 2018, VA has reduced improper and unknown1312payments by $12.57 billion, or 85.29 percent, and removed seven1313programs from reporting requirements by prioritizing corrective actions1314on the largest proportion of errors and noncompliance with laws and1315regulations.1316    VA continues to strengthen its risk assessments, test plans, and1317collection of error data to ensure accurate projections and inform1318effective remediation strategies. While any amount of improper payment1319is unacceptable, VA continues to make progress in identifying and1320preventing these from occurring. VA acknowledges that improper payments1321are problematic and remains committed to process improvements that will1322ensure VA is providing accurate and timely benefits to Veterans and1323their dependents with effective oversight.1324    As an example of recent VA efforts to reduce improper payments, on1325December 2, 2024, VA modified its procedural guidance to liberally1326interpret re-evaluation provisions for Dependency and Indemnity1327Compensation (DIC) claims. The changes streamlined the decision-making1328process to mitigate the likelihood of underpayments and ensure VA1329renders the correct decision the first time. Additionally, these1330changes reduced requests for unnecessary information and simplified the1331claim review process.1332    In some cases, VA cannot adjust a Veteran's benefits in time to1333prevent an overpayment. Administrative or operational constraints1334within VA may cause processing delays. Congress and VA recognized the1335burden this placed on Veterans and beneficiaries, based on1336circumstances outside of their control. As a result, on December 29,13372022, Congress enacted the Joseph Maxwell Cleland and Robert Joseph1338Dole Memorial Veterans Benefits and Healthcare Improvement Act of 2022,1339also known as the ``VA Beneficiary Debt Collection Improvement Act of13402022'' or simply the ``Cleland-Dole Act'' (P.L. 117-328; 136 Stat.13414459).1342    Section 252 of this law amended 38 U.S.C. Ch. 53 by adding a new1343section 5302B, which establishes prohibitions on the creation of debts1344due to delays in VA processing. Unless a delay is directly attributable1345to a beneficiary's actions outside of his or her basic due process1346rights, the law requires that VA must issue an overpayment decision and1347associated notice within 1 year of receiving information that results1348in potential debt. Delays caused by a beneficiary's actions will extend1349the timeliness period for VA to issue a decision by the number of days1350equivalent to the length of the delay. When VA fails to issue a timely1351decision, the beneficiary is not responsible for repaying VA for the1352overpayment. Each issue that generates a potential overpayment is1353considered separately for purposes of applying these timeliness1354standards. It is important to note, however, that this guidance does1355not apply where there is evidence of fraud, misrepresentation, or bad1356faith on the part of a beneficiary, or to instances in which a1357beneficiary did not provide current and accurate information affecting1358his or her benefits in a timely manner.1359    In another example of VA's efforts to reduce improper payments, in1360Fiscal Year 2024, VA identified an administrative error which resulted1361in duplicate dependency payments for Chapter 35 Dependency Education1362Assistance benefits. As of February 18, 2025, VA estimated the monthly1363average of overpayments in Fiscal Year 2025 for the Chapter 35 error at1364approximately $5.8 million. The total of overpayments from Fiscal Year13652017 through 2025 is estimated at $211.3 million. VA's former Under1366Secretary for Benefits, under the previous administration, determined1367that the duplicate payments were an administrative error; therefore,1368impacted Veterans would not have debts established. VA worked to1369correct the point in the process leading to the administrative error1370and implemented a fix in January 2025. On January 10, 2025, VA issued1371due process letters to approximately 15,000 Veterans who receive1372disability compensation or pension benefits for a child while the child1373is concurrently being paid benefits pursuant to Chapter 35. The due1374process letters did not propose the creation of an overpayment. On1375March 17, 2025, following the due process period, VA notified Veterans1376that the child was being removed from their disability payment. No1377overpayments were created. VBA's Compensation Service and Education1378Service continue to partner to develop a solution to eliminate future1379overpayments for Chapter 35 dual entitlement.13801381Inter-Agency Data Sharing13821383    To assist with preventing improper payments, VA regularly receives1384information from various Federal agencies through data matching1385agreements. VA partners with other Federal agencies to compare1386information between VA and each partner agency's records to identify1387discrepancies or confirm information through the computer matching1388agreement process governed by the Privacy Act (5 U.S.C. Sec.  552a).1389These agreements are used to establish or verify eligibility for1390Federal benefits, verify compliance with Federal benefit programs, and1391recoup payments or delinquent funds as well as investigate potential1392fraud, waste, or abuse. These data matching agreements include those1393that concern benefits related to military duty