oversight

Further Action by Veterans Administration Could Reduce Administrative Costs and Improve Service to Veterans Receiving Educational Benefits

Published by the Government Accountability Office on 1971-07-08.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

Reduce Adminis




BY THE COMPTROLL      GENEIUL
OF THE UNITEL’ STATES
              COMPTROLLER         GENERAL       OF      TIiE       UNITED   STATES

                                WASHlNGTOM.      D.C.          20548




B- 114859




To the President   of the Senate and the
Speaker  of the House of Representatives

        This is our report     entitled   “Further                           Action     by the Veterans
Administration       Could Reduce Administrative                                 Costs and Improve
Service     to Veterans   Receiving     Educational                           Benefits.”

      Our review   was made pursuant   to the Budget and Accounting
Act, 1921 (31 U.S.C. 53), and the Accounting   and Auditing Act of
1950 (31 U.S.C.  67).

         Copies of this report                are being sent to the Director,     Office
of Management      and Budget,                and to the Administrator     of Veterans
Affairs.




                                                     Comptroller                General
                                                     of the United              States




                            50TH ANNIVERSARY                      1921- 1971
COMPTRQLLER GENEi'tYiL'S                      FURTHER ACTION BY VETERANS ADMINISTRATION
REPORT.TO THE CONGRE;"S                       COULD REDUCE ADMINISTRATIVE COSTS AND
                                              IMPROVE SERVICE TO VETERANS RECEIVING
                                              EDUCATIONAL BENEFITS B-114859


DIGEST
-----_

WHY THE REVIEW WAS MADE
                                                                                                          #
   '   The Weterans Administration     (VA) provides    financial     assistance     to vet-
       erans while they are obtaining     an education:       VA paid $1 billion        to
       about 1.3 million    veterans in fiscal   year 1970,and payments are expected
       to increase to $1.4 billion     to about 1.5 million       veterans    in fiscal    year
       1971.    (See p. 3.)

       The General Accounting       Office      (GAO) reviewed VA's practices      and proce-
       dures for processing      veterans'       status documents--the    basis for payment
       of educational   benefits--because           of indications   that processing   delays
       had resulted   in late payments          and overpayments    or underpayments.


FINDINGS AND CONCLUSIONS

       VA regional   offices   manually verify  data on a veteran's    status docu-
       ments, such as his name and identification       number, with like data in
       his case file     and compute the amount of monthly payments due the vet-
       eran.   VA"s data processing     center, however, verifies    most of the same
       data with a master record which is maintained       for each veteran and in
       most cases computes the amount due the veteran.          (See p. 5.)

       VA could accelerate          the processing      of status      documents by eliminating
       the regional      office     manual verification        of   status documents and by
       placing greater        reliance      on the capability       of its automatic       data proc-
       essing equipment to perform this function.                    A test by VA's Los Angeles
       Regional Office        during the period March to            June 1970 demonstrated         that
       it would be feasible           to transmit    data from      status documents directly
       to the data processing             center for computer       verification      without   prior
       regional   office      manual verification         of the    data.       (See p. 10.)   GAO
       assisted   WA officials          in this test.

       GAO estimated    that placing greater     reliance    on computer verification
       of data from status     documents would result      in savings of about $600,000
       annually.     To achieve such savings,      however, the data processing         cen-
       ter's   computer would have to be reprogrammed.          Additional    computer
       time also would be needed to perform these functions.               VA officials     es-
       timated   that such reprogramming     would involve     a one-time    cost of about
       $72,000 and that increased      corn uter time would cost about $100,000
       annually.     (See pp. 12 and 13. P

