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[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]

        INVESTIGATING VA'S MANAGEMENT OF VETERANS' PAPER RECORDS

=======================================================================

                                 HEARING

                               BEFORE THE

       SUBCOMMITTEE ON DISABILITY ASSISTANCE AND MEMORIAL AFFAIRS

                                 OF THE

                     COMMITTEE ON VETERANS' AFFAIRS
                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

                        WEDNESDAY, JUNE 15, 2016

                               __________

                           Serial No. 114-72

                               __________

       Printed for the use of the Committee on Veterans' Affairs
       
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                     COMMITTEE ON VETERANS' AFFAIRS

                     JEFF MILLER, Florida, Chairman

DOUG LAMBORN, Colorado               CORRINE BROWN, Florida, Ranking 
GUS M. BILIRAKIS, Florida, Vice-         Minority Member
    Chairman                         MARK TAKANO, California
DAVID P. ROE, Tennessee              JULIA BROWNLEY, California
DAN BENISHEK, Michigan               DINA TITUS, Nevada
TIM HUELSKAMP, Kansas                RAUL RUIZ, California
MIKE COFFMAN, Colorado               ANN M. KUSTER, New Hampshire
BRAD R. WENSTRUP, Ohio               BETO O'ROURKE, Texas
JACKIE WALORSKI, Indiana             KATHLEEN RICE, New York
RALPH ABRAHAM, Louisiana             TIMOTHY J. WALZ, Minnesota
LEE ZELDIN, New York                 JERRY McNERNEY, California
RYAN COSTELLO, Pennsylvania
AMATA COLEMAN RADEWAGEN, American 
    Samoa
MIKE BOST, Illinois
                       Jon Towers, Staff Director
                Don Phillips, Democratic Staff Director

       SUBCOMMITTEE ON DISABILITY ASSISTANCE AND MEMORIAL AFFAIRS

                   RALPH ABRAHAM, Louisiana, Chairman

DOUG LAMBORN, Colorado               DINA TITUS, Nevada, Ranking Member
LEE ZELDIN, New York                 JULIA BROWNLEY, California
RYAN COSTELLO, Pennsylvania          RAUL RUIZ, California
MIKE BOST, Illinois

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public 
hearing records of the Committee on Veterans' Affairs are also 
published in electronic form. The printed hearing record remains the 
official version. Because electronic submissions are used to prepare 
both printed and electronic versions of the hearing record, the process 
of converting between various electronic formats may introduce 
unintentional errors or omissions. Such occurrences are inherent in the 
current publication process and should diminish as the process is 
further refined.
                            C O N T E N T S

                              ----------                              

                        Wednesday, June 15, 2016

                                                                   Page

Investigating VA's Management of Veterans' Paper Records.........     1

                           OPENING STATEMENTS

Honorable Ralph Abraham, Chairman................................     1
Honorable Dina Titus, Ranking Member.............................     2

                               WITNESSES

Ms. Beth McCoy, Deputy Under Secretary for Field Operations, U.S. 
  Department of Veterans Affairs.................................     3
    Prepared Statement...........................................    22

        Accompanied by:

    Mr. Brad Houston, Director, Office of Business Process, U.S. 
        Department of Veterans Affairs

Mr. Brent Arronte, Deputy Assistant Inspector General for Audits 
  and Evaluations, Office of Inspector General, U.S. Department 
  of Veterans Affairs............................................     5
    Prepared Statement...........................................    24

        Accompanied by:

    Ms. Dana Sullivan, Director, San Diego Benefits Inspection 
        Division, Office of Inspector General, U.S. Department of 
        Veterans Affairs

 
        INVESTIGATING VA'S MANAGEMENT OF VETERANS' PAPER RECORDS

                              ----------                              

                        Wednesday, June 15, 2016

             U.S. House of Representatives,
                    Committee on Veterans' Affairs,
                      Subcommittee on Disability Assistance
                                      and Memorial Affairs,
                                                   Washington, D.C.
    The Subcommittee met, pursuant to notice, at 10:00 a.m., in 
Room 334, Cannon House Office Building, Hon. Ralph Abraham 
[Chairman of the Subcommittee] presiding.
    Present: Representatives Abraham, Zeldin, Costello, Bost, 
Titus, and Brownley.

          OPENING STATEMENT OF RALPH ABRAHAM, CHAIRMAN

    Mr. Abraham. Good morning and welcome. Thanks for being 
here. This oversight hearing of the Subcommittee on Disability 
Assistance and Memorial Affairs will now come to order.
    I thank the witnesses for being here. I think I have met 
you all this morning. This hearing will focus on the troubling 
allegation of the destruction of veterans claims documents. I 
note that this Subcommittee has previously addressed this issue 
on March the 3rd, 2009, in response to report of systemic 
mishandling of paper documents through VBA. This Subcommittee 
held a joint hearing with the Oversight and Investigations 
Subcommittee. And at that time the VA had assured Congress that 
they had implemented policies that would protect important 
claim documents.
    Then Deputy Under Secretary for benefits Michael Walcof 
testified that the VA would implement a plan that and I quote, 
``Ensures measures are in place to prevent future incidence of 
employees inappropriately discarding veterans' paperwork.'' end 
quote.
    Yet only a few years later the IG has documented more cases 
of VA employees inappropriately destroying veterans' paperwork. 
It may be tempting to discuss the problems uncovered by the 
April 14, 2016 IG reports as understandable human error. After 
all, the IG reviewed more than 400,000 documents and found 
fewer than a 100 that were mishandled. I know that no one is 
perfect, but as a physician I also know that there are times 
when there is absolutely no room for error.
    In my line of work, people die if I make a mistake, and the 
same applies here. These mistakes may ultimately cost veterans 
their lives. Each lost document represents a veteran who may 
have been injured while serving our country, and therefore may 
be entitled to medical care and other benefits.
    Veterans have the right to expect that the VA will 
carefully consider all the evidence, including paper documents 
before granting or denying a claim. A lost document may result 
in a denied claim, which may have serious financial and 
emotional costs to that veteran.
    The seriousness of this issue is highlighted by two cases 
involving homeless veterans. The VA has made the processing of 
claims of homeless veterans a priority because they are among 
the most vulnerable people in our society. And as a result of 
VA's outreach, two homeless individuals filed paper claims for 
benefits with the Los Angeles regional office. I would imagine 
that these two individuals were probably very optimistic that 
the VA would approve their claims and help them get back on 
their feet.
    How disappointed and upset would these veterans be if they 
learned that the IG had found that their unprocessed claims 
were about to be shredded. The truth is that these claims would 
not have an adjudicated if the IG had not discovered them in 
the shred bin.
    Moreover, we don't know the extent of the problem. The IG 
only had the resources to conduct spot checks at ten ROs. I 
look forward to hearing the VA's plans to ensure that each RO 
has implemented procedures to ensure important claim 
information is not being destroyed.
    With that, I call on our distinguished Ranking Member, Ms. 
Titus, for her opening statement.

        OPENING STATEMENT OF DINA TITUS, RANKING MEMBER

    Ms. Titus. Well thank you very much, Mr. Chairman, and 
thank you for holding this hearing today. I would like to point 
out that our fellow Members of the Committee from southern 
California requested this hearing, Ms. Brownley and Dr. Ruiz. 
And I appreciate you taking the time to address the issue that 
is critical to all our constituents, and that they noted in 
southern California.
    I share the Chairman's concerns regarding the improper 
handling of paperwork at ROs and its impact on veterans' 
benefits. And I am hopeful that we will hear how the VA has 
addressed the problem by utilizing their new electronic system 
to standardize the processes for handling, protecting and 
destroying documents as necessary.
    I would also note that this Committee held a similar 
hearing in 2008. And I hope that the VA makes the changes that 
we need so we won't be having another hearing like this 8 years 
down the road.
    I want to thank Chairwoman--Congressman, excuse me. You 
should be a chairwoman on the other Committee, but 
Congresswoman Brownley and Ruiz for their efforts to address 
this issue and that included visiting the Los Angeles VA 
regional hospital, which was a ground zero for this problem.
    Their visits led to an immediate policy change at the Los 
Angeles VA regional office, and contributed significantly to 
the overall conversation within the VA about how to best handle 
electronic documents.
    So today, we have a number of questions that must be 
answered by the VA. For example, the IG did spot checks at ten 
different ROs and found that almost half of the documents from 
the shred bins they reviewed were incorrectly marked to be 
destroyed.
    In Reno, which serves my constituents, in Las Vegas six of 
16 documents were incorrectly placed in shred bins. So I am 
curious to learn about the follow-up plan from the VA, and the 
IG to check in on the offices that did poorly in the first 
review, including Reno to see how they have improved. I am also 
interested to hear how moving from the antiquated paper based 
processing system into VBMS will affect VA's ability to 
safeguard documents.
    What protocols need to be updated? Is there sufficient use 
of automation? Are supervisors able to track employees handling 
of veterans' personal information? How much of an upgrade and 
document control does a new electronic system offer over the 
old paper based system? These are all questions and I hope to 
hear answers for because we owe it to our veterans to ensure 
that when they entrust their personal information to the VA, it 
is handled appropriately and discreetly.
    So Mr. Chairman, I look forward to hearing the answers to 
these questions and continuing to work with you and Ms. 
Brownley and others on our Subcommittee to address this issue, 
and I yield back.
    Mr. Abraham. Thank you, Ms. Titus.
    I ask that all Members waive their opening remarks as part 
of this Committee's customs.
    And I would like to welcome today's witnesses, Beth McCoy, 
Deputy Under Secretary for field operations. She is accompanied 
by Brad Houston, Director of Office of Business Process.
    Brent Arronte, Deputy Assistant Inspector General for 
Audits and Evaluations, Office of Inspector General. He is 
accompanied by Ms. Dana Sullivan, Director, San Diego Benefits 
Inspections Division, Office of Inspector General.
    I want to remind the witnesses that your complete written 
statements will be entered into the hearing record.
    Ms. McCoy, you are now recognized to present your 
testimony.

