VA Issues Over $100 Million in Improper Emergency Education Benefits Payments

The Office of the Inspector General for the Department of Veterans Affairs (VA) recently reviewed allegations of improper emergency education benefits payments under the Post-9/11 GI Bill. Launched in September 2009, the VA' emergency payment initiative was designed to mitigate financial hardships experienced by veterans who were affected by significant delays in claims processing.

What Led to the Improper Emergency Benefits Payments?

The Post-9/11 expanded education benefits to thousands of eligible recipients in the fall of 2009, and the VA quickly faced a processing backlog. In turn, 122,000 emergency payments worth $356 million were issued so eligible veterans could use their GI Bill funds to attend school. These payments were initially intended to dig in to the servicemember’s future education benefits offered under the Post-9/11 GI Bill. However, this policy could only work if the servicemembers would in fact receive Post-9/11 benefits in the future.

A hotline tip regarding inadequate fiscal controls during the emergency payment initiative led to the investigation. A review of the alleged improper emergency payments from the VA’s Office of Inspector General notes that the tipster believed "the VA was not checking or verifying the information presented by applicants and that inadequate controls resulted in the misuse of funds."

Over $100 Million in Ineligible Payments Issued

The full report, "Veterans Benefits Administration: Review of Alleged Improper Emergency Payments for Education Benefits" from the Inspector General's Office was released on September 14th and reports the following discoveries from the investigation:

• The VA issued 35,000 emergency payments ($103 million) to ineligible military servicemembers
• The VA issued 2,700 emergency payments ($8 million) to servicemembers who did not meet VA criteria for receipt of emergency payments

The report also notes significant inadequate controls within the VA:

• The VA did not have a contingency plan for the emergency payment initiative
• The VA did not communicate clearly the eligibility rules to servicemembers
• The VA did not have proper controls in place to determine if applicants were eligible for VA emergency payments or enrolled in school

Ultimately, the emergency payment initiative created an estimated administrative burden and loss of approximately $87 million in unrecoverable debts out of the $356 million total payments.

Making it Right: Correcting the Improper Emergency Benefits Payments

Overall, the VA issued 87,000 emergency payments totaling $253 million to students enrolled in various VA education payments during the fall 2009 school term. According to the report, 29 percent of all emergency payments were provided to non-participating individuals. Elements of fraud were involved with the report finding 850 examples of ineligible individuals claiming emergency benefits.

While efforts are underway to recoup all of the advance payment funds, the Inspector General report expects that the effort will cost the VA millions of dollars in debts that can’t be collected and will need to be written off. In fact, the report continues that in recent years, the VA has only been able to collect around 41 percent of its education related debts.

Additionally, The Office of the Inspector General's findings led to a recommendation for the Acting Under Secretary for Benefits to "develop a contingency plan for additional emergency payments that includes effective communication of eligibility requirements and adequate controls to prevent payments to ineligible persons." This effort, in essence, would prevent a similar problem from happening in the future.

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