status, benefit changes1394due to death, and issues related to income. Additionally, VA has made1395several improvements related to data matching agreements for VA's1396income-based pension benefits, including using Federal tax information1397to verify an applicant's income upfront and income matching with the1398Social Security Administration (SSA) to verify continued eligibility1399for income-based benefits.1400    Certain statutory requirements prohibit duplication of benefits1401during the same period, such as receiving both a disability1402compensation payment and regular active duty pay. VA conducts routine,1403monthly data matches with the Department of Defense (DoD) to identify1404Veterans who return to active duty. When the match occurs after a1405Veteran returns to active duty, this results in a duplicate payment1406from DoD and VA.1407    Additionally, VA conducts an annual data match with DoD to identify1408Reservists and members of the National Guard receiving active duty for1409training pay, often referred to as drill pay. Both scenarios may1410identify an improper overpayment.14111412Effective Dates: Importance and Improvements14131414    VA acknowledges the crucial importance of claims processors1415understanding and assigning the proper effective dates as required by1416law in issuing accurate payments. Training is at the core of the issue,1417and VA has taken steps to enhance training on effective dates. Once1418hired, claims processors receive training on effective dates as part of1419their foundational core curriculum. Following their initial training,1420claims processors undergo annual assessments to evaluate their1421application of the rules and guidance on effective dates, as part of1422the Competency Based Training Systems assessment. If any knowledge gaps1423or inefficiencies are identified, claims processors receive targeted1424refresher training to address those specific areas.1425    VBA is also enhancing its collaboration with the Board of Veterans'1426Appeals and the Office of General Counsel to improve the quality,1427comprehensiveness, and legal accuracy of its training programs, with a1428focus on improving claims development and decision-making through1429thorough data analysis, root cause identification, and targeted1430training for VA personnel. This approach aims to drive impactful1431change, ultimately benefiting Veterans by ensuring the accuracy of the1432benefits and payments they receive.1433    The Sergeant First Class Heath Robinson Honoring our Promise to1434Address Comprehensive Toxics (PACT) Act, signed into law on August 10,14352022, marked the largest and most significant expansion of Veterans'1436care and benefits in decades. While the original legislation was1437written with a phased-in approach for the effective dates of various1438exposure-related conditions, VA proactively determined that all1439conditions would instead be effective upon date of enactment, to not1440only benefit the Veteran, but to make implementation of the law less1441complex for claims processors. Additionally, VA took immediate action1442to ensure claims processors received guidance on processing PACT Act1443claims and, in December 2022, VBA provided the training needed to begin1444processing these claims as quickly as possible. This ensured all front-1445line claims processors who handle claims for disability compensation1446benefits based on toxic exposure were ready to process claims on1447January 1, 2023, and could accurately apply the provisions of the law.1448    On April 1, 2025, VA also released PACT Act refresher training to1449claims processors, which specifically addressed effective dates. The1450content was created using data collected from the PACT Act Special1451Focused Review for Quarter 1 of Fiscal Year 2025. The leading error1452category was failure to apply or misapplication of effective dates1453under 38 C.F.R. Sec.  3.114, which governs effective dates of awards1454based on a liberalizing law or liberalizing VA issue. In these training1455updates, VA addressed effective date provisions that involve the1456general effective date rules, liberalizing laws, and presumptive1457conditions. VA also addressed the impact of intent to file and the date1458of receipt rule with such claims.1459    VA also relies on our Office of Inspector General (OIG) and1460Government Accountability Office (GAO) partners to independently review1461our processes and procedures to identify issues. VA works1462collaboratively with OIG and GAO to address any issues discovered. For1463example, on April 15, 2025, OIG published its report titled ``The PACT1464Act Has Complicated Determining When Veterans' Benefits Payments Should1465Take Effect'' (Report Number: 24-01153-52). In their report, OIG1466estimated that about 31,400 of the 131,000 PACT Act-related claims (241467percent) VA completed between August 10, 2022, and August 9, 2023, had1468errors in the assigned effective date. OIG determined an estimated146926,100 of those claims resulted in at least $6.8 million in improper1470payments. Subsequently, OIG recommended that VA implement system1471enhancements to add functionality that applies liberalizing laws on1472claims when VA receives an intent to file or when service connection is1473based on a toxic exposure risk activity. These system enhancements are1474currently scheduled for implementation by the end of the 3d quarter of1475Fiscal Year 2025. Additionally, OIG