Detailed Information on the
Veterans Disability Compensation Assessment

Developing capability to begin reporting on five new performance measures

Evaluating recommendations from the Veterans Disability Benefits Commission

Develop analyses of how results information from new measures is used and how this information impacts program performance.

Develop a measure related to rating consistency.

Will maintain current staffing level for the program.

Will develop long-term and cost-efficiency measures.

Will initiate a program evaluation in 2004.

Total disability based on individual unemployability.

Measure: National Accuracy Rate - core rating work

Explanation:

Measure: Rating related actions - average days pending

Explanation:

Measure: Authorization - Accuracy Rate

Explanation:

Measure: DIC - Average Days to Process

Explanation:

Measure: Overall Satisfaction Rate

Explanation:

Measure: Percent of veterans in receipt of compensation whose income exceeds that of like circumstanced veterans

Explanation:

Measure: Percent of compensation recipients who were kept informed of the full range of available benefits

Explanation:

Measure: Percent of compensation recipients who perceive that VA compensation redresses the effect of service connected disability in diminishing the quality of life

Explanation:

Measure: Out of all original claims filed within the first year of release from active duty, the percentage filed at a Benefits at Delivery Discharge (BDD) site prior to a service members discharge

Explanation:

Measure: Productivity Index

Explanation:The productivity index is ratio of the "generated Veterans Service Center (VSC) employees" to the actual number of VSC employees. The generated VSC employees is the product of the completed end products and the standard work rate divided by 1576.

Measure: Average Days to Process Compensation and Pension (combined) Rating Related Actions

Explanation:

Is the program purpose clear?

Explanation: The purpose of the program is to provide monthly benefit payments, equal to the economic loss due to injury or disease incurred or aggravated during military service. However, the definitions of "economic loss," "injury or disease," and " incurred or aggravated by military service" are not well defined, and all stakeholders interpret these concepts differently. As such, it would be difficult for VA to define unilaterally these concepts.

Evidence: There is no definition of economic loss or injury in VA's law (38 USC 1110 and 1155). Regulations are meant to implement the law but VA's (38 CFR 3.321) regulation is still vague on these items and states," The provisions contained in the rating schedule will represent as far as can practicably be determined, the average impairment in earning capacity in civil occupations resulting from disability." The Veterans' Claims Adjudication Commission, Report to Congress, December 1996 reached the same conclusion.

Does the program address a specific interest, problem or need?

Explanation: Even if "economic loss" (see above) was defined, the VA provides payments for disabilities and diseases that the general public does not consider a barrier to productive employment.

Evidence: The VA Schedule for Rating Disabilities (Part 4 of 38 CFR) includes acne scars, hemorrhoids, high blood pressure, and diabetes. Since 1945, new disabilities and diseases have been added to the schedule, but none has been removed in spite of changes in medical technology and treatment and the workplace environment.

Is the program designed to have a significant impact in addressing the interest, problem or need?

Explanation: The impact of providing payments to veterans is not known because no objective study has been conducted to determine the percentage of income that this program replaces or whether the monthly benefit amount is appropriate (is it too big or too small?).

Evidence: The General Accounting Office (GAO) report entitled "Disability Ratings May Not Reflect Veterans' Economic Losses," (January 1997) has a good description and background on this issue. The Veterans' Claims Adjudication Commission, Report to Congress, December 1996 reached the same conclusion.

Is the program designed to make a unique contribution in addressing the interest, problem or need (i.e., not needlessly redundant of any other Federal, state, local or private efforts)?

Explanation: This program serves a unique population, but is otherwise similar to other public programs. The VA disability compensation program is the workers' compensation program for the military workforce. Without this program, service members would have no workers' compensation benefits for illness or injury that occurred during military service. Federal civilian and private sector workforces can rely on the Federal Employee Compensation Act (FECA) or their states' workers' compensation programs, respectively. Nonetheless, these civilian programs could be an alternative to the VA disability compensation program, if redesigned to include the military population and any appropriate unique issues.

Evidence: CBO, "Budget Options," February 2001 (an annual report to Congress itemizing options to increase or decrease spending or taxes) describes this situation as it outlines ways of refining the definition to a modern day design. The history and alignment of state programs, other Federal programs etc is discussed in Pensions in the Public Sector (Copyright 2001 University of Pennsylvania Press). The Veterans' Claims Adjudication Commission, Report to Congress, December 1996 reached the same conclusion.

Is the program optimally designed to address the interest, problem or need?

