In 2006, VA paid over $34 billion in compensation and pension benefits to  about 3.5 million veterans and survivors. The VA Pension Population Is Characterized by Low Income, Older Ages, Multiple Impairments, and Decreasing Numbers

In 2006, most VA pensioners had nonpension incomes well below the  federal poverty level, were beyond retirement age, and had multiple  impairments, and the population had been decreasing in number. The Size of the Pensioner Population Has Decreased

As shown in table 2, the total number of pensioners has been decreasing in  recent years, although the number of pensioners from more recent service  periods has been increasing. For Initial Pension Claims, VA Policies and Procedures Do Not Always Ensure Well-Supported Decisions

VA policies and procedures are not sufficient to ensure sound decisions on  new pension claims. Unlike other federal agencies with similar income- based programs, VA largely does not independently verify the accuracy of  financial information provided by claimants to support initial pension  program eligibility, a fact that makes the pension program vulnerable to  improper payments. In addition, the guidance used by staff to make  pension eligibility decisions, which is under revision and dispersed across  several sources, is not always current or clear. Further, VA’s quality  assurance review process for initial claims does not select a sufficient  number of pension cases to examine to ensure the accuracy of pension  decisions. Finally, VA does not adequately evaluate pension training. For Ongoing Pension Cases, VA Procedures and Controls Do Not Adequately Ensure That Benefits Are Proper

VA procedures for assessing whether pensioners continue to receive the  proper benefits have significant limitations because VA does not require  pensioners to submit financial documentation, conducts untimely and  inefficient verification of pensioners’ incomes and assets, and lacks a  system for identifying and reducing improper pension benefits. Although  the agency requires all pensioners to submit documentation for  nonfinancial changes, such as for marriages or deaths, it does not require  documentation such as bank or asset statements when pensioners report  financial changes. Finally, despite millions of dollars in improper  payments made each year, VA does not collect sufficient data on causes of  improper payments that could be used to help it better manage the  pension program. 5. Appendix I: Objectives, Scope, and Methodology

The Senate Veterans’ Affairs Committee asked GAO to (1) determine the  characteristics and trends in size of the pensioner population, (2) assess  the policies and procedures the Department of Veterans Affairs (VA) has  in place to ensure that initial pension eligibility decisions are well  managed, and (3) assess the procedures VA has in place to ensure that  pensioners continue to receive the proper benefit payments. We visited 4 of VA’s 57 regional offices, located in  Boston, Milwaukee, Providence, and St. Paul.
Why GAO Did This Study

In 2006, the Department of Veterans Affairs (VA) paid about $3.5 billion in means-tested pension benefits to over 500,000 veterans and survivors. GAO was asked to review the management of VA pension program. This report assesses (1) the characteristics and trends in size of the current pensioner population, (2) the policies and procedures VA has in place to ensure that initial pension eligibility decisions are well managed, and (3) the procedures VA has in place to ensure that pensioners continue to receive the proper benefit payments on an ongoing basis. Our study included reviews of agency policies, procedures, and internal controls; site visits to 4 of VA's 57 regional offices and all three of its pension maintenance centers; and a selected file review of new claims at three locations.

What GAO Found

In 2006, most of the over 500,000 VA pensioners had nonpension incomes well below the federal poverty level, were beyond retirement age, and had multiple impairments, and the population has been decreasing in number. The average annual reported income of these pensioners, excluding their VA pensions, was less than $5,000. The average age of VA pensioners was 70. More than 80 percent had no spouse or dependent children. Three-fourths of veteran pensioners had multiple impairments. After reaching a peak of almost 2 million in 1978, the overall size of the pensioner population has gradually decreased, although the number of pensioners from more recent service periods has been increasing. VA policies and procedures are not sufficient to ensure sound decisions on new pension claims. Unlike other federal agencies with similar income-based programs, VA largely does not independently verify the accuracy of financial information provided by claimants to support initial pension program eligibility. In addition, the guidance used by staff to make pension eligibility decisions is not always current or clear. Further, VA's quality assurance review process for initial claims does not select a sufficient number of pension cases to ensure the accuracy of pension claims decisions. Finally, VA does not adequately evaluate training for pension staff. VA procedures for assessing whether pensioners continue to receive the proper benefits have significant limitations. Although the agency requires pensioners to report changes that might affect their pensions, VA does not require documentation such as bank or asset statements when pensioners report financial changes. Also, a key data match operation with the Internal Revenue Service is not conducted in a timely or efficient manner. Finally, despite millions of dollars in improper pension payments made each year, VA lacks a system to monitor and analyze their causes.