VA Office of Inspector General

OFFICE OF AUDITS AND EVALUATIONS

Veterans Benefits 

Administration 

Audit of 

Compensation and Pension 

Benefit Payments to 

Incarcerated Veterans 

June 28, 2016 

13-02255-276
 
ACRONYMS 

BOP Bureau of Prisons 

C&P Compensation and Pension 

CMA Computer Matching Agreement 

FY Fiscal Year 

IEA Information Exchange Agreement 

OIG Office of Inspector General 

PMC Pension Management Center 

SSA Social Security Administration 

USC United States Code 

VA Department of Veterans Affairs 

VARO Veterans Affairs Regional Office 

VBA Veterans Benefits Administration 

To Report Suspected Wrongdoing in VA Programs and Operations: 

Telephone: 1-800-488-8244 

Email: vaoighotline@va.gov
 

(Hotline Information: www.va.gov/oig/hotline)
 
 

Highlights: Audit of VBA’s 

Compensation and Pension Benefit 

Payments to Incarcerated Veterans 

Why We Did This Audit $44.2 million. Without improvements, we 

estimated VBA could make additional 

We conducted this audit to determine whether 

the Veterans Benefits Administration (VBA) 

was adjusting compensation and pension 

(C&P) benefits payments timely for veterans 

incarcerated in Federal, state, and local penal 

institutions. Federal law requires VBA to 

reduce C&P benefits for veterans incarcerated 

for more than 60 days in a Federal, state, or 

local penal institution. 

What We Found 

VA Regional Office (VARO) and Pension 

Management Center (PMC) staff did not 

consistently take action to adjust C&P benefits 

for veterans incarcerated in Federal penal 

institutions. Specifically, based on Federal 

incarceration data ranging from 

May 2008 through June 2015, VBA did not 

adjust veterans’ C&P benefits, as required, in 

an estimated 1,300 of 2,500 cases 

(53 percent), which resulted in improper 

payments totaling approximately 

$59.9 million. Without improvements, we 

estimated VBA could make additional 

improper benefits payments totaling about 

$41.8 million for Federal incarceration cases 

from fiscal year (FY) 2016 through FY 2020. 

VARO and PMC staff also did not take 

consistent and timely action to adjust C&P 

benefits for veterans incarcerated in state and 

local penal institutions. Based on 

incarceration notifications received from 

March 2013 to August 2014—the most current 

data available at the time of our audit—VBA 

did not effectively adjust veterans’ C&P 

benefits in an estimated 3,800 of 21,600 state 

and local incarceration cases (18 percent), 

which resulted in significant delays and 

improper payments totaling approximately 

improper benefits payments totaling about 

$162 million for state and local incarceration 

cases from FY 2016 through FY 2020. In 

total, we estimated improper benefit payments 

of about $307.9 million. 

In general, VBA did not place priority on 

processing incarceration adjustments because 

VBA did not consider these non-rating claims 

to be part of the disability claims backlog. 

Both VBA Central Office staff from 

Compensation Service and the Office of 

Field Operations as well as VARO service 

center managers and staff consistently 

reported that incarceration adjustments were 

not a high priority. 

What We Recommended 

We recommended the Acting Under Secretary 

for Benefits increase the priority of VBA’s 

incarceration adjustment workload. 

Agency Comments 

The Acting Under Secretary for Benefits 

concurred with our recommendations. 

Management’s planned actions were 

responsive and we will follow up as 

required. 

GARY K. ABE 

Acting Assistant Inspector General 

for Audits and Evaluations
 

VA OIG 13-02255-276 June 28, 2016 
TABLE OF CONTENTS 

Introduction......................................................................................................................................1
 

Finding 1 VBA Needs To Improve Its Processing of Federal Incarceration 

Appendix D Potential Monetary Benefits in Accordance With Inspector General Act 

Results and Recommendations ........................................................................................................2
 

Adjustments ........................................................................................................2
 

Recommendations ...............................................................................................6
 

Finding 2 VBA Needed To Prioritize State and Local Incarceration Adjustments .............7
 

Recommendations .............................................................................................12
 

Appendix A Background .......................................................................................................13
 

Appendix B Scope and Methodology....................................................................................14
 

Appendix C Statistical Sampling Methodology ....................................................................16
 

Amendments ......................................................................................................21
 

Appendix E Management Comments ....................................................................................22
 

Appendix F OIG Contact and Staff Acknowledgments........................................................25
 

Appendix G Report Distribution............................................................................................26
 
 

 

Audit of VBA’s C&P Benefit Payments to Incarcerated Veterans 

Objective 

Incarceration 

Adjustments 

Non-Rating 

Claims 

VBA Program 

Offices 

Other 

Information 

INTRODUCTION 

The purpose of the audit was to determine whether the Veterans Benefits 

Administration (VBA) was adjusting compensation and pension (C&P) 

benefit payments timely for veterans incarcerated in Federal, state, and local 

penal institutions. 

VA disability compensation is paid to veterans with disabilities that are the 

result of a disease or injury incurred or aggravated during military service. 

VA pension is paid to low-income wartime veterans. Federal law1 requires 

VBA to reduce C&P benefits for veterans incarcerated in a Federal, state, or 

local penal institution in excess of 60 days. Effective the 61st day of 

incarceration, VBA must reduce compensation benefits for veterans 

convicted of a felony and discontinue pension benefits for veterans convicted 

of a felony or misdemeanor. VBA reduces compensation benefits to the 

10 percent disability rate for veterans rated 20 percent service-connected or 

more. For veterans whose service-connected disability rating is 10 percent, 

VBA reduces the benefit payment by one-half. VA Regional 

Office (VARO) and Pension Management Center (PMC) employees are 

responsible for making incarceration adjustments. Once the veteran is 

released from the penal institution, VBA can restore C&P benefits. 

Authorization end products—also known as non-rating claims—require 

development, review, and administrative decision or award action. VBA 

classifies incarceration adjustments as non-rating claims because Veterans 

Service Representatives can process them without a rating decision. This 

workload is not included as part of VBA’s disability claims backlog. 

Compensation Service is responsible for developing policy requirements and 

disseminating procedures for the administration of compensation benefit 

programs. Pension and Fiduciary Service has jurisdiction and responsibility 

over the three PMCs, which are located in Philadelphia, PA; Milwaukee, WI; 

and St. Paul, MN. The Office of Field Operations oversees operations and 

establishes workload priorities at the VAROs. 

 Appendix A provides pertinent background information. 

 Appendix B provides details on our scope and methodology. 

 Appendix C provides details on our statistical sampling methodology. 

1

 Relevant Federal laws are Title 38 United States Code (USC) Section 3113, Title 38 USC 

Section 5313, and Title 38 USC Section 1505. 