                    STATEMENT OF BETH MCCOY

    Ms. McCoy. Good morning Chairman Abraham and Ranking Member 
Titus, and Members of the Subcommittee. Thank you for the 
opportunity to discuss the Veterans Benefits Administration 
records management program. Specifically handling and 
disposition of veterans' claims-related documents.
    As you mentioned, I am accompanied today by Mr. Brad 
Houston, our director of VBA's business process integration 
office. VBA is committed to ensuring that veterans' records are 
protected and maintained with accuracy and care.
    Today, I will address findings from two reports by VA's 
Office of Inspector General, released in April 2016, one about 
disposition of documents at the Los Angeles regional office, 
and one based on reviews at ten other ROs.
    Although the number of document handling errors IG 
identified in these reports was extremely small, VBA knows that 
every veteran's record is vitally important and sincerely 
regrets any human errors. We greatly appreciate the support of 
Congress that has enabled us to transform our antiquated paper 
based claims processing system to a fully electronic processing 
environment using digital records in the veterans benefits 
management system or VBMS.
    To address the inefficiencies and risks associated with 
working with paper folders. VA has converted millions of paper 
files to e-folders. Nearly 6 million claims files were scanned 
into veterans e-folders in VBMS between 2012 and 2015.
    In fiscal year 2015, VBA also deployed the centralized mail 
initiative to all of our regional offices. Centralized mail 
reroutes all inbound compensation related mail directly from 
the U.S. Postal Service to intake centers that we have at 
vendor sites where documents are quickly scanned and digitized.
    Conversion of paper records to digital records 
significantly strengthens the systemic protection of veterans 
claims documents, which is a top priority for VBA. We have also 
enhanced our online claims filing capabilities for veterans and 
their representatives through e-benefits, and the stakeholder 
enterprise portal helping to keep paper documents from being 
created in the first place, which is very important.
    VBA claims processors used to touch 5,000 tons of paper 
every year. Today, 99.8 percent of disability compensation 
claims are processed electronically. While VBA's transformation 
to an electronic claims processing system has significantly 
minimized the flow of paper documents to our regional offices, 
a small volume of paper documents do continue to be received in 
the ROs.
    VBA's current records management guidance provides several 
layers and levels of review and oversight in the process of 
appropriately handling and disposing of paper documents. 
Employees and supervisors play a critical role in the records 
management process, along with designated records management 
officers or RMOs.
    During one of its benefit inspection program visits at the 
L.A. regional office at the beginning of 2015, OIG received an 
allegation that claims processors were shredding mail related 
to Veterans compensation claims. IG reviewed about 13,800 
documents and found nine documents or .065 percent that 
required supervisor or RMO annotations or some action.
    I want to emphasize these documents were reviewed midstream 
in the whole process and would still have been subject to 
review by a supervisor, and/or the RMO prior to final 
disposition. The L.A. RO director immediately took action. He 
halted shredding, retrained all employees on paper document 
handling procedures, and reviewed the records related to those 
nine documents to take all necessary final actions.
    IG then conducted unannounced visits at ten ROs in July of 
2016 where they reviewed 438,000 documents. In the end, the 
review identified 11 documents or .0025 percent of the 438,000 
that actually affected, or had the potential to affect 
benefits. Although again the number of document handling errors 
during that ten RO review was extremely small, we continue to 
emphasize that every veteran's record is vitally important and 
must be safeguarded. We are right now updating our records 
management policies to strengthen compliance and better align 
procedures with the current electronic environment.
    Finally, we cannot underscore the importance of protecting 
veterans' records too strongly with our employees, 53 percent 
of whom are veterans themselves. We sincerely regret when 
errors are made. And we continue to expand use of digital 
technology to eliminate potential for human error in the 
process.
    I appreciate the opportunity to address this important 
topic today. Mr. Chairman, this concludes my statement. I would 
be happy to take any questions from you or other Members of 
Subcommittee.

    [The prepared statement of Beth McCoy appears in the 
Appendix]

    Mr. Abraham. Thank you, Ms. McCoy.
    Mr. Arronte, you are recognized for 5 minutes from the 
Office of Inspector General.

                   STATEMENT OF BRENT ARRONTE

    Mr. Arronte. Chairman Abraham, Ranking Member Titus and 
Members of the Subcommittee, thank you for the opportunity to 
discuss the Office of Inspector General's recent work on the 
review of records disposition and alleged shredding of claims-
related documents. As indicated, I am accompanied by Ms. Dana 
Sullivan, the director of our benefits inspection division in 
San Diego.
    VBA must be committed to ensure veterans' records are 
properly protected, maintained and disposed of. A complete and 
accurate record is critical for veterans to receive timely and 
accurate benefits. Inappropriate shredding or mishandling of 
claims related documents can lead to incorrect disability 
decisions and can affect the integrity of VBA's reported 
workload.
    As stated in late 2008, the OIG reported staff at four VA 
regional office inappropriately discarded 132 claims related 
documents. Subsequent to that review, the Under Secretary for 
Benefits, as you indicated, instructed regional office 
leadership to conduct an internal review of all regional 
offices and their documents scheduled for shred. That review 
revealed an additional 474 claims related documents 
inappropriately scheduled to be shredded.
    As a result, VBA leadership redesigned their policies and 
procedures regarding the disposition of veterans claims. The 
OIG Benefits Inspection Division teams conducted inspections at 
nine regional offices in 2009 over a 9-month period. We 
conducted this review to ensure regional offices were complying 
with VBA's new policy.
    Early on in our inspections, we found very high rates of 
noncompliance. However, by the end of December 2009, most 
offices were complying with the new policies, and we did not 
identify any improper destruction of documents.
    In June 2014, the acting director for the Baltimore 
regional office identified a situation where approximately 
8,000 documents and 80 veterans' claims folders were improperly 
stored. Upon the request from that acting director, we 
confirmed that most of those documents consisted of processed 
and unprocessed claims related material.
    Our findings led the Under Secretary for Benefits at that 
time to require each regional office director review 100 
percent of all work spaces to ensure these conditions did not 
exist at other offices.
    In January 2015, we received an anonymous allegation that 
staff at the Los Angeles regional office were inappropriately 
shredding veterans' claims related mail. We substantiated that 
staff, at that office, were not following VBA's policies. 
Failure to follow key controls, such as not having a Records 
Management Officer in place and staff not following the 
policies, led to those conditions.
    As such, we expanded our scope and conducted a review at 10 
additional regional offices. We found 69 documents 
inappropriately scheduled for shredding. Fifty-five of these 
documents consisted of congressional inquiries at the Atlanta 
Regional Office. Three of those fifty-five congressional 
inquiries contained evidence to support a veteran's claim.
    Regional offices continue to deal with paper on a regular 
basis. In our national review, we identified some offices using 
between 18 and 31 large bins to store documents scheduled for 
shredding. Based on our analysis, most of those documents were 
properly scheduled and stored for shredding. However, while the 
number of claims related document we found in those bins were 
fewer than compared to our 2009 review, we cannot minimize the 
impact improperly shredded evidence could have on a single 
veteran.
    We are aware VBA is moving towards a paperless work 
environment, and believe that as claims related documents are 
scanned into VBMS, the risk of inappropriate shredding should 
decrease. However, we believe that risk is going to move to 
ensuring that there are controls to maintain and properly store 
veterans documents that contain PII, and ensure that documents 
sent to scanning facilities are actually scanned into the 
electronic record.
    Our recent work across the Nation has demonstrated VBA must 
remain vigilant when enforcing its policies related to the 
disposition of governmental records. Over the past 7 years, we 
identified several instances where veterans' official records 
were at risk for inappropriate destruction or mishandling.
    While VBA is moving towards a paperless work environment, 
there remain paper by-products that must be successfully 
managed. VBA might not consider the number of documents we 
found as a systemic issue; however, we consider this to be a 
systemic issue in the sense that policies were not followed 
across the Nation, at the offices that we looked at. We would 
like to thank the VBA employees who brought these issues to our 
attention so we can all better serve veterans.
    Mr. Chairman, this concludes my statement, and we look 
forward to answering any questions you or the Members may have.

    [The prepared statement of Brent Arronte appears in the 
Appendix]

