DEVELOPMENT OF THE VETERANS

BENEFITS ADMINISTRATION’S ANNUAL 

BUDGET

Hearing

before the

Committee on Veterans’ Affairs

House of Representatives

Subcommittee on Disability Assistance 

and Memorial Affairs

one hundred ninth congress

first session

November 3, 2005

Printed for the use of the Committee on Veterans’ Affairs

Serial No. 109-27

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Committee on Veterans’ Affairs

Steve Buyer, Indiana, Chairman

Michael Bilirakis, Florida Lane Evans, Illinois, Ranking

Terry Everett, Alabama Bob Filner, California

Cliff Stearns, Florida Luis V. Gutierrez, Illinois

dan burton, Indiana Corrine Brown, Florida

Jerry Moran, Kansas Vic Snyder, Arkansas

richard H. baker, Louisiana Michael H. Michaud, Maine

Henry E. Brown, Jr., South Carolina Stephanie Herseth, South 

Jeff Miller, Florida Dakota

John Boozman, Arkansas Ted Strickland, Ohio

Jeb Bradley, New Hampshire Darlene Hooley, Oregon

Ginny Brown-Waite, Florida Silvestre Reyes, Texas

Michael R. Turner, Ohio ShellEy Berkley, Nevada

 Tom Udall, New Mexico

James M. Lariviere Staff Director

Subcommittee on Disability Assistance

and Memorial Affairs

Jeff Miller, Florida, Chairman Shelley Berkley, Nevada, 

Jerry Moran, Kansas Ranking

Jeb Bradley, New Hampshire, Vice Chairman Tom Udall, New Mexico

Ginny Brown-Waite, Florida Lane Evans, Illinois

 

PAIGE MCMANUS, Subcommittee Staff Director

(II)
CONTENTS

November 3, 2005

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Development of the Veterans Benefits Administration’s 

Annual Budget Request ........................................................ 

OPENING STATEMENTS

Chairman Jeff Miller .................................................................

Prepared statement of Chairman Miller ...................................

Hon. Shelley Berkley, Ranking Democratic Member ..............

Prepared statement of Ms. Berkley ..........................................

Hon. Lane Evans ........................................................................

Prepared statement of Mr. Evans .............................................

Witnesses

Cooper, Daniel L., Under Secretary for Benefits, Veterans 

Benefits Administration ........................................................

Prepared statement of Admiral Cooper ...................................

STATEMENT FOR THE RECORD

Bascetta, Cynthia A., Director, Education, Workforce and

Income Security, U.S. Government Acountability Office ....

POST-HEARING QUESTIONS FOR THE RECORD

Chairman Miller .........................................................................

(III)
DEVELOPMENT OF THE VETERANS

BENEFITS ADMINISTRATION’S ANNUAL BUDGET

REQUEST

Thursday, November 3, 2005

(1)

U.S. House of Representatives,

Subcommittee on Disability Assistance and

Memorial Affairs,

Committee on Veterans’ Affairs,

Washington, D.C.

The Subcommittee met, pursuant to call, at 2:00 p.m., in Room 334, 

Cannon House Office Building, Hon. Jeffrey Miller [Chairman of the 

Subcommittee] presiding.

Present: Representatives Miller, Berkley, Udall, and Evans.

 Mr. Miller. Good afternoon, everybody. This hearing will come 

to order.

I do want to open by saying I appreciate everybody reworking their 

schedules from the last scheduled time to be here with us. Today we 

are meeting to receive testimony on the development of VBA’s annual 

budget. The Subcommittee is prepared to explore the process and the 

assumptions used by VBA to project the workload and the workforce 

trends that are then used to formulate the annual budget.

Earlier this year, in the context of the VA health care, we learned 

that given the limitations of the federal budget process and the dynamic nature of health care, VA’s budget projection models can and 

have failed. When models fail in the context of health care, Congress 

must appropriate additional funds or VA may have to reduce services 

provided to our veterans.

It is important to note that the benefits provided by VBA in the 

form of compensation, pension, and other monetary benefits are entitlement programs which Congress is obligated to pay.

However, the administrative costs of claims adjudication are discretionary funds, which are subject to annual appropriations.

Therefore, the accurate projection of workforce and workload trends 

has a direct impact on the claims adjudication process. These projections are the basis for the discretionary appropriation request. And 

if VBA’s projections fail, VBA may not have the resources necessary 

to timely and accurately adjudicate claims.
2

The Claims Processing Task Force Report, which Admiral Cooper 

chaired, stated in October of 2001 that, quote, “VBA’s workload will 

continue to remain dynamic. To expect the workload to return to 

some normalized, predictable level is not reasonable,” end of quote.

Admiral Cooper, we hope to better understand how VBA in light 

of this dynamic nature projects its workload and workforce trends to 

formulate its budget to ensure that VBA accomplishes the mission. I 

intend this to be the first in a series of such hearings.

[The statement of Mr. Miller appears on p. 20]

 Mr. Miller. I now recognize our Ranking Member, Ms. Berkley, 

for her opening statement.

 Ms. Berkley. Thank you, Mr. Chairman, for holding this hearing 

and thank you all for being here. I appreciate it.

I have a number of questions and I am going to include a number of 

them in my testimony in case I get called to the floor.

Unlike the Veterans Health Administration, most of the Veterans 

Benefit Administration’s budget is mandatory rather than discretionary spending. And I appreciate that you have little control over mandatory spending.

