VA OFFICE OF INSPECTOR GENERAL 

OFFICE OF AUDITS & EVALUATIONS

 

Inspection of 

VA Regional Office 

Nashville, TN

 September 29, 2009

09-01664-231
Office of Inspector General 

Benefits Inspection Program 

The Benefits Inspection Program is part of the Office of Inspector General's (OIG's) 

efforts to ensure our Nation’s veterans receive timely and accurate benefits and 

services. The Benefits Inspection Division contributes to the improvement and 

management of benefits processing activities and veteran services by conducting onsite 

inspections at 57 VA Regional Offices (VAROs). The purpose of these independent 

inspections is to provide recurring oversight of VAROs by focusing on disability 

compensation claims processing and performance of Veterans Service Center (VSCs) 

operations. The objectives of the inspections are to: 

• Evaluate how well VAROs and VSCs are accomplishing their missions of 

providing veterans with convenient access to high quality benefit services. 

• Determine if management controls ensure compliance with VA regulations and 

policies; assist management in achieving program goals; and minimize risk of 

fraud, waste, and other abuses.

• Identify and report systemic trends in VSC operations. 

In addition to this standard coverage, inspections may examine issues or allegations 

referred by VA employees, members of Congress, or others. 

To Report Suspected Wrongdoing in VA Programs and Operations 

Telephone: 1-800-488-8244 between 8:30AM and 4:00PM Eastern Time, 

Monday through Friday, excluding Federal holidays 

E-mail: vaoighotline@va.gov
Table of Contents 

Page 

Report Highlights............................................................................................................. i 

Results of Inspection..................................................................................................... 1 

VARO Activities Requiring Additional Management Attention .................................... 1 

Observations .................................................................................................................. 15 

Appendixes

A. VARO Profile and Scope of Inspection................................................................... 19 

B. VARO Director’s Comment .................................................................................... 21 

C. Inspection Summary................................................................................................. 28 

D. OIG Contacts ........................................................................................................... 29 

E. Report Distribution................................................................................................... 30 

VA Office of Inspector General 
Report Highlights: Inspection of VA 

Regional Office, Nashville, TN 

Why We Did This Review 

The Benefits Inspection Program 

conducts on-site inspections at VA 

Regional Offices (VAROs) to review 

disability compensation claims 

processing and Veteran Service Center 

(VSC) operations. The inspection 

focused on VSC operations in five 

established areas of claims processing, 

data integrity, management controls, 

information security, and public contact. 

What We Found 

The Nashville Regional Office met the 

requirements for processing benefit 

claims involving diabetes. The office 

also met all requirements in the areas of 

tracking claims folders, systematic 

analysis of operations, date stamp 

accountability, and accurately and timely 

handling congressional inquiries. 

The VARO management team needs to 

provide additional management attention 

in processing claims identified as Haas 

cases, post-traumatic stress disorder, and 

traumatic brain injury. Management also (original signed by:)

needs to improve controls over the 

following areas: correction of errors 

identified by VBA’s Systematic 

Technical Accuracy Reviews (STAR), 

implementation of the Claims Process 

Improvement model, safeguards over 

sensitive information, handling claimsrelated mail, responding to electronic 

inquiries, and fiduciary activities. 

What We Recommended

We recommended that the VARO 

provide refresher training on claims 

processing and improve management 

oversight and controls over operations. 

 

Agency Comments

The Director of the Nashville VARO 

concurred with all recommendations 

except for training Legal Instrument 

Examiners (LIEs). The Nashville RO 

provided training to LIEs during the 

course of our inspection. Our review 

looked at work performed before that 

training. Therefore, we consider the 

actions taken by management as 

responsive to our recommendation and 

will perform follow-up as required on all 

actions. 

BELINDA J. FINN 

Assistant Inspector General 

for Audits and Evaluations

i 
VARO Nashville, TN Inspection 

VA Office of Inspector General 1 

Results of Inspection 

The inspection focused on 5 protocol areas examining 15 operational activities from 

July 1, 2008, through April 24, 2009. The VARO met selected standards in 5 activities; 

they did not meet all selected standards in 10 activities. The protocol areas and 

operational activities reviewed are described in Appendix A. We also made observations 

pertaining to issues that are not specifically required by policy but may affect benefits 

delivery or VARO performance. 

VARO Activities Needing Additional Management Attention 

Disability Claims Processing 

We reviewed 106 (11 percent) of 979 completed Haas case,1 post-traumatic stress 

disorder (PTSD), traumatic brain injury (TBI), and diabetes claims for which the VARO 

made a disability decision regarding these specified issues. The claims decisions were 

made during the period October 1, 2008, through March 31, 2009. The number of claims 

reviewed was determined by a random sample of completed claims processed during that 

time, except for Haas cases, which were selected from VBA’s Veterans Service Network 

(VETSNET) Operations Reports (VOR). 

Our analysis revealed errors in 20 (19 percent) of the 106 claims, but the Nashville 

VARO actually processed only 15 (75 percent) of those errors. The 5 remaining errors 

were attributable to work completed at other VAROs as part of VBA’s efforts to broker 

claims and expedite the processing of claims decisions. Regardless of where claims 

decisions are processed, these errors negatively impact the delivery of benefits to 

veterans. For example, the 5 claims processed at other VAROs contained errors that 

impacted veteran’s benefits. The following table reflects the errors by claim type and 

those errors impacting veteran’s benefits: 

Table 1. Disability Claims Processing Errors 

Claim Type Claims Reviewed Claims With Errors Errors With Impact On 

Veteran Benefits 

Haas 16 8 7 

PTSD 30 9 4 

TBI 30 3 2 

Diabetes 30 0 0 

Total 106 20 13 

 

1

A Haas claim is a claim affected by a U.S. Court of Appeals for Veterans Claims decision in Haas v. Nicholson. Haas claims 

involve veterans who served in waters off Vietnam and did not set foot in Vietnam, potentially precluding those veterans from 

entitlement to presumption of exposure to herbicide agents, including Agent Orange. VA had put a stay of adjudication on these

claims; however, VA lifted the stay in January 2009. 
VARO Nashville, TN Inspection 

1. VSC personnel made inaccurate disability decisions processing Haas, PTSD, and 

TBI claims. 

Haas Claims. Of the eight errors identified regarding processing Haas cases, seven 

impacted veterans’ benefits and one error did not impact benefits. The following is a 

description of the seven errors that impacted the veterans’ benefits. 

• 3 claims—Veterans not granted service connection although evidence of record 

supported a grant of service connection. 

• 3 claims—VARO staff did not properly develop evidence to support the veterans’ 

claims. 

• 1 claim—VARO staff incorrectly identified this claim as a Haas claim and the veteran 

was provided inaccurate appellate information. 

The remaining error was procedural in nature as VARO staff improperly controlled this 

claim as a Haas case. The veteran’s claim never met the criteria for consideration under 

this legislation. 

PTSD Claims. Of the nine errors identified regarding processing of PTSD claims, four 

errors impacted veterans’ and five errors did not impact the veterans’ benefits. The 

following is a description of the four errors regarding processing PTSD claims that 

impacted the veterans’ benefits: 

• 3 claims—PTSD claims did not receive the appropriate disability evaluation based on 

medical evidence provided in the VA medical disability examination. One of these 

claims was brokered to another VARO for processing. 