Tear Sheet




                                                                        JULY        8,197l.
                                                                                       I

                                                                                       / ’
                                                                                       I
                                                                                       I
                                                                                       I
RECOMMENDATIOflS
             OR SUGGESTIONS                                                            I
                                                                                        ,
                                                                                       I
    The VA regional     offices should, whenever possible,   forward all data          I
                                                                                        I
    from status     documents to the data processing  center to be processed            I
    without   referral   to the case files.   (See pp. 14 and 15.)                      I
                                                                                        I
                                                                                        I
                                                                                        I
AGENCYACTIONSAND UNRESOLVED
                          ISSUES                                                        I
                                                                                        I
                                                                                        I
    VA agreed,   in principle,      with GAO and said that procedures    for auto-      I
    mating the processing       of status documents which concern reenrollment          I
                                                                                        I
    in the educational      assistance   program had been implemented    in 1970 and    I
    were being refined.        VA said that-it   planned to further  automate the       I
                                                                                         I
    processing   of other status documents as soon as reasonably         possible.         I
    (See p. 14.)                                                                           I
                                                                                           I
                                                                                           I
                                                                                           I
MATTERSFOR CONSIDERATION
                       BY THE CONGRESS                                                     I

                                                                                           I
    GAO is reporting  this matter to the Congress to inform        it of the ac-           1
                                                                                           I
    tions being taken by VA to reduce costs and to improve         service  to vet-        I
    erans.                                                                                 I
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                          Contents
                                                                 Page

DIGEST                                                            1

CHAPTER
   1       INTRODUCTION                                            3

   2       NEED TO IMPROVEPROCEDURES       FOR PROCESSING
           STATUS DOCUMENTS                                        5
               Procedures for processing       status docu-
                 ments                                             5
               Delays in processing     status documents           7
               Potential   for processing    status docu-
                 ments Without referral      to case files         9
               Test of transmitting     unverified    data        10
               Significant    cost savings possible with
                 further   automation of processing       pro-
                 cedures                                          12

   3       AGENCYCOMMENTS  AND GAO RECOMMENDATION                 14
              Recommendation                                      14

   4       SCOPEOF REVIEW                                         16

APPENDIX
       I   Letter dated February 23, 1971, from the
             Associate Deputy Administrator    of Veterans
             Affairs  to the General Accounting Office            19

  II       Principal    officials     of the Veterans Adminis-
              tration   responsible     for administration  of
              the activities      discussed in this report        21

                          ABBREVIATIONS

DPC        Data Processing Center
GAO        General Accounting Office
VA         Veterans Administration
                                             FURTHER ACTION BY VETERANS ADMIMSTRATION
                                             COULD REDUCE ADMI!~ISTRATIVE COSTS AND
                                             IMPROVE SERVICE TO VETERANS RECEIVING
                                             EDUCATIONAL BENEFITS B-114859


DIGEST
------


WHY THE REVIEW WAS MADE

    The Veterans Administration     (VA) provides    financial     assistance     to vet-
    erans while they are obtaining     an education.       VA paid $1 billion        to
    about 1.3 million    veterans in fiscal   year 1970, and payments are expected
    to increase   to $1.4 billion   to about 1.5 million       veterans    in fiscal    year
    1971.    (See p. 3.)

     The General Accounting       Office      (GAO) reviewed VA's practices      and proce-
     dures for processing      veterans'       status documents--the    basis for payment
     of educational   benefits--because           of indications   that processing   delays
     had resulted   in late payments          and overpayments    or underpayments.


FINDINGS AND CONCLUSIONS

     VA regional   offices     manually verify  data on a veteran's      status  docu-
     ments, such as his name and identification          number, with like data in
     his case file     and compute the amount of monthly        payments due the vet-
     eran.   VA's  data    processing   center, however,   verifies    most of the same
     data with a master record which is maintained          for each veteran     and in
     most cases computes the amount due the veteran.              (See p. 5.)