VA OIG 13-02255-276 1 
 

 

 

Audit of VBA’s C&P Benefit Payments to Incarcerated Veterans 

RESULTS AND RECOMMENDATIONS 

Finding 1 VBA Needs To Improve Its Processing of Federal 

Incarceration Adjustments 

VARO and PMC staff did not consistently take action to adjust C&P benefits 

for veterans incarcerated in Federal penal institutions. Specifically, based on 

Federal incarceration data from May 2008 through June 2015, employees did 

not adjust veterans’ C&P benefits, as required, for an estimated 1,300 of 

2,500 cases (53 percent), which resulted in improper payments totaling 

approximately $59.9 million.2 VBA had a computer matching 

agreement (CMA) with the U.S. Department of Justice, Federal Bureau of 

Prisons (BOP), to obtain monthly data on individuals confined in Federal 

penal institutions. The agreement allowed VBA to use this information to 

match against its records of veterans in receipt of C&P benefits to identify 

potential incarceration adjustments. 

VBA did not receive BOP data for Federal incarcerations from 

July 2008 through May 2015. This occurred because VBA did not ensure a 

secure method of receiving electronic data from BOP. Furthermore, VBA 

did not effectively monitor the terms of the CMA with BOP, and VBA let 

the agreement expire in April 2012. VBA and BOP established a new CMA 

and Interconnection Security Agreement, which was finalized in April 2015.3 

The following month, BOP began providing VBA with data on Federal 

incarcerations. However, in March 2016—10 months after VBA received 

backup files from BOP—VBA Central Office staff told us VBA had not yet 

used the BOP data to make incarceration adjustments because it was still 

determining how to manage this workload. 

VBA did not consistently process Federal incarceration adjustments 

primarily because VBA set its priority on eliminating the disability claims 

backlog. In general, VBA did not place priority on incarceration adjustments 

because VBA did not consider these non-rating claims part of the disability 

claims backlog. Both VBA Central Office staff from Compensation Service 

and the Office of Field Operations as well as VARO service center managers 

and staff consistently reported that incarceration adjustments were not a high 

priority. If VBA does not improve its processing of Federal incarceration 

adjustments and conditions remain the same, we estimated VBA could make 

2

 Figures, costs, and percentages have been rounded for reporting purposes. As a result,
 

totals may not always sum due to rounding.

3

 The CMA went into effect in December 2014; however, the Interconnection Security 

Agreement was not signed until April 2015. Since both were required to resume the transfer 

of data, we determined the new agreements were finalized in April 2015. 

VA OIG 13-02255-276 2 
Audit of VBA’s C&P Benefit Payments to Incarcerated Veterans 

Lack of 

Federal 

Incarceration 

Adjustments 

Example 1 

Example 2 

additional improper payments totaling about $41.8 million from FY 2016 

through FY 2020. 

VBA needed to improve its process of adjusting C&P benefits for veterans 

incarcerated in Federal penal institutions. Based on Federal incarceration 

data from May 2008 through June 2015, we reviewed a statistical sample of 

132 Federal incarcerations for veterans who had received C&P benefits prior 

to their incarcerations, which included past incarcerations and incarcerations 

that were current at the time of our review. Based on this review, we 

estimated that VARO and PMC staff did not adjust veterans’ C&P benefits, 

as required, in about 1,300 of 2,500 cases (53 percent). Specifically, VBA 

employees did not adjust C&P benefits in about 590 past Federal 

incarcerations, which resulted in improper payments totaling 

approximately $8.6 million. In these cases, veterans were convicted, served 

time in Federal penal institutions, and had been released (as of 

October 1, 2015). 

The following is an example of a veteran who was overpaid benefits while 

incarcerated in a Federal penal institution. 

We determined a veteran was incarcerated in a Federal penal 

institution for felony charges while receiving compensation benefits 

at a 100 percent rate. He was sentenced to serve in a penal 

institution from January 2012 until he was released in October 2013. 

VBA did not adjust the veteran’s benefits as required, and, as a result, 

this veteran was overpaid more than $55,000. VBA should take 

action to issue a bill of collection to the veteran to recover the 

improper benefit payments. 

VARO and PMC staff also did not adjust C&P benefit payments in about 

720 Federal incarcerations that were current at the time of our review, which 

resulted in improper payments totaling approximately $51.3 million. In 

these cases, convicted veterans still serving their sentence in a Federal penal 

institution (as of October 1, 2015). 

The following is an example of a veteran who was overpaid benefits while in 

a Federal penal institution and continues to be overpaid. 

We determined a veteran was incarcerated in a Federal penal 

institution for felony charges while receiving compensation benefits 

at the 70 percent rate. He was sentenced to serve 151 months in a 

penal institution starting in April 2012. VBA had not adjusted the 

veteran’s benefits, as required. As a result, this veteran had been 

overpaid about $107,000 (as of October 1, 2015) with the potential of 

an additional overpayment of more than $240,000 (based on the 

veteran’s expected release date from the Federal penal institution) if 

VA OIG 13-02255-276 3 
 

 

Audit of VBA’s C&P Benefit Payments to Incarcerated Veterans 

No Federal 

Incarceration 

Data Since 

2008 

VBA does not take action to reduce benefit payments to the 10 percent 

rate, as required by Federal law. 

Prior to July 2008, VBA had a CMA with BOP to receive data on individuals 

admitted to Federal penal institutions. The purpose of the agreement was to 

identify veterans and VA beneficiaries in receipt of VA benefit payments 

who were confined in Federal penal institutions for more than 60 days 

because of a felony or a misdemeanor conviction. The agreement allowed 

VBA to use the BOP data to match against its records of veterans in receipt 

of C&P benefits to identify the need for potential incarceration adjustments. 

However, in July 2008, the agreement between VBA and BOP expired. 

After the CMA expired, VBA did not receive data from BOP on Federal 

incarcerations from July 2008 through May 2015—a total of 83 months. A 

new CMA did not go into effect until October 2010. Prior to the effective 

date of the new CMA, VA’s Office of Information and Technology had 

revised VA policy regarding VA information systems. Specifically, it 

required sensitive data to be encrypted when transferred. In order to comply, 

VBA needed to set up a secure connection with BOP. Even though the new 

CMA was in effect, VBA reported that it did not receive data from BOP 

because VBA did not fully implement a secure connection to receive 

electronic data until July 2012. 

Once VBA fully implemented the secure connection, BOP still could not 

transfer data because VBA allowed the CMA to expire in April 2012. VBA 

could have extended the agreement for 1 year if VBA and BOP certified in 

writing that the matching program complied with the original agreement and 

would continue without change. However, VBA needed to complete this 

action within 3 months prior to the end of the agreement. VBA did not 

complete these necessary steps in a timely manner and the CMA expired. 