    Mr. Abraham. Thank you, Mr. Arronte, for your testimony. I 
will begin the questioning.
    Ms. McCoy, this question goes to you, please describe the 
procedures used by the VA's central office VACO, to monitor 
compliance with your current policies on record management?
    Ms. McCoy. Thank you, Mr. Chairman. We have multiple 
different avenues for monitoring compliance. Those would 
include various headquarters entities such as compensation 
service, pension and fiduciary service. These are our 
headquarters policies and procedures arms. They do site visits 
out at our regional office, they check in and have the 
opportunity to look on the ground at records management 
processes and policies and compliance.
    Another avenue is our district directors, we have five 
districts within VBA. They go out and have very similar 
oversight mechanisms in place. So for example, when I was the 
central area director, several years ago, I would go out and we 
would do spot checks of individual employees' desks to make 
sure that records were appropriately annotated and stored. We 
would look in trash bins, we looked in the common areas. So 
there are multiple opportunities for on-the-ground oversight.
    Mr. Abraham. Does the central office ensure that each RO 
has at least one records management officer who is devoting 100 
percent of their time to ensuring that these veterans records 
are not improperly destroyed?
    Ms. McCoy. So there is a requirement to have a records 
management officer at each facility.
    Mr. Abraham. Is that happening?
    Ms. McCoy. It is happening, sir, to the sense that there 
are some of our offices that are so small, the Dakotas for 
example, that there is an RMO that handles both of those 
offices. So some of the volume of paper that we are working at, 
does come into play.
    Mr. Abraham. But is that protocol for that to be like that? 
I mean, does policy dictate that there is a record management 
person at every regional office?
    Ms. McCoy. It requires that records management officer 
functions are fulfilled at every office, yes, sir. So in some 
cases those are not less than full-time duties. And if there is 
not a full-time officer, there is a requirement to check with 
the district and have approval for less than a full-time.
    Mr. Abraham. Okay. How did the VA miss that Los Angeles did 
not have an RMO for 2 years.
    Ms. McCoy. Sir, if I could clarify that. That is not 
correct. We had a long time standing records management officer 
who was promoted. There was about a 6-month time period when 
this person was working in a different job, in a different part 
of the office. Before he left that position, he trained others, 
including his supervisor, to cover those records management 
duties, and they were doing that. He was also still helping, to 
do those records management reviews, even in his new position.
    So during the transition, there was a vacancy, and they 
were filling that, but the duties were being fulfilled.
    Mr. Abraham. Well I guess my question is, who dropped the 
ball there? We have had records that were inappropriately 
handled. So who takes the hit for that, is that the RMO? 
Somebody's got to own this problem. Hey, it was a mistake, and 
it was not a minor mistake. I mean, this is major stuff, here. 
So, you know, we have to have accountability.
    Ms. McCoy. Absolutely, accountability is important. And we 
have put several layers of process in place to make sure that 
we handle veterans' records appropriately and safeguard them.
    Mr. Abraham. All right. So you know, back in 2009, the VA's 
answer was similar to your answer now, more training more 
training. And now in 2016, the VA's solution is, again, is to 
provide more training, better training. Now how can we as a 
Committee be assured that this training, more training, extra 
training, whatever you want to call it, would actually result 
in better management of these veterans records?
    Ms. McCoy. Chairman, it is a very important topic. And 
training is a piece of it, but the bigger solution is something 
that Congress has helped us implement, and that is a paperless 
system, so that we don't have paper that we are handling and 
passing along. It is scanned and digitized as early in the 
process as possible. We don't want to receive paper in our 
regional offices. We are diverting it at the post office, to 
the scanning vendor, and we have several mechanisms for online 
submission so that we don't get--
    Mr. Abraham. Okay. Let me ask one more question before my 
time runs out. How many employees, including RO management have 
been held accountable, and in what way, for noncompliance of 
the VBA policy related to document destruction during this past 
year, and during the last 2 years? How many have been held 
actually accountable?
    Ms. McCoy. Chairman, I don't have that information with me. 
I can take that for the record.
    Mr. Abraham. Please.
    Ms. McCoy. But within L.A. in particular, I can tell you 
there was one employee, a bargaining unit employee, that was 
held accountable for the incidents that we are--
    Mr. Abraham. What happened to him? What happened to that 
employee?
    Ms. McCoy. I will take that for the record. I believe it 
was a suspension.
    Mr. Abraham. Okay. So they are still working somewhere?
    Ms. McCoy. Yes.
    Mr. Abraham. All right. Thank you. My time is up. Ms. 
Titus.
    Mr. Titus. Thank you. Ms. McCoy, as I highlighted in my 
opening statement, I was concerned, but not surprised to find 
out that Reno once again makes the list of the worst in the 
country again now for this investigation.
    I wonder if you can tell me what is going on at the Reno 
office, if you are going to check back to see if they have 
improved? Is the new guidance going to help you do that? Are 
there any periodic checks with the places that had problems?
    Ms. McCoy. Thank you, Congresswoman Titus.
    We do have our new Regional Office Director Sheila A. 
Jackson, who is there on the ground, insuring that records 
management is a top priority. As far as, we have our 
Continental district, our Pacific district, we have five 
district offices, Pacific district is also making check-ins to 
do oversight reviews for records management.
    Ms. Titus. I have met with her, and I like her, and I think 
she is improving the morale at that office and doing a good 
job. So I am glad she is going to make this a priority as well.
    Can you tell us a little bit more about the updated 
guidance when it is going to come out, how it is going to 
impact the backlog claims? Can you just give us some more 
information about it?
    Ms. McCoy. I would be happy to. So we have had a 
longstanding records management process that was really beefed 
up after 2008. So we put this multilayer review in so that we 
would minimize any risk of mishandling of documents. We updated 
that guidance in 2011, and we recognized in our new paperless 
environment that it was certainly time to update it again. So 
it is in draft process right now going through the concurrence. 
We had hoped to have it done by the end of May, but we are 
needing just a little bit more time because it is an important 
complex issue.
    So I would anticipate seeing that going through concurrence 
in the next few weeks or months.
    Ms. Titus. And you are keeping in mind how it is going to 
impact the backlog, because it is not just about keeping 
records secure, it is about moving the process along.
    Ms. McCoy. Absolutely. And making sure that we have a good 
records handling process, cuts down on delays and makes sure 
that we are doing the most timely and accurate job we can for 
our veterans.
    Ms. Titus. Thank you. Mr. Arronte, can you tell us how you 
pick the offices that you studied?
    Mr. Arronte. Yes, ma'am. After what we found in Los 
Angeles, we made a fairly quick decision to conduct this 
national review. Typically, when we conduct a review, we like 
to statistically sample or select the offices that we want to 
review. But based on how fast we wanted to get this turned 
around, we judgmentally selected these offices. And how we did 
that was to minimize travel costs. We tried to select offices 
that were closely co-located to a current inspector general 
field office, so we could eliminate travel costs.
    Oh, I believe six of the ten offices were co-located or 
closely co-located with an IG office, so we selected those 
offices.
    Ms. Titus. It wasn't because you knew Reno was so bad you 
put it on the list?
    Mr. Arronte. Well, so--that is a good point. For one of the 
offices where we do not have an IG, we selected Philadelphia 
because we had seen some issues with Philadelphia before. We 
did the same thing with San Juan.
    Ms. Titus. Okay. Thank you. Can you give us an update on 
the status of the action that has been taken on some of your 
recommendations?
    Mr. Arronte. Okay. Right now the recommendations are still 
not closed. VBA is still working those. Ms. McCoy and I are in 
contact, and we are aware that they are going through a 
concurrence process right now. We discussed an extension to get 
this done. The concurrence process is fairly lengthy.
    In about 2 months we have a process, a follow-up process, 
where we will reach out to VBA and start asking, "When are you 
going to provide our answers to the recommendations?" So, in 
about 2 months we will start official follow-up.
    Ms. Titus. And will you keep this Committee informed of how 
those recommendations are being implemented so we can kind of 
keep some oversight on--to be sure those problem are addressed?
    Mr. Arronte. Absolutely, ma'am.
    Mr. Titus. Okay. Thank you. I yield back, Mr. Chairman.
    Mr. Abraham. Thank you Ms. Titus. Mr. Bost.
    Mr. Bost. Thank you, Mr. Chairman. Ms. McCoy, I am--I don't 
even know--you said a while ago when speaking to the Chairman 
and answering his question, that training will now occur. Is 
that correct, are you working on training now so that this will 
not happen again?
    Ms. McCoy. Training is ongoing all the time. We are 
updating the training and the policies.
    Mr. Bost. Okay. The concern I have is is in our documents 
and what we have got, that prior--that the assistant director 
assumed the previous RMO has provided SDA staff with training, 
but no one assured--there was no assurance that it had 
occurred, and that is why we are back in this spot. Is that 
correct?
    Ms. McCoy. I don't--
    Mr. Bost. Apparently, it is, because otherwise we would 
have stopped it from occurring again, correct?
    Ms. McCoy. I think the minimum human error that was 
involved here, which cannot be minimized, but I don't want to 
make more of it than what it is, also. There was a vacancy, an 
interim vacancy, and we were working to fill that. We 
reorganizing our support service divisions at the time. It is 
not accurate that we were not filling behind that position. We 
were filling behind it in a hybrid manner.
    So there would be additional duties on top of the RMO 
duties. Because there was so little paper going through the 
regional offices compared to what we had in 2008, when we had 
100 percent paper based process. Now 99.8 of our processing in 
our compensation claims is done with digits and not with paper.
    Mr. Bost. Okay. What type of backup do you have there in 
all electronic records?
    Ms. McCoy. I would ask my colleague Mr. Houston to speak to 
that. I am not the IT person. He is a little closer to that 
than I am.
    Mr. Houston. Sir, 2 years ago we began central intake 
process for VBA. Before that, every single claim and every 
single piece of evidence came in, in paper. And in the last 2 
years, we have transitioned that to--in three venues. One, 13 
percent of the documents we receive now, we receive online 
through e-benefits directly into e-file. Thirty-six percent of 
the documents we received we received by fax. We receive them 
digitally, they go immediately to a digital mail queue. Again, 
if they are electronic, and can't be lost.
    And then in the last 2 years with our central mail program, 
an additional 13 percent of the documents we received are 
received directly at our intake sites where they are opened and 
imaged the same day.
    So now, in the last 2 years, we have gone from 100 percent 
paper at regional offices, 56 different intake methods, to 61 
percent of our inbound communications are received digitally or 
are digitized the day we open the envelope. So at this point, 
only 39 percent of the evidence we receive from veterans is 
even paper to begin with, which greatly reduces our opportunity 
for any sort of misrouted or lost document.
    Mr. Bost. Okay. I guess my next question, Mr. Arronte, how 
do you respond to the VA's testimony that the error rate is 
actually less that 1 percent and not indicative of the whole 
VBA system?
    Mr. Arronte. Sir, I think it is the way we are doing math. 
We did look at 400,000 documents, but we went through those 
documents to specifically identify claims-related documents. So 
if you want to do the division, then the .06 percent that Ms. 
McCoy is talking about is one way to look at it.
    But, we narrowed our universe down to only those claims 
related documents that we found and that was 155. And then we 
looked at all 155 of those.
    Mr. Bost. All right. I am trying to find out if--Okay I 
won't say it is called cooking the books, but it is kind of 
whichever way you are selling it. Okay. Because you are saying 
that you look at it one way, and that is the way you come up 
with your numbers and the VA looks at it another way, and that 
is the way they come up with their numbers, which makes it very 
difficult for this Committee as we move forward to try to deal 
with this issue, along with many other issues that we are 
having with the VA similar to this, and to try and get it under 
control in a system that really works.
    And each one, unfortunately, I keep seeing the VA come 
forward and say one either--and not just in this instance, it 
is not your fault or the not as bad as everybody says. Well, it 
is as bad as everybody says if you are the person--it is your 
records that this occurs with.
    And I have been on the Committee now for--since being here, 
a year and a half, and I have watched this over and over again, 
and it becomes very frustrating when I have to go back to my 
constituents and try to answer for the VA, when either you have 
got too big in so many areas, and you are just out of control 
and we have got to get this under control. And for you to come 
back here a second time with the same problem is really a 
problem.
    Thank you, Mr. Chairman.
    Mr. Abraham. Thank you, Mr. Bost. Ms. Brownley.
    Ms. Brownley. Thank you, Mr. Chairman. And I want to thank 
you and Ranking Member Titus for holding this hearing today. I 
think it is very important that we follow through with 
oversight when issues are raised. So I appreciate it very much.
    I wanted to ask Mr. Arronte, I think Ms. McCoy is saying 
that staff was trained to do the RMO duties. And I think you 
are stating that they weren't trained. So I just wanted to get 
a clarification there?
    Mr. Arronte. Yes, ma'am. I am going to defer this to Ms. 