     VA could accelerate           the processing      of status      documents by eliminating
     the regional       office     manual verification        of   status     documents and by
     placing   greater       reliance       on the capability      of its automatic       data proc-
     essing   equipment        to perform      this function.        A test by VA's Los Angeles
     Regional Office         during      the period March to       June 1970 demonstrated         that
     it would be feasible            to transmit     data from     status     documents directly
     to the data processing              center for computer       verification      without   prior
     regional    office      manual verification         of the    data.       (See p. 10.)   GAO
     assisted   VA officials           in this test.

     GAO estimated    that placing   greater    reliance    on computer verification
     of data from status     documents would result       in savings of about $600,000
     annually.     To achieve such savings,       however, the data processing         cen-
     ter's   computer would have to be reprogrammed,           Additional    computer
     time also would be needed to perform these functions.                VA officials     es-
     timated   that such reprogramming      would involve     a one-time    cost of about
     $72,000 and that increased      computer time would cost about $100,000
     annually.     (See pp. 12 and 13.)
RECOMMENDATIONSOR 3X;ESTIONS

     The VA regional     offices should, whenever possible,   forward all data
     from status     documents to the data processing  center to be processed
     without   referral   to the case files.   (See ppB 14 and 15.)


AGENCY ACTIONS AND UNRESOLVEDISSUES

     VA agreed,   in principle,      with GAO and said that procedures     for auto-
     mating the processing       of status documents which concern reenrollment
     in the educational      assistance   program had been implemented     in 1970 and
     were being refined.        VA said that it planned to further     automate the
     processing   of other status documents as soon as reasonably          possible.
     (See p. 14.)


MATTERS FOR CONSIDERATION BY THE CONGRESS

     GAO is reporting  this matter to the Congress to inform        it of the ac-
     tions being taken by VA to reduce costs and to improve         service  to vet-
     erans.
                              CHAPTER1

                            INTRODUCTION

      The Educational     Assistance Program authorized        by shap-
ters 31, 34, and 35 of title        38, United States Code, as
amended,lprovides      for the Veterans Administration       to assist
veterans     to meet their tuition,      living    expenses, and other
costs while obtaining      an education.        The duration of assis-
tance to a veteran is determined primarily            by the length of
his military    service and generally        ranges from 9 to 36
months.
     In fiscal     year 1970 about 1.3 million      veterans partici-
pated in the educational       assistance   program and received
about $1 billion     in benefits.      VA estimated that in fiscal
year 1971 educational     assistance     payments would increase to
about $1.4 billion     because of anticipated      increases in the
number of participating      veterans (1.5 million)      and because
of authorized    increases in the amounts of monthly benefit
payments.

       In March 1970 legislation      was enacted which increased,
as of February 1, 1970, educational         assistance  payments to
veterans.    Under this law the minimum payment to a veteran
attending   a full-time   educational    program at a university    or
college is $175 a month, as compared with the $130 a month
previously   authorized.     The amount of the monthly payment
to a veteran depends on such factors         as the type of educa-
tional program, the number of courses, and the number of
his dependents.
        The VA Department of Veterans Benefits has 57 regional
offices    throughout    the Nation which administer     the various
veterans'     programs authorized      by the Congress,    A veteran
applies for educational       benefits    at a regional  office.
The office     determines his eligibility      and is his principal


1
 As used in this report,    the term "veteran'" includes        veterans
 and servicemen and their wives, widows, and children            who
 are eligible  for educational   benefits.



                                    3
point of contact with VA. The regional               office    establishes
and maintains      a case file which is the depository             of all of-
ficial    VA records pertaining        to the veteran.        Documents af-
fecting    educational    benefit payments to a veteran,             such as
a certification      of enrollment       in school, termination        of en-
rollment,     and  changes  in   the  number   of  his    dependents    or
course load--hereinafter         collectively     referred     to as status
documents-- are maintained         in the veteran's       case file.

      The VA Department of Data Management operates a data
processing   center (DPC) at Hines, Illinois,    which uses a
computer to process data related    to educational    benefits.
For each veteran DPC maintains a master record which con-
tains selected data obtained from the documents on file at
the regional   office.