• 1 claim—VARO staff failed to address the issue of competency for a 100% service 

connected veteran. This claim was also brokered to another VARO for processing. 

The remaining five errors were procedural in nature. For example, VARO staff recorded 

the incorrect dates of claim in the electronic record. These dates did not affect the 

veterans’ benefits. 

TBI Claims. Of the three errors identified regarding the processing of TBI claims, two 

impacted the veterans’ benefits. The following is a description of errors regarding 

processing TBI claims that impacted the veterans’ benefits: 

• 2 claims—VA medical center staff provided the VARO inadequate examinations as 

all residual disabilities related to TBI were not reviewed. 

The remaining error was procedural in nature. VARO staff recorded the incorrect date of 

claim in the electronic record. This date did not affect the veterans’ benefits. 

VA Office of Inspector General 2 
VARO Nashville, TN Inspection 

The processing errors for Haas, PTSD, and TBI claims occurred because VBA personnel 

did not follow VBA policies related to processing cases and some of the Rating Veteran 

Service Representatives (RVSRs) lacked sufficient experience to appropriately process 

these claims. A senior VSC official indicated approximately 50 percent of the RVSRs 

had less than 2 years experience. As a result, disability decisions were inaccurate and 

veterans were not always granted service connection or they received incorrect benefit 

payments. During the inspection fieldwork, we discussed each processing error with 

VSC managers who agreed with the identified errors. 

Recommendation 1. We recommend the VA Regional Office Director provide refresher 

training emphasizing the correct procedures for processing Haas, PTSD, and TBI cases 

for Veteran Service Center personnel. 

Management Comment 

The VARO Director commented on the OIG’s testing methodology, saying the sample 

size of 30 PTSD, 30 diabetes, 30 TBI, and 16 Haas claims was not adequate to make 

valid statistical projections because the OIG sample size changed from fieldwork to the 

draft report. The Director also said this sample would not portray an accurate 

representation of station performance. The Director concurred with the recommendation 

with qualification and provided the dates of completed refresher training. Although the 

VSC manager agreed with the cited errors on Haas and PTSD claims, the Director noted 

that several claims were completed at other VAROs and should not be considered an 

error committed by the Nashville VARO. The Director reiterated his concern about the 

OIG reviewing only 16 Haas claims and said that the review would not be indicative of 

overall accuracy in processing these types of claims. Finally, the Director agreed with 

the OIG’s assessment of errors on TBI claims but said that the OIG applied inapplicable 

criteria to the TBI claims under review because the claims were processed before new 

guidance was promulgated in January 14, 2009. 

OIG Response 

The Director’s comments on the OIG sampling methodology reflect unfamiliarity with 

OIG’s statistical sampling procedures. The Director noted that our sample size changed 

from audit fieldwork to the report. We deleted some claims from our sample because 

decisions on PTSD, TBI, and diabetes in those claims did not occur within our scope 

timeframe and those results would not have provided an accurate review of the Nashville 

VARO. However, even a very small sample can be a valid statistical sample if that item 

is selected by truly random means, such as sample selection methodology used by the 

OIG. Our sample was adequate to project errors across the VARO had we chosen to do 

so, but in fact, we never reported anything other than the specific errors. The sample size 

we used enables us to capture sufficient information to identify and report systemic 

trends in VARO operations as we continue to perform inspections at other VAROs 

throughout the nation. Finally, we reviewed 100 percent of Haas claims completed 

VA Office of Inspector General 3 
VARO Nashville, TN Inspection 

VA Office of Inspector General 4 

within our scope and available for review. Therefore, data sampling was not required and 

these 16 cases do more than just represent the VARO’s performance on Haas cases 

during this period, they present the VARO’s performance during the period October 2008 

through December 2008, in its entirety. 

We agree that other VAROs actually completed one Haas case and two of the four PTSD 

claims with errors. However, these errors negatively impacted the delivery of veterans’ 

benefits and blaming other offices for errors provides little consolation to the affected 

veterans. The Director’s comment on not counting these errors against the Nashville 

VARO is based upon methodology used by Systematic Technical Accuracy Review 

(STAR) quality assurance process used by VBA to assess claim rating accuracy. 

In March 2009, the OIG issued a report titled Audit of Veterans Benefits Administration 

Compensation Rating Accuracy and Consistency Reviews.2

 We reported that the process 

does not provide a complete assessment of compensation claim rating accuracy, largely 

because VBA officials excluded brokered claims from STAR reviews. Our audit results 

found the accuracy rate of brokered claims was 69 percent. Our results also suggested 

that the national accuracy rate associated with brokered claims was 11 percent lower than 

our projection of VBA’s accuracy rate for claims reviewed by STAR. In contrast, the 

audit report supported that the accuracy of brokered claims was 18 percent lower than the 

national accuracy VBA reported for the 12-month period ending February 2008 in VA’s 

FY 2008 Performance and Accountability Report. Therefore, the OIG has chosen to 

report on the accuracy of brokered cases under the jurisdiction of offices selected for 

inspection. 

The VARO Director noted that VBA Central Office issued significant changes in 

guidance regarding the processing of TBI claims from October 2008 through January 

2009. The three TBI processing errors involved claims decided and processed prior to 

the October 23, 2008, change in criteria. As a result, the VARO should have separately 

evaluated all residual disabilities associated with TBI claims according to criteria in 

effect for these claims. Instead, VARO staff improperly combined residual disabilities to 

support one evaluation. The OIG inspection team applied the appropriate guidance to 

each claim based on the timing of the decisions under review. Inspection staff and 

VARO personnel discussed these errors and they agreed with our assessment. It is 

inconceivable that those personnel would concur if the OIG had misapplied criteria 

during our review. 

Management Controls 

Management controls assessed during this inspection included a review of VARO date 

stamp accountability, completion of Systematic Analysis of Operations (SAOs), 

 

2

Audit of Veterans Benefits Administration Compensation Rating Accuracy and Consistency Reviews (Report # 08-

02073-96), dated March 12, 2009. 
VARO Nashville, TN Inspection 

correction of errors identified by the Systematic Technical Accuracy Review (STAR) 

staff, and rotation of employees within the Claims Process Improvement (CPI) business 

model. 

VARO Nashville was compliant with current policy regarding the accountability and 

safeguarding of date stamps. We observed that the VARO properly maintained an 

accountability log for all manual date stamps and all date stamps were secured at the end 

of every business day. In addition, the VARO was compliant with completing the 

required annual SAOs to include reviewing the required operations and proposing 

corrective actions when necessary. 

2. VSC personnel failed to take appropriate action to correct VBA’s Systematic 

Technical Accuracy Review (STAR) errors. We examined the adequacy of the 

resolution of 16 errors identified by VBA’s STAR program review related to claims 

processing at the VARO between July 1, 2008, and December 31, 2008. Our analysis 

revealed 2 (13 percent) of the 16 errors were not corrected as directed by the STAR 

review staff. These VARO errors did not affect veterans’ benefits; however, they should 

have been corrected. Interviews with VARO management revealed these errors occurred 

due to a lack of oversight to ensure all corrective actions had been completed. 