Sullivan, she was actually on site when her team conducted the 
reviews. But I can tell you that when we interviewed the SSD 
staff who were supposed to be taking over this responsibility, 
they unequivocally told us that they had not been trained. 
Dana?
    Ms. Sullivan. Yes, ma'am. We interview folks at their 
regional offices, when we go out and do our inspections and our 
hotline reviews. We were told by the former RMO that he had not 
provided training, formal training. We spoke to the support 
services division staff who were doing the duties of the RMO, 
and they told us they had not received the training as well. 
And, we followed that up with discussions and interviews with 
the assistant director who confirmed with us that she had not 
followed up on whether or not that training had taken place.
    Ms. Brownley. Ms. McCoy, can you respond?
    Ms. McCoy. Thank you, Congresswoman. In talking to the L.A. 
regional office director, several times about this, I would add 
and clarify that he said, that the IG folks never talked to the 
SSD, the support services supervisor who was actually 
performing the duties. There were other people helping, but no 
one talked to him.
    Also, the former records management officer had conducted 
the training and was still involved in helping, when necessary, 
to review records. So these duties were being performed by 
folks who were capable and trained to do it. So there is a 
disconnect somewhere.
    Ms. Brownley. There is a disconnect somewhere.
    So Ms. McCoy, in your testimony, I think you were making 
the point that you believe at this point that mistakes that 
occur are relatively small. And I concur that in any sort of 
management organization, you know, there is going to be some 
human error involved and I get that. That is not to say that we 
accepted it, and we have to do something about it, but I accept 
that notion.
    I think, you know, I wanted to follow-up on the Chairman's 
line of questioning, and Ms. Titus' line of questioning, in 
terms of just trying to really understand the accountability 
measures that are going to be in play.
    So previously the IG makes visits, site visits, finds 
mistakes. They are going to follow-up on that, you will follow-
up on that. But what are the measures actually embedded now 
into your system that you will find mistakes, not the IG, that 
you will find mistakes, rectify those mistakes?
    And what is your reporting mechanisms so that you know 
internally where the mistakes are happening? It shouldn't be in 
my opinion for this Committee to ask you to make a report and 
you come and tell us, we should be able to, I think, at any 
time be able to look at the records and see what you have 
identified what mistakes are there, and we can all sort of 
concur. So that is what I am looking for, is what are those 
accountability measures?
    Now you also said that the paperless system is part of that 
accountability. And, I mean, a paperless system, I think, is 
the right way to go, and I think it may eliminate some of the 
errors made just in terms of pushing paper. But a paperless 
system, I think, is better for efficiency purposes, but not 
necessarily accountability systems.
    So if you could just inform us on what are those embedded 
accountability measures?
    Ms. McCoy. I would be happy to. Thank you. So I would like 
to briefly touch on the accountability for the paper and then I 
would ask Mr. Houston if there is time to talk about the 
accountability in the electronic system.
    So as far as the records management policies and 
procedures, I mentioned we are updating them right now. Our 
office of management which oversees records management is 
taking into account the IT findings, best practices from across 
our regional offices, and then incorporating the records 
management piece of a digital environment. So those things are 
ongoing.
    We do keep records violation logs in our regional offices, 
the RMOs keep logs of anything they find, so that is an 
important piece of this. They give feedback to the supervisors 
and the employees if they find that they are missing signatures 
or annotations. So these are ongoing. And I did mention our 
oversight visits. So as far as the electronic piece of this--
    Ms. Brownley. Mr. Chairman, I know, my time.
    Mr. Abraham. Go ahead.
    Ms. Brownley. Thank you.
    Ms. McCoy. Thank you. Mr. Houston I think can elaborate on 
that.
    Mr. Houston. So in the electronic system, the first thing 
is that as soon as we image it, it is permanent. Even if we 
identify later that it is not of evidentiary value for our 
record, we have still got that image. And so if someone were to 
delete it, no matter when or where we find a problem, we can go 
back, restore that image and see who deleted it.
    The second thing is in the logs Ms. McCoy mentioned, that 
is a log of a paper system. It is a digital log, but it takes a 
human being to key it in. In a digital system if someone 
identifies a document as not belonging in a claims folder and 
it goes in the digital system to the RMO, and they say no, we 
need to retain that--it will track how many times somebody sent 
something back saying you shouldn't have marked this for 
disposal. And it is not human driven, the system tracks it.
    So we have got no human influence, on a data tracking 
system, that will tell us statistically do we have some 
employees at some locations that are doing it more than others? 
What type of documents are they marking for deletion? And if 
turns out we did it wrong, we can get it back. And the biggest 
piece there is that it is tracked by the system while they are 
doing their job. It is not them doing their job and then 
recording it.
    I would be happy to elaborate on that if you would like.
    Ms. Brownley. But is there a system in place that 
management in some sense checks in on that rather than the 
system, you know, figuring that out, but we have got to make 
sure that we do something about it as well once--
    Ms. McCoy. Yes, ma'am. So we are checking in on the paper 
based system and updating the policy and procedures, we will 
incorporate this new electronic environment that we are in just 
in the past few years.
    And again, that is the direction for the future. We very 
much appreciate Congress' support to get us where we are and 
going forward we don't want paper coming in. The more digits 
and the more images we have that cannot be lost in our digital 
fingerprint in the system of who touched it, and moved it, and 
did what with it. We won't be having these conversations.
    Ms. Brownley. Thank you, Mr. Chairman. I yield back.
    Mr. Abraham. Mr. Costello.
    Mr. Costello. Thank you, Mr. Chairman. I read this report. 
Mr. Arronte, I commend you and all those at the IG's office 
that worked on it. It is deeply frustrating, it is deeply 
troubling. When I consider, and I am from Pennsylvania, just 
looking by example to Philadelphia VA RO, last tread log 
documentation December 2012.
    We look at claims related document without the required two 
signatures in shred bin. And I look at the Philadelphia data 
there, which is not as bad as the Atlanta data, but that 
doesn't make it any much better.
    I get concerned when--and this isn't directed at you, but I 
get concerned when we see information like this. And the 
response from the VA is, well, we are going to--and with all 
due respect to you, Ms. McCoy, we are looking at revising our 
rules and regulations, our procedures, our requirements. When 
in fact, there is nothing that prevents those working on these 
files from just doing their job properly in the first instance. 
And if you are not going to properly do your job, then it 
really doesn't matter what rules, regulations or requirements 
are further added.
    Is there anything else that you could share with me Mr. 
Arronte about the findings at the Philadelphia office that 
either aren't included in here, or that make it unique, or 
particular in any respect? And then Ms. McCoy I will offer you 
an opportunity to respond as well.
    Mr. Arronte. Yes, sir. I am going to defer to Ms. Sullivan. 
In my testimony, and my oral statement, we discussed a large 
number of bins filled with paper documents. Philadelphia was 
one of the offices that, I think, had 31 bins of documents. 
Most of the documents were properly scheduled to be shredded, 
but when you have that kind of volume in a paperless 
environment, it kind of increases the risk, in our opinion. 
Dana?
    Ms. Sullivan. Certainly, sir. At Philadelphia, we did find 
31 bins when we were there doing our surprise inspection. We 
were told that the week before that they--and we saw 
documentation, that they had looked at 28 bins.
    The majority of documents, as Mr. Arronte said, had no 
value. They were paper envelopes, those types of items that are 
okay to be shredded, which is why we separated out the claims 
related documents, because that is where the risk to veterans 
lies.
    Mr. Costello. Right.
    Ms. Sullivan [continued]. Is in the claims related 
documents. And we talked to the RMT, they have an RMT there, a 
Records Management Technician, who it is a similar position to 
the records management officer. And, she told us that during 
her review each week, she would look at a random selection of 
bins. Such that she could not guarantee they were looking at 
all claims related documents prior to destruction as was 
required under the policy for the VBA.
    Mr. Costello. When I look at what types of claims related 
documents in Philadelphia, as provided in the IG's report, it 
seems to me--I am not a claim processor--it seems to be pretty 
self-evident that they would be related to a claim, and 
everybody makes mistakes. But am I off there? Aren't most of 
those documents self-evident? I mean, it is not really a close 
call, is it?
    Ms. Sullivan. Well, we have talked to staff not only at 
Philadelphia, but at other regional offices who said they were 
confused by the policy. Some said they hadn't had any training 
in quite some time, and they were not sure what documents 
needed a one signature, two signatures, or no signature, and 
they were just confused frankly.
    Mr. Costello. Do you accept that as credible?
    Ms. Sullivan. Based on the fact that we found some 
documents, we talked to some folks in Philadelphia. We asked 
some supervisors and managers, "Should these documents have 
been shredded?" And, they said, "No, they should not have been 
shredded. They should not have been in the final gray bin. They 
should have been caught."
    Mr. Costello. Ms. McCoy, what do you think the next steps 
are based on the findings in this IG report? Which is just a 
flash point in time, and that is the point. People make 
mistakes. If these finding in Philadelphia were over a year, 
you know, if that was the aggregate in a year or maybe even a 
month, I can look at that and say, well there is a lot going 
on, there is a lot of paperwork, but it just seems to me rather 
high given that flash point in time.
    And again, I am speaking specifically about Philadelphia, 
and Atlanta is certainly a lot worse. But can you share with me 
your concerns and what you think needs to be done moving 
forward, and specifically beyond just new rules or regulations 
which candidly someone can ignore at their desk. And if there 
is not the oversight afterward, then a new rule or regulation 
isn't going to really accomplish much.
    Ms. McCoy. Absolutely. Every record is important. And I 
don't want to look at any veteran and have to say or explain 
that we mishandled something.
    Mr. Houston's comments earlier about the electronic 
environment and all the safeguards, that is the answer, that is 
the way to go. As we get there during the transition, we do 
have humans involved in the process, and we are doing 
everything we can to help them understand what they need to do. 
And that is why we have our multiple layer review process.
    A bulk of the documents that are moving around in the 
regional offices for disposal are internally generated. So it 
is a copy of a letter that we printed out and realized there 
was a typo or a draft of a rating decision that we then decided 
we need to add something else.
    So I don't want to minimize any of this, every document is 
important. But we are not talking about us throwing away 
claims, you know, critical claims documents. The bulk of the 
paper we are working with, is stuff that we make internally and 
realize we don't need it. Or there are duplicate documents that 
are already in the system that have come in again from a 
veteran or a veteran service officer and we don't need them, 
but we have to annotate them to assure along the whole process 
that we know they are duplicate.
    And some of these violations--yes, it is accurate that we 
didn't follow policy if we didn't put the right initials and 
annotations, but that doesn't mean the paper gets thrown away.
    Mr. Costello. I agree. And I think it is one thing when--
and then I will yield back, I know I am over--
    It is one thing when you needed two signatures and you only 
got one, I think it is entirely different when you need a 
signature and you don't need any. I think that that is a darker 
shade of problem.
    But I am over my time. I appreciate the response from all 
three of you. Thanks.
    Mr. Abraham. Thank you, Mr. Costello. Mr. Zeldin.
    Mr. Zeldin. Thank you, Mr. Chairman. Ms. McCoy, by any 
chance do you know of a case involving a Mr. John Mitchell?
    Ms. McCoy. I am familiar with Mr. Mitchell, yes.
    Mr. Zeldin. Okay. Why is he not receiving aid and 
attendance?
    Ms. McCoy. I would say that we--I would be happy to have 
myself and our compensation service folks sit down and have a 
deeper conversation.
    I think the overall answer is that the evidence that we 
reviewed in that case doesn't substantiate entitlement to that 
benefit. And I know that there has been a lot of back and forth 
on that case. I personally have asked our headquarters experts 
to look at, make sure that we did it right, and we have done 
that a couple of times. So we are not finding entitlement based 
on the evidence we have.
    Mr. Zeldin. We admit that John Mitchell is a veteran and 
that he served in special operations for over 20 years. There 
is no doubt about that biographical part of his service, 
correct?
    Ms. McCoy. Sir, I am not that intricately familiar with his 
particular case. I know that we have had multiple reviews and a 
lot of conversation. I--
    Mr. Zeldin. Okay. But you are not even willing to admit 
that he is served in the military?
    Ms. McCoy. I understand he did--
    Mr. Zeldin. You came here and you admit that you know his 
case.
    Ms. McCoy. Yes.
    Mr. Zeldin. And you are not intimately involved in his case 
enough to even vouch that he served in the military?
    Ms. McCoy. On the spot, in this moment, I don't know those 
intricacies. I believe he did, but I don't--I did not write the 
case.
    Mr. Zeldin. Okay. So just imagine this, you serve for over 
20 years in the military, you are in special operations, you 
deploy into combat. You suffer a traumatic brain injury after a 
1,250 foot parachute fall. You are involved in a military 