      DPC also maintains master payment tapes which contain
data showing the amount of educational       benefits   to be paid
to each veteran each month.      DPC revises the tapes each
month to incorporate    any payment changes that result       from
the processing   of status documents and furnishes        the master
payment tapes to regional    Treasury Disbursing      Centers which
prepare and issue the educational     benefit   payment checks.
                              CHAPTER2

                 NEED TO IMPROVEPROCEDURES
                                         FOR

                   PROCESSINGSTATUS DOCUMENTS

      VA is not using its automatic data processing            capabil-
ity to maximum advantage to process status documents perti-
nent to the payment of educational        benefits   to veterans.
Regional office     employees manually verify      data on a veteran's
status documents, such as his name and identification             number,
with like data in his case file and compute the amount of
monthly payments due the veteran.         The regional    office    then
transmits    data from the status documents to DPC for inclu-
sion in the veteran's      master record.    At DPC the computer
also verifies    most of the data from the status documents
with data on the master record and, in most cases, computes
the amount of the monthly payment due the veteran.              We be-
lieve that greater reliance       on computer verification       of the
data could result     in reducing the manual processing         costs
by about $600,000 annually.

      To achieve such savings,VA would have to reprogram
DPC's computer to provide for verifying    pertinent  data from
each status document processed and for performing     all pay-
ment calculations.   Additional  computer time also would be
needed to perform these functions.     VA estimated that such
reprogramming would involve a one-time cost of about $72,000
and that increased computer time would cost about $100,000
annually.

       Elimination of the regional    offices'   manual verifica-
tion of data on status documents would result         in the accel-
eration of the processing     of the documents, in earlier        pay-
ments of benefits   to veterans,    and  in  the reduction   of   pos-
sible overpayments and underpayments.

PROCEDURES
         FOR PROCESSINGSTATUS DOCUMENTS

       Cur observations      of educational benefit processing op-
erations,    including   the flow of documents, at the VA re-
gional offices      in Los Angeles and Boston showed that the
two regional     offices   followed the procedures described below.


                                   5
      When a veteran applies for financial            assistance,     the
regional  0fficeOs Administrative        Division     prepares a case
file to store all documents pertaining            to the veteran".5
dealings with VA. The case file and the veteran's                 applica-
tion are delivered   to the Adjudication          Division which de-
termines the veteran!s    eligibility      for educational        benefits
and forwards the application        to the Finance Division         in the
regional  office,

       The data     on the application     is keypunched on paper tape
by the Finance        Divisioqand    the tapes are transmitted    to
DPC, where an       individual    master record is created on mag-
netic tape for       use in the computer system.       The case file
containing    the     documents is then returned to the Administra-
tive Division       to be stored in the file room,

         On the basis of the data in the master record, the com-
puter prepares a form for the veteran which shows his eli-
gibility,      The form also serves as an enrollment          certifica-
tion which the veteran gives to the school to complete.                   The
school completes the enrollment       certification        and transmits
it to the regional     office   where the Administrative         Division
obtains the veteranIs       case file and forwards the certifica-
tion and case file to the Adjudication           Division.

       An adjudicator    verifies   certain    data3 such as the vet-
eran's name and identification         number on the certification,
by referral    to documents in the case file and computes the
monthly payment,      The data from the enrollment         certification
is entered on a form which is sent to the Finance Division,
and the case file,     including    the certification,      is returned
to the file room. The Finance Division             keypunches the data
from the form on paper tape, sends the form to the file
room for inclusion     in the case file,       and sends the paper
tape to DPC where the computer is used to transfer                the in-
formation   to the veteran!s      master record and the master pay-
ment tapes.