recommended that VA create a job1476aid for claims processors on how to determine the correct effective1477date for PACT Act-related claims. The job aid is scheduled for1478implementation in July 2025.1479    In addition to specific audit reviews, OIG annually reviews VA's1480improper payments as required by the Payment Integrity Information Act1481(PIIA) of 2019 (P.L. 116-117; 134 Stat. 113). PIIA specifically1482requires agencies to review programs that may be susceptible to1483significant improper payments exceeding either 1.5 percent of program1484outlays and $10 million, or $100 million in total. Since 2004, VA has1485made proactive efforts to identify and report improper payments by1486continuously examining the following programs: compensation, DIC,1487pension, and monetary burial benefits. VBA's pension program saw an1488increase in improper payments above the compliance threshold for Fiscal1489Year 2023 and Fiscal Year 2024 (10.86 percent [$419.27 million] and149013.85 percent [$518.58 million], respectively). This increase primarily1491resulted from the pause in the SSA income data match, which was1492reinstated in Fiscal Year 2022. When the program resumed in June 2022,1493VA implemented a quarterly data match for additional oversight versus1494the prior annual match to mitigate errors under its corrective action.1495This frequency change will help to reduce improper payments resulting1496from unreported SSA income.1497    OIG has recognized the corrective actions VBA put in place to help1498reduce improper pension payments, including increased oversight via1499site visits, special focused reviews, and targeted training based on1500analysis of quality assurance data. As an additional prevention1501measure, VBA's Pension and Fiduciary Service is investigating the1502potential implementation of an automation solution to utilize the data1503provided via the SSA income match to render timely award adjustments.1504This would minimize debt associated with unreported SSA income and1505prevent future improper payments.15061507The Role of the Veteran15081509    It is critical that Veterans and beneficiaries self-report changes1510in their eligibility or status, including changes in income, net worth,1511medical expenses, marital status, dependency status, or death of a VA1512beneficiary. Timely reporting of these changes in beneficiary status1513significantly impacts VA's ability to deliver appropriate benefits and1514prevent improper payments. Generally, in the absence of data sharing1515agreements, VA relies on the information Veterans or beneficiaries1516report and pays the most accurate amount possible based on the1517information available at the time a claim is processed. Reporting1518changes to VA is crucial for maintaining accurate records and ensuring1519Veterans receive the most accurate benefits. Once VA receives a1520notification of change, payments VA already issued are considered1521improper even though VA had no knowledge of the information at the time1522of payment. This may result in an overpayment that the beneficiary will1523be responsible for repaying.1524    When VA makes a decision on a benefits claim, VA sends a1525notification letter to the claimant. This letter includes detailed1526information about the decision and the factors affecting the1527compensation rate. It also explains how claimants can report any1528changes to VA to avoid disruptions to their benefits or the risk of1529overpayments. VA understands the negative impact overpayments can have1530on Veterans and beneficiaries and makes every effort to inform them up1531front and prevent overpayments. VA continues to expand access and1532streamline communications with Veterans and beneficiaries to make the1533exchange of information faster and less burdensome on our stakeholders.1534    VA is committed to working with Veterans and beneficiaries to1535identify ways to assist them in keeping information updated and1536reporting any changes to dependency, income, or other benefits-related1537issues to avoid delays in payments, ensure eligibility for benefits,1538and receive timely communications from VA. VA offers easily accessible1539methods for Veterans to promptly report a change of status, such as1540online at va.gov, calling our VA benefits hotline, or in person at a VA1541benefits facility, in an effort to ensure Veterans and beneficiaries1542receive the correct benefits they are entitled to, avoid improper or1543discrepant payments, and maintain up-to-date information with VA.15441545Conclusion15461547    VA strives to safeguard the financial well-being of Veterans and1548beneficiaries and is committed to working with Congress to proactively1549improve and mitigate potential improper payments. Chairman Luttrell,1550Ranking Member McGarvey, this concludes my testimony. We thank the1551Committee for your continued support of programs that serve the1552Nation's Veterans and look forward to working together to further1553enhance delivery of benefits and services. My colleagues and I are1554prepared to respond to any questions you or other Members of the1555Subcommittee may have.15561557                  Prepared Statement of Brent Arronte1558[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]15591560                       Statements for the Record15611562                              ----------15631564          Prepared Statement of Paralyzed Veterans of America15651566    Chairman Luttrell, Ranking