vehicle accident. You are at the point now legally blind, and 
you disparately need aid and attendance, and you completely 
qualify for it.
    After suffering multiple military injuries connected to 
your service, serving your country, willing to lay down your 
life for it, and you reach out for help. And despite meeting 
all of the legal obligations and all of the legal requirements 
to qualify for aid and attendance, after serving your country 
for over 20 years, you can be watching a video where a House 
Veterans' Affairs Committee is speaking with the representative 
from the Department of Veterans Affairs on this topic of the 
handling of paperwork and taking care of our veterans and never 
wanting to tell a veteran that there has been any type of 
mishandling of your paperwork.
    And I am asking you about his case. You acknowledge that 
you know of his case, and even though this has been brought up 
at past Veterans' Affairs Committee hearings, I can't even get 
you to admit that he served our country.
    Now just imagine if you are at home, and after serving your 
country for literally decades, and deploying into combat, you 
can't even get the Department of Veterans Affairs to 
acknowledge that you served, let alone the fact that you have 
to live your entire life with traumatic brain injury from a 
parachute fall and a military vehicle accident.
    That is how you personalize, this isn't just about paper. I 
am offended on behalf of my constituent. I thank him for his 
service. I am willing to not only acknowledge that he served 
our country, but that his traumatic brain injury that he 
suffered as a result of it, which qualifies him for this 
benefit, at the very least, at the very least at this point, in 
June of 2016 after everything he's gone through trying to get 
this approval, maybe the Department of Veterans' Affairs can at 
least acknowledge that he served. That right there was one of 
the most, if not the most offensive answers I have heard in any 
Committee hearing that I have been in.
    And if you put yourself in the position of John Mitchell, I 
implore you please at the end of this Committee hearing to 
relook at his paperwork because everything is there, to get 
this man the help that he needs, and at the very least at this 
point after what we just witnessed with the answer to that 
question, I think the Secretary owes John Mitchell an apology, 
and a thank you for his service. At the very least your 
Department can acknowledge he served.
    Mr. Abraham. Thank you, Mr. Zeldin.
    I am going to ask a couple of follow-up questions so we are 
going to start a second round here.
    Mr. Arronte, this will go to you. Your testimony explained 
inappropriately shredding of documents and how it impacts our 
veterans. And we understand that in our claim process. Yet, 
your office didn't follow-up on the 2008 findings until 
recently. So why hasn't your office made this more of a 
priority?
    Mr. Arronte. Sir, unless I didn't speak clearly, we did 
follow-up after the 2008 incidents where we found all the 
inappropriate shredding. Our Benefits Inspection Division, 
which was newly created in 2009, looked at nine regional 
offices over a 9 month period. And initially, I think there was 
an 88 percent noncompliance rate. We were still finding 88 
percent of the documents we looked at should not have been 
shredded.
    And then towards the end of that year in December, I 
believe, it went to below 10 percent. And, so then, at that 
time, we have to conduct risk assessments for the protocols we 
look at based on the staffing. So, we shifted some of our work 
from that to look at issues like traumatic brain injury, and 
temporary 100 percent claims. But we did look at the policy for 
about 9 months to make sure staff at these offices were 
complying.
    Mr. Abraham. Okay. And I am going to ask you this too, Mr. 
Arronte. How do you respond to the VA's testimony of Ms. McCoy 
that, that the error rate is actually less than 1 percent and 
is not indicative of VBA's systemic issues?
    Mr. Arronte. Again, sir, as Ms. Sullivan indicated, when we 
look through these bins and we are looking for mail, we go 
through a lot of paper documents, some of them are Post-it 
notes, some are envelopes. So, if you want to count that as the 
total universe of documents that we looked at, then that is one 
way to do the math.
    What we were looking for is claims related documents, and 
we found 155. So to us, that is 100 percent. We found 155 at 
that snapshot in time, so 100 percent of what we looked at that 
should have not been there was the 155. So we had to filter 
through the okay stuff to find the universe that we wanted to 
find.
    Mr. Abraham. And I think that is my concern is that we are 
having voodoo math here on some of these issues. So we will 
continue. Ms. Titus.
    Ms. Titus. I thank you. I would just go back Ms. McCoy you 
said we don't want to receive any paper, we don't want paper. 
We want everybody to do electronic filing. Well if some of 
those veterans are like me, that is a problem because they are 
low tech.
    But what are you doing to get the VSOs to get our veterans 
to apply online, as opposed to sending paper? Are we helping 
them to do this so that they can then in turn make the system 
work better?
    Ms. McCoy. Yes, we are. We are making sure they have 
access. We are increasing the capabilities in those systems to 
upload documents electronically. We have fax capabilities to 
send them in and they are digitized immediately upon receipt of 
the fax.
    And I know there are concerns that there are, as you say, 
low tech veterans or folks in rural areas who might not have 
access to a computer or scanner or something like that. Another 
solution is don't send it to the regional office, send it 
straight to the scanning vendor. That way we don't have to put 
it in the box, and take the time and expense to send it to the 
scanning vendor.
    There is a P.O. Box, it is P.O. 4444 in Janesville, 
Wisconsin. And someone can send it straight to the scanning 
vendor for us, it doesn't get to a regional office, there are 
not hand offs' with humans touching the paper. It goes right 
into digits and is scanned immediately.
    Ms. Titus. So are you in communication with VSOs? Have they 
offered any input into how to make this process better or 
anything they need to help their veterans, their members apply 
in this way?
    Ms. McCoy. Yes. We have been working with them and I would 
ask Mr. Houston to elaborate on that, please.
    Mr. Houston. Ma'am, we have been working with the VSOs on 
both, when they send this information, how do we make it so 
that our systems make it digital, where we use smart technology 
to extract file numbers, names, contentions, so even though the 
veteran wrote it and sent it to us in paper, right as we scan 
it, we make it just as they had applied online. And we are 
making changes to the VA forms to accommodate that.
    We have also added so that when you send a fax you get a 
fax confirmation page back right away to say this is the number 
of pages we have got, we confirm that we have got it, and we 
are expanding that so you will get more than just a 
confirmation page. You will get a confirmation page when we 
receive it, and you will also get an update once the claim has 
been put under control in the VA systems. And all of those 
changes were due to direct feedback from veteran service 
officers.
    We have also been working to enable veteran service 
officers who have their own imaging systems to upload directly 
to VA systems from theirs, rather than print, mail and we 
rescan it. And we are doing that for a couple of reasons. One 
is because I wanted to spend less money on scanning. We scanned 
2 billion images in the last 4 years. Any time I can get it 
digitally to begin with I save the taxpayer a lot of money.
    So we are working with the VSOs to get it directly from 
them digitally. And I know that the VSOs have been really 
aggressive about pushing both scanners and fax machines into 
their remote offices to increase our ability to get it 
electronically.
    So we are working with VSOs to get it more electronically, 
with more data. And then we have also worked with them to make 
sure that when we get paper, we can make it electronic rapidly 
and accurately. Because we really want to make sure no matter 
what generation of veteran you are, we take care of you.
    In addition on that, with older records we have specific 
technology's, hardware and software in place to handle older 
records. I think we are probably the leading edge on microfiche 
reading, because we still get microfiche records. We have got 
specialized equipment for that. And we have got specialized 
equipment for the old onion skin records. We have got some 
really terrific equipment. We have been resourced by this 
Committee and others to make sure we get that done right. And a 
lot of that is aimed at making sure we can handle older records 
as fast or faster than new records.
    Ms. Titus. Well, that is good to hear. Do you have a 
scanning center in the West?
    Mr. Houston. We do not, ma'am.
    Ms. Titus. Maybe we need to look at that.
    Mr. Houston. What we have done is, we use a competitive 
contract, and we award it to two competitors at the same time. 
And we essential make them compete for veterans' business every 
day, whichever one of them is doing better gets more work, 
whichever one of them is doing poorly gets less work.
    On that note, though, we don't tell them how to do their 
business. We bring a good industry-government partnership in 
where industry brings its best game, best value for the 
taxpayer, and we make sure they do it. We really haven't 
dictated where they put them, we just dictate the results they 
give us.
    Ms. Titus. And you are confident that the records are kept 
safe there and there is not a problem at that level that maybe 
the IG hasn't looked at?
    Mr. Houston. Absolutely. In addition to the quality of the 
records, records security is huge. At our scan sites, you can't 
take paper in, you can't take a cell phone in, you can't take a 
camera in. Anything electronic you take in is examined. When 
you walk out, you hold your jacket out in front of you so they 
can see you are not taking anything with you. And then we use a 
five-tier accuracy review on what we scan.
    Our vendors use individual quality reviews on their people. 
They do inline audits of their process. We have an independent 
company go in and audit that process. We also use the accuracy 
controls in the software and the hardware. And then our last 
accuracy review is the VA employee when they are looking at the 
claim and looking at, did I get it, was it scanned right, was 
it clear, was it readable, is there a page missing? And so we 
use both physical controls on the paper in the sites and all 
kinds of electronic controls on the quality we get from them.
    I would welcome anybody, any Congressmen or your staffers 
or VSOs, we routinely show them through our sites because we 
are really proud of the value those folks are giving the 
veterans.
    Ms. Titus. That would be interesting. Thank you. Thank you, 
Mr. Chairman.
    Mr. Abraham. Ms. Brownley.
    Ms. Brownley. Thank you, Mr. Chairman. Ms. McCoy, you have 
basically testified that almost now 100 percent of the claims 
are processed electronically, almost there. And so do you have 
any idea what percentage of appeals are processed 
electronically and what the timeframe is for that?
    Ms. McCoy. A majority of the appeals are in electronics 
both for VBA and also the Board of Veterans' Appeals.
    Ms. Brownley. Is that like 51 percent or--
    Ms. McCoy. I think more like 60 to 70 percent, but I would 
have to check on that.
    Ms. Brownley. And the timeline?
    Ms. McCoy. And the timeline--so, I believe this year Mr. 
Houston, in getting the best value we can, and maximizing the 
amount of scanning we can do. We are looking for additional 
opportunities to have regional offices send any remaining 
appeals folders and paperwork to the scanning vendor so it is 
electronic as well.
    Ms. Brownley. But a timeline, by what date?
    Mr. Houston. We are looking to have it done by the end of 
the calendar year, ma'am.
    Ms. Brownley. Thank you, thank you, thank you.
    So again, Ms. McCoy, you have concurred with 
recommendations from the IG. You said you were in the process 
of releasing additional guidance on that. And again timeline, 
when is that going to happen and how will it be executed in all 
the VA offices?
    Ms. McCoy. Our office of management is working on that 
right now. I believe they have an early draft, it will go 
through concurrence. If I had to tentatively put a timeline--I 
would think in the next maybe 6 to 8 weeks, we would have that 
policy updated and concurrence completed. Then we would do all 
of the necessary training at the regional offices on that, and 
then start whatever oversight changes are generated by that new 
policy.
    Ms. Brownley. And last question, which is with regard to 
congressional inquiries, I know that there was, I think the 
IG--maybe it wasn't the IG, but I know that in Atlanta it was 
identified that congressional inquiries were not properly 
uploaded, and so can you clarify, are you putting forward again 
new guidance, new policy, vis-`-vis congressional inquiries?
    Ms. McCoy. Yes, that will be part of the updated policies 
and procedures. Right now there is some gray area as to whether 
just general congressional inquiries are supposed to go into 
the claims folder itself. We have in the regional offices 
separate tracking mechanisms for requests on status of claim 
and things of that nature. And the policy is that if there is 
any attachment of evidence, that goes into the claims folder.
    There is still a little squishiness there. And we are 
asking our experts to shore that up to make sure it is very 
clear to employees, everything from congressional inquiry 
perspective that needs to go in the folder versus on a 
spreadsheet or something of that nature.
    Ms. Brownley. Thank you. I yield back.
    Ms. Brownley. Thank you. I yield back.
    Mr. Abraham. Okay. Thank you, Ms. Brownley. Okay ladies and 
gentlemen, on behalf of the Subcommittee, I thank you for your 
testimony. And this testimony has raised some serious questions 
about how the VA is handling the paper documents.
    And I appreciate that the VA has made some progress since 
the 2009 hearing on this issue, but the IG reports prove that 
the veterans' paperwork is still ending up in the shred bin 
when it should not. I look forward to working through these 
issues with the department and my colleagues on the Committee.
    Again, thanks to everyone for being here. And as initially 
noted, the complete written statement of today's witnesses will 
be entered into the hearing record.
    I ask unanimous consent that all Members have 5 legislative 
days to revise and extend their remarks and include extraneous 
materials.
    Hearing no objection, so ordered.
    I thank the Members and the witnesses for their attendance 
and the participation today. This hearing is now adjourned.