Recommendation 2. We recommend the VA Regional Office Director develop a plan to 

ensure timely corrective action is taken to address errors identified by the Veterans 

Benefits Administration Systematic Technical Accuracy Review (STAR). 

Management Comment 

The VARO Director concurred with the recommendation and had initiated action to 

revamp procedures on correcting STAR errors, as recommended during the December 

2008 C&P Service Site Visit. Management has taken action to improve and streamline 

internal controls and ensure STAR errors are corrected timely. 

OIG Response 

Management comments and actions are responsive to the recommendation. 

3. VSC employees were not systematically rotated within the Claims Process 

Improvement (CPI) model. VAROs currently use the CPI model as their work 

management system. VBA’s CPI implementation plan states, “in order to maximize 

management flexibility to handle peak workloads, an orderly rotation plan must be 

developed.” In addition, VBA’s implementation plan provides a sample rotation plan 

indicating experienced Veteran Service Representatives (VSRs) will rotate from one 

specialized team to another specialized team at least once every 2 years.

VSC management stated no plan was in place to rotate employees. VARO employees 

were only rotated out of necessity, such as moving employees to other teams based on 

VA Office of Inspector General 5 
VARO Nashville, TN Inspection 

workload requirements. Currently, the VSC management leaves experienced staff on the 

post determination team. This practice does not ensure VSRs maintain the full 

complement of skills needed to process veterans claims and the practice does not adhere 

to VBA’s CPI implementation plan. 

Recommendation 3. We recommend the VA Regional Office Director rotate Veteran 

Service Representatives within the Claims Process Improvement model to maintain their 

skills. 

Management Comment 

The VARO Director concurred with our recommendation with a qualification. The 

VARO Director said employees are rotated, resources are added, or workloads are shifted 

based on workload demand to adequately address all aspects of claims processing. VSC 

management contends this approach adequately complies with the CPI directive to rotate 

employees and ensures a higher-level of competence in all areas of the CPI model. 

OIG Response 

Management comments and actions are responsive to the recommendation. While 

management believed its approach is adequate to comply with the CPI model, our 

experience shows that a more objective, disciplined and systematic approach to rotating 

staffing resources would enable them to learn all aspects of claims processing and ensure 

a high-level of competency. 

Information Security 

The OIG inspection team conducted random inspections of employee workstations and 

the VARO mailroom to determine if the VARO was compliant with VBA policies to 

safeguard veterans’ personally identifiable information. 

4. The VARO needs to improve safeguards over veterans’ personally identifiable 

information. While performing random inspections of employee workstations, we found 

an unmarked shipping box located within a common area of the VSC. The box contained 

the following materials: 

• Unique Deoxyribonucleic Acid (DNA) specimen pouches (14) each containing a 

sample of the veteran’s DNA, name, and social security number (SSN). 

• Laboratory glass vial (1) with a veteran’s name and SSN. 

• Unique dental X-rays (23) each containing the veteran’s name and SSN. 

Interviews with the VSC Senior Management and one supervisor revealed these items 

were associated with veterans’ service treatment records. VARO employees would then 

remove these items from the treatment records and place them in the box for collection. 

VA Office of Inspector General 6 
VARO Nashville, TN Inspection 

A Senior VSC Manager stated employees had been trained several years earlier to 

dispose of this type of information. However, the VBA policy letter providing this 

guidance was rescinded in March 1999. 

The coach of Triage also revealed she had instructed employees to discontinue this 

practice several weeks prior to our inspection. However, the OIG inspection team 

discovered this process had continued after the coach’s instruction to the employees. A 

Senior VSC Manager reported the Chief of Support Service would collect the box on a 

monthly basis to provide the contents to the local VA Medical Center for destruction. 

The Chief of Support Service confirmed this unwritten procedure but stated the process 

was discontinued in November 2008 because hospital staff no longer collected the items. 

VARO management disclosed VBA does not have procedures prescribing a proper 

disposal method for this type of information. Furthermore, there were no local policies 

for employees to follow when disposing of such items. Although the inspection team 

could not confirm improper destruction of these materials, the lack of an established 

procedure increased the risk of improper destruction or retention of these materials and 

inadequate protection of the veteran’s personal information. VBA’s recently published 

policy on Management of Veterans’ and other Government Paper Records does not 

clearly address proper disposition of medical information contained in veterans’ service 

treatment records. 

We additionally found personally identifiable information in training materials at two 

employees’ desks that were not redacted, which does not follow VBA policy regarding 

management of paper records. At one desk, there were more than 20 pieces of 

information, including copies of previous claim documents and letters. 

Recommendation 4. We recommend the VA Regional Office Director suspend the 

process of removing medical information from veterans’ service records until a policy is 

created to ensure proper safeguarding of veterans’ personally identifiable information. 

Management Comment 

The VARO Director concurred with our recommendation and said the Nashville RO 

always strives to protect the privacy of our veterans, but the wording used infers that the 

office does not protect PII information. The Director further noted that the OIG team 

found a closed box in a restricted area not accessible to the public, which contained Xrays, DNA packages, and a vial, which had all been removed in the course of routine 

reviews of Service Treatment Records (STRs). None of these materials were in clear 

view and no PII was violated. VBA policy guidance on the destruction of DNA material 

was rescinded in March 1999. VSC management has issued a directive to all employees 

to discontinue the practice of removing DNA material from veterans’ service records 

until VBA issues guidance. 

VA Office of Inspector General 7 
VARO Nashville, TN Inspection 

The Director further said that the RO has provided extensive training to all employees on 

safeguarding veterans’ PII information, established a records management program, 

which includes conducting desk audits and proper shredding of ALL paper records, and 

prohibits the destruction of any veteran records without the prior approval of the 

Supervisor Division Records Manager and the station Records Manager Officer.

OIG Response 

Management’s comments and actions are responsive to the recommendation. However, 

we take exception to the Director’s characterization of the circumstances surrounding our 

discovery of the box containing the DNA specimens. We actually found the box opened

and located next to a trash can. In addition, VSC management informed the inspection 

team they could not locate the box temporarily and determined that personnel contracted 

to clean office carpets had moved the box. Therefore, we concluded the box, its contents, 

and the PII information associated with the medical records were at risk for inappropriate 

disposal and/or disclosure. The OIG issued a Management Advisory Memorandum to 

VBA’s Under Secretary for Benefits recommending that VBA issue immediate guidance 

on the handling and storage of DNA specimens to all VAROs. 

5. The Triage team was not timely in picking up claims-related mail from the 

mailroom. We identified four claims submitted by veterans in a mailroom distribution 

box that were over 30 days old and not entered into the electronic record to establish the 

claim. These claims were in a box designated for claims establishment; however, the 

coach of Triage reported it was their responsibility to pick up incoming mail from the 

mailroom and she was unaware of this distribution box or the mail it contained. 