What I would like to do is focus on VBA’s projections of new claims 

and staffing needs. I am particularly concerned that VBA does not 

have the adequate number of staff to do the job that we are asking 

them to do.

In fact, the number of new claims involving eight or more issues 

has more than doubled in the last five years. These are the most 

complex claims to decide, yet increases in staff have not kept up with 

the increase in the workload, particularly the complexity of it.

I am also concerned that the number of appeals has more than 

doubled in the past five years. And I fear that we are pushing overworked staff to quickly decide claims which may result in errors and 

more staff and time in order to correct the mistakes.

VA’s Inspector General recently reported that most rating specialists and decision review officers who consider appeals do not believe 

that the VA Regional Offices have sufficient rating staff.

With the increase in claims, especially the more complex ones, and 

appeals compared to the current staffing levels, I have to agree with 

the Inspector General.

During our recent hearings on PTSD claims, the acting Inspector 

General indicated that VBA may only need to look at the 2,100 cases 

under review rather than the proposed 72,000. He said that issue is 

worthy of discussion.

At the same hearing, Mrs. Brown-Waite, who sits on this Subcommittee, raised concerns about the impact of the proposed 72,000 review on claims currently in the pipeline. I share her concerns and 

have questions regarding the process.
3

How many additional staff would VBA need to proceed on the proposed additional review of PTSD claims in 2006 without jeopardizing 

the accuracy and timeliness of claims currently in the system and 

future claims? Has there been any estimate of the cost of conducting this review? Will additional funds be needed? Are these costs 

included in the budget for 2006?

The VBA failed to meet its projected target for pending claims at 

the end of fiscal year 2005 and the number of claims received was 

substantially higher than projected.

To what extent was the low-balling, and I do not say that in a derogatory sense, the low-ball projection for claim receipts and lack of 

staff responsible for the failure to meet projected targets for pending 

claims?

I would like to know what is being done to provide more accurate 

projections of workload and staffing needs.

For fiscal year 2005 and 2006, VBA was awarded one-time money 

to improve claims processing. I believe that we are likely to fall even 

further behind if these funds are not included in the administration’s 

budget for 2007. What happens if those funds no longer exist?

I am almost done, Mr. Chairman.

Also the VA is currently working under a continuing resolution, so 

I assume the ability to add any additional staff or make other expenditures is quite limited.

I hope that you can discuss the impact on VBA’s budget when fiscal 

year funding is delayed by months and months.

In addition, it appears for the past several years VA has underestimated the amount of pay increase and when a higher amount is enacted, VA must adjust its spending. For fiscal year 2006, an increase 

of 2.3 percent was projected, but 3.1 percent is now expected.

How does the VA project the annual pay adjustment provided to its 

employees? How will the VBA be able to accommodate this increase? 

Where does the money come from? Is it from heaven or do we take it 

from equipment and travel and everything else?

We all know that this year, Congress had to provide supplemental 

funding for the VA due to inadequate budget projections for discretionary spending. We need to be sure that funding for the administration of the Compensation and Pension Program and the staffing 

of regional offices is adequate to provide veterans with accurate and 

timely decisions.

Unfortunately, the prepared testimony that I had an opportunity 

to review in a very cursory manner lacks specificity needed for proper 

oversight. I truly appreciate your willingness to provide additional 

data which I requested concerning claims receipts over the past five 

years. I ask that to be included in the record.

[The information is found on pgs. 25-27.]
4

And I want to thank you again for being here. I know you do not 

have an easy job. And I would like to be as helpful as possible in making your job easier.

 Mr. Miller. Without objection, your request will be added into the 

record.

[The statement of Ms. Berkley appears on p. 23]

 Mr. Miller. Mr. Evans.

Mr. Evans. Thank you, Mr. Chairman. I want to thank Ranking 

Member Berkley as well. I forgot to ask her how many veterans are 

in her district.

Ms. Berkley. Funny you should ask. Fastest-growing veterans 

population in the United States.

Mr. Evans. Okay. They all live in Illinois, I guess.

Ms. Berkley. Two hundred thousand.

 Mr. Evans. Well, thank you.

I am concerned that the VA budgets have not matched the need for 

care and services for our veterans, that our veterans have.

As Veterans Day approaches, the administration seems more interested in reducing benefits to seriously disabled veterans than providing adequate staff to meet VBA’s growing workload.

More veterans are applying for benefits. More veterans are appealing decisions that they believe are erroneous. Staff who will process 

these claims and appeals have not kept up with these increases.

VA employees perceive that the quantity not quality is recognized 

and rewarded. VBA’s budget methodology must assure that adequate 

staff based upon real numbers, real needs, real problems, and real 

choices for veterans who have served their country.

I want to thank all the witnesses and look forward to your testimony.

Thank you, Mr. Chairman, for this opportunity to participate in 

this important hearing.

 Mr. Miller. Thank you, Mr. Evans.

I welcome the panel of witnesses today.

Admiral Cooper, I appreciate you being with us. Most of the members of the Committee are well aware of his distinguished career, 

graduating from the Naval Academy in 1957, followed by a 33-year 

career in the Navy.

In April of 2001, Secretary Principi asked Admiral Cooper to head 

the Claims Processing Task Force to examine the benefits system at 

large and make recommendations the department could implement 

without Congressional action.