In April 2015, VBA finalized a new agreement with BOP. In May 2015, 

BOP transferred to VBA 83 backup files with data on individuals 

incarcerated in Federal penal institutions from May 2008 through 

March 2015—almost 7 years of data not previously provided to VBA. From 

this point forward, BOP agreed to provide monthly data files to VBA on 

Federal incarcerations. 

VA OIG 13-02255-276 4 
 

 

Audit of VBA’s C&P Benefit Payments to Incarcerated Veterans 

The following figure shows a timeline of CMAs and the transfer of Federal 

incarceration data between BOP and VBA. 

Figure. Timeline Recapping Data Transfer Between BOP and VBA 

Source: VBA Compensation Service and Federal Bureau of Prisons 

No Action 

Taken With 

BOP Data 

Causes for 

Federal 

Incarceration 

Adjustment 

Issues 

In December 2015, VBA Central Office staff told us VBA had not yet used 

the 83 backup files or the monthly data from BOP to make incarceration 

adjustments. Staff stated VBA was still in the process of analyzing the BOP 

data and determining how to manage this workload. Consequently, VBA 

could not provide a timeline for when VBA would make incarceration 

adjustments based on the BOP Federal incarceration data. VBA needed to 

prioritize this workload by reviewing the BOP data, taking action to make 

appropriate benefit adjustments, and issuing bills of collection to recover 

improper payments. 

VBA did not process Federal incarceration adjustments primarily because of 

how VBA set its priority on eliminating the disability claims backlog. In 

general, VBA did not place priority on incarceration adjustments because 

VBA does not consider these non-rating claims part of the disability claims 

backlog.4

 Both VBA Central Office staff from Compensation Service and 

the Office of Field Operations as well as VARO service center managers and 

staff consistently reported that incarceration adjustments were not a high 

priority. Several VARO employees stated that they had not worked 

incarceration adjustments for up to 2 years. Furthermore, VBA did not 

effectively monitor the terms of its agreements with BOP, which led to an 

almost 7-year lapse in obtaining data on Federal incarcerations. 

4

 The disability claims backlog includes disability compensation and pension claims 

exceeding 125 days that require a rating decision. Non-rating claims require development, 

review, and administrative decision or award action; however, they generally do not require 

a rating decision. 

VA OIG 13-02255-276 5 
Audit of VBA’s C&P Benefit Payments to Incarcerated Veterans 

Effects of 

Federal 

Incarceration 

Adjustment 

Issues 

Conclusion 

Management 

Comments 

and OIG 

Response 

VBA’s ineffective actions in processing Federal incarceration adjustments 

from May 2008 through June 2015 resulted in improper payments totaling 

about $59.9 million. Based on these results, we calculated the amount of 

additional improper payments VBA could make over a 5-year period if 

conditions remained the same. We estimated VBA could make additional 

improper payments totaling about $41.8 million, from FY 2016 through 

FY 2020. 

Federal law requires VBA to adjust veterans’ C&P benefits when veterans 

are incarcerated for more than 60 days because of a felony, and in some 

cases a misdemeanor conviction. VBA staff did not consistently take action 

to make Federal penal incarceration adjustments when appropriate. VBA 

needs to prioritize this workload and make improvements to ensure sound 

financial stewardship and minimize improper benefit payments. 

Recommendations 

1.	 We recommended the Acting Under Secretary for Benefits review the 

data on Federal incarcerations from May 2008 through June 2015 and 

issue bills of collection to recover improper payments made to veterans 

while they were incarcerated. 

2.	 We recommended the Acting Under Secretary for Benefits review the 

data on Federal incarcerations from May 2008 through June 2015 and 

take action to make appropriate benefits adjustments and issue bills of 

collection to recover improper payments for veterans currently 

incarcerated in Federal penal institutions. 

3.	 We recommended the Acting Under Secretary for Benefits increase the 

priority placed on the Federal incarceration adjustment workload by 

using monthly data on Federal incarcerations to make appropriate and 

timely compensation and pension benefits adjustments. 

4.	 We recommended the Acting Under Secretary for Benefits monitor the 

terms of the current agreement with the Bureau of Prisons and take 

timely action to extend the agreement when appropriate. 

The Acting Under Secretary for Benefits concurred with our 

recommendations and agreed that VBA’s current process for award 

adjustments due to incarceration needs to be improved. The Acting Under 

Secretary provided action plans that were responsive to our 

recommendations. As of June 14, 2016, VBA had not completed their 

planned actions. We will monitor VBA’s progress and follow up, as 

required, until all proposed actions are completed. The Acting Under 

Secretary for Benefit’s full response is included in Appendix E. 

VA OIG 13-02255-276 6 
 

Audit of VBA’s C&P Benefit Payments to Incarcerated Veterans 

Finding 2 

Issues 

Processing 

State and 

Local 

Incarceration 

Adjustments 

VBA Needs To Prioritize State and Local Incarceration 

Adjustments 

VARO and PMC staff did not take consistent and timely action to adjust 

C&P benefits for veterans who were incarcerated in state and local penal 

institutions. Based on incarceration notifications received from 

March 2013 to August 2014,5

 employees did not effectively adjust veterans’ 

C&P benefits for an estimated 3,800 of 21,600 state and local incarcerations 

(18 percent), which resulted in significant delays and improper benefit 

payments totaling approximately $44.2 million. VBA had an Information 

Exchange Agreement (IEA) with the Social Security Administration (SSA) 

to identify veterans incarcerated in state and local penal institutions while 

receiving C&P benefits. VBA used these data to identify potential 

incarceration adjustments. We identified issues and delays with VBA 

employees initiating development action (taking steps to determine whether a 

benefit adjustment is needed) and making final incarceration adjustments 

after providing due process notification to veterans. 

VBA did not effectively make state and local incarceration adjustments 

primarily because VBA set its priority on eliminating the disability claims 

backlog. In general, VBA did not place priority on incarceration adjustments 

because VBA does not consider these non-rating claims part of the disability 

claims backlog. Both VBA Central Office staff from Compensation Service 

and the Office of Field Operations as well as VARO service center managers 

and staff consistently reported that incarceration adjustments were not a high 

priority. If VBA does not improve processing of state and local incarceration 

adjustments and conditions remain the same, we estimated VBA could make 

additional improper payments totaling about $162 million from FY 2016 

through FY 2020. 

VBA needed to improve processing of C&P benefit adjustments for veterans 

incarcerated in state and local penal institutions to reduce improper 

payments. Specifically, based on SSA notifications received from 

March 2013 to August 2014, we reviewed a statistical sample of 331 state 

and local incarcerations for veterans who had received C&P benefits. Based 

on this review, we estimated that VARO and PMC staff did not effectively 

adjust veterans’ C&P benefits for about 3,800 of 21,600 state and local 

incarcerations (18 percent), which resulted in significant delays and improper 

payments totaling approximately $44.2 million. 