Mailroom personnel stated VSC employees placed claims-related mail requiring entry in 

the electronic record by Triage in the distribution box, and the box was not intended to 

contain documents for mailroom distribution. The Triage coach took action to establish 

each claim in the electronic record during the inspection visit; however, the lack of 

obvious distribution locations in the mailroom did not ensure that claim information was 

processed in a timely manner. 

Recommendation 5. We recommend the VA Regional Office Director ensures mail 

distribution points are clearly identified and managed to ensure timely processing of 

claim information within the Veterans Service Center. 

Management Comment 

The VARO Director concurred with our recommendation with qualification. The 

Director said this recommendation is a result of the OIG team finding a single mail slot 

placed on a high shelf in the Mailroom where the contents of the bin were not visible. 

The mail slot was established by the Triage Team a week before the OIG Site Visit and 

contained four pieces of mail. All four pieces were over 30 days old, but only one of the 

four pieces of mail required claims establishment. Two pieces of mail were received in 

VA Office of Inspector General 8 
VARO Nashville, TN Inspection 

support of existing claims. The fourth piece of mail could not be associated with an 

existing claim due to the absence of adequate identifying information. VSC management 

removed the mail slot in question while the OIG audit team was on station. 

OIG Response 

Management action was responsive as the VSC took immediate action to address the mail 

slot when the inspection team notified management. Although the VARO Director 

minimizes this situation in his comments, the fact is that 3 veterans claims were 

unnecessarily delayed because their mail was misplaced at the VARO. 

Public Contact 

The Public Contact team provides benefit information to veterans, beneficiaries, and 

congressional staff through several methods including email and correspondence. As part 

of the inspection, we reviewed congressional inquiries and VA’s Inquiry Routing and 

Information System (IRIS). In addition, we inspected Fiduciary Program team activities 

that provide oversight to veterans who are unable to adequately handle their own funds. 

VARO Nashville was compliant with VBA policy regarding the timely and accurate 

processing of congressional inquiries. This included processing congressional inquiries 

within VBA’s 5-day standard. 

6. VARO staff are not consistently providing veterans with accurate and timely 

responses to electronic inquiries. We selected 30 completed Inquiry Routing and 

Information System (IRIS) messages to determine if the VSC provided accurate and 

timely responses to veteran inquires. IRIS is VA’s internet-based public message 

management system, and is one method used by VSCs to communicate with veterans. 

Each written correspondence provided to the veteran contains an e-mail address 

(https://iris.va.gov) that provides a method for veterans to send electronic inquiries to 

VA. Generally, the inquiries request information regarding the status of a pending claim. 

Our analysis revealed 8 (27 percent) of the 30 inquiries did not follow VBA policy that 

requires accurate responses to be provided within 5 calendar days. Of the eight errors, 

four related to inaccurate responses and four exceeded the 5-day standard to respond. 

The following is an example of an inaccurate response: 

The veteran’s daughter submitted an inquiry to determine if her father was 

entitled to assisted living care from VA. The VARO responded, “The 

Privacy Act/Freedom of Information Act does not permit us to provide 

information to third parties.” 

The response should have included general benefit information to the veteran’s daughter, 

as this is not a violation of the Privacy or Freedom of Information Act. VARO 

management concurred. The inspection team was informed these errors occurred because 

VA Office of Inspector General 9 
VARO Nashville, TN Inspection 

of a staffing shortage and the VARO’s review process (entailing a quality assessment of a 

small sample of IRIS responses) did not identify these errors. 

Recommendation 6. We recommend the VA Regional Office Director develop and 

implement a plan to improve oversight of Inquiry Routing and Information System 

responses. 

Management Comment 

The VARO Director concurred with our recommendation with a qualification. The 

Director said based on the OIG review of 30 IRIS responses, the OIG audit team 

determined only 4 responses were untimely. The Director also implemented a plan to 

improve timeliness of these responses. The Public Contact Coach will monitor the 

timeliness of IRIS responses on a daily basis. Based on the OIG review of 30 IRIS 

responses, the Nashville RO determined only 1 response was inaccurate. This review 

shows the Nashville RO has a 97% accuracy rate for IRIS responses. 

OIG Response 

Management planned actions are responsive to the recommendation. However, the 

Director says that the OIG found only 4 responses to be untimely and seems to indicate 

that the Nashville VARO determined only 1 response was inaccurate. VBA’s Quality 

Control Standards and Procedures require 90 percent of IRIS responses be completed 

within 5-days. Four untimely responses equate to a timeliness rate of 87 percent, 

therefore, the Nashville VARO is not meeting VBA’s standard. 

We are puzzled by the Director’s comment on the accuracy of IRIS responses as this is 

the first indication that the Nashville VARO found only 1 response to be inaccurate. The 

inspection team discussed these responses with VARO personnel during the field visit 

and those managers agreed with the OIG assessment. Four errors equate to an 87 percent 

accuracy rate, not the 97 percent rate claimed by the Nashville Director. 

7. Controls over fiduciary activities need strengthening. We reviewed 41 Principal 

Guardianship Folder (PGF) cases that were completed during March 1, 2009, through 

April 20, 2009. 

The PGFs included the following type of fiduciary activities: 

• Initial Appointments (IA)—IAs involved the qualification and appointment of a 

fiduciary to receive VA benefits on behalf of an incompetent beneficiary. 

• Fiduciary Beneficiary (FB)—Follow-up field examinations involve the reassessment 

of incompetent veterans’ needs and determines whether funds have been properly 

used and protected. The first FB must be completed within one year of the initial 

VA Office of Inspector General 10 
VARO Nashville, TN Inspection 

appointment. Subsequent FB’s are determined by the field examiner’s assessment of 

the current status of the beneficiary and the fiduciary. 

• Accountings—Fiduciary’s written report of the management of a beneficiary’s 

income and estate. 

Our analysis revealed 19 (46 percent) of the 41 folders were not processed according to 

VBA policy. The following table reflects the number of errors by claim type (see 

Appendix C for a summary of the errors and relevant policy): 

Table 2. Fiduciary Processing Errors 

 

Claim Type Number Reviewed Number in Error Errors With Impact 

 On Veterans’ Benefits 

Initial Appointment (IA) 14 10 7 

Fiduciary Beneficiary (FB) 13 4 1 

Accountings 14 5 5 

Total 41 19 13 

Following is a description of errors that may impact the safeguarding of incompetent 

veterans’ benefits: 

Initial Appointments (IA): 

• 5 IAs—Fiduciary unit had no assurance funds were released to the claimant because 

the PGF did not contain required documentation showing when and if funds were 

actually released. 

• 1 IA—Beneficiary was not afforded the maximum benefit under Medicaid provisions. 

• 1 IA—Fiduciary unit had no assurance that a claim for additional benefits was 

adjudicated. 

Fiduciary Beneficiary (FB): 

• 1 FB—Fiduciary unit lacked assurance that funds disbursed to the payee prior to the 

scheduled FB were spent on behalf of the beneficiary. 

Accountings: 

• 3 Accountings—Fiduciary unit lacked documentation to support verification of 

beneficiaries fund controlled by the fiduciary. 

• 2 Accountings—Fiduciaries were overpaid for services rendered. VBA policy states a 

Fiduciary’s fee must not exceed 4 percent of the managed funds. 