Subsequent to chairing that Task Force, President Bush nominated Admiral Cooper to serve as Under Secretary of Benefits and he 

assumed that post April 2nd of 2002.

Admiral, we all look forward to your testimony. Please proceed.
5

STATEMENT OF DANIEL L. COOPER, UNDER SECRETARY

 FOR BENEFITS, VETERANS BENEFITS ADMINISTRATION;

 ACCOMPANIED BY JAMES W. BOHMBACH, CHIEF

 FINANCIAL OFFICER, VETERANS BENEFITS ADMINISTRA-

 TION; RENEE L. SZYBALA, DIRECTOR, COMPENSATION

 AND PENSION SERVICES, VETERANS BENEFITS ADMINI-

 STRATION; MICHAEL WALCOFF, ASSOCIATE DEPUTY

 UNDER SECRETARY FOR FIELD OPERATIONS, VETERANS

BENEFITS ADMINISTRATION

STATEMENT OF DANIEL L. COOPER

Mr. Cooper. Thank you, Mr. Chairman.

Mr. Chairman, members of the Subcommittee, thank you for the 

opportunity to appear before you today to discuss the budget formulation and the process we use in the Compensation and Pension Program.

I am pleased to be accompanied by Ms. Renee Szybala, who is the 

Director of the Compensation and Pension Service; Mr. James Bohmbach, our Chief Financial Officer; and Mr. Michael Walcoff, who is the 

Associate Deputy Under Secretary for Field Operations.

My opening remarks will be brief and I respectfully request that 

my full testimony be made a part of the record.

In fiscal year 2005, the total obligations for C&P were 32.5 billion. 

Of that amount, $1 billion was for discretionary funding or our general operating expenses, the vast majority of which is for personnel 

or FTE.

The 32.5 billion was for mandatory funding to pay the benefits 

that we administer to the veterans, their survivors, and their dependents.

Last fiscal year, VBA produced over two million award actions, 

763,000 of which were disability rating determinations in connection 

with claims for disability benefits.

We handled over 6.3 million phone calls. We conducted over a million interviews. We provided nearly 8,200 briefings for more than 

330,000 service personnel as they returned from OIF, OEF, and so 

on. We conducted nearly 70,000 hours of outreach.

As these figures emphasize, VBA’s primary role is serving veterans. That role is extensive and complex. So our budget formulation 

process must take into account a myriad of factors in order to establish a found basis for projecting our resource needs.

Each factor has its own set of assumptions and several of the factors have great variance from one fiscal year to the next.

Projecting the incoming workload, that is primarily the number of 

new and resubmitted claims we can expect, is the starting point for 

developing the FTE requirements in our discretionary budget.
6

The number of claims receipts is projected based on historical 

trends and anticipated external factors. Interestingly, despite the 

unprecedented level of claims that we have seen, the level of incoming each year still seems to increase.

FTE requirements dominate our discretionary funding needs. To 

determine FTE levels, we analyze our current performance. We try 

to establish performance goals and targets and we make assumptions 

relative to future performance.

Adjustments to the direct labor personnel requirements are made 

based upon those performance assumptions and goals as well as other factors, such as anticipated improvements, planned, process, and 

management efficiencies, various initiatives, mandatory training, 

and the experience levels of the employees.

There are also external influences which are less predictable, such 

as legislative changes, judicial decisions, and the guardianship and 

outreach activities that we must do.

We as all effective organizations must ensure that we fully consider 

a proper mix of management oversight, workforce training, and initiatives to improve our effectiveness and efficiencies in future years.

Over the past ten years, VA’s budget for the C&P mandatory benefits has increased by 83 percent to the current $32.5 billion. If we 

exclude additional annual COLAs, those obligations increase by 49 

percent.

In the past ten years, the number of veterans on the compensation 

rolls has increased from 2.2 million to 2.6 million this year and the 

average annual payment for veteran has increased from $5.2 thousand to $9.4 thousand.

VBA has developed a benefits budget forecasting model based on 

detailed historical data and recent trends in workload and accession 

rate. This model then projects both the number of veterans expected 

to receive benefits and the average amount of benefits to be paid in 

the next ten years.

We estimate, using a discretionary budget formulation process, the 

expected number of both new and reopened claims which will be completed each year, we estimate the percent of those claims that will be 

granted and then use this accession rate to project additions to the 

compensation rolls.

To forecast total mandatory obligations, we must also estimate the 

average value of payments to be paid to veterans and we have seen 

significant increases in veterans’ degree of disability, the number of 

veterans receiving individual unemployability, and veterans receiving special monthly compensation.

The most recent ten-year plan projects a $21 billion increase in the 

annual veterans’ compensation payment total by the year 2015, thus 

continuing the trend seen over the past decade.

As I have described, projections of incoming claims workload are 
7

key to the formulation to both our mandatory and our discretionary 

budget requests. The number of veterans filing disability compensation claims has increased every year since 2000, growing by 36 percent between 2000 and 2005, this last fiscal year.

The ongoing hostilities in Afghanistan and Iraq are expected to continue to add to the compensation workload. In 2004, original claims 

increased 17 percent. In 2005, we saw an additional eight percent 

increase. We believe these increases are directly related to our aggressive outreach programs for separating service members.