VBA had a 5-year IEA with SSA that identified veterans incarcerated in state 

and local penal institutions and who were in receipt of C&P benefits. Under 

the agreement, data on VBA benefit recipients are matched against SSA’s 

5

 The actual date range for the notifications was March 29, 2013, through August 8, 2014, 

which was the most current data available at the time of our audit. 

VA OIG 13-02255-276 7 
 

 

 

Audit of VBA’s C&P Benefit Payments to Incarcerated Veterans 

Lack of 

Development 

Action 

Delays Initiating 

Development 

Action 

state and local data. For each match, a notification of incarceration is 

created. The notification includes veteran information—such as name, 

Social Security number, and date of birth. It also includes information on the 

incarceration, such as name and address of penal institution, telephone 

number, fax number, and date of confinement. The notification does not 

include information on the veteran’s conviction and does not regularly 

include the actual date of release from the state or local penal institution. 

Therefore, VBA employees needed to take development action to determine 

whether the veteran’s benefits needed adjustment.6

 We identified issues and 

delays with VBA employees initiating development action and making final 

C&P benefit adjustments after providing due process notification to veterans. 

VARO and PMC staff did not consistently initiate development action after 

receiving notifications of incarceration from SSA. We estimated VBA had 

not initiated development action for about 11,500 of 21,600 incarcerations 

(53 percent) at the time of our audit. In these cases, VBA received 

notifications from SSA; however, employees had not taken any action to 

determine whether benefit adjustments were needed. The average number of 

days pending without initiating development action for these incarcerations 

was about 360 days. 

VBA policy7

 requires that employees put all claims, including incarceration 

adjustments, promptly under control. For incarceration adjustments, the 

claim is placed under control when VBA employees initiate development by 

taking action to determine whether the notice contains sufficient information 

to verify the individual’s incarceration status. Should additional information 

be required, the employees must continue development action until it is 

determined whether an incarceration adjustment is necessary. 

VBA had placed claims under control and initiated development action for 

about 10,200 of 21,600 incarcerations (47 percent). However, VBA did not 

consistently complete this action promptly upon receipt of incarceration 

notifications. The average number of days to initiate development for state 

and local incarceration notifications received from March 2013 to 

August 2014 was about 76 days.8 Therefore, we concluded that significant 

delays existed. 

6

 In its response to this report, VBA stated it would continue to work with BOP and SSA to
 

obtain the needed data, as part of the data matching agreements, and identify additional ways 

to streamline the process.

7

 Relevant VBA policy is M21-4 Manual, Appendix B.
 8

 This average is for cases in which VBA had initiated development action.
 

VA OIG 13-02255-276 8 
 

Audit of VBA’s C&P Benefit Payments to Incarcerated Veterans 

Example 3
 

Delays After 

Due Process 

Notification 

Table 1 summarizes estimates for the average number of days to initiate 

development action for state and local incarceration notifications received 

from March 2013 to August 2014. 

Table 1. Time To Initiate Development Action 

Average Number 

of Days To Initiate 

Development Action 

Number From 

Population 

Percent of 

Population 

0 to 7 Days 1,500 16% 

8 to 60 Days 4,700 49% 

61 to 90 Days 450 5% 

91 to 180 Days 1,300 14% 

More Than 180 Days 1,500 16% 

Source: VA OIG analysis of statistically sampled state and local incarcerations 

Note: This table includes estimates for cases in which VBA had initiated development 

action.
 

The following is an example in which we identified a significant delay in 

adjusting the veteran’s compensation benefits because VARO staff had not 

placed the claim under control or initiated development action at the time of 

our review. 

A veteran was receiving compensation benefits at the 100 percent 

rate. In June 2013, the veteran was identified as being incarcerated 

through data provided by SSA. At that time, an electronic notification 

was created for the VARO of jurisdiction related to the incarceration. 

At the time of our audit, we determined staff did not place this claim 

under control or initiate development action. At our request, the 

VARO developed this claim and determined an adjustment was 

needed. In January 2015, VBA provided due process notification to 

the veteran, and finalized the incarceration adjustment in April 2015. 

Due to a processing delay of about 500 days, VBA overpaid the 

veteran a total of about $27,000. After our review, VARO staff took 

steps, through VA’s Debt Management Center, to recover the 

improper benefit payments made to the veteran. 

We found that VBA employees delayed making final incarceration 

adjustments after providing due process notification to veterans. Once VBA 

staff complete a development action, a determination is made whether a 

veteran’s C&P benefits should be adjusted. For cases in which an 

adjustment is needed, VBA staff send a due process notification to the 

veteran. VBA allows the veteran 60 days to provide additional evidence 

showing that his or her benefits should not be adjusted. After 60 days, if 

VA OIG 13-02255-276 9 
 

Audit of VBA’s C&P Benefit Payments to Incarcerated Veterans 

Example 4 

Overall 

Delays 

VBA has not received additional evidence from the veteran, staff should 

adjust the veteran’s benefits as proposed—retroactively dating back to the 

veteran’s 61st day of incarceration. 

VBA staff made final incarceration adjustments in about 3,000 cases after 

sending due process notifications to the veterans. For these claims, it took 

VBA staff an average of about 110 days to make final benefit adjustments 

from the date of due process notification. Since VBA staff should make final 

benefit adjustments after the 60-day due process period expires, we 

concluded that significant delays existed. 

The following is an example in which we identified a significant delay in 

adjusting the veteran’s pension benefits after VBA provided due process 

notification to the veteran. 

A veteran was receiving VA pension benefits. In April 2013, VBA 

identified the veteran as being incarcerated through data provided by 

SSA. At that time, an electronic notification was created for the PMC 

of jurisdiction related to the incarceration. In April 2014, more than 

360 days after being notified by SSA, PMC staff initiated development 

action on this case. In August 2014, PMC staff sent the veteran due 

process notification, proposing a termination of pension benefits. 

VBA reported that the letter was returned undeliverable and was 

resent to an updated prison address in December 2014. As of 

March 2015, PMC staff had not taken action to suspend pension 

benefits even though the 60-day due process period had expired. 

Because of delays in this case, VBA overpaid the veteran a total of 

more than $28,000. After our review, PMC staff took steps, through 

VA’s Debt Management Center, to recover the improper benefit 

payments made to the veteran. 