        VA regional  office offecials  told us that the manual
verification     of data on status documents with data on docu-
ments in the case filewas performed to ensure that the in-
coming data on the status documents is correct before it is
stbmitted    to DPC for use in updating the master records and
master payment tapes,


                                    4
BELAYS IN PRQCESSINGSTATUS DOCkTMEEJTS
      Belays in processing   status documents which authorize
the initial   benefit payments and subsequent increases or de-
creases in the amounts of the payments result in delayed
payments and overpayments or underpayments to some veterans.
Either instance is apt to cause hardship to the veteran.
Overpayments also result   in collection  costs to VA.
      VA's established   time goal for processing   status dots
ments provides that, generally,     they be processed by a re-
gional office   within '85 days after receipt,,   VA Central (4f-
fke officials     in Washington, B.C., informed us that the
goal was established    on the basis of what VA would Like to
achieve and, considering     prior experience,  what could rea-
sonably be expected.

       TO determine how well the regional   offices      were meeting
the established    goal, we selected from the Boston and LOS
Angeles Regional Offices a random sample consisting             of 199
enroLLment certifications    and analyzed the time required           to
process each of the certifications.      As summarized       in   the
following   table, 97 of the 199 enrollment     certifications,
or about 49 percent, were not processed within the 15-day
goal.
                                  Enrollment certifications
       grocessinktime                  Number    Percent

        Within 15 days                      102          51
        Over 15 days:
             16 to 20 days             27          13
             2% to 25 days             23          10
             26 to 30 days             15           9
             31 to 40 days             14           8
             41 to 50 days              8           4
             51 to 60 days              3           2
             Over 60 days              -7          -3
                                             97          49

                  Total                     199         100
The delays in processing  the enrollment  certifications gen-'
erally were attributable  to the time required to locate case
files which had been removed from the file room and to the
backlog of cases awaiting processing,

       To ascertain    the extent to which overpayments were
caused by delays in the processing of status documents, we
selected and analyzed a random sample of 200 overpayments
made to veterans by the Boston and Los Angeles Regional Of-
fices,    These overpayments were uncollected     as of Qctober
1969 6   We found   that:

      --Delays in processing  status documents had caused 29
         overpayments, about 15 percent, totaling about
         $2,900.

      --The time required to process the status documents for
         the 29 overpayments had ranged from 18 days to over
         60 days.

     As of October 1969 at the two regional         offices     there
were 12,460 uncollected       overpayments totaling    about
$1.7 million,       On the basis of our sample results,we         esti-
mated that,of     the 12,460 overpayments,about     1,870, or about
15 percent,    totaling    about $187,000 had been caused by de-
lays in the processing of status documents.          At the time of
our analysis,about      47,000 overpayments totaling      about
$6.6 million    were uncollected     at all VA regional    offices.




                                   8
POTENTIAL FOR PROCESSINGSTATUS DCCUHENTS
WITHOUT REFXXRALTO CASE FILES

       Our examination of printed copies of master record
tapes maintained by DPC showed that much of the data neces-
sary for verification       of data on status documents was con-
tained in the master records.           In fact much of the data
which is verified       manually at the regional        offices      is also
verified   by the computer.        For  example,   in   processing       an
enrollment   certification,      the regional     office      adjudicator
compares data in the case file with data on the certifica-
tion to verify      the veteran@s identification         number, name,
dependency information,        and  date   the  payment     is to start
and computes the amount of the monthly payment.                   At DPC the
computer compares the same data from the enrollment                    certifi-
cation with data in the veteranIs           master record and verifies
the benefit    payment computation        (except when a veteran's
course load is less than half the course load of a full-time
student),
      The Los Angeles Regional Office has about a thousand
employees and has about a million      case files in storage.
When a veteran's   case file is removed from storage, a card
is left in its place which shows its general location        at
that time.   For example9 the card may show that the case
file is in the Adjudication    Division,   but it will not show
the name of the individual   who has the file.