Interestingly, the numbers of claims resubmitted by veterans who 

were already service connected and on our rolls are also increasing 

each year. Since 2000, the numbers have increased 42 percent and 

that number makes up about 56 percent of our total rating claims 

workload each year.

Since the addition of diabetes mellitus type II to the list of Agent 

Orange presumptive conditions in 2001, about 200,000 veterans have 

been compensated for diabetes.

The increased number of compensation recipients, many of whom 

suffer from chronic progressive disabilities, will continue to drive 

more claims for increased benefits in the coming years as veterans 

age and their conditions worsen.

There has also been a significant change in the processing procedures since the enactment of “Veterans Claims Assistance Act” of 

2000.

VA’s notification and development requirements increased, adding 

more steps to the claims process and the time that it takes to develop 

and properly adjudicate a claim.

The impact of all these factors and others, which may be more subtle and difficult to measure, must be considered as we attempt to 

formulate our budget.

As I have described, formulation is based on a complex combination of historical data, current experience, workload, performance assumptions, and independent variables.

Our budget evolves as these factors are refined, revised, and revisited. It is mandatory that we estimate and project our budget needs 

to the best of our ability.

VBA’s mission is to serve deserving disabled veterans. That is the 

best mission we have in government today. We are dedicated to doing it well.

Mr. Chairman, this concludes my statement. We will be happy to 

answer any questions.

[The statement of Mr. Cooper appears on p. 28]

Mr. Miller. Thank you very much, Admiral.

In fiscal year 2005, VBA estimated receiving 794,000 rating-related 

claims, but actually received somewhere around 788,000 and adjudi-
8

cated 763,000-plus. Given that VBA had approximately 7,500 direct 

FTEs to adjudicate those claims, it works out to about 101 claims per 

FTE.

At the current staffing levels, are you meeting your performance 

goals and is the 2006 production assumption of 109 claims per FTE 

still realistic in your opinion?

 Mr. Cooper. First, no, sir, we are not meeting our goals. One of 

the things that happened in 2003, we worked very strongly on claims, 

initial claims and resubmitted claims. As we did that, in fact the appeals went up quite dramatically.

As a result, I have made the decision over the last year or so that 

we need to attack across the board because we need to give service to 

all the veterans. And as was mentioned, the appeals had gone up. In 

fact, we have attacked appeals and we have attacked remands.

We did not meet our goals in initial claims or resubmitted claims, 

but we did do fairly well in appeals and remands in starting to move 

those down. So in trying to attack across the board, we did that.

Secondly, we were not able to hire for a while, as you know, because 

of the continuing resolution. We did hire in the middle of the year 

about 400 people and toward the end of the year, we hired about 500 

additional. All of those need to be trained and are not fully productive yet.

So my answer is, we are attempting to attack in several ways this 

thing. We are trying to ensure that our training is proper and that 

takes time too. So the first answer is no. 

You asked me the question, did I think we had properly estimated 

for 2006, the answer is, yes, I think we are properly estimating. I also 

think that if the budget decided by the Senate in the SAC is agreed 

to, if we get that budget, we will be covered properly.

 Mr. Miller. You talk about 400 new people. How long does it 

take to actually train a new individual and consider them fully up to 

speed?

 Mr. Cooper. To be fully up to speed and essentially able to operate 

independently, it takes approximately two years. We get them out 

and starting to help after about three or four months.

By having this central training, we at least know that we are training the people in the right way to do things as they then go back out 

to their various regional offices. They then come back and we try to 

reinforce and then send them back out again.

So essentially they get about three to four weeks of central training 

and then the rest of it is done on the site of the regional offices.

 Mr. Miller. Why in the world does it take two years to train somebody to do this job?

 Mr. Cooper. This is a very complicated thing. And part of it is how 

you get the records. The records that we use to adjudicate are all 

paper records. We are not looking at any electronic records.
9

And so as you look through each and every page and you want to 

make sure, because we have tried to push quality also, and you try 

to make sure we are looking to get even those disabilities that that 

person may not have claimed. They may have put in for three issues 

on their claim.

We are training our people to look very thoroughly to ensure that, 

in fact, if there is anything else in there, that we are able to get it and 

work with the VSOs and the veteran. We are trying to do everything 

as completely as we can.

But it is a complicated process and it is very difficult for me even 

after about three -- maybe 25 years -- but actually three and a half 

years in this job, it is difficult for me to understand everything that 

they are doing. It is a complicated job. It calls for people who are 

well-trained and it calls for people who will concentrate on doing the 

job properly.

 Mr. Miller. Can you tell me what the average length of service in 

the position is, how long they stay?

 Mr. Cooper. I will first say that we probably have better retention 

than the first figures I saw when I came in. I would say that the 

average time -- I am talking off the top of my head -- I would say 

the average time that a person stays in the VA when they come in is 

probably six to ten years.

Now, when we hired 400, you will find that even though we try 

to look very closely and interrogate them properly and make them 

understand what they are going to get into, you will find sometimes 

people will say the job is not what I expected. I do not want to do that 

and it is too cumbersome. 

And even though we try to push the importance of the mission, 

they may still decide that claim adjudication is not for them. And 

that is fine. If they decide, then they should go on somewhere else.

My guess is we retain in that first year maybe close to 80 percent, 

a little bit more.

Mr. Miller. Do you know -- I am sure you do from exit interviews 

-- the reasons for most people’s departure? Is it burnout, compensation, moving up in the system?