Delays in initiating development action and making final C&P benefits 

adjustments after due process notifications had a negative effect on overall 

timeliness of state and local incarceration adjustments. The longer the 

incarceration adjustment remains unaddressed, the larger the overpayment 

will be to the veteran. It took VBA an average of about 300 days to process 

state and local incarceration notifications received from March 2013 to 

August 2014. 

VA OIG 13-02255-276 10 
 

 

Audit of VBA’s C&P Benefit Payments to Incarcerated Veterans 

Causes for 

Untimely State 

and Local 

Incarceration 

Adjustments 

Effects of 

Untimely State 

and Local 

Incarceration 

Adjustments 

Conclusion 

Table 2 summarizes estimates for the total number of days to process state 

and local incarceration notifications received from March 2013 to 

August 2014. 

Table 2. Time To Process State and Local Incarceration Notifications 

From March 2013 to August 2014 

Total Number of Days 

To Process Notifications 

Number From 

Population 

Percent of 

Population 

0 to 125 Days 4,700 23% 

126 to 180 Days 2,400 12% 

181 to 300 Days 3,700 17% 

301 to 500 Days 6,200 29% 

More Than 500 Days 4,000 19% 

Source: VA OIG analysis of statistically sampled state and local incarcerations 

Note: Figures have been rounded for reporting purposes. As a result, totals may not 

always sum due to rounding. 

VBA did not effectively make state and local incarceration adjustments 

primarily because VBA set its priority on eliminating the disability claims 

backlog. This priority had a negative effect on timeliness of other workload. 

In general, VBA did not place priority on processing state and local 

incarceration adjustments because VBA does not consider these non-rating 

claims part of the disability claims backlog. Both VBA Central Office staff 

from Compensation Service and the Office of Field Operations as well as 

VARO service center managers and staff consistently reported that 

incarceration adjustments were not a high priority. Several VARO 

employees stated that they had not worked incarceration adjustments for up 

to 2 years. Furthermore, VBA did not effectively monitor the timeliness of 

initiating development action for these claims, and did not make final 

benefits adjustments after due process expired. 

VBA’s failure to timely process state and local incarceration data resulted in 

significant delays and improper payments totaling an estimated 

$44.2 million. If VBA does not improve its processing of state and local 

incarceration adjustments, we estimated it could make additional improper 

payments totaling about $162 million from FY 2016 through FY 2020. 

Federal law requires VBA to adjust veterans’ C&P benefits when they are 

incarcerated for more than 60 days due to a felony and in some cases a 

misdemeanor conviction. VBA staff did not take consistent and timely 

action to make state and local incarceration adjustments when appropriate. 

VBA needed to prioritize this workload and make improvements to ensure 

sound financial stewardship and minimize improper benefit payments. 

VA OIG 13-02255-276 11 
Audit of VBA’s C&P Benefit Payments to Incarcerated Veterans 

Management 

Comments and 

OIG Response 

Recommendations 

5.	 We recommended the Acting Under Secretary for Benefits increase the 

priority placed on state and local incarceration adjustment workload by 

initiating timely development action after receiving notifications of 

incarceration from the Social Security Administration. 

6.	 We recommended the Acting Under Secretary for Benefits increase 

priority of state and local incarceration adjustment workload by making 

timely incarceration adjustments and issue bills of collection to recover 

improper payments, as appropriate, after providing due process 

notification to veterans. 

The Acting Under Secretary for Benefits concurred with our 

recommendations and agreed that VBA’s current process for award 

adjustments due to incarceration needs to be improved. The Acting Under 

Secretary provided action plans that were responsive to our 

recommendations. As of June 14, 2016, VBA had not completed their 

planned actions. We will monitor VBA’s progress and follow up, as 

required, until all proposed actions are completed. The Acting Under 

Secretary for Benefit’s full response is included in Appendix E. 

VA OIG 13-02255-276 12 
Audit of VBA’s C&P Benefit Payments to Incarcerated Veterans 

Appendix A 

BOP 

Agreement 

SSA 

Agreement 

Prior OIG 

Report 

Background 

VBA Compensation Service is responsible for establishing and maintaining 

computer-matching agreements between VBA and other Government 

agencies, including those used to identify veteran incarcerations. 

VBA has a CMA with BOP under which VBA receives information on 

Federal prisoners whose VA benefits may be subject to reduction or 

termination. The current CMA went into effect in December 2014 for a 

period of 18 months, expiring in June 2016. The purpose of this agreement 

is to identify veterans and beneficiaries who are in receipt of VBA benefits, 

including C&P, and who are incarcerated for a period exceeding 60 days due 

to a felony or misdemeanor conviction. 

VBA has an IEA with SSA under which VBA receives information on state 

and local prisoners whose VA benefits may be subject to reduction or 

termination. The current IEA went into effect in May 2011 for a period of 

5 years, expiring in May 2016. The purpose of this agreement is to identify 

those veterans and beneficiaries who are in receipt of VBA benefits, 

including compensation and pension, and who are incarcerated for a period 

exceeding 60 days due to a felony or misdemeanor conviction. 

In 2007, OIG issued a report titled, Audit of Veterans Benefits Administration 

Controls to Minimize Compensation Benefit Overpayments (Report 

No. 06-01623-220, September 28, 2007). OIG recommended the timeliness 

of compensation benefit adjustments be monitored—including incarceration 

adjustments. 

VA OIG 13-02255-276 13 
 

Audit of VBA’s C&P Benefit Payments to Incarcerated Veterans 

Appendix B 

Scope 

Methodology 

Scope and Methodology 

We conducted our audit work from August 2014 through March 2016. We 

suspended our audit from March through October 2015 until VBA made the 

Federal incarceration data available to OIG for our review. The audit 

focused on VBA’s processes, procedures, and controls related to 

incarceration adjustments. Specifically, our scope included the following: 

 Veterans incarcerated in Federal penal institutions from 

May 2008 through June 2015, as identified by BOP data provided to 

VBA under the new CMA. 

 Veterans incarcerated in state and local penal institutions, identified by 

SSA notifications from March 2013 to August 2014—the most current 

data available at the time of our audit. 

To achieve our objectives, we reviewed a statistical sample of 132 Federal 

incarcerations and a statistical sample of 331 state and local incarcerations. 

Appendix C contains details on our statistical sampling methodology. 

We performed site visits at the following VAROs from October through 

December 2014: 

 Los Angeles, CA 

 St. Petersburg, FL 

 Winston-Salem, NC 

 Cleveland, OH 

 Houston, TX 

 Waco, TX 

 Seattle, WA 

We also visited the PMC in St. Paul, MN. During our site visits, we 

conducted tours to obtain an understanding of the local workflow processes. 

We also interviewed management and staff regarding topics related to our 

audit objectives. 

We reviewed VBA’s policies and procedures for incarceration adjustments 

and interviewed management and staff from VBA Central Office to discuss 

oversight and training. 