VA Office of Inspector General 11 
VARO Nashville, TN Inspection 

The Assistant Coach of Public Contact reported he had not fully trained his staff of Legal 

Instrument Examiners (LIEs), and these errors occurred because the LIEs have not 

received adequate training. In addition, the Assistant Coach revealed VBA has not 

conducted LIE training since 2006. 

Recommendation 7. We recommend the VA Regional Office Director provide training 

to Legal Instrument Examiners emphasizing the correct procedures for processing Initial 

Appointments, Fiduciary Beneficiaries, and accountings. 

Management Comment 

The VARO Director non-concurred with our recommendation because the entire F&FE 

staff had received training during the week of the OIG Site Visit. Further, he said all 

Nashville LIEs have received the requisite 80 hours of training over the past fiscal years 

and participate in monthly training conference calls. 

The Director also said the Nashville RO follows VBA policies and procedures where 

applicable and has developed local policies and procedures, which have proven to be very 

effective and timely. The Director indicated the Nashville RO Fiduciary and Field 

Examination (F&FE) staff is compliant with all national directives, and local procedures 

are permitted and accepted practices. The Director made the following comments on the 

specific issues identified in the OIG inspection report. 

Initial Appointments (IA). Of the 14 IA field exams reviewed, 10 errors were 

cited, 7 of which were said to have affected veterans’ benefits. The OIG cited five 

errors because the PGF did not contain required documentation showing when and 

if funds were actually released and one error because the Fiduciary unit had no 

assurance that a claim for additional benefits had been adjudicated. The OIG 

noted F&FE must use a miscellaneous diary date in the Fiduciary Beneficiary 

System (FBS) to control for the release of these payments. While a miscellaneous 

diary could have been inserted into FBS to control for the release of the retroactive 

payment, there is no manual reference regarding miscellaneous diaries for the 

monitoring of award actions after the completion of the Form 21-555. 

Miscellaneous diaries for award actions are not inserted into FBS to follow up, but 

they are maintained by the F&FE Supervisor on a spreadsheet and checked every 

30 days. 

The OIG also cited one error because a beneficiary was not afforded the maximum 

benefit under Medicaid provisions. The field examiner did not identify the widow 

as a Medicaid recipient. The field examiner stated he discussed the provisions of 

the effect of Medicaid if the widow entered into a nursing home and became 

Medicaid eligible. The beneficiary was not a Medicaid recipient. 

VA Office of Inspector General 12 
VARO Nashville, TN Inspection 

Fiduciary Beneficiary (FB): Of the 13 FB field exams reviewed, four errors were 

cited, only one of which had an impact on veterans’ benefits. The Nashville RO 

concurs on the one error but does not concur with the three FB errors which did 

not affect veterans’ benefits. These were not substantive errors and had no bearing 

on benefit entitlement for the beneficiary. 

Accountings. Of the 14 accountings reviewed during the OIG’s visit, a total of 

five errors were cited, all of which were said to have impacted veterans’ benefits. 

OIG cited four errors for the Fiduciary unit lacking documentation to support 

verification of beneficiaries’ funds controlled by the fiduciary. In the cited cases, 

there is verification of the funds in the control of the payee. The four cited cases 

did verify the amount of funds on hand for the fiduciary; however, the date of 

verification was different (by a matter of days) from the end date of the accounting 

period. Per manual reference (M21-1, Part XI, 3 D b), minor discrepancies are not 

a reason to disallow an accounting if all other aspects of the accounting are 

complete and accurate. There were no discrepancies in the accounting balances 

and the accounting itself did not have any questionable entries or expenditures. 

OIG Response 

The VARO Director stated LIE’s had received the requisite number of training hours 

over the past fiscal year. However, the fiduciary supervisor informed the inspection team 

that LIEs had not been fully trained in all aspects of their jobs and that he intended to 

give more training to LIEs because previous training focused on Field Examiners. We 

agree that the entire F&FE unit received training while the OIG team was on-site. 

However, the errors were associated with claims processed prior to completing this 

training. Although the Director did not concur with the recommendation, he has actually 

taken the recommended action. Therefore, we accept this action as a concurrence and 

will evaluate the effectiveness of the most recent training during a future follow-up site 

inspection. 

The following OIG responses address each of the VARO Director’s concerns regarding 

fiduciary errors: 

• VARO Nashville disagreed with five IA errors stating no manual citation requires the 

Fiduciary Unit to track the release of retroactive payments (miscellaneous diary dates 

in FBS). However, the LIE Program Guide states “Always diary for follow-up when 

you request referrals to the VSC for action to change benefits or competency status.” 

The LIE Program Guide also states “local methods for follow-up are acceptable; use 

of the FBS Miscellaneous Due Report is recommended for diaries. This will ensure 

that managers and other fiduciary personnel are aware as diary dates mature in the 

event that you are unavailable due to illness, vacation, or other absence.” In a VBA 

Fiduciary teleconference held April 19, 2007, transcripts revealed, “local controls can 

be used, however, the PGF must have clear evidence of the diary to include the date 

VA Office of Inspector General 13 
VARO Nashville, TN Inspection 

the diary comes due.” The Assistant Coach of Public Contact used a locally created 

spreadsheet kept on a personal drive of his work computer to which no other staff had 

access. This spreadsheet had no entries indicating a future date (diary) to show when 

funds were to be released to the fiduciary. This spreadsheet, maintained outside 

official files and not accessible to other staff, clearly does not meet the requirement 

for PGF’s to include clear evidence. 

• VARO Nashville disagreed with one IA stating “the field examiner did not identify 

the widow as a Medicaid recipient.” This is incorrect. The field examiner’s written 

report stated “she is enrolled in the TN State Medicaid program for healthcare and 

medication.” C&P policy states “if Medicaid is paying the expenses of nursing 

facility care, the facility qualifies as a “nursing facility”. Therefore, the field 

examiners statement clearly identified the widow as a Medicaid recipient. 

• VARO Nashville disagreed with one IA where the inspection team indicated the 

Fiduciary unit had no assurance that a claim for additional benefits had been 

adjudicated. The fiduciary unit was aware the beneficiary submitted a claim to the 

VSC for additional benefits but had no assurance the claim had been processed. The 

LIE Program Guide states “Always diary for follow-up when you request referrals to 

the VSC for action to change benefits.” The LIE failed to properly track this action in 

FBS. 

• VARO Nashville disagreed with three Accountings where the inspection team 

indicated there was a lack of documentation to support verification of beneficiaries’ 

funds controlled by the fiduciary. C&P policy (M21-1 XI, Chapter 3, Section C 

14(a)) states, “individual fiduciaries who are required to account, must furnish 

verification of VA and non-VA estate funds on deposit in banks and other financial 

institutions as of the ending date of the accounting period.” In addition, the LIE 

Program Guide states “an acceptable verification of deposit must verify funds as of 

the ending date of the accounting.” The PGFs reviewed did not contain evidence that 

the funds on deposit with the fiduciary were verified on the ending date of the 

accounting period. We do not consider this a minor discrepancy as even low dollar 

differences in accountings and verifying deposits could allow a dishonest fiduciary to 

manipulate accounting records. C&P policy further states, “38 U.S.C. 6107 makes 

clear VA's duty to perform timely analysis of accountings from fiduciaries. When a 

misuse determination has been made, VA's failure to timely analyze a fiduciary's 

accounting will be considered in determining whether VA was negligent in 

supervising the fiduciary.” The manual citation provided by VARO Nashville applies 

to verifying mathematical accuracy on accountings, not the need to verify funds on 

deposit. The citation used by the inspection team applies to the verification of 

balance on deposit at the end of the accounting period. 