       At any given time about 10,000 files are out of storage
and can be in one of many locations      within the regional     of-
fice.    During peak work load periods as many as 40,000 files
may be in circulation.     Most of these files    are in the Adju-
dication   Division which has about 250 employees,      Since the
location   card designates   only the general location    of a case
file and since the file can be moved both within the Adjudi-
cation Division    and to other areas of the office,    locating
a file may be difficult    and time-consuming.

      On the basis of our observations   and discussions   with
Los Angeles Regional Office officials,    we believe that VA
could substantially  reduce the cost and time necessary to
process status documents by eliminating    the manual verifica-
tion of the accuracy of the documents and by reprogramming
its computers to perform this operation.

                                       9
     We assisted     the Los Angeles Regional        Office in devel-     '
oping procedures     that would place reliance        on computer veri-
fications      and computations    without   the status   documents
first     being verified     at the regional    office.These proce-
dures provide     for (1) data on status documents to be re-
viewed by an    adjudicator   for legibility     and reasonableness,
put on paper    tape, and transmitted       to DPC and (2) computer
verification    of the data on the paper tape by comparison
with data in    the master record.

        The adoption of these procedures would result in sub-
stantially    reducing the work load at the regional   office  by
eliminating    the need to search for a case file every time a
status document is received and by eliminating      the manual
verification.

TEST OF TRANSMITTING UNVERIFIED
                             -. ---DATA
       In March 1970 the VA Los Angeles Regional Office under-
took a test of the feasibility       of the above procedures.
During a go--day period from March to June 1970, data con-
cerning termination    of veterans"    benefits     was transmitted
from status documents (about 3,200) to DPC for computer
processing   without regional   office   verification      with data
in case fifes.

      The results    of the test demonstrated that it was fea-
sible to transmit     data from status documents directly       to
DPC without prior regional         office manual verification   of
the data.      About 90 percent of the status documents were
processed in this manner without any subsequent referral           to
the case files.      Because of errors in the veteranss names
or identification     numbers,most of the remaining 10 percent
of the status documents required          subsequent referral to case
files  at the regional     office.

      In October 1970 we discussed the results    of this test
with the VA Central Office Director    of Compensation, Pen-
sion and Education Service and with members of his staff.
The Director  advised us that VA had been continually     study-
ing methods to automate the processing    of status documents
and that he was encouraged by the results    of our review in
this area,   We stated that, as a result of our review and
VA"s own studies,   VA-wide procedures had been implemented
which provide for transmitting    data concerning veterans'
reenrollment  in the educational   assistance   program from
status documents directly    to DPC without prior manual veri-
fication.

        He explained,     however, that, because of other higher
priorities      for computer programming time--such            as legisla-
tive changes affecting        veterans'      benefit    payments--further
revision      and implementation    of procedures to reduce manual
verifications       at the regional     offices     could not be accom-
plished at that time.         He agreed to maintain a surveillance
over the present priorities         and, as manpower and computer
time became available,        to give priority        to revising     and im-
plementing      such procedures.
SIGNIFICANT CQST SAVINGS POSSIBLE WITH
FURTHER AUTOMATION OF PROCESSING PROCEDURES

       Considering    the volume of status documents generated
by VABs educational        assistance  program and considering     the
regional   offices8     time-consuming    procedures for verifying
data on status documents prior to transmittal             of the data
to DPC, the elimination         of the manual verifications     would
result   in significant      savings in manpower and related costs,

       Since the test at the Los Angeles Regional Office dem-
onstrated    the feasibility     of computer verification     of data
from status documents with data in the master records, we
estimated the potential        savings that could be realized      if
VA were to revise its procedures to eliminate            or minimize
regional    office verification      of data on status documents.
       We discussed with VA Central Office officials                 the vari-
ous types of status documents which would be susceptible                      to
processing    at the regional        offices without referral          to the
case files,      We were advised that referral             to case files
would be necessary to process status documents which relate
to veteranss      initial   enrollment      in the program.        Therefore,
in estimating       the total number of status documents which
would be susceptible        to improved processing procedures,             we
eliminated    initial     enrollment      documents.      We also eliminated
reenrollment     documents, since procedures             had been imple-
mented to process them at the regional               offices    without re-
ferral   to the case files.