VA OIG 13-02255-276 14 
 

Audit of VBA’s C&P Benefit Payments to Incarcerated Veterans 

Fraud 

Assessment 

Data 

Reliability 

Government 

Standards 

The audit team assessed the risk that fraud, violations of legal and regulatory 

requirements, and abuse could occur during this audit. The audit team 

exercised due diligence in staying alert to any fraud indicators by taking 

actions such as: 

	 Soliciting the OIG’s Office of Investigations for indicators 

	 Interviewing VBA management and staff concerning potential fraudulent 

activities within the scope of our objectives 

	 Reviewing and assessing documentation in veterans’ claims folders and 

in VBA’s electronic data systems 

We did not identify any instances of fraud during this audit. 

We relied on computer-processed data from SHARE and data provided by 

OIG’s Austin Data Section, which obtained data related to veterans 

incarcerated in Federal, state, and local penal institutions from BOP and 

SSA. We tested the reliability of these data by comparing certain elements, 

such as the veteran’s name and file number, to information available in VBA 

systems, such as Veterans Benefits Management System, Virtual VA, and 

the Modern Award Processing Development system. In addition, we 

reviewed records maintained in the Public Access to Court Electronic 

Records9

 system to verify the date of incarceration. Based on our reliability 

assessments, we concluded these data were appropriate and sufficient for our 

audit purposes. 

Our assessment of internal controls focused on those controls relating to our 

audit objectives. We conducted this performance audit in accordance with 

generally accepted government auditing standards. These standards require 

that we plan and perform the audit to obtain sufficient, appropriate evidence 

to provide a reasonable basis for our findings and conclusions based on our 

audit objective. We believe the evidence obtained provides a reasonable 

basis for our findings and conclusions based on our audit objective. 

9

 This is an electronic public access service that allows users to obtain case and docket 

information online from Federal, district, and bankruptcy courts. 

VA OIG 13-02255-276 15 
 

 

Audit of VBA’s C&P Benefit Payments to Incarcerated Veterans 

Appendix C 

Population 

Sampling 

Design 

Weights 

Projections 

and Margins 

of Error 

Statistical Sampling Methodology 

To determine whether VBA was adjusting C&P benefit payments timely for 

veterans incarcerated in Federal, state, and local penal institutions, we 

selected a statistical sample of: (1) veterans incarcerated in Federal penal 

institutions, and (2) veterans incarcerated in state and local penal institutions. 

Figures, costs, and percentages have been rounded for reporting purposes. 

As a result, totals may not always sum due to rounding. 

Federal Incarcerations Review 

For veterans incarcerated in Federal penal institutions, we identified veterans 

who had received C&P benefits prior to incarceration. Our population 

consisted of 2,915 Federal incarceration notifications for the period from 

May 2008 through June 2015. 

For veterans incarcerated in Federal penal institutions, we used a simple 

random sample. We reviewed 132 incarceration cases from the population, 

and all records had a known chance of selection. This allowed us to make 

estimates over the entire population. 

We calculated estimates in this report using weighted sample data. Sampling 

weights are computed by taking the product of the inverse of the 

probabilities of selection at each stage of sampling. 

Our review indicated VBA staff did not consistently take action to adjust 

C&P benefits for veterans incarcerated in Federal penal institutions. VBA 

did not adjust veterans’ C&P benefits, as required, for about 1,300 of 

2,500 cases (53 percent), which resulted in improper payments totaling 

approximately $59.9 million. Specifically, VBA did not adjust C&P benefits 

for about 590 past Federal incarcerations, which resulted in improper 

payments totaling approximately $8.6 million. VBA also did not adjust C&P 

benefit payments for about 720 Federal incarcerations that were current at 

the time of our review, which resulted in improper payments totaling 

approximately $51.3 million. 

The margins of error and confidence intervals are indicators of the precision 

of the estimates. If we repeated this audit with multiple samples, the 

confidence intervals would differ for each sample, but would include the true 

population value 90 percent of the time. 

VA OIG 13-02255-276 16 
 

 

Audit of VBA’s C&P Benefit Payments to Incarcerated Veterans 

Table 3 presents estimates over the entire population, including the estimate, 

margin of error, lower 90 percent value, and upper 90 percent value. 

Table 3. Statistical Projections – Federal Incarcerations 

(Dollars are in millions) 

Results Sample 

Results Estimate Margin of Error 

Lower 

90% 

Upper 

90% 

Total number of Federal 

incarcerations in 

universe 

113 2,458 146 2,312 2,604 

Number of 

incarcerations for which 

C&P benefits were not 

adjusted as required 

60 1,305 

(53.1%) 

207 

(7.8%) 

1,098 

(45.3 %) 

1,512 

(60.9%) 

Past Federal 

incarcerations (as of 

October 1, 2015) 

27 587 168 420 755 

Current Federal 

incarcerations (as of 

October 1, 2015) 

33 718 180 538 898 

Overpayments as a 

result of veterans’ C&P 

benefits not being 

adjusted as required 

60 $59.9 $23.9 $36 $83.7 

Past Federal 

incarcerations (as of 

October 1, 2015) 

27 $8.6 $4.8 $3.8 $13.3 

Current Federal 

incarcerations (as of 

October 1, 2015) 

33 $51.3 $23.8 $27.6 $75.1 

Source: VA OIG analysis of statistical sample results projected over the sample population 

VBA’s ineffective actions processing Federal incarceration adjustments, 

from May 2008 through June 2015, resulted in improper payments totaling 

about $59.9 million. Based on these results, we calculated additional 

improper payments VBA could make over a 5-year period based on the date 

range of our population. If conditions remained the same, we estimated 

VBA could make additional improper payments totaling about $41.8 million 

from FY 2016 through FY 2020. 

VA OIG 13-02255-276 17 
 

 

Audit of VBA’s C&P Benefit Payments to Incarcerated Veterans 

Population 

Sampling 

Design 

Weights 

Projections 

and Margins 

of Error 

State and Local Incarcerations Review 

For veterans incarcerated in state and local penal institutions, our population 

consisted of SSA notifications used to identify incarcerated veterans who 

were in receipt of C&P benefits. Our population consisted of 21,658 state 

and local incarceration notifications from March 29, 2013, through 

August 8, 2014. 

For veterans incarcerated in state and local penal institutions, we selected a 

random sample of incarceration cases based on our site visit locations. We 

conducted site visits at seven VAROs (Los Angeles, CA; St. Petersburg, FL; 

Winston-Salem, NC; Cleveland, OH; Houston, TX; Waco, TX; Seattle, WA) 

and one PMC (St. Paul, MN). All records had a known chance of selection 

per VARO and PMC. We also selected a random sample of incarceration 

cases from locations that were not part of our site visits and all records had a 

known chance of selection. This allowed us to make estimates over the 

entire population. 

