Funding is requested to  support an estimated full-time equivalent (FTE) employment level. In  fiscal year 2003, VBA spent about $878 million to administer its  compensation and pension programs. VBA’s Budget Justification Did Not Clearly Explain the Basis for Its Fiscal Year 2005 Compensation and Pension Staffing Estimates

VBA officials stated that productivity improvements, workload changes,  and attrition of experienced claims processing staff are considered  throughout the annual budget process. VBA’s fiscal year 2005 budget justification identified a number of  initiatives and projections that could affect its staffing levels. Despite identifying these factors in its 2005 budget justification, VBA does  not specify how such initiatives and projections will affect the number of  employees it needs to meet its claims processing performance goals. Finally, VBA’s fiscal year 2005 budget justification does not explicitly show  the impact of budget decisions to shift funding away from initiatives that  could improve productivity; such decisions were based on VBA’s emphasis  on meeting the Secretary’s 100-day timeliness goal for deciding rating- related claims. VBA officials identified training and information technology initiatives that  have been delayed because of these cuts in nonpayroll funds. Congressional oversight could be enhanced if  VBA’s budget justifications were more transparent. VBA Projected Claims Workload Is Based on Historical Trends and Other Factors but VBA Did Not Project Claims Complexity

VBA estimated the number of rating-related claims it would receive in  fiscal year 2005 based on historical trends and judgments about the likely  impacts of various factors on receipts, but it did not project claims  complexity, such as average disabilities per claim. For example, VBA  expected an increase in the number of claims received based on the  enactment of legislation allowing some military retirees to receive both  military retirement pay and VA disability compensation. For fiscal  years 2000 through 2004, VBA’s projections of rating-related claims  receipts varied from an underprojection of about 11 percent to an  overprojection of about 19 percent, as shown in table 1. However, its  budget justification does not provide information on VBA’s claims  processing productivity or how much VBA expects to improve  productivity. Consequently, the effect of complexity on VBA’s workload and  staffing requirements is unclear. A more transparent budget justification  would better inform the Congress’ oversight of VBA, by making it easier to  evaluate whether the agency’s administrative budget requests adequately  reflect the resources, particularly staff, needed to achieve expected  performance. Recommendation

To assist the Congress in its oversight of VBA’s compensation and pension  claims processing operations, we recommend that the Secretary of  Veterans Affairs direct the Under Secretary for Benefits to prepare the  following information and work with the Committees on Veterans’ Affairs  and the Appropriations Subcommittees on Veterans Affairs, Housing and  Urban Development, and Independent Agencies on how best to make it  available for their use:    explanation of the expected impact of specific initiatives and changes  in incoming claims workload on requested staffing levels;  information on claims processing productivity, including how VBA  plans to improve productivity; and    explanation of how claims complexity is expected to change and the  impact of these changes on productivity and requested staffing levels.
Why GAO Did This Study

The Chairman and Ranking Minority Member, Senate Committee on Veterans' Affairs, asked GAO to assist the committee in its oversight of the Veterans Benefits Administration's (VBA) disability compensation and pension programs. This report examines (1) VBA's determination and justification of claims processing staffing levels, and the role of productivity in such determinations, and (2) VBA's projections of future claims workload and complexity.

What GAO Found

VBA's fiscal year 2005 budget justification did not clearly explain how the agency would achieve the productivity improvements needed to meet its compensation and pension claims processing performance goals with fewer employees. According to VBA officials, productivity improvements, workload changes, and employee attrition were considered in developing its fiscal year 2005 budget request. While some of these factors were identified in VBA's budget justification, they were not linked to the requested full-time equivalent (FTE) employment levels. Also, VBA's justification did not specifically address its claims processing productivity or how much VBA planned to improve productivity. Finally, VBA does not explain the impacts of VBA budgetary decisions on long-term productivity. VBA officials identified information technology improvements and training programs that could help improve productivity but have been delayed because VBA shifted funding from these initiatives to support higher staffing levels. This was done to help meet VBA's shorter-term goal to improve claims decision timeliness, in particular the Secretary of Veterans Affairs' goal to reduce decision time for rating-related claims to an average of 100 days. More transparent budget justifications would better inform congressional oversight of VBA by making it easier to evaluate whether the agency's budget requests reflect the resources, particularly staffing, needed to achieve expected performance. V BA estimated the number of claims it expects to receive (receipts) in fiscal year 2005 based on historical workload trends, with adjustments for factors that could affect future receipts, notably the impact of legislation allowing some military retirees to concurrently receive Department of Veterans Affairs (VA) disability compensation and military retirement pay. The accuracy of VBA's projections of rating-related receipts for fiscal years 2000 through 2004 was mixed, varying from underprojecting by about 11 percent to overprojecting by about 19 percent. Actual receipts in fiscal year 2004 exceeded VBA's projections. Meanwhile, VBA did not project claims complexity in its fiscal year 2005 budget justification and did not explain how it expected claims complexity to affect its productivity and requested staffing levels. A claim's complexity can be affected by many factors, such as the number and types of disabilities claimed. VBA's budget justification could be improved if the agency explained how changes in complexity affect workload and staffing requirements.