Member McGarvey, and members of the1567subcommittee, Paralyzed Veterans of America (PVA) would like to thank1568you for the opportunity to submit our views on how the Department of1569Veterans Affairs (VA) can improve the compensation benefits process to1570limit the amount of debt veterans' may incur from the improper payment1571of disability compensation or other benefits and reduce the additional1572workload on the VA to address such payments.1573    Veterans with service-related medical conditions are entitled to1574compensation benefits under law. The Veterans Benefits Administration1575(VBA) administers these tax-free compensation benefits through their1576Compensation Service which determines the appropriate percentage1577rating, whether the veteran is entitled to dependency pay, and the date1578the veteran was entitled to start receiving this compensation.1579Generally, these benefits are designed to offset a veterans' loss of1580earning capacity that is caused or exacerbated by these conditions.1581Many veterans, especially those with catastrophic disabilities, like1582spinal cord injuries and disorders, rely on these payments for a1583substantial portion of their income.1584    However, VBA too often has difficulty assigning correct effective1585dates for claims, both rating and non-rating.\1\ An improper effective1586date could result in lost compensation or, more detrimentally, create a1587debt that the veteran must repay. For many veterans, losing a portion1588of their benefits toward repayment of a debt can lead them to dire1589financial straits. PVA believes that the most common causes for1590incorrect effective dates and unnecessary overpayments are easily1591remedied.1592---------------------------------------------------------------------------1593    \1\ VA OIG, Accuracy of Claims Involving Service-Connected1594Amyotrophic Lateral Sclerosis, Report No. 18-00031-05, November 20,15952018; VA OIG, Accuracy of Effective Dates for Reduced Evaluations Needs1596Improvement, Report No. 17-05244-226, August 29, 2018; VA OIG,1597Processing Inaccuracies Involving Veterans' Intent to File Submissions1598for Benefits, Report No. 17-04919-210, August 21, 2018.15991600---------------------------------------------------------------------------1601Removing Dependents16021603    According to PVA's National Service Officers (NSO), removal of1604dependents from a veteran's claim triggers the most problems with1605effective dates and improper payments. When veterans experience1606qualifying life events like divorce, marriage of a child, or death of a1607dependent and seek to halt payments for that dependent, they must fill1608out VA Form 21-686c, a rather lengthy and complicated form, and submit1609it to the VA or go online via VA.gov to submit the form and the needed1610documentation. Even when veterans submit their request in a timely1611manner, many wait several months or even longer to have VA remove the1612additional monetary amount for their dependent from the veteran's1613monthly compensation. Because of VA's inaction, the veteran accrues a1614debt totaling hundreds and sometimes thousands of dollars that the1615department will eventually be forced to try and recoup. The veteran has1616the option of asking for the debt to be waived, which is a process that1617PVA's NSOs assist with regularly. To seek a waiver, a different form1618must be completed and taxpayer dollars spent for VA employees to1619consider the veteran's request.16201621Returning to Active Duty16221623    When a veteran returns to active duty, either due to being recalled1624as a reservist or a voluntary reenlistment, their benefits are1625generally not affected. However, ``[p]ension, compensation, or1626retirement pay on account of any person's own service shall not be paid1627to such person for any period for which such person receives active1628service pay.'' \2\ The veteran is obligated to inform the VA either via1629phone or by filing a VA Form 21-4138, ``Statement In Support of1630Claim,'' to inform the department of the veteran's intention to enter1631active duty and the need to pause any benefit payments. The issue then1632becomes how quickly the VA acts on the request. As with the removal of1633dependents off a veteran's award, it often takes the VA months to stop1634a veteran's compensation payments creating a debt totaling thousands of1635dollars that the veteran must repay. This debt can create a crippling1636financial situation for the veteran, especially if it occurs while the1637service member is deployed and there is little or no help on how to1638fight the decision. Any veteran who has chosen to return to duty to1639serve our country deserves better.1640---------------------------------------------------------------------------1641    \2\ 38 U.S.C.Sec.  5304(c).16421643---------------------------------------------------------------------------1644Automation16451646    PVA believes that increased investment in automation could1647significantly decrease the occurrence of needless overpayments, such as1648those described above. Our NSOs have access to VBA systems that have1649significantly reduced the waiting time for processes like filing claims1650and adding dependents. Unfortunately, the process does not work the1651same for what should be a relatively simple task like removing1652dependents off a veteran's claim. Currently, it's so burdensome that1653our service officers must warn