We calculated estimates in this report using weighted sample data. Sampling 

weights are computed by taking the product of the inverse of the 

probabilities of selection at each stage of sampling. 

Our review indicated VBA staff did not consistently take action to adjust 

C&P benefits for veterans incarcerated in state and local penal institutions. 

VBA did not adjust veterans’ C&P benefits timely for about 3,800 of 

21,600 state and local incarcerations (18 percent), which resulted in improper 

payments totaling approximately $44.2 million. 

The margins of error and confidence intervals are indicators of the precision 

of the estimates. If we repeated this audit with multiple samples, the 

confidence intervals would differ for each sample, but would include the true 

population value 90 percent of the time. Table 4 presents estimates over the 

entire population, including the estimate, margin of error, lower 90 percent 

value, and upper 90 percent value. 

VA OIG 13-02255-276 18 
Audit of VBA’s C&P Benefit Payments to Incarcerated Veterans 

Table 4. Statistical Projections – State and Local Incarcerations 

(Dollars are in millions) 

Results Sample 

Results Estimate Margin of Error 

Lower 

90% 

Upper 

90% 

Total number of 

state and local 

incarcerations in 

universe 

331 21,646 38 21,608 21,684 

Number of 

incarcerations in 

which C&P 

benefits were not 

adjusted timely 

42 3,839 

(17.7%) 

1,430 

(6.6%) 

2,409 

(11.1%) 

5,269 

(24.3%) 

that resulted in 

overpayments 

Overpayments as 

a result of 

veterans’ C&P 42 $44.2 $21.4 $22.8 $65.5 

benefits not being 

adjusted timely 

Cases in which 

development 

action was not 

initiated 

151 11,458 

(52.9%) 

1,695 

(7.8%) 

9,762 

(45.1%) 

13,153 

(60.8%) 

Average number 

of pending 

without 

development 

151 357 38 319 395 

Cases in which 

development 

action was 

initiated 

180 10,188 

(47.1%) 

1,696 

(7.8%) 

8,492 

(39.2%) 

11,884 

(54.9%) 

0–7 days 

to initiate 20 1,536 (16%) 

951 

(9.4%) 

586 

(6.6%) 

2,487 

(25.4%) 

8–60 days 

to initiate 85 4,743 (49.4%) 

1,385 

(11.5%) 

3,357 

(38%) 

6,128 

(60.9%) 

61–90 days 

to initiate 13 450 (4.7%) 

238 

(2.6%) 

212 

(2.1%) 

689 

(7.3%) 

91–180 days 

to initiate 28 1,344 (14%) 

658 

(6.8%) 

686 

(7.2%) 

2,002 

(20.8%) 

VA OIG 13-02255-276 19 
Audit of VBA’s C&P Benefit Payments to Incarcerated Veterans 

Table 4. 

Statistical 

Projections 

(cont’d) 

Results Sample 

Results Estimate Margin of Error 

Lower 

90% 

Upper 

90% 

181+ days 

to initiate 24 1,524 (15.9%) 

839 

(8.4%) 

685 

(7.5%) 

2,363 

(24.3%) 

Average number 

of days to initiate 

development 

180 76 23 53 100 

Cases in which 

final incarceration 

adjustment was 

made after due 

process 

notification 

40 2,992 1,145 1,846 4,137 

Average number 

of days to process 

state and local 321 296 30 267 326 

incarceration 

notifications 

0–125 days 

to process 105 4,737 (22.6%) 

1,229 

(5.9%) 

3,508 

(16.7%) 

5,967 

(28.4%) 

126–180 days 

to process 33 2,419 

(11.5%) 

1,111 

(5.3%) 

1,308 

(6.2%) 

3,530 

(16.8%) 

181–300 days 

to process 61 3,658 

(17.4%) 

1,241 

(5.9%) 

2,417 

(11.5%) 

4,899 

(23.3%) 

301–500 days 

to process 72 6,169 (29.4%) 

1,632 

(7.7%) 

4,537 

(21.7%) 

7,800 

(37.1%) 

501+ days 

to process 50 4,008 (19.1%) 

1,430 

(6.8%) 

2,577 

(12.3%) 

5,438 

(25.9%) 

Source: VA OIG analysis of statistical sample results projected over the sample 

population 

VBA’s ineffective actions processing state and local incarceration 

adjustments resulted in significant delays and improper payments totaling 

about $44.2 million. Based on these results, we calculated additional 

improper payments VBA could make over a 5-year period based on the date 

range of our population. If conditions remained the same, we estimated 

VBA could make additional improper payments totaling about $162 million 

from FY 2016 through FY 2020. 

VA OIG 13-02255-276 20 
Audit of VBA’s C&P Benefit Payments to Incarcerated Veterans 

Appendix D Potential Monetary Benefits in Accordance With 

Inspector General Act Amendments 

Recommendation Explanation of Benefits Better Use of Questioned

Funds Costs 

1–2 

3 

5–6 

5–6 

Improper payments based 

on Federal incarcerations 

from May 2008 through 

June 2015 

(as of October 1, 2015) 

Potential improper 

payments based on 

Federal incarcerations 

from FY 2016 through 

FY 2020 

Improper payments based 

on state and local 

incarceration notifications 

from March 2013 to 

August 2014 

Potential improper 

payments based on state 

and local incarceration 

notifications from 

FY 2016 through FY 2020 

$0 $59,900,000 

$0 $41,800,000 

$0 $44,200,000 

$0 $162,000,000 

Total $0 $307,900,000 

VA OIG 13-02255-276 21 
 

 

 

 

 

 

Audit of VBA’s C&P Benefit Payments to Incarcerated Veterans 

Appendix E Management Comments 

Department of Memorandum 

Veterans Affairs 

Date: April 18, 2016 

From: Acting Under Secretary for Benefits (20) 

Subj: OIG Draft Report—Audit of Compensation and Pension Benefit Payments to 

Incarcerated Veterans—VAIQ 7683359 

To: Assistant Inspector General for Audits and Evaluations (52) 

1. Attached is VBA’s response to the OIG draft report: Audit of Compensation and 

Pension Benefit Payments to Incarcerated Veterans. 

2. Questions may be referred to Catherine Milano, Senior Program Analyst, at 

461-9216. 