 Mr. Cooper. Part of it is moving up. And I was just passed a 

note. When we bring people in as veteran service representatives, 

and these are the people who first review the records, eventually they 

get promoted within our organization to what we call rating veterans 

service representatives or RVSRs.

Burnout, I do not think is necessarily it, but I do think if it is a 

degree of burnout to say this is not the job I want to do, I cannot take 

the pressure of doing so many claims and I am just unable to do this 

job for whatever reason, so the mutual decision is made by the RO 

director and the individual. I think there are several reasons and 

those are a couple of them.
10

Mr. Miller. Are there any performance-based measures in their 

job?

 Mr. Cooper. You bet. After a certain amount of time, we have a 

requirement that they do so many ratings per rating period per day. 

We look at that very closely, but we also look at quality too. And 

we have gotten hit pretty hard that we were not paying attention to 

quality while pushing productivity so much.

But I would say to you that in any organization, you have to ensure 

the people are doing the work. If somebody does one claim in a year, 

it is going to be a perfect claim, but there are going to be a lot of disgruntled people out there. So, yes, we do require that.

But we also have procedures set up for people who are not doing 

well, to mentor them, to try to help them do well. Some of them recover and some of them decide this is not what they want to do. But 

it is the same in any organization if you are going to be successful in 

my mind.

We are trying to look at quality and make sure that the quality is 

there. We are doing lots of things in the training arena too. I think 

we have made pretty good improvements in overall training throughout the organization.

Mr. Miller. You stated that VCAA has significantly increased the 

length and complexity of claims development. And at the end of 2005, 

records show it took VBA on average 168.2 days to process a claim.

So my question is, how many processing days do you attribute to 

VCAA compliance?

Mr. Cooper. Well, the VCAA was a total bill. And let me first say 

-- of course, it came before I came into this job -- in my opinion, it 

was a very important, positive bill because it made us, the VA, do the 

job helping the veteran rather than saying, Mr. Veteran, you did not 

give us enough information so we are turning you down.

And so from what I understand historically, it is a good bill. It took 

us a while to understand the ins and outs of the bill because several 

judicial decisions were made that said, yeah, you are trying, but you 

are not quite doing it right. So, therefore, you have to revisit this and 

you have to make changes.

I hope by the time I leave this job, whenever that is, that we will 

have finally got it just about right.

We even had to make a change last year in the letter that we send 

out. One of the first times I came over here to testify, I got the question of, the letters you send out are so complicated. And so I went 

back and I said let us make it less complicated.

But it is a difficult thing to do to make a less complicated letter that 

goes to the veteran and still fulfills the notification requirements. So 

the letters have presented us a problem. There are also certain time 

elements there. One of the major ones is that, as soon as we receive 

the claim, we send a letter that hopefully states exactly what we need 
11

from the veteran as well as what we ourselves are going to do. The 

veteran is allowed 60 days to get that information back to us.

Prior to that, it was my understanding that we did it in about 30 

days, but that is not germane. The fact is that there is a set time. 

And, in fact, today, it appears that it is taking somewhere between 50 

and 60 days from the time we send our letter until we get a response. 

So already you are at the 70-day point.

At that point then, you are trying to send the gentleman or the 

lady on to physical exams. As the claims get more complicated, one 

physical exam will not do it. You have to send them for a couple, two 

or three.

There are just complications that we have to understand. I think 

we are slowly getting there. I am not sure that we are there a hundred percent yet.

Mr. Miller. Ms. Berkley.

Ms. Berkley. Thank you.

One of the areas of concern that I mentioned during my opening 

statement was the administration’s projection of the annual pay adjustment for federal employees and other increases in personnel services.

For 2006, the VA’s budget is based upon an expected increase of 2.3 

percent. The actual increase is now expected to be 3.1. In previous 

years, VBA has needed to reduce staffing when annual pay adjustments exceeded projections.

How are you planning to pay for the increased costs in 2006?

Mr. Cooper. As you rightfully state, 71 percent of our budget is 

paying people. And, in fact, that is where most of my flexibility is. 

When I take the other percentages, about 15 percent of the 29 percent I have left, in fact, goes to headquarters or goes to things I am 

obligated to do. Half again goes to other things over which I have 

nominal control.

So I have about six percent left. Some of that, determines whether 

we have IT initiatives or other training or things. I have to look 

across the whole board and decide. And, yes, in fact, sometimes I 

have to do it by decreasing the number of FTE that we have.

Ms. Berkley. Wouldn’t you agree that that is counterproductive 

given the fact that we do not have enough staffing as it is?

Mr. Cooper. Yes, ma’am.

Ms. Berkley. In response to one of the Chairman’s questions, you 

talked about as soon as the ban was lifted or whatever, you were able 

to hire 400 additional FTE.

Is that new hires or is it backfill because I know in 2003 -- you 

probably know these numbers better than I do -- in 2002, you had 

over 7,000 FTE. In 2003, it went down to 6,886. In 2004, 6,784. And 

now 2005, 6,880.

For the regional offices, are you just replacing what has already 
12

been taken or are these truly additions?

Mr. Cooper. Both. You know, I have to make sure I stay within my 

budget. We know that we attrite approximately 30 a month across 

the full range of employees. So I try to look ahead and find out where 

we are and try to keep up with that.