clients of the almost certain impending1654debt that will be created. The same is true with veterans who seek to1655halt their disability compensation to return to active duty.1656    VA should be required to develop an easier way for veterans to1657remove dependents or halt benefits through a system like VA.gov.1658Investing in such a system would save the department considerable1659funding in the long run by greatly reducing the number of waiver1660requests needed due to overpayments. It should be noted, however, that1661any new website or function must be accessible to all veterans,1662including those whose conditions require disability accommodations.1663Also, creating a specific form to halt VA payments for those who are1664returning to active duty would help the department manage these1665requests more quickly, and decrease the overall number of debts that1666are incurred.1667    PVA would once again like to thank the subcommittee for the1668opportunity to submit our views on VA's improper payments and the1669impact they have on our Nation's veterans.16701671  Information Required by Rule XI 2(g) of the House of Representatives16721673Pursuant to Rule XI 2(g) of the House of Representatives, the following1674information is provided regarding Federal grants and contracts.16751676                            Fiscal Year 202516771678Department of Veterans Affairs, Office of National Veterans Sports1679Programs & Special Events----Grant to support rehabilitation sports1680activities--$502,000.16811682                            Fiscal Year 202316831684Department of Veterans Affairs, Office of National Veterans Sports1685Programs & Special Events----Grant to support rehabilitation sports1686activities--$479,000.16871688                            Fiscal Year 202216891690Department of Veterans Affairs, Office of National Veterans Sports1691Programs & Special Events----Grant to support rehabilitation sports1692activities--$ 437,745.16931694                     Disclosure of Foreign Payments16951696Paralyzed Veterans of America is largely supported by donations from1697the general public. However, in some very rare cases we receive direct1698donations from foreign nationals. In addition, we receive funding from1699corporations and foundations which in some cases are U.S. subsidiaries1700of non-U.S. companies.17011702  Prepared Statement of Veterans of Foreign Wars of the United States17031704    Chairman Luttrell, Ranking Member McGarvey, and members of the1705subcommittee, on behalf of the men and women of the Veterans of Foreign1706Wars of the United States (VFW) and its Auxiliary, thank you for the1707opportunity to provide testimony on this topic.1708    The Department of Veterans Affairs (VA) may improperly pay1709beneficiaries for a variety of reasons. However, despite the cause,1710improper payments adversely affect beneficiaries either by overpayment1711and subsequent demands to immediately return the excess, or by1712underpayment that creates financial hardship. We limit our statement to1713four common causes of improper payments: incorrect effective dates,1714delayed notification of a life event, untimely VA action, and1715incarceration.17161717Incorrect Effective Dates17181719    Assigning erroneous effective dates when a veteran's disability1720compensation begins has been a major Veterans Benefits Administration1721(VBA) deficiency in Office of the Inspector General (OIG) reports for1722the past several years. Additionally, it was one of the top three1723rating error categories since 2011, as noted in the April 15, 2025, VA1724OIG report 24-01153-52, The PACT Act Has Complicated Determining When1725Veterans' Benefits Should Take Effect.1726    Claims processors must assign the most advantageous effective date1727for each grant, as an incorrect effective date can significantly1728financially penalize the claimant. Title 38, Code of Federal1729Regulations, Section 3.400 allows an effective date that is the date on1730which VA received the claim or the date on which the entitlement arose,1731whichever is later. Complicating this determination is the veteran's1732right to submit an ``intent to file'' establishing the effective date1733when VA receives the notice but allowing the veteran as long as 1 year1734from that date to actually file the claim.1735    Of the more than 31,000 errors that comprise this OIG report's data1736sample, the two most prevalent were the assignment of incorrect1737effective dates and the potential applicability of more advantageous1738effective dates. According to the report, claims processors likely1739contributed to the latter error by failing to collect additional1740evidence that could have led to a more advantageous effective date.1741    Enactment of the Honoring our PACT Act of 2022 (hereafter the1742``PACT Act'') exacerbated the situation and magnified the problem.1743Before passage of the PACT Act, incorrect effective dates comprised 181744percent of the errors the OIG catalogued. However, a combination of1745complex rules, a sudden influx of claims attributed to PACT Act1746enactment, and ineffective training for claims processors contributed1747to the error rate rising to 25 percent post-PACT Act.1748    Additionally, the PACT Act is a liberalizing law since it1749substantially changed benefits derived from certain toxic exposures1750under specific conditions. A claimant may qualify for an effective date1751of service connection as early