(original signed by:) 

DANNY G.I. PUMMILL 

Attachment 

VA OIG 13-02255-276 22 
Audit of VBA’s C&P Benefit Payments to Incarcerated Veterans 

Attachment 

Veterans Benefits Administration (VBA)

Comments on OIG Draft Report
 

Audit of Compensation and Pension Benefit Payments to Incarcerated Veterans
 

The Veterans Benefits Administration provides the following comments: 

VA has a statutory responsibility to reduce or terminate disability compensation or pension benefits for 

VA beneficiaries incarcerated in a Federal, State, or local penal institution in excess of 60 days. VBA 

conducts an electronic data match of all disability compensation and pension benefit recipients with the 

Department of Justice, Federal Bureau of Prisons (FBOP), and the Social Security Administration (SSA) 

to identify those individuals confined in penal institutions. 

VBA agrees with the OIG that the current process for award adjustments due to incarceration needs to be 

improved. VBA is required to make the adjustments effective on the date of the beneficiary’s conviction; 

however, the electronic data currently received from FBOP does not include this information. Therefore, 

after verifying that the match results correctly correspond to the identified beneficiary, VBA personnel 

must perform additional, time-consuming research to determine the date of conviction (e.g., contacting 

the beneficiary or prison in writing and/or by phone). VBA is working with FBOP to determine the 

changes needed to obtain conviction dates as part of the data-matching agreement. This will allow VBA 

to more timely and efficiently make the adjustments and will also support future automation of the 

process. VBA will continue to work with FBOP and SSA to obtain the needed data and identify additional 

ways to streamline the process. 

Incarceration adjustments are part of VBA’s non-rating workload. As VBA continues to receive and 

complete record numbers of disability rating claims, the result is a corresponding increase in the volume 

of non-rating claims. In fiscal year (FY) 2015, VBA completed a record 3.1 million non-rating claims, a 

15-percent increase over FY 2014. 

The following comments are submitted in response to the recommendations in the OIG draft 

report: 

Recommendation 1: We recommended the Acting Under Secretary for Benefits review the data on 

Federal incarcerations from May 2008 through June 2015 and issue bills of collection to recover improper 

payments made to veterans while they were incarcerated. 

VBA Response: Concur. VBA received the data on Federal incarcerations from May 2008 through June 

2015 and has identified approximately 3,400 cases that need to be reviewed for potential award 

adjustment. VBA will take action to complete all necessary award adjustments on these cases. 

Target Completion Date: December 31, 2016 

Recommendation 2: We recommended the Acting Under Secretary for Benefits review the data on 

Federal incarcerations from May 2008 through June 2015 and take action to make appropriate benefit 

adjustments and issue bills of collection to recover improper payments for veterans currently incarcerated 

in Federal penal institutions. 

VBA Response: Concur. VBA received the data on Federal incarcerations from May 2008 through June 

2015 and has identified approximately 3,400 cases that need to be reviewed for potential award 

adjustment. VBA will take action to complete all necessary award adjustments on these cases. 

Target Completion Date: December 31, 2016 

VA OIG 13-02255-276 23 
Audit of VBA’s C&P Benefit Payments to Incarcerated Veterans 

Recommendation 3: We recommended the Acting Under Secretary for Benefits increase the priority 

placed on Federal incarceration adjustment workload by using monthly data on Federal incarcerations to 

make appropriate and timely compensation and pension benefit adjustments. 

VBA Response: Concur. VBA agrees that processing incarceration adjustments is important and will 

prioritize these adjustments based on the date of incarceration, working the oldest dates first. VBA will 

also continue to work to balance available resources in order to increase its focus on processing 

incarceration adjustments. By May 31, 2016, VBA will communicate additional guidance to regional 

offices (ROs) on the prioritization of Federal, State, and local incarceration adjustments. 

Target Completion Date: May 31, 2016 

Recommendation 4: We recommended the Acting Under Secretary for Benefits monitor the terms of the 

current agreement with the Bureau of Prisons and take timely action to extend the agreement when 

appropriate. 

VBA Response: Concur. VBA initiated the renewal of this agreement in the first quarter of FY 2016 and 

expects it to be completed by June 30, 2016. 

Target Completion Date: June 30, 2016 

Recommendation 5: We recommended the Acting Under Secretary for Benefits increase the priority 

placed on State and local incarceration adjustment workload by initiating timely development action after 

receiving notifications of incarceration from the Social Security Administration. 

VBA Response: Concur. VBA agrees that processing incarceration adjustments is important and will 

prioritize these adjustments based on the date of incarceration, working the oldest dates first. VBA will 

also continue to work to balance available resources in order to increase its focus on processing 

incarceration adjustments. By May 31, 2016, VBA will communicate additional guidance to ROs on the 

prioritization of Federal, State, and local incarceration adjustments. 

Target Completion Date: May 31, 2016 

Recommendation 6: We recommended the Acting Under Secretary for Benefits increase priority of State 

and local incarceration adjustment workload by making timely incarceration adjustments and issue bills of 

collection to recover improper payments, as appropriate, after providing due process notification to 

veterans. 

VBA Response: Concur. VBA agrees that processing incarceration adjustments is important and will 

prioritize these adjustments based on the date of incarceration, working the oldest dates first. VBA will 

also continue to work to balance available resources in order to increase its focus on processing 

incarceration adjustments. By May 31, 2016, VBA will communicate additional guidance to ROs on the 

prioritization of Federal, State, and local incarceration adjustments. 

Target Completion Date: May 31, 2016 

VA OIG 13-02255-276 24 
Audit of VBA’s C&P Benefit Payments to Incarcerated Veterans 

Appendix F OIG Contact and Staff Acknowledgments 

Contact For more information about this report, please 

contact the Office of Inspector General at 

(202) 461-4720. 

Acknowledgments	 Nick Dahl, Director 

Stephen Bracci 

Michael Cannata 

John Cintolo 

Ron Comtois 

Michael Derick 

Lee Giesbrecht 

Karen Myers 

David Orfalea 

Victor Rhee 

Joseph Vivolo 

Ann Wolf 

VA OIG 13-02255-276 25 
Audit of VBA’s C&P Benefit Payments to Incarcerated Veterans 

Appendix G Report Distribution 

VA Distribution 

Office of the Secretary 

Veterans Health Administration 

Veterans Benefits Administration 

National Cemetery Administration 

Assistant Secretaries 

Office of General Counsel 

Board of Veterans Appeals 

Non-VA Distribution 

House Committee on Veterans’ Affairs 

House Appropriations Subcommittee on Military Construction, 

Veterans Affairs, and Related Agencies 

House Committee on Oversight and Government Reform 

Senate Committee on Veterans’ Affairs 

Senate Appropriations Subcommittee on Military Construction, 

Veterans Affairs, and Related Agencies 

Senate Committee on Homeland Security and Governmental Affairs 

National Veterans Service Organizations 

Government Accountability Office 

Office of Management and Budget 

This report is available on our Web site at www.va.gov/oig. 

VA OIG 13-02255-276 26