But, in fact, we have had fewer people in the last couple years than 

we had in 2003. And I have had to make sure I look across the board 

and that we are doing the whole job and not just stressing only one 

element.

 Ms. Berkley. So you have got more claims, more complicated 

claims, but less FTE to do the job?

 Mr. Cooper. Basically that is correct, but we are working on getting more FTE. And, in fact, this year, we are hiring more.

 Ms. Berkley. In recent budgets, you have received one-year money. 

VBA has received one-year money that is supposed to be used for 

increased staffing.

What happens if the temporary funding dries up in 2007? What do 

you do then?

 Mr. Cooper. We received one-year money, and I thank Congress 

for that, to help the Secretary do that. And you are absolutely correct. That gives me a type of problem wherein, when I present a 

budget and you go back to what the base budget was, there is no allowance for the fact that I was given some extra money to do the job. 

It then suddenly appears if I am going to have a large increase in the 

total amount of money.

I think in the 2006 budget, I think we have properly accounted for 

that. And certainly people have recognized the problem.

And where I needed the money was in my base. It is good to get 

one-year money. But as you properly state, that does not help me in 

the following years because the base is not where it should be. And I 

think that has been properly corrected.

Ms. Berkley. Okay. And for 2007?

 Mr. Cooper. If I may, going with the Senate mark, as they marked 

up the bill, I think everything has been properly accounted.

 Ms. Berkley. So they put the temporary money that you got in 

2005 and 2006 as part of the base for 2007? Did I miss that?

 Mr. Cooper. In 2006.

 Ms. Berkley. In 2006.

 Mr. Cooper. It looks like they have made the proper adjustments 

for 2006.

 Ms. Berkley. Great. Okay. Great. Let me ask you something. 

There were a few things in the last hearing when we were talking 

about PTSD that concerned me a lot.

And do you know what the projected cost would be for the administration’s proposal to review 72,000 PTSD claims in 2006?

And let me add some other questions to that so you can give me an 
13

entire answer.

What additional staffing would be needed to complete this review 

without compromising the adjudication of current and expected workloads for 2006 and how are these kinds of contingencies taken into account in the budget process?

 Mr. Cooper. I honestly do not remember the money that we estimated. I estimate that approximately 150 to 160 people would be 

needed for that review.

 Ms. Berkley. Where do those people come from and what happens 

to the claims they are already working on?

 Mr. Cooper. They come from whatever staffing we have available 

at the time. Now, in the Senate mark, they take into account, I believe, 150 or so people that we would be using for that review. I think 

that is one of the amounts that is in there. 

Ms. Berkley. Additional from what you already have?

 Mr. Cooper. Yes, that is correct.

 Ms. Berkley. What happens when they are done reviewing the 

72,000 PTSD? Is it like a one-year mark or -- 

 Mr. Cooper. No. No. Quite frankly, I would hope that I retain 

those people and do what has to be done. I fought pretty hard to try 

to ensure that whatever people are in the budget for that, if we make 

changes in how we are going to implement the review, that I be allowed to keep the money and the people.

 Ms. Berkley. Right. Well, I hope you do not have to do it. I hope 

you do get the people. But what if you do not get the Senate mark?

 Mr. Cooper. Then I have got problems.

 Ms. Berkley. Earlier this year, I had asked VBA to review the 

hundred oldest pending claims, many of which involved remanded 

claims for PTSD.

How does VBA budget methodology identify staffing needs to comply with the requirement to expedite handling of remanded claims so 

that the veterans are not waiting a decade or more for a decision?

 Mr. Cooper. I cannot talk specifically to your question on the hundred remands. But I will tell you this.

In the last year and a half, we have worked very closely with BVA 

as directed by the Deputy Secretary, I might add. We have set up a 

special office called the Appeals Management Center in Washington. 

We have also told our regional offices how they will submit the claims 

to BVA. So at least we are fulfilling most of the requirements as far 

as we can tell.

We have then worked with BVA and any remand they send, we 

forward to our Appeals Management team and work it. We have set 

up a system so that, when the board sends back a remand, the reason 

is stated in a much better fashion than it had been in the past. They 

specify precisely what it is they want VBA to do. We have set it up 

so it is not dictated that we have to do steps one through ten in order, 
14

which has helped us to an extent.

We have also taken a few people from separate regional offices to 

work on remands. In fact, we have reduced remands, about 8,000 in 

the last year or so. That is one of the things we have tried to push 

very hard.

When I look at remands, when I look at a figure that I watch each 

month, out of every 100 claims decided in 2005, about 3.9 claims are 

certified to the board. The board decided in about 1.5 cases per 100 

to not allow the appeal. About 1.5 are resolved through the remand 

process. In the other one percent, the appeal is allowed by BVA.

All of those are improved figures. Hopefully it means we are serving the veteran better and faster, but the important thing is we have 

worked together to try to make sure that we are doing this thing 

properly.

 Ms. Berkley. Between the years 2000 and 2005, the number of 

claims involving eight or more issues has more than doubled, I think 

from 21,000 plus to 43,000 plus.

VA projected increases in claims for 2005 fiscal year was much lower than actually received.

Was the failure to more accurately predict the number of claims 

received and necessary staffing responsible for VBA’s failure to meet 

its targeted pending caseload at the end of fiscal year 2005?