    [Whereupon, at 11:07 a.m., the Subcommittee was adjourned.]

                            A P P E N D I X

                              ----------                              

                    Prepared Statement of Beth McCoy
Introduction

    Good Morning Chairman Abraham, Ranking Member Titus, and Members of 
the Subcommittee. Thank you for the opportunity to discuss the Veterans 
Benefits Administration (VBA) records management program - specifically 
the handling and disposition of Veterans' claim-related documents. I am 
accompanied today by Mr. Brad Houston, Director of VBA's Office of 
Business Process Integration. VBA is committed to ensuring all 
Veterans' records are protected and maintained with accuracy and care. 
My testimony today will address the findings of two reports by the 
Department of Veterans Affairs (VA) Office of Inspector General (OIG), 
released in April 2016, regarding disposition of claim-related 
documents; one related to an inspection at the Los Angeles Regional 
Office (RO) and one based on reviews at 10 additional ROs (Atlanta, 
Baltimore, Chicago, Houston, New Orleans, Oakland, Philadelphia, Reno, 
San Juan, and St. Petersburg). Although the numbers of document-
handling errors identified by the OIG in these reports were extremely 
small, VBA knows that every Veteran's record is vitally important and 
sincerely regrets these human errors. My testimony will begin by 
discussing the extensive transformation VA has been diligently 
undertaking to eliminate the potential for these types of errors.

Transformation from Paper to Digital Records

    VA greatly appreciates the support of the Congress that has allowed 
us to transform our antiquated paper-based claims processing system to 
a fully electronic processing environment using digital records. The 
Veterans Benefits Management System (VBMS) was developed as a web-
based, paperless claims processing solution, complemented by improved 
business processes, to address the inefficiencies of paper folders and 
the problems of misplaced files and improper handling and disposal of 
paper documents.
    VA's shift to electronic claims processing has meant converting 
millions of paper files to eFolders. Between fiscal year (FY) 2012 and 
FY 2015, the Veterans Claims Intake Program (VCIP) scanned nearly six 
million claims files into Veterans' eFolders in VBMS. In FY 2015, VBA 
deployed its innovative Centralized Mail Initiative to all ROs. 
Centralized Mail reroutes all inbound compensation applications and 
claim-related mail directly from the U.S. Postal Service to Claims and 
Evidence Intake Centers at document conversion services vendor sites - 
an innovation that ensures these documents are quickly digitized and 
protected from improper handling and inappropriate disposal. Conversion 
of paper records to digital records significantly strengthens the 
systemic protection of Veterans' claim documents. Assuring these 
protections remains a top priority for VBA.
    Additionally, we have enhanced our online claims filing 
capabilities for Veterans and their representatives through eBenefits 
and the Stakeholder Enterprise Portal, helping to keep paper documents 
from being created in the first place. VBA claims processors used to 
touch approximately 5,000 tons of paper each year. Today approximately 
99.8 percent of disability compensation claims are processed 
electronically.

RO Records Management Process for Document Disposal

    While VBA's transformation to electronic claims processing has 
significantly minimized the flow of paper documents to ROs, a small 
volume of paper documents continue to be received. VBA's current 
records management guidance provides several levels of review and 
oversight in the process of appropriately handling and disposing of 
paper documents. Employees and supervisors play a critical role in the 
records management process, along with designated Records Management 
Officers (RMO).
    Employees are the first line of defense in ensuring proper handling 
of paper records. All employees are issued a red shred bin for 
collection of general paper materials and employee-generated documents 
and system print-outs appropriate for disposal. Additionally, all 
employees are issued a separate red envelope for claim-related 
documents that require additional reviews and oversight by supervisors 
and records management officers before determined appropriate for 
disposal. Claim-related ``red-envelope'' documents that have received 
the appropriate oversight reviews are ultimately placed by RMOs in 
locked grey disposal containers for delivery to shredding service 
contractors. These contractors are required to have systems in place 
that are compliant with VA standards for protection of personally 
identifiable information (PII) and requirements for disposal, or 
shredding, of unnecessary paper.

OIG Inspection at the Los Angeles RO

    During a regularly scheduled benefits inspection at the Los Angeles 
RO in January/February 2015, the OIG received an allegation that 
necessary claims processing documents were being inappropriately 
designated for disposal.
    OIG reported that approximately 13,800 documents were reviewed to 
determine if all appropriate actions had been taken and the documents 
were in fact appropriate for disposal. As a result of this review, nine 
documents (approximately 0.065 percent) were identified as needing 
additional action because proper shred-disposal procedures had not been 
followed with required annotations documenting the oversight review by 
a supervisor and/or the RMO. However, it is important to note that 
these documents would still have been subject to final review by a 
supervisor and RMO prior to being placed in the grey disposal 
containers for final disposal. OIG also found that the RO had not 
consistently assigned appropriately-trained staff to perform the RMO 
duties and, as a result, did not maintain required logs of the 
oversight reviews.
    OIG notified RO leadership of the nine documents identified as 
needing additional action on February 11, 2015, and the Los Angeles RO 
Director took immediate action to address the concerns. The RO reviewed 
the claims records associated with the nine documents and took all 
necessary corrective actions. Shredding was halted while the RO took 
extra steps to reissue guidance to all employees to reinforce correct 
document-handling procedures. Every employee in the RO was retrained on 
the proper procedures for identifying and annotating records for 
shredding. The RMO position was vacant at the time, but RMO duties 
continued to be performed by appropriate personnel until the position 
was filled.