       On the basis of the total number of status documents
processed by VA in fiscal        year 1970, less enrollment     and
reenrollment    documents, we estimated that transmitting         data
from status documents directly          to DPC without prior regional
office    manual verification      of the data would result in sav-
ing about 60 man-years of effort          representing   costs of about
$600,000 annually,         The savings would result from (1) reduc-
tions in overtime requirements         and in the number of new em-
ployees needed to handle the increasing           work load and (2)
redirection    of available     manpower to more pressing work load
areas.

      To achieve     these savings, DPC's computer would have to
be reprogrammed      to verify  pertinent data from each status


                                        12
' document processed and to make all payment calculations,
  Additional   computer time also would be needed to perform
  these functions.     VA officials estimated that such repro-
  gramming would involve a one-time cost of about $72,000 and
  that increased computer time would cost about $100,000 annu-
 ally.

       We believe that further     automation of the processing
 of status documents would result       in earlier   payments to vet-
 erans and would reduce the possibility         of overpayments and
 underpayments.      In addition,  it should result     in reduced
 costs of collecting     overpayments.




                                  13
                              CHAPI'ER3

            AGENCYCOPQ!TEmS
                          AND GAO RECOMMENDATION

       In a draft of this report submitted to VA for comment,
we proposed that VA (1) reexamine existing      priorities for
computer programming time for the purpose of expediting        the
    lementation   of procedures that would make maximum use of
computers in processing     educational  status documents and (2)
establish    the earliest  possible target date for such imple-
mentation.

      In a letter   dated February 23, 1971 (see app, I>, the
Associate Deputy Administrator     of Veterans Affairs    told us
that VA agreed, in principle,     with our views regarding     the
computer processing     of status documents without referral      to
case files.     He pointed out that procedures for automating
the processing    of reenrollment  status documents had been im-
plemented in 1970 and were being refined,        He advised us also
that VA planned to automate further      the processing of other
status documents, such as unscheduled termination        and depen-
dency changes, as soon as reasonably possible.

        When fully     implemented    and refined,  the revised proce-
dures for processing         reenrollment    status documents, which
constitute       about 35 percent     of all status documents, should
assist     in achieving     more timely   handling  of veterans! educa-
tional     assistance    payments.

       In our opinion,     however, the increasing       number of vet-
erans participating       in the educational     assistance   program
makes it imperative      that VA make maximum use of its computer
capabilities    for processing all status documents which may
be susceptible      to automation.     We believe that, to achieve
the potential     for savings    ($600,000) and to achieve improved
service to veterans,       VA should establish     target dates for
implementing    the automated processing       of all status docu-
ments which may be susceptible         to automation.

RECOMMENDATION
     We recommend that t'he Administrator    of Veterans Affairs
have the Chief Benefits  Director  establish   target dates for


                                  14
implementing procedures requiring   that, whenever possible,
all data from status documents be transmitted   by the re-
gional offices  to DPC to be processed without referral    to
the case files.




                              15
                           SCOPEOF REVIEW

       Our review was made at the VA regional        offices   in
Los AngePes, California,        and Boston, Massachusetts;     at DPC
in Hines, Illinois;       and at the VA Central Office in Wash-
ington, B.C, We reviewed the procedures and observed the
operations    for processing      the various documents which are
required   to initiate,     revise,    and terminate educational     as-
sistance benefits       to veterans.     Discussions were held with
the various VA officials        involved with the activities      dis-
cussed in this report.
APPENDIXES




  17
                                                                           APPEND.IXI


                             VETERANS ADMIPIISTRATION
                          OFFICEOF THE ADMINISTRATOR OF VETERANS AFFAIRS
                                 WASHINGTON, D.C.         20420