 Mr. Cooper. It may have been. That is difficult to figure out exactly. But the fact is, interestingly enough, one of the things that we 

have tried to do and we have pushed very hard is to have two BDD 

rating sites. BDD is benefits delivery at discharge. And these are for 

people coming out of the service. They may be retiring. They may be 

coming out for another reason.

We have decided to have the 140 intake sites at various military 

sites, then have the adjudication done at two specific sites. And hopefully that will make us more efficient. Hopefully that will give us 

more consistency.

But what I have come to realize is the people who are retiring, the 

people who are leaving the service from these sites, we have found 

that the number of issues are quite high. The average number of 

issues on the claims coming in today is about 2.6, 2.7. The number 

of issues we have from people at BDD sites is about eight and a half 

to ten issues per claim. And I have physically seen claims with 40 

issues and more.

And when you have those issues, they may not be pertinent. But 

the point is you still have to take specific actions to address each issue.

 Ms. Berkley. Well, then here is my question then. How many 

claims does VBA expect to be processed per FTE and what factors are 

taken into account? Do we take into account the complexity of it?

If you have got a claim with 40 issues, I would imagine that takes 
15

a tremendous amount of time as opposed to a claim with one or two. 

So how do you determine how much staffing you need?

 Mr. Cooper. Well, I would hope by having the adjudication done 

at two sites where you have people that are experienced in how to 

process multiple issue claims.

But as the number of issues increase, yes, that increases the complexity. You hope that through training, through getting people on 

board that you take care of that, but it is an ongoing process. We are 

working on it.

Ms. Berkley. The last question I have is regarding the continuing 

resolution funding. What is the impact on your ability to hire additional staff or make other expenditures and does the budget methodology take into account the possibility that the appropriation bills 

may not be enacted in a timely fashion? I hope I am not giving you 

too bad a headache, Admiral.

 Mr. Cooper. The fact is we are hiring right now. We are trying to 

hire, but I am still limited in what I can spend under the continuing 

resolution. 

And so it will eventually impact me. I am trying to hire right now 

so I can get the people on board, get them through training, and get a 

little bit ahead of the curve.

Ms. Berkley. Thank you very much. It was very helpful. Thanks.

 Mr. Miller. Mr. Udall.

 Mr. Udall. Thank you, Mr. Chairman.

Admiral, good to have you here today with us.

The 150 to 160 people you talked about -- and I am following up on 

the PTSD testimony of yours -- are those the individuals that would 

be needed to process all 72,000 claims review?

Mr. Cooper. The processing, when we do it, will consist of first reviewing each one of those cases. The initial review should take about 

an hour for each. And then we estimate, predicated upon the review 

that the IG did of 2,100 claims, that approximately one-third of those 

will require further development. That will take a longer amount of 

time.

So we took those figures together and that is how we came up with 

approximately 150 FTE. And we expect about one-third of those cases to require some further development for whatever reason.

 Mr. Udall. One-third of the 72,000?

 Mr. Cooper. Yes, sir.

 Mr. Udall. And what is mandated as part of the further development? What do you expect to happen there? Is this the issue of 

stressors and -- 

 Mr. Cooper. That is correct.

 Mr. Udall. -- the documentation for stressors?

 Mr. Cooper. Primarily stressors, that is correct. The IG reported 

that of the 2,100 that they reviewed that stressors were not properly 
16

stated in 25 percent of the cases.

And I use that term “not properly stated” carefully, by the way, 

because I think we have found some areas where we might disagree 

with what the IG said and we are looking very closely at that.

 Mr. Udall. So this estimate of 150 to 160 people would be for reviewing the 72,000 with this one-third additional attention that they 

needed.

And what period of time are we talking about for that review?

 Mr. Cooper. I think probably the initial review would be close to 

a year.

 Mr. Udall. So you are saying 150 to 160 people would be working 

on those cases for a year?

 Mr. Cooper. Yes, sir.

 Mr. Udall. Okay. That is obviously a significant amount of manpower in terms of your operation; is it not?

 Mr. Cooper. Yes, sir.

 Mr. Udall. Now, you understand this whole issue of PTSD, I am 

sure, very well from your service. Do you think it is wise to head 

down this course knowing the kinds of cases and reevaluating stressors that sometimes occurred many years ago?

 Mr. Cooper. I think it is a very difficult problem.

 Mr. Udall. Would you be in a position to recommend to us that the 

House do what the Senate did in terms of putting in language after 

the 2,100 to just terminate this review?

 Mr. Cooper. No. I am not in a position to -- 

 Mr. Udall. That is above your pay grade?

 Mr. Cooper. I am in a position to talk to my boss, the Secretary, 

but -- 

 Mr. Udall. Okay. But this issue is being discussed in the department, I hope?

 Mr. Cooper. Absolutely.

 Mr. Udall. Let me see here. So your estimate is not that there 

is going to be additional staff needed to fully flesh out the stressor 

evidence?

Mr. Cooper. One moment. I am getting advice here.

 Mr. Udall. Yeah.

 Mr. Cooper. Yes. The Senate mark gives me the authority to hire 

up to do the review as I understand it.

 Mr. Udall. And in the Senate mark, you believe it gives you enough 

to do that?

 Mr. Cooper. Yes, I do. Yes, today, I do believe so.