OIG Inspection of 10 ROs

    After issuing an interim report on the findings in Los Angeles, OIG 
conducted unannounced visits at 10 ROs to determine whether improper 
identification of claims records for disposal was systemic throughout 
VBA. In the course of these inspections, OIG reviewed approximately 
438,000 documents. Of these, 155 were potentially claim-related, and 
OIG concluded 69 were inappropriately submitted by employees for 
destruction. Of the 69 documents, 55 were congressional inquiries 
handled by the Atlanta RO, 52 of which had no impact on benefits. The 
Atlanta RO had interpreted VBA's policy as requiring congressional 
correspondence to be maintained but not requiring placement in the 
Veterans' electronic claims folder. The report findings demonstrated 
the need for clarification of VBA's national policy regarding the 
maintenance of congressional correspondence, which VBA is actively 
working on now.
    Overall, the OIG review identified 17 claim-related documents that 
were not compliant with VBA's document destruction policy and 
procedures. Only 11 of those 17 documents - or approximately 0.0025 
percent of the 438,000 documents reviewed - affected or had the 
potential to affect benefits.
    Although the number of document-handling errors identified during 
the OIG's 10-RO review was extremely small, VA continues to emphasize 
to our employees that every Veteran's record is vitally important, and 
every effort must be taken to protect all Veterans' records. OIG 
identified lack of clarity in VBA's records management policy as 
contributing to the errors identified and made seven recommendations. 
VA concurred with the recommendations, and we are revising VBA's 
records management policy to strengthen compliance and better align 
procedures with the current electronic environment.

Conclusion

    We, in VBA, cannot underscore the importance of protecting 
Veterans' records too strongly with our employees, approximately 53 
percent of whom are Veterans themselves. We sincerely regret when 
errors are made, and we will continue to work diligently to leverage 
and expand our use of digital technologies to eliminate the potential 
for human error in the process.
    I appreciate the opportunity to address the Committee today. Thank 
you for your continued support and commitment on behalf of Veterans, 
their families, and Survivors.
    Mr. Chairman, this concludes my statement. I would be happy to take 
any questions you or other Members of the Committee may have.

                                 
                  Prepared Statement of Brent Arronte
    Mr. Chairman and Members of the Subcommittee, thank you for the 
opportunity to discuss the Office of Inspector General's (OIG) recent 
reports on the review of records disposition for veterans' claims-
related documents, Review of Alleged Shredding of Claims-Related 
Evidence At The VA Regional Office Los Angeles, California, and Review 
of Claims-Related Documents Pending Destruction at VA Regional Offices. 
\1\ Our statement today focuses on the results of work conducted 
related to a hotline allegation that management and staff at the Los 
Angeles, California, VA Regional Office (VARO) were not following 
Veterans Benefits Administration (VBA) policy on management of 
veterans' and other governmental paper records. We will also discuss 
the effectiveness of VA's controls for compliance with records 
disposition guidance for veterans' claims-related documents observed 
during our unannounced inspections at 10 VAROs across the nation. I am 
accompanied by Ms. Dana Sullivan, Director, OIG's San Diego Benefits 
Inspections Division.
---------------------------------------------------------------------------
    \1\ Both reports were published on April 14, 2016, and are 
available at http://www.va.gov/oig.

---------------------------------------------------------------------------
BACKGROUND

    In April 2009, the OIG established an independent benefits 
inspection program to provide recurring oversight of VAROs, focusing on 
disability compensation claims processing and performance of Veterans 
Service Center (VSC) operations. Since the inception of the program, 
the OIG has consistently reported on the need for enhanced policy 
guidance, oversight, training, and supervisory review to improve the 
accuracy and timeliness of disability claims processing and VARO 
operations. We also perform specialized reviews of VBA programs and 
initiatives. A complete and accurate record is critical to ensure 
claims are identified and worked, and that staff make timely and 
accurate decisions. Inappropriate shredding of documents can lead to 
lost claims, veterans experiencing delays in obtaining compensation 
decisions, decisions based upon incomplete information, and incorrect 
decisions. When claim information is inappropriately disposed, it could 
also affect the integrity of VBA's reported workload.
    Inappropriate shredding of veterans' claim information was 
identified in 2008 at four VAROs during our audit of claims-related 
mail processing. \2\ The issue came to our attention at the Detroit, 
Michigan VARO in September 2008, when we were told that claims-related 
documents might have been inappropriately discarded in shred bins. We 
reviewed the entire contents of 18 shred bins at the Detroit VARO and 
identified 80 documents that were inappropriately discarded. After 
finding the claims-related documents at the Detroit VARO, we expanded 
our review to include the Waco, Texas; St. Louis, Missouri; and St. 
Petersburg, Florida VAROs. Overall, the OIG identified 132 claims-
related documents that VARO staff inappropriately discarded, of which 
45 could have affected claim benefits. The remaining 87 documents 
consisted of death certificates, as well as correspondence from 
veterans and award documents that would not have affected claims, but 
should have been retained in the claims files. Shred bins had been 
located in different work areas throughout these VAROs allowing staff 
to deposit documents no longer considered necessary. In order to 
protect veterans, since the documents contained personally identifiable 
information, the staff could not deposit the documents in open trash 
collection bins. VBA had no controls in place for review of documents 
placed in shred bins, and no requirement for any final review prior to 
destruction. Therefore, an employee could easily dispose of documents, 
either purposefully or unintentionally. The extent of the inappropriate 
claims-related shredding could not be determined as the bins reviewed 
contained 14 or fewer days of material.
---------------------------------------------------------------------------
    \2\ Audit of VA Regional Office Claim-Related Mail Processing, 
September 30, 2009.
---------------------------------------------------------------------------
    On October 14, 2008, the OIG briefed James Peake, the then 
Secretary of Veterans Affairs; Patrick Dunne, the then Under Secretary 
for Benefits (USB); and other senior VA and VBA officials concerning 
the documents found in the shred bins. The USB directed every VARO to 
suspend all document shredding. In addition, the USB instructed every 
VARO Director to review and inventory all contents in shred bins, 
report all claims-related mail or original supporting documents found 
in shred bins, and verify that the contents did not include documents 
needed for processing claims. VBA's search of shred bins found an 
additional 474 claims related documents in 41 VBA locations nationwide, 
including 40 of the 57 VAROs and VBA's Records Management Center in St. 
Louis, Missouri.

    VBA Policy on Management of Veterans' and Other Governmental Paper 
Records
    In November 2008, VBA issued additional policies for the 
maintenance, review, and appropriate destruction of veterans' and other 
governmental paper records in response to our findings and VBA's own 
administrative review results. \3\ This policy also established two new 
positions-the Records Management Officer (RMO) and the Division Records 
Management Officer (DRMO)-to protect against the inappropriate 
shredding of documents.
---------------------------------------------------------------------------
    \3\ VBA Letter 20-08-63, VBA Policy on Management of Veterans' and 
other Governmental Paper Records, November 14, 2008.
---------------------------------------------------------------------------
    The RMO is responsible for overseeing all programs established for 
the management of veterans' records and is the subject matter expert 
and records liaison for administrative records. Additionally, the RMO 
is the VARO's final control to prevent shredding of claims-related 
documents. RMOs work closely with other records management staff and 
other agencies to protect personally identifiable information of 
veterans and employees from unauthorized use, disposal, and 
destruction. They provide records management guidance to staff, and 
conduct frequent sampling and spot checks to ensure compliance with 
station shredding policies. Additionally, the RMO is required to 
conduct annual training for all VARO staff relating to the maintenance, 
review, and appropriate destruction of veterans' paper records.
    DRMO reviews are generally performed by supervisors as a collateral 
duty, and VBA policy provides for one DRMO for every 15-20 employees in 
the division. The VARO director determines the appropriate number of 
DRMOs at a VARO or other VBA facility to fully carry out these 
responsibilities.
    In January 2011, VBA revised its policy to include an optional 
full-time position, the Records Management Technician (RMT). Each VARO 
could replace their DRMO position with an RMT. VBA made this change to 
reduce the supervisory records review and approval process to claims-
related material only and provide more time for VARO supervisors to 
devote toward claims processing activities. Further, VBA issued each 
employee a red envelope and a red box. Employees were directed to use 
the red envelopes for claims-related documents only. Claims-related 
documents generally include duplicate evidence and are required to be 
signed by the employee and the supervisor prior to destruction. The red 
boxes are used for other documents, such as training materials, draft 
rating decisions, and internally generated papers. Some of these 
documents require the employee's signature before destruction, and 
others do not require any signatures. Employees are responsible for 
ensuring all items in their designated shredding containers meet the 
guidelines of the policy.
    VBA requires staff to file, in a claims folder, essential documents 
with evidentiary, legal, or administrative value. VBA policy also 
requires staff upload all file mail to an electronic claims folder to 
ensure that an accurate historical record is maintained for each 
veteran's claims folder.