Recommendation 8. We recommend the VA Regional Office Director take the 

appropriate action to recover the funds overpaid to Fiduciaries. 

VA Office of Inspector General 14 
VARO Nashville, TN Inspection 

Management Comment 

The VARO Director provided the following comment to our recommendation: 

Nashville RO Response: Concur. Explanation: We will take appropriate action to 

recover overpaid funds. 

OIG Response 

We consider management actions to recover overpaid funds to Fiduciaries as responsive 

to our recommendation. 

Data Integrity 

We assessed data integrity by reviewing VBA’s Control of Veterans Records System 

(COVERS) to determine if the VARO is accurately tracking the location of veterans’ 

claims folders. We reviewed claim folders to determine if the VARO is also complying 

with VBA policy regarding the correct establishment of date of claim in the electronic 

record. The date of claim is generally used to indicate when a document arrives at a 

specific VA facility. Also, VBA relies on an accurate date of claim to establish a key 

performance measure to determine the average days to complete a claim.

The Nashville VARO is following VBA and local policies governing the use of 

COVERS to track and identify claims. Our review of 30 claims folders revealed all were 

accurately entered into COVERS and the physical location of each folder was properly 

recorded. 

8. VARO staff established the incorrect date of claim. We selected 30 disability 

claims to determine if the VSC established the correct date of claim in the electronic 

record. Our analysis revealed 3 (10 percent) of the 30 claims contained the incorrect date 

of claim. However, we saw no evidence indicating the incorrect dates of claim were 

established with intent to inappropriately improve VARO performance standards. VARO 

management corrected the deficiencies prior to completion of the site inspection. 

Observations 

Observations pertain to issues that may affect benefits delivery or diminish VARO 

performance but are not specifically compliance-related issues. Several observations 

were noted during the on-site inspection: 

• Workload Credit for Unfinished Claims. VARO Nashville took credit for completing 

fiduciary claims prior to all work associated with those claims being finished. VBA 

policy states “work should be completed as soon as practical.” VARO management 

indicated the policy does not clearly outline a specific standard as to when the work 

credit should be taken or if all work associated with a fiduciary claim must be 

VA Office of Inspector General 15 
VARO Nashville, TN Inspection 

VA Office of Inspector General 16 

completed prior to taking credit for completing the claim. For example, VARO 

Nashville took work credit for one claim, however, work continued on that claim for 

an additional 21 days. 

Because the claims are ultimately completed, we did not find that the VARO was 

non-compliant with procedures regarding when work credit should be taken. 

However, we are providing this observation as a practice to be aware of because once 

the work credit has been taken, there is no control to ensure the completion of 

additional internal actions associated with fiduciary estate administration. 

Furthermore, senior VBA leadership does not receive accurate information relating to 

the actual time required to complete fiduciary claims. 

• Brokered Claims. VBA has established a brokering plan that allows VAROs to send 

(broker) claims that are designated as ready-to-rate to other VAROs for processing. 

VAROs that broker claims typically do not have the rating capacity to complete such 

work in a specific time. VARO Nashville brokered 1,792 rating related claims to 

other VAROs for processing. 

In March 2009,3

 we reported that the STAR quality assurance process does not 

provide a complete assessment of compensation claim rating accuracy, partially 

because it excluded brokered claims from STAR reviews. The accuracy of brokered 

claims was 18 percent lower than the national accuracy VBA reported for the 

12-month period ending February 2008 in VA’s FY 2008 Performance and 

Accountability report. VBA agreed to establish procedures for reviewing quality of 

brokered claims in response to the audit recommendations. However, until those 

procedures are in place brokered claims do not receive the scrutiny of a quality 

assurance review. Therefore, the OIG will review brokered claims for errors and 

report those errors in the inspection reports for the VARO with jurisdiction of those 

claims. 

• PTSD Evidence. We identified five PTSD claims that were denied because there was 

a lack of evidence to document the occurrence of a stressful event which is required to 

properly grant service connection for PTSD. VBA policy (M21-1MR Part IV, subpart 

ii, Chapter 1, section D 16 (a) & (b)) states a formal finding must be prepared by the 

Joint Service Records Research Center (JSRRC) Coordinator and approved by the 

Veterans Service Center Manager (VSCM) or his/her designee when there is a lack of 

sufficient information in the claims folder to document the occurrence of a stressful 

event. 

The JSRRC Coordinator correctly prepared the formal finding memorandum. 

However, neither the VSCM nor a designee other than the JSRRC Coordinator 

approved this formal finding. The VSCM stated his interpretation of the policy 

 

3

Audit of Veterans Benefits Administration Compensation and Rating Accuracy and Consistency Reviews (Report 

No. 08-02073-96, March 12, 2009.) 
VARO Nashville, TN Inspection 

allows the JSSRC Coordinator to prepare and approve the finding. Although VARO 

management disagreed with these errors, it is our position the intent of this policy is to 

provide for separation of duties to ensure a thorough independent review of the 

evidence before a claim is denied for lack of a verifiable stressor. Lack of separation 

of duties by VARO management creates risk for potential errors to go undetected in 

this area. 

Management Comment on Observations 

The VARO Director concurred that STAR errors incurred by brokered sites should not be 

counted against the Nashville VARO. However, the VARO Director did not concur with 

our observation regarding the issue of separation of duties between the JSRRC 

Coordinators and the VSCM. The VARO Director stated the Nashville RO is in 

compliance with all manual provisions concerning JSRRC Coordinator duties, including 

separation of duties. 

OIG Response to Director’s Comments for Observations 

Observations pertain to issues that may affect benefits delivery or diminish VARO 

performance but are not specifically compliance-related issues. The Director of VARO 

Nashville provided responses to our observations, although comments to observations are 

not required. However, we will address the Director’s concerns.

Although the Director concurred that brokered errors should not count against the 

Nashville VARO, these errors negatively impact the delivery of benefits regardless of 

where the claims are processed. Veterans are concerned only with accurate and timely 

claims processing, not with which VARO processed their claim. The OIG has chosen not 

to use the same methodology as the STAR program which excludes brokered claims from 

accuracy reviews. Therefore, we report all errors found during inspection reviews, 

although we footnoted the errors we identified to indicate that other VARO’s processed 

some of the claims found to have errors. 

The VARO Director contends that Nashville is in compliance with all manual provisions 

concerning the separation of duties between the JSRRC Coordinator and the VSCM 

regarding completion of a formal finding verifying the lack of a stressful event to grant 

service connection for PTSD. VBA policy (M21-1MR Part IV, subpart ii, Chapter 1, D 

(16)) states the following action is to be completed by the JSRRC Coordinator: 

“The JSRRC coordinator will make a formal finding regarding the lack of 

sufficient information in the claims folder to document the occurrence of 

the stressful event(s) and the veteran’s involvement in it.” 

