Combined Assessment Program Review of VA Regional Office Nashville, Tennessee
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Department of Veterans Affairs Office of Inspector General Combined Assessment Program Review of the VA Regional Office Nashville, Tennessee Report No. 02-02248-31 December 13, 2002 VA Office of Inspector General Washington, DC 20420 Office of Inspector General Combined Assessment Program Reviews Combined Assessment Program (CAP) reviews are part of the Office of Inspector General's (OIG's) efforts to ensure that high quality health care and benefits services are provided to our Nation's veterans. CAP reviews combine the knowledge and skills of the OIG's Offices of Healthcare Inspections, Audit, and Investigations to provide collaborative assessments of VA medical facilities and regional offices on a cyclical basis. The purposes of CAP reviews are to: • Evaluate how well VA facilities are accomplishing their missions of providing veterans convenient access to high quality medical and benefits services. • Determine if management controls ensure compliance with regulations and VA policies, assist management in achieving program goals, and minimize vulnerability to fraud, waste, and abuse. • Conduct fraud and integrity awareness training for facility staff. In addition to this typical coverage, CAP reviews may examine issues or allegations referred by VA employees, patients, Members of Congress, or others. To Report Suspected Wrongdoing in VA Programs and Operations Call the OIG Hotline – (800) 488-8244 Combined Assessment Program Review of VA Regional Office Nashville, Tennessee Contents Page Executive Summary ......................................................................................................... i Introduction ....................................................................................................................... 1 Regional Office Profile ................................................................................................... 1 Objectives and Scope of CAP Review ............................................................................ 1 Results of Review ............................................................................................................ 3 Organizational Strengths.................................................................................................. 3 Opportunities for Improvement ....................................................................................... 4 Fiduciary and Field Examination Activities .............................................................. 4 Compensation and Pension Claims Processing ......................................................... 6 Compensation and Pension One-Time Payments Under $25,000............................. 7 Compensation and Pension System Error Messages ................................................. 8 Automated Information Systems Security................................................................. 8 Agent Cashier............................................................................................................. 9 Vocational Rehabilitation and Employment Claims Processing ............................... 10 Appendixes A. VARO Nashville Director Comments ............................................................................. 11 B. Report Distribution .......................................................................................................... 14 VA Office of Inspector General Combined Assessment Program Review of VA Regional Office Nashville, Tennessee Executive Summary Introduction The Office of Inspector General (OIG) conducted a Combined Assessment Program (CAP) review of the VA Regional Office (VARO) Nashville, Tennessee from June 17–21, 2002. The purpose of the review was to evaluate benefits claims processing, Benefits Delivery Network (BDN) security, and selected financial and administrative activities. Results of Review Financial and administrative activities were generally operating satisfactorily, and management controls were generally effective. We found that the management control used to ensure payment accuracy by requiring third-signatures for one-time benefit payments over $25,000 was effective, Vocational Rehabilitation and Employment (VR&E) Division provided quality service and payment transactions were appropriate, and controls over the assignment of BDN passwords and authorizations reduced the risk of fraudulent or improper use of the system. However, VARO Nashville needed to improve: • Monitoring of Fiduciary and Field Examination (F&FE) activities. • Timeliness of compensation and pension (C&P) claims processing. • Oversight of third-signature authorizations for C&P awards made by one-time payments under $25,000 and also retroactive for more than 2 years. • Timeliness and accuracy of actions on C&P system error messages. • Automated information systems (AIS) contingency plan. • Documentation of justification for Loan Guaranty convenience checks issued by the Agent Cashier. • Timeliness of VR&E claims processing. Regional Office Director Comments The Regional Office Director agreed with the findings and recommendations and provided acceptable improvement plans. We may follow up on the implementation of planned improvement actions until they are completed. RICHARD J. GRIFFIN Inspector General VA Office of Inspector General i Combined Assessment Program Review of VA Regional Office Nashville, Tennessee Introduction Regional Office Profile Organization. VARO Nashville provides C&P and VR&E services to eligible veterans, dependents, and beneficiaries residing in Tennessee. The VARO has itinerant Veterans Benefits Counselors who provide claims assistance services to veterans at VA Medical Centers (VAMCs) Memphis, Mountain Home, Murfreesboro, and Nashville. In addition, a C&P Pre-Discharge Program claims processing team is located at the U.S. Army Base, Fort Campbell, Kentucky. VR&E has out-based counselors at offices in Murfreesboro, Knoxville, Memphis, and Clarksville, Tennessee; and Fort Campbell, Kentucky. Most Loan Guaranty (LGY) program activities were consolidated at the VARO Atlanta, Georgia Regional Loan Center. VARO Nashville underwrites and approves the loans. VARO Atlanta processes, guarantees, and services loans; and, provides property management services for veterans in Tennessee. In addition, VARO Atlanta provides education benefits for veterans residing in Tennessee. Resources. The VARO’s general operating expenses for Fiscal Year (FY) 2001 totaled about $13.9 million, and the staffing level was 248 full-time equivalent employees. Workload. VARO Nashville serves a veteran population of about 543,000. During FY 2001, almost $504 million in C&P benefits were paid to approximately 74,000 beneficiaries. VR&E services were provided to about 1,830 beneficiaries, with estimated benefits totaling over $33 million. Objectives and Scope of CAP Review Objectives. The objectives of the CAP review were to evaluate selected claims processing and administrative operations. Scope. We reviewed selected VARO operations, focusing on the efficiency, effectiveness, quality, and timeliness of the VARO’s delivery of benefits and the associated management controls. Management controls are the policies, procedures, and information systems used to safeguard assets, prevent errors and fraud, and ensure that organizational goals are met. In performing the review, we interviewed managers and employees, inspected work areas, and reviewed benefits, and financial and administrative records. The review covered the following activities: C&P Claims Processing VR&E Services C&P One-Time Payments Agent Cashier C&P System Error Messages AIS Security Fiduciary & Field Examinations BDN Security VA Office of Inspector General 1 Combined Assessment Program Review of VA Regional Office Nashville, Tennessee We did not provide fraud and integrity awareness training to VARO employees during this CAP review because we had provided this training in October 2001 when we visited the VARO to perform work on the OIG’s Special Review of One-Time Compensation and Pension Payments and Related Security Controls. About 250 employees attended the 2 training sessions given in October 2001. The CAP review covered VARO operations from April 1, 2000 through June 30, 2002, and was conducted in accordance with the OIG’s Standard Operating Procedures for CAP reviews. To evaluate the timeliness of C&P claims processing at the VARO, we randomly sampled 100 of the 5,177 (2 percent) original and reopened claims that had processing actions completed during the period January 1 through March 31, 2002. In this report we make recommendations and suggestions for improvement. Recommendations pertain to issues that are significant enough to be monitored by the OIG until corrective actions are implemented. Suggestions pertain to issues that should be monitored by VARO management until corrective actions are completed. VA Office of Inspector General 2 Combined Assessment Program Review of VA Regional Office Nashville, Tennessee Results of Review Organizational Strengths The administrative, VR&E, and BDN security activities reviewed were generally operating satisfactorily, and management controls were generally effective. The Director’s C&P One-time Payment Reviews Were Effective. Veterans Benefits Administration (VBA) policy requires the Director or Assistant Director to review all one-time C&P payments of $25,000 or more. The purpose of this review is to ensure that these payments are appropriate and that the internal control requirements relating to these payments have been met. The most important