REVIEW OF ALLEGED SHREDDING OF CLAIMS-RELATED EVIDENCE AT THE VA 
    REGIONAL OFFICE, LOS ANGELES, CALIFORNIA

    In January 2015, the OIG received an anonymous allegation that 
staff at the Los Angeles VARO were inappropriately shredding mail 
related to veterans' disability compensation claims. The allegation 
also stated that supervisors were instructing staff to shred these 
documents. We conducted an unannounced inspection at the VARO in 
February 2015 to evaluate the merits of the allegation.
    We issued an interim report on August 17, 2015, Interim Report- 
Review of Alleged Shredding of Claims-Related Evidence at the VA 
Regional Office, Los Angeles, California, in which we substantiated 
that VARO staff were not following VBA's policy on the management of 
veterans' and other governmental paper records. We reviewed 
approximately 13,800 documents to be shredded. These documents were 
contained in the VARO's locked final shredding disposal containers, as 
well as in individual employee red shred boxes on the appeals team, the 
intake processing center, the mailroom, the file room, the public 
contact team, and the VSC Manager's office.
    We found nine claims-related documents incorrectly placed in 
employees' individual red boxes. Records management staff stated they 
did not follow a set schedule for picking up documents to be shredded. 
Therefore, we could not determine when employees' red boxes were last 
emptied or how long these documents had been in their boxes. This 
action bypassed VBA's control that requires supervisory review of 
claims-related documents before shredding. Eight of the documents had 
the potential to affect veterans' benefits and consisted of homeless 
veterans' disability claims, medical evidence, VARO letters returned as 
undeliverable, an address change, and a veteran's request for 
information related to his appeal. The final claims-related document 
was a letter from a veteran that did not affect benefits, but should 
have been included in the file for historical purposes. None of the 
nine documents had all required signatures or initials.
    We also found there was no RMO at the VARO from August 2014 until 
our inspection in February 2015. The RMO had been promoted to another 
position in August 2014, and the Assistant Director determined that it 
was not necessary to fill the position. VBA policy requires that an RMO 
continue to oversee all programs established to manage veterans' 
records. We found that Support Services Division (SSD) staff who took 
over the duties of the RMO lacked training regarding maintaining, 
reviewing, protecting, and appropriately destroying veterans' and other 
governmental paper records. The Assistant Director assumed that the 
former RMO had provided SSD staff with training but did not ensure this 
had occurred. SSD staff stated they would only complete a ``cursory 
review'' that consisted of observing the documents as they emptied red 
boxes into final shred bins. As a result, we concluded it was likely 
that this cursory review would not have identified the claims-related 
documents we found, and they would have likely been inappropriately 
destroyed. Upon our request, VARO management could not provide 
documentation of permission to reassign the RMO duties to other staff 
and deviate from the requirement of having an RMO.
    The Los Angeles VARO failed to provide any documentation of 
shredding violation logs for the past 2 years. SSD staff only kept 
certificates of each shredding event carried out by the shredding 
contractor, as they said they were unaware of VBA's requirement to log 
any material that was determined inappropriate for destruction or 
identify staff who did not follow VBA policy. In the absence of the 
shredding logs, we could not determine the effectiveness of the RMO/SSD 
reviews over the past 2 years to prevent claims-related documents from 
being improperly destroyed, compared to what we found during our 
review. This was a missed opportunity for the VARO to identify its 
training needs on the management of veterans' paper records.
    Due to noncompliance with VBA policy, poor controls, inadequate 
oversight, and lack of training, the Los Angeles VARO put veterans' 
claims-related documents at risk for inappropriate destruction. Because 
the VARO did not consistently follow VBA's controls, it was likely that 
staff would have inappropriately destroyed the nine claims-related 
documents we found. Similar to the 2008 audit, we could not quantify or 
identify claims related documents that the VARO may have shredded prior 
to our inspection.
    We recommended the VARO Director implement a plan to ensure staff 
comply with VBA's policy for handling, processing and protection of 
claims-related documents. We also recommended the Director assess the 
effectiveness of training provided to staff on VBA policy and provide 
documentation to the OIG that corrective action had been taken on the 
eight cases we identified. On April 14, 2016, we issued our final 
report, Review of Alleged Shredding of Claims-Related Evidence at the 
VA Regional Office Los Angeles, California that contained the Los 
Angeles VARO Director's concurrence with our recommendations. He stated 
refresher training had been provided to all employees, and that a 
revised local Standard Operating Procedure on shredding had been 
instituted. In addition, he stated management would receive reports 
from the RMO detailing errors made in the handling of the documents and 
would follow up with retraining and accountability for conduct. 
Finally, the VARO Director stated staff had completed action on the 
eight cases referenced in the report. The VARO Director's comments and 
action were responsive to the recommendations, and we will follow up as 
required.

REVIEW OF CLAIMS-RELATED DOCUMENTS PENDING DESTRUCTION AT VA REGIONAL 
    OFFICES

    After determining there were claims-related documents pending 
inappropriate destruction at the Los Angeles VARO and assessing that 
the controls of the records' disposition process were not effective, we 
conducted unannounced inspections at 10 VAROs on July 20, 2015. We 
reviewed all claims related documents pending destruction contained in 
the VAROs' final shred bins. We issued the results of these unannounced 
inspections in April 2016, Review of Claims-Related Documents Pending 
Destruction at VA Regional Offices, (April 14, 2016). We reported that 
VBA's controls for records disposition were not fully effective in 
preventing VARO staff from destroying claims related documents. We 
reviewed approximately 438,000 documents awaiting destruction. The 
number of documents found represented the contents within shred bins 
between disposal cycles. The 10 VAROs, per their local policies, had 
planned pick-ups ranging from twice weekly to once a month. However, 
the shred bins contained documents that were not claims-related, such 
as scratch paper, envelopes, internally generated papers, draft or 
duplicate decisions and letters, and training materials. Once other 
materials were separated out, we identified 155 claims related 
documents in final shred bins at 9 of 10 VAROs, and one VARO had no 
claims-related documents in their final shred bins. Of the 155 claims-
related documents, 25 documents found at 6 VAROs were compliant with 
VBA policy and appropriate to shred.
    The remaining 130 of 155 claims-related documents found in the 
shred bins did not follow VBA policy and have the signatures needed to 
be placed in the shred bins. These documents bypassed VBA's internal 
control requiring supervisory review of all claims-related documents 
prior to shredding. Sixty one of these documents were appropriate to 
shred because they were available in veterans' electronic or paper 
records. However, 69 were not appropriate to shred because VARO staff 
had not added them to veterans' claims folders. Of those 69 documents:

      Two documents affected benefits. One document discovered 
at the Reno, Nevada VARO consisted of evidence supporting reimbursement 
of burial costs which was incorrectly denied. The other document found 
at the Atlanta, Georgia VARO included congressional correspondence with 
evidence related to removal of a former spouse which resulted in a 
delay in adjusting the veteran's compensation benefits and a larger 
overpayment.
      Nine documents had the potential to affect veterans' 
benefits, including medical evidence, a veteran's inquiry regarding his 
appeal, evidence related to a provisional rating, original personnel 
records, an administrative decision, and bank account information. Two 
of these documents also included congressional correspondence.
      Fifty-eight claims-related documents did not affect 
benefits but were still required to be included in the veterans' claims 
folders. Fifty-two of these documents consisted of congressional 
inquiries at the Atlanta VARO-VARO staff uploaded these documents into 
the veterans' electronic records after being notified by the OIG. VARO 
management disagreed that shredding these documents had any effect on 
veterans' because they had retained local copies. While we acknowledge 
that VARO management maintained local copies, this evidence was not 
part of the claims files at the time of our review. As such, no one can 
be assured that other VAROs, which may process future claims from these 
veterans, would have access to these documents.

    The Acting USB stated that our findings were not indicative of a 
systemic issue considering the large number of documents that were 
reviewed. However, we disagree and reiterate that the potential effect 
on veterans cannot be minimized. Generally, the errors we found 
occurred because management did not ensure staff complied with VBA's 
policy for safeguarding veterans' documents. Management and staff 
stated VBA's policy was confusing and outdated, and did not clearly 
delineate signature requirements for all claims-related documents. 
Management did not ensure that RMOs provided annual training to all 
VARO staff on the proper procedures for managing veterans and other 
governmental paper records as required. Staff at numerous VAROs stated 
they could not recall when RMOs provided training. Management and staff 
noted training would be a helpful reminder of the proper annotation 
requirements.
    VBA's policy was established to ensure that documents are properly 
identified for shredding. Records management staff are required to 
review claims-related documents submitted for shredding, and conduct 
spot-checks of non-claims-related material. However, we found that they 
did not consistently review documents at some of the VAROs we 
inspected. For example, at one regional office, the RMO did not review 
any documents submitted for shredding in 2015, and management directed 
the RMT to review a sample of only three of the total bins each week. 
Furthermore, records management staff at three VAROs stated that they 
were assigned additional duties that inhibited their review 
responsibilities. Based on the insufficient records management 
processes we observed at these VAROs, staff did not appropriately 
review all claims related documents designated for shredding.
    If records management staff identify material inappropriately 
scheduled for destruction, they are required to report these violations 
to VARO directors and maintain logs for 2 years. At the 10 VAROs we 
reviewed, records management staff did not consistently maintain 
violation logs. Two VAROs did not have current violation logs because 
records management staff reported having no violations in the past 2 
years. Five additional VAROs' logs had no recorded violations within 
the current year. At one VARO, records management staff did not have 
recent log entries because they would not record a document missing 
signatures as a violation, unless it was a chronic problem originating 
from one employee. Based on our findings of claims-related documents 
inappropriately placed in the shred bins, it is highly unlikely the 
VAROs had no violations within the last year.
    We concluded claims related documents were at risk of being 
inappropriately destroyed. As noted in both the 2008 audit and the 
February 2015 inspection, we could not quantify or identify claims-
related documents that the VAROs may have shredded prior to our review.
    We recommended the Acting USB ensure VARO compliance with policy, 
update and clarify policy and procedures, and provide training where 
needed. The Acting USB concurred with our recommendations, and agreed 
the records management policy needs to be revised to align with the 
current electronic document storage and centralized mail handling. VBA 
will also revise associated roles and responsibilities, with deliberate 
consideration given to compliance enforcement and oversight, and will 
ensure procedures are in place to track all shredding violations 
identified. The Acting USB also stated Phase 2 of the Records 
Management Accountability and Training initiative to ensure records 
management compliance and proper control, storage, and maintenance of 
mail and other benefit and claim-related documents will be scheduled. 
Finally, VBA is in the process of clarifying procedures for the 
maintenance and disposition of congressional correspondence. The Acting 
USB's planned corrective actions are responsive to the recommendations, 
and we will follow up as required.

CONCLUSION

    OIG's 2008 audit and the 2015 inspections demonstrate that VBA's 
controls have been ineffective in safeguarding veterans' claims-related 
documents from potential inappropriate destruction. Our recent 
inspection work at 11 VAROs demonstrated that due to noncompliance with 
VBA policy, poor controls, inadequate oversight, a lack of training, 
and confusing policies, veterans' claims-related documents were at risk 
for inappropriate destruction.
    The potential effect on veterans should not be minimized. 
Considering that there are 56 VAROs, and if weekly shredding is 
conducted, it is highly likely that claims-related documents at other 
VAROs are being improperly scheduled for destruction. We consider any 
loss of claims-related documents to be unacceptable. These actions can 
potentially result in loss of claims and evidence, incorrect decisions, 
and delays in claims processing. Further, this situation increases the 
distrust that veterans, their beneficiaries and families, and other 
stakeholders have in VA's ability to adequately protect documents and 
provide timely benefits.
    Mr. Chairman, this concludes my statement. We would be happy to 
answer any questions you or members of the Subcommittee may have.

                                 [all]
```