The policy then describes the following requirement for a formal finding: 

“The formal finding must be approved by the Veterans Service Center 

Manager (VSCM) or his/her designee, should be on a separate page to be 

VA Office of Inspector General 17 
VARO Nashville, TN Inspection 

VA Office of Inspector General 18 

filed in the claims folder, should note the actions taken to obtain the 

required information, and that the information required to document the 

stressful event(s) is unavailable.” 

The VARO Director stated that formal findings of unavailability were co-signed by other 

JSRRC Coordinators. In our opinion, having coworkers sign off on determinations 

violates the separation of duties internal control principle. For the control to be effective, 

a supervisor outside the JSRRC should be approving the determination that evidence is 

not available to verify the claimed stressful event. 
VARO Nashville, TN Inspection 

Appendix A 

 

VA Office of Inspector General 19 

VARO Profile 

Organization. As of March 2009, the Nashville VARO is responsible for delivering 

non-medical VA benefits and services to veterans and their families in Tennessee and 

Fort Campbell Military Base in Kentucky. This is accomplished through the 

administration of Compensation and Pension Benefits (C&P), Vocational Rehabilitation 

and Employment (VR&E) Assistance, Burial Benefits, and Outreach activities. In 

addition, the Nashville VARO maintains several out-based offices throughout Tennessee 

that provide claims processing activities for Fiduciary Field Examiners, VR&E, and 

Benefits Delivery at Discharge (BDD). 

Other VA programs and support services co-located with the VARO are Loan Guaranty 

(Home Loan), Education Services, and a Nashville Call Center. The call center provides 

services for Georgia, North Carolina, South Carolina, Virginia, West Virginia, Kentucky, 

Tennessee, and portions of Florida. 

Resources. As of March 2009, the VARO had a staffing level of 363 Full-Time 

Employees (FTE). Of the 363 FTE, 260 (72 percent) were assigned to the VSC. 

Workload. As of the 2nd quarter of FY 2009, the VARO had 8,175 pending C&P claims 

that took an average of 147.8 days to complete. Accuracy, as reported by VBA’s STAR, 

for C&P rating and authorization related issues was 90.7 percent and 98.3 percent 

respectively. According to VBA, accuracy for fiduciary-related activities was 

96.4 percent. As of April 2009, VARO Nashville brokered 1,792 rating claims to other 

VAROs to process. 

Scope of the Inspection 

Scope. We reviewed select management controls, benefits claims processing, and 

administrative activities to evaluate if the VARO is following VBA policies as they relate 

to benefits delivery and non-medical services provided to veterans. 

In performing the inspection, we interviewed managers and employees, reviewed 

veterans claim folders, and inspected work areas. We did not inspect any of the outbased offices or examine work processed at these locations. The disability claims 

processing review covered VARO operations from October 1, 2008, through 

March 31, 2009. STAR reviews covered cases reported as errors by STAR staff from 

July 1, 2008 through December 31, 2008. IRIS reviews covered veteran inquiries 

received at the VARO from October 1, 2008 to March 30, 2009. Fiduciary activities 

review covered cases completed from March 1, 2009, to April 20, 2009. The reviews 

were done in accordance with the President’s Council for Integrity and Efficiency’s 

Quality Standards for Inspections. 
VARO Nashville, TN Inspection 

Appendix A 

 

VA Office of Inspector General 20 

The inspection covered 15 operational activities in the 5 protocol areas of claims 

processing, data integrity, management controls, information security, and public contact, 

as detailed in Table 3 that follows: 

Table 3. Protocols With Activities Reviewed. 

Inspection Protocols 

Claims 

Processing 

Data 

Integrity 

Management 

Controls 

Information 

Security 

Public 

Contact 

15 Activities Reviewed 

1. Haas Claims 5. Date of Claim 7. Systematic 

Analysis of 

Operations 

(SAO) 

11. Mail 

Handling 

Procedures 

13. Inquiry 

Routing and 

Information 

System (IRIS) 

2. Post-traumatic 

Stress Disorder 

(PTSD) Claims 

6. Control of 

Veterans Record 

System 

(COVERS) 

8. Systematic 

Technical 

Accuracy Review 

(STAR) 

Compliance 

12. Destruction of 

Documents 

14. Congressional 

Inquiries 

3. Traumatic 

Brain Injury 

(TBI) Claims 

9. Employee 

Rotation in 

Claims Process 

Improvement 

(CPI) Model 

15. Fiduciary 

4. Diabetes 

Claims 

10. Date Stamp 

Accountability 
VARO Nashville, TN Inspection 

Appendix B 

VA Office of Inspector General 21 

Department of 

Veterans Affairs Memorandum

Date: September 2, 2009 

From: Director, VA Regional Office 

Subj: Benefits Inspection Division, OIG Visit 

To: Assistant Inspector General for Audit (52) 

1. Attached is the Nashville Regional Office revised response to the OIG Draft Report: 

Benefits Inspection Division, OIG Visit. 

2. Questions may be referred to Shelley Mullins, Senior Management Analyst at (615) 

695-6005. 

(original signed by:) 

 Brian Corley 

Attachment
VARO Nashville, TN Inspection 

Appendix B 

VA Office of Inspector General 22 

The following Director’s comments are submitted in response to the recommendation(s) 

in the Office of Inspector General’s Report: Inspection of VARO Nashville, TN. 

The VA Office of the Inspector General (OIG) visited the Nashville Regional Office 

(RO) April 20, 2009, through April 24, 2009. This paper outlines the Nashville RO 

concerns regarding the visit. 

Prior to this visit, the OIG informed the Nashville RO that they would review 

approximately 225 claims folders. While on-station, the OIG reviewed 267 cases, as 

documented in the OIG’s “Inspection of VA Regional Office Nashville Exit Briefing,” 

dated April 24, 2009. The draft report indicates a sample size of 177 cases. 

The table below illustrates the difference between the sample size of cases reviewed 

while on-station compared to the number of cases cited in the OIG’s draft report. 

OIG On-Station 

Review OIG Draft Report OIG Draft Report 

Claim Type 

Claims 

Reviewed Errors Claims Reviewed Errors Claims Brokered 

Nashville

Errors 

Haas 16 8 16 8 1 8 

PTSD 60 31 30 9 4 5 

TBI 60 8 30 3 0 3 

Diabetes 60 2 30 0 0 0 

F&FE Initial Appointments (IA) 14 11 14 10 0 10 

F&FE Fiduciary Beneficiary (FB) 13 6 13 4 0 4 

F&FE Accountings 14 5 14 5 0 5 

IRIS 30 10 30 8 0 8 

TOTALS 267 81 177 55 5 43 

Nashville RO leadership is concerned that the OIG's decision to decrease the sample size 

may not have allowed for a statistically valid sample and will not portray an accurate 

representation of station performance. 

OIG Recommendation 1: The VA Regional Office Director provide refresher training 

emphasizing the correct procedures for processing Haas, PTSD, and TBI cases for 

Veteran Service Center personnel. 