                                        February23,         1971



.
    1%. Max Hirschhorn
    Associate   Director,      Civil    Division
    U. S. General     Accounting       Office    (801)
    Room 137, Lafayette        Building
    811 Vermont Avenue,        N. I~?.
    Washington,    I). c. 20420


    Dear Mr.      Hirschhorn:
                 Thank you for the opportunity           to review    and
    comment on your proposed         draft    report    entitled
    "Opportunity      to Reduce Administrative          Costs of the
    Veterans     Administration     Education     Assistance     Program
    and to Improve        Service to Veterans."
                  We agree in principle               with the draft           report
    recommendation          as it relates         to processing           status
    documents      through       Adjudication         Divisions        and Finance
    and Data Processing             activities        of the Veterans                           0
    Administration          without      claims     folders.        The conclusions
    in the GAO draft           report       are based,       for the most part,
    upon unscheduled           terminations.            The Veterans          Administration
    in FY 1970 implemented               and is refining           procedures         to permit
    processing       documents        without     the claims         folder      for
    re-entrance        into school.            The volume of re-enrollment                  is
    much greater         than unscheduled           terminations,           re-enrollments
    are much more adaptable                 to automated        procedures,          and
    adverse     publicity        results       if claimants        are not paid promptly
    after    re-enrolling.            Other status         documents,         such as
    unscheduled        terminations           and dependency         chaqes,         are in
    our plans for further               automation.
                 While we have no argument with the range of
    dollars    indicated,   the savings      cannot be effectively
    related   to a specific      number of people since fragmented
    bodies   at 57 regional      offices   are involved.        The effect,                  if
    any, will     perhaps  be reflected      in lesser    overtime      require-
    ments.     Considering    the increasing      workload,     innovations


                                                19
 APPENDIX I

     Nax Hirschhorn
i-h? .
Associate   Director,     Civil     Divis.ion
U. S. General     Accounting       Office     (801)

such as out-lined    in your report    are an absolute     necessity.
Any lessened    personnel   needs generated     by such improve-
ments are diverted      to more pressing    workload   needs.
             We appreciate      your interest      in our operations
and welcome any recommendations              which will     improve   our
service    to veterans      and reduce costs.          We recognize     that
improved     service   is possible       subject   to a calculated        risk
that payments will         not be correctly       adjusted     or terminated
in every instance.          Essentially,      we agree with the
principle     of processing       status   changes without       the claims
folder    and intend     to introduce      all applications        of this
principle     as soon as is reasonably           possible,.
                                       Sincerely,




                                      RUFUSH. WILSON
                                      Associate Deputy Administrator             - in
                                      the absence of
                                      FRED B. RHODES
                                      Deputy Administrator




                                        20
.
                                                              APPENDIX II

                              PRINCIPAL OFFICIALS OF

                            THE VETERANSADMINISTRATION

                    RESPONSIBLEFOR ADMINISTMTION OF THE

                         ACTIVITIES DISCUSSEDIN THIS REPORT


                                                    Tenure of office
                                                    From             To
                                                                     -
ADMINISTRATOROF VETERANSAFFAIRS:
   D, E. Johnson                               June    1969    Present

DEPUTYADMINISTRATOROF VETERANS
  AFFAIRS:
    F. B. Rhodes                               bY      1969    Present

CHIEF BENEFITS DIRECTOR:
    R. H. Wilson                               July    1969     Feb. 1970
    0. B. Owen                                 Feb.    1970     Present

DIRECTOR, COMPENSATION,PENSION
  AND EDUCATIONSERVICE:
    J. T. Taaffe, Jr.                          Mar.    1968     Present

CHIEF DATA MANAGEMENT
                    DIRECTOR:
    P. J. Budd                                 Feb.    1963     Present




U.S. GAO, 'Jash.. D.C.
                                        21