Explanation: Program benefit payments are based on the medical, technological, and workplace standards of 1945. The program has not been updated to reflect current standards. For example, in 1945, most jobs involved manual or physical labor. Most jobs now are in the service industry. Changes in medical technology and treatment have eliminated or can manage conditions that were once considered barriers to productive employment.

Evidence: CBO, "Budget Options," February 2001 (an annual report to Congress itemizing options to increase or decrease spending or taxes) describes this situation as it outlines ways of refining the definition to a modern day design. The history and alignment of state programs, other Federal programs etc is discussed in Pensions in the Public Sector (Copyright 2001 University of Pennsylvania Press). The Veterans' Claims Adjudication Commission, Report to Congress, December 1996 reached the same conclusion.

Does the program have a limited number of specific, ambitious long-term performance goals that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: VA published outcome measures in FY 2003 and is in the process of developing specific goals for these measures. VA does, however, have output goals for the timeliness and accuracy of claims processing.

Evidence: Volume 6 of VA's FY 2003 Budget is its Performance Plan. The plan contains many production goals (output) but does not contain program outcome goals.

Does the program have a limited number of annual performance goals that demonstrate progress toward achieving the long-term goals?

Explanation: VA published outcome measures in FY 2003 and is in the process of developing specific goals for these measures. VA does, however, have output goals for the timeliness and accuracy of claims processing.

Evidence: Volume 6 of VA's FY 2003 Budget is its Performance Plan. The plan contains many production goals (output) but does not contain program outcome goals.

Do all partners (grantees, sub-grantees, contractors, etc.) support program planning efforts by committing to the annual and/or long-term goals of the program?

Explanation: Three organizations within VA (the Veterans Benefits Administration, Veterans Health Administration, and the Board of Veterans Appeals) collaborate among themselves and with the Department of Defense (DoD) to collect information needed to process claims to improve its two key output measures -- timeliness and accuracy, but has yet to develop outcome measures.

Evidence: Volume 6 of VA's FY 2003 Budget is its Performance Plan. The plan contains many production goals (output) but does not contain program outcome goals.

Does the program collaborate and coordinate effectively with related programs that share similar goals and objectives?

Explanation: Although VA has agreements with the Social Security Administration and DoD to increase database access, these agreements are output oriented. The shared enrollment system, which was a goal in the President's Management Agenda, has not been developed.

Evidence: The President's Management Agenda, 2001 outlined a shared vision whereby there would be seamless delivery of services to veterans as they leave military service and go to VA for benefits and services. This vision has yet to be fully implemented.

Are independent and quality evaluations of sufficient scope conducted on a regular basis or as needed to fill gaps in performance information to support program improvements and evaluate effectiveness?

Explanation: The program has never been subject to an evaluation that measures its purpose or effectiveness, and as such, it is not known whether monthly benefit amounts are appropriate (are they too big or too small?). The first such evaluation is scheduled for FY 2004. This program, however, has been subject to numerous management evaluations examining claims processing. These evaluations try to reduce the number of steps to process a claim or time it takes to complete a particular step.

Evidence: The Report to Congress, Veteran's Claims Adjudication Commission, Dec. 1996; and the VA Claims Processing Taskforce Oct. 2001 evaluated the management and production of the adjudication of claims but did not evaluate whether the benefit amounts are appropriate.

Is the program budget aligned with the program goals in such a way that the impact of funding, policy, and legislative changes on performance is readily known?

Explanation: VA has difficulty estimating the total amount of benefits payments for this entitlement program. When VA's initiative to process claims quicker was successful in 2002, a supplemental appropriation was needed to cover the higher amount of benefits going to veterans in that year. There is no link between the management, performance, and cost of administering the claims and the resulting effect on the funds needed to pay the higher benefits -- demonstrated by the supplemental. VA's FY 2004 budget is being restructured, in part, to address this issue.

Evidence: Since 1992, this program has required nine supplementals.

Has the program taken meaningful steps to address its strategic planning deficiencies?

Explanation: VA conducts an agency-wide annual review of its strategic plan and produces an annual strategic report. Specific programs, however, do not have strategic plans. VA has yet to agree upon outcome goals for this program. VA will create a team dedicated to Strategic Planning and is discussing the make-up and function of the proposed team, anticipating more focus on strategic planning in the near future.

Evidence: VA's Congressional Justification, February 2002, includes a performance plan. There are no oucome goals in the plan for the disability compensation program.