Nashville RO Response: Concur, with qualification. 

Refresher training on these topics was conducted on the following dates: 

• 07-09-09, TBI training for all RVSRs and DROs. 
VARO Nashville, TN Inspection 

Appendix B 

VA Office of Inspector General 23 

• 07-16-09, PTSD training for all RVSRs and DROs. 

• Haas TBD 

Haas Claims: Of the sixteen Haas claims reviewed during the OIG’s visit, a total of eight 

errors were cited. One of the eight errors did not have an impact on veterans’ benefits. 

Of the remaining seven cases, one was completed at a brokered work site and should not 

be considered an error committed by the Nashville RO. Concur with the remaining 

errors. The RO has concerns that the review of only sixteen Haas Claims is not a valid 

sample size and is not indicative of overall accuracy in processing these types of claims. 

PTSD Claims: Of the nine errors cited by OIG, only four affected veterans’ benefits, two 

of which were completed at brokered sites. Concur with the remaining errors completed 

by the Nashville RO. 

TBI Claims: Of the thirty TBI claims reviewed during the OIG’s visit, a total of three 

errors were cited. The VSC refuted several of the errors which were initially called. As a 

result, OIG’s draft report notes three errors. 

Concur on these errors, however, these three cases were rated and promulgated well 

before significant changes occurred in the regulations governing how VBA rated TBI 

cases. The three cases in error were completed on the following dates: October 3, 2008, 

October 8, 2008, and November 3, 2008. OIG used current TBI criteria to audit claims 

rated by the Nashville RO prior to the latest instruction from VACO. The following 

guidance was issued by C&P service on TBI this fiscal year: 

• 10/22/08—Availability of TBI Rating Demonstration Video on RBA 2000 and Rating 

Job Aids Page 

• 10/24/08—Fast Letter 08-36 Final Rule: Schedule for Rating Disabilities; Evaluation 

of Residuals of TBI 

• 10/29/08—TBI Examination Worksheet Updated 

• 01/14/09—Fast Letter 09-02 TBI Outreach Letter (Rev. 2-18-09) 

• 01/21/09—Training Letter 09-01, Evaluating Residuals of TBI under Revised Criteria 

OIG Recommendation 2: The VA Regional Office Director develop a plan to ensure 

timely corrective action is taken to address errors identified by the Veterans Benefits 

Administration Systematic Technical Accuracy Review (STAR). 

Nashville RO Response: Concur. The Nashville RO is already in the process of 

revamping procedures on correcting STAR errors, as recommended during the December 

2008 C&P Service Site Visit. Management has taken action to improve and streamline 

internal controls and ensure STAR errors are corrected timely. 
VARO Nashville, TN Inspection 

Appendix B 

VA Office of Inspector General 24 

OIG Recommendation 3: The VA Regional Office Director rotate Veteran Service 

Representatives within the Claims Processing Improvement model to maintain their 

skills. 

Nashville RO Response: Concur, with qualification. 

Employees are rotated, resources are added, or workload is shifted to adequately address 

all aspects of claims processing, based on workload demand. VSC management contends 

this approach adequately complies with the CPI directive to rotate employees and ensures 

a high-level of competence in all areas of the claims processing model. 

OIG Recommendation 4: The VA Regional Office Director suspend the process of 

removing medical information from veterans’ service records until a policy is created to 

ensure proper safeguarding of veterans’ personally identifiable information. 

Nashville RO Response: Concur. 

This recommendation is a result of the OIG team finding a closed box in a restricted area 

not accessible to the public which contained X-rays, DNA packages, and a vial which had 

all been removed in the course of routine reviews of Service Treatment Records (STRs). 

None of these materials were in clear view and no PII was violated. VBA policy 

guidance on the destruction of DNA material was rescinded in March 1999. VSC 

management has issued a directive to all employees to discontinue the practice of 

removing DNA material from veterans’ service records until VBA issues guidance. 

The Nashville RO always strives to protect the privacy of our veterans. The wording used 

infers we do not protect PII information. We have provided extensive training to all 

employees on safeguarding veterans’ PII information. We have established a records 

management program which includes conducting desk audits and proper shredding of 

ALL paper records. We prohibit the destruction of any veteran records without the prior 

approval of the Supervisor Division Records Manager, and the station Records Manager 

Officer. 

OIG Recommendation 5: The VA Regional Office Director ensures mail distribution 

points are clearly identified and managed to ensure timely processing of claim 

information within the Veterans Service Center. 

Nashville RO Response: Concur, with qualification. 

This recommendation is a result of the OIG team finding a single mail slot placed on a 

high shelf in the Mailroom where the contents of the bin were not visible. The mail slot 

was established by the Triage Team a week before the OIG Site Visit and contained four 

pieces of mail. All 4 pieces were over 30 days old, but only 1 of the 4 pieces of mail 

required claims establishment. Two pieces of mail were received in support of existing 
VARO Nashville, TN Inspection 

Appendix B 

VA Office of Inspector General 25 

claims. The fourth piece of mail could not be associated with an existing claim due to the 

absence of adequate identifying information. 

VSC management has removed the mail slot in question. This task was completed while 

the OIG audit team was on-station. There were no other deficiencies noted by the audit 

team. 

OIG Recommendation 6: The VA Regional Office Director develop a plan to improve 

oversight of Inquiry Routing and Information System responses. 

Nashville RO Response: Concur, with qualification. 

Based on the OIG review of 30 IRIS responses, the OIG audit team determined only 4 

responses were untimely. We have already implemented a plan to improve our 

timeliness. The Public Contact Coach is monitoring the timeliness of IRIS responses on 

a daily basis. 

Based on the OIG review of 30 IRIS responses, the Nashville RO determined only 1 

response was inaccurate. This review shows the Nashville RO has a 97% accuracy rate 

for IRIS responses. 

OIG Recommendation 7: The VA Regional Office Director provide training to Legal 

Instrument Examiners emphasizing the correct procedures for processing Initial 

Appointments, Fiduciary Beneficiaries, and accountings. 

Nashville RO Response: Nonconcur. 

The Nashville RO follows VBA policies and procedures where applicable and has 

developed local policies and procedures which have proven to be very effective and 

timely. The Nashville RO F&FE is compliant with all national directives, and our local 

procedures are permitted and accepted practices. 

The OIG Draft Report states the Assistant Coach of Public Contact reported he had not 

fully trained his staff of Legal Instrument Examiners (LIEs) and these errors occurred 

because the LIEs have not received adequate training. All Nashville LIEs have received 

the requisite 80 hours of training over the past fiscal years. The LIEs participate in 

monthly training conference calls and the entire F&FE unit was on station for training 

during the week of the OIG Site Visit. 

Initial Appointments (IA): Of the 14 IA field exams reviewed, 10 errors were cited, 7 of 

which were said to have affected veterans’ benefits. The OIG cited 5 errors because the 

PGF did not contain required documentation showing when and if funds were actually 

released and 1 error because the Fiduciary unit had no assurance that a claim for 

additional benefits had been adjudicated. The OIG noted F&FE must use a 
VARO Nashville, TN Inspection 