as the enactment of the law, which in1752this case is August 10, 2022. The OIG discovered that claims processors1753did not pursue all avenues for the most advantageous effective date,1754and the PACT Act's liberalizing law status could have contributed to1755these errors.17561757Delayed Notification of a Life Event17581759    Beneficiaries must notify VA of major life events that could affect1760the amount of their disability compensation. For example, notification1761must be given to VA of remarriage or the loss of a spouse through death1762or divorce. Both situations would affect the amount of the veteran's1763disability compensation, and could result in either an underpayment or1764overpayment depending on the specific circumstances.1765    A survivor's remarriage, under certain conditions, could cause a1766substantial overpayment that the beneficiary would have to return.1767Remarriage before age 55 prompts a discontinuance of Dependency and1768Indemnity Compensation (DIC). VA sends survivors a marital1769recertification letter every 8 years. If the survivor is nonresponsive,1770VA will send two more letters and then a ``due process'' letter to1771which the survivor must respond within 60 days. If the survivor still1772does not respond, VA will discontinue DIC and require the beneficiary1773to repay any unauthorized benefits back to the last valid1774recertification, sometimes as far back as 8 years prior, which could1775cause a substantial overpayment that the beneficiary would have to1776return. Consequently, the indebtedness of some survivors could reach1777hundreds of thousands of dollars. Also, reporting a life change that1778would result in removal of a dependent so close to the next scheduled1779benefits payment that VA is unable to react in time could cause an1780overpayment that the beneficiary would have to repay. Last, a VA error1781such as issuing a double payment would also cause an overpayment.17821783Untimely VA Action17841785    Untimely VA action can also result in an overpayment. Even if the1786veteran conscientiously reports a change in status, if VA does not1787process the request quickly enough the beneficiary will receive an1788overpayment or underpayment appropriate to the situation. Our VFW1789Service Officers have provided the following examples as illustrations.1790In one case, the veteran petitioned VA to remove his dependent child1791from an educational program when she withdrew from school. VA took 2171792days from the time it received the request to remove her from the1793program, resulting in a $1653.00 debt to the veteran. In a second case,1794a veteran submitted a verification of dependents at the end of August17952024 to remove a spouse due to a divorce earlier that same month. VA1796processed the action 4 months later in April 2025, causing a $10311797debt. In each of these cases, overpayment would have been prevented if1798VA had processed the change request in a timely manner.17991800Incarceration18011802    VA will reduce disability compensation for felonious beneficiaries1803incarcerated for more than 60 days and will discontinue pensions for1804veterans convicted of either a felony or misdemeanor. Upon release, the1805veteran's compensation and pension payments may resume. However, VA1806does not reduce payments for beneficiaries participating in work1807release programs, residing in halfway houses, or under community1808control. Similar to failing to inform VA of life events, failing to1809notify VA of incarceration could result in an improper payment.1810According to the June 28, 2016, VA OIG report 13-02255-276, Veterans1811Benefits Administration Audit of Compensation and Pension Benefit1812Payments to Incarcerated Veterans, VBA did not consistently adjust1813benefits for several years for veterans incarcerated in Federal1814institutions. Causative factors included insecure electronic data1815sharing methods, including a lapsed computer matching agreement with1816the Federal Bureau of Prisons intended to identify potential1817incarceration adjustments, and a lower prioritization of these1818adjustments compared with eliminating the disability claims backlog. As1819a result, between May 2008 and June 2015, VA did not adjust1820incarcerated veterans' compensation and pension benefits in an1821estimated 53 percent of cases, resulting in improper payments totaling1822approximately $59.9 million. OIG recommendations to remedy the1823situation included issuing bills of collection to recover improper1824payments, increasing the priority placed on making timely compensation1825and pension benefits adjustments, and monitoring data sharing1826agreements with the Federal Bureau of Prisons and extending them when1827needed. VA will have to continually monitor the incarcerated veteran1828population to prevent a recurrence.1829    Chairman Luttrell and Ranking Member McGarvey, this concludes my1830statement. Again, thank you for the opportunity to offer comments on1831this issue.18321833Information Required by Rule XI2(g)(4) of the House of Representatives18341835Pursuant to Rule XI2(g)(4) of the House of Representatives, the VFW has1836not received any Federal grants in Fiscal Year 2025, nor has it1837received any Federal grants in the two previous Fiscal Years.18381839The VFW has not received payments or contracts from any foreign1840governments in the current year or preceding two calendar years.18411842                                 [all]