 Mr. Udall. Great. And just to summarize here, at least for this 

member of the Committee, I believe after meeting with veterans in 

my home state of New Mexico and hearing testimony before this 

Committee that we really should take the action to terminate further 

review on these PTSD claims. It is causing a significant amount of 
17

anxiety in the veterans community and many veterans, I think, are 

feeling under attack as a result of this.

And I just hope that you continue the analysis and make a speedy 

decision on this rather than go forward with this really protracted 

review.

Thank you, Mr. Chairman, and -- 

 Mr. Cooper. Could I make one statement?

 Mr. Udall. Please. Please do.

 Mr. Cooper. As you know, one of the things that we have done as 

the first step before we do anything further is to look at the 2,100 that 

the IG used to come up with their recommendation. And we have 

reviewed these very carefully, by first bringing all of those records to 

Washington. And in general, we agreed that the stressors had not 

been properly annotated in about 25 percent.

There are seven regional offices that are concerned with this right 

now. I have specifically gone to each one of them with a personal 

letter that said I want to make sure we do this in the most sensitive 

way possible.

And I want to do everything we can to clear it without even talking 

to the veteran. And if we do, in fact, have to do some more development, then I want them to work very closely with the veteran and the 

VSO to make sure we do not do something dumb.

So I am merely pointing out I am trying to carry this out in the 

most sensitive way possible. The fact that the IG made this very 

strong recommendation at the time, that presents the problem. But 

we are discussing it. We are discussing it thoroughly and if not on a 

daily basis, certainly on an every third day basis.

 Mr. Udall. Thank you, Admiral, and we very much appreciate 

your sensitivity to the issue. And we hope that all of your personnel 

all the way down to the lowest level carry it out with the same sensitivity that you have just described.

Thank you very much, Mr. Chairman.

 Mr. Miller. Admiral, are you prepared possibly to disclose to this 

Committee how many FTEs you have requested for 2007?

 Mr. Cooper. I would rather not.

 Mr. Miller. Okay. Thought I would ask. Thank you.

Ms. Berkley, anything else?

 Ms. Berkley. Is that in an open hearing or just in general?

 Mr. Cooper. In fact, we are still in the discussion, as you know, 

with OMB in the ongoing budget process. But I have to tell you, I 

think they are trying to support me to a very great extent.

I do not know if I am allowed to say that or not, but I feel that they 

are quite supportive. And we made pretty strong representation in 

talking about some of the same stuff with a lot of facts behind it.

 Ms. Berkley. If I could recommend, and you certainly know your 

job better than I, but given the protracted length of the war and it 
18

does not look like it is going to end any time soon, we are going to 

have a lot of veterans coming back and they are going to need a lot of 

services, so go to the mat. And I can promise you at least this Congresswoman will be on that mat with you.

 Mr. Cooper. I would like to make a statement on that, if I may. 

One of the wonderful things in my mind that VA has done is set up 

the seamless transition. And we have worked very closely with the 

young men and women coming back to Walter Reed, to Bethesda, to 

the six or seven other service hospitals, so that we have people as 

soon as those young men and women are ready to talk about benefits 

to try to explain to them all the benefits that will be available when 

they are discharged.

And then, as you know, when they leave, their record is sent to the 

VA hospital closest to where we think they are going. And sometimes 

that is a problem. They do not go there. 

Plus we try to make it so the day they are discharged that the 

disability claim that they have put in is either absolutely decided or 

very close to decision so they can start accruing the compensation 

payment and 30 to 60 days later start getting paid.

So we have set up a process that can adjudicate immediately and, 

therefore, I feel very confident that the decisions we see, the disabilities we adjudicate are rightful decisions and we can move on.

 Mr. Miller. Thank you, Admiral.

Mr. Udall, do you have anything else?

 Mr. Udall. Mr. Chairman, just one additional question here.

Last week, the IG seemed to indicate that the 72,000 review may 

not be needed. Do you have any thoughts on that?

 Mr. Cooper. Yes. I have a thought that there was no doubt in my 

mind when the IG made that recommendation, it was not up for a 

vote. Now, if the IG now feels it might not be necessary, that is a 

decision or a statement that he has made.

Right now I will tell you I felt when that recommendation was 

made -- you know, the IG, the way the IG law is set up, he answers 

to the secretary, but he also answers to Congress. And so the way it 

was stated and the way it was stated to me in the meeting, there was 

no doubt in my mind that I was going to be required to do a 72,000 

review. But we are talking about it and I think that eventually we 

will come to an understanding.

 Mr. Udall. Thank you, Admiral.

Thank you, Mr. Chairman.

 Mr. Miller. Thank you very much.

We all know that each and every year, hundreds of thousands of 

veterans and VA beneficiaries ask for new benefits or increased benefits. And it is important that VBA be prepared to be able to accurately fulfill that role and responsibility with which you have been 

charged.
19

I would say personally and on behalf of this Committee as well, we 

are all counting on you, Admiral, as well as the veterans community, 

to keep us and the staff informed of the needs your organization has 

so that we can ensure that VBA’s beneficiaries receive the timely and 

accurate service that they have earned.

I look forward to working with you, the staff that you brought with 

you, and the rest of your staff in the future as you continue your service to the veterans of our nation.

Without objection, a statement from the Government Accountability Office will be entered into the record.

With nothing further, this hearing is adjourned.

[The attachment appears on p. 38]

[Whereupon, at 2:58 p.m., the Subcommittee was adjourned.]
(20)

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