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: The funding allocated to VA regional offices is dependent upon productivity levels. This type of resource allocation was initiated in FY 2002.

Evidence: VA senior program officials have explained this new process in several different interviews.

Are Federal managers and program partners (grantees, subgrantees, contractors, etc.) held accountable for cost, schedule and performance results?

Explanation: The performance evaluations of VA regional office directors include performance results, but not cost schedules.

Evidence: VA senior program officials have explained this new process in several different interviews.

Are all funds (Federal and partners') obligated in a timely manner and spent for the intended purpose?

Explanation: Funds for this program are obligated in a timely manner and spent on their intended purpose. However, comparing actuals to prior estimates has yet to become a routine exercise.

Evidence: VA's financial reporting supports this conclusion.

Does the program have incentives and procedures (e.g., competitive sourcing/cost comparisons, IT improvements) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: VA has a cost accounting system and is able to track cost per unit, but neither sets cost-per-unit goals nor manages to them. VA's priority is to process claims; costs are secondary. This program has no cost-efficiency measures.

Evidence: VA's Congressional Justification, February 2002, includes a performance plan. There are no cost efficiency measures or targets for the disability compensation program.

Does the agency estimate and budget for the full annual costs of operating the program (including all administrative costs and allocated overhead) so that program performance changes are identified with changes in funding levels?

Explanation: VA has difficulty estimating the total amount of benefits payments for this entitlement program. When VA's initiative to process claims quicker was successful in 2002, a supplemental appropriation was needed to cover the higher amount of benefits going to veterans in that year. There is no link between the management, performance, and cost of administering the claims and the resulting effect on the funds needed to pay the higher benefits -- demonstrated by the supplemental. VA's FY 2004 budget is being restructured, in part, to address this issue.

Evidence: Since 1992, this program has required nine supplementals.

Does the program use strong financial management practices?

Explanation: Poor internal controls and financial systems prevent management from obtaining reliable and timely information to make operations decisions.

Evidence: The VA Office of the Inspector General, "Report of the Audit of the Department of Veterans Affairs Consolidated Financial Statements for Fiscal Years 2001 and 2002," February 2002 supports this conclusion.

Has the program taken meaningful steps to address its management deficiencies?

Explanation: Shortly after confirmation, VA's Secretary convened the VA Claims Processing Task Force, which assessed the status of the claims processing environment. Many recommendations were made. The Secretary accepted all of them and some have been fully implemented. As a result of the implemented recommendations, the program has increased its production significantly.

Evidence: The most recent report: The Report to the Secretary by Claims Processing Task Force, 2001 addressed many management deficiencies. They have been rigorously addressed.

Has the program demonstrated adequate progress in achieving its long-term outcome goal(s)?

Explanation: VA has not developed outcome measures or goals for this program. VA does, however, have output goals for the timeliness and accuracy of claims processing.

Evidence: VA's FY 2003 Congressional Justification, February 2002, includes a performance plan. There are no outcome goals in the plan for the disability compensation program.

Does the program (including program partners) achieve its annual performance goals?

Explanation: VA has not developed outcome measures or goals for this program. VA does, however, have output goals for the timeliness and accuracy of claims processing.

Evidence: VA's FY 2003 Congressional Justification, February 2002, includes a performance plan. There are no outcome goals in the plan for the disability compensation program.

Does the program demonstrate improved efficiencies and cost effectiveness in achieving program goals each year?

Explanation: Beginning in 2002, the offices responsible for administering the disability compensation program are allocated resources based on their productivity. These offices are subject to monthly performance reviews of timeliness and accuracy, but not cost efficiency. Cost accounting data are tracked, but no specific cost effectiveness goals have been established. As such, cost per unit is an output instead of direct input to decision making.

Evidence: This was explained during interviews with VA senior program officials.

Does the performance of this program compare favorably to other programs with similar purpose and goals?

Explanation: No rigorous side-by-side study has been made with the civilian Federal Employees' Compensation program (FECA) or state workers' compensation programs that reached any conclusions or recommendations.

Evidence: GAO Report - Comparison of VA Benefits with Those of Workers' Compensation Programs, February 1997 compared VA's programs to other workers' compensation programs, but made no conclusions.

Do independent and quality evaluations of this program indicate that the program is effective and achieving results?

Explanation: This program has never been subject to an evaluation. Its first one is scheduled for 2004. As such, the effectiveness of the program cannot be determined.

Evidence: VA senior program officials have stated this in several different interviews. Independent research on the content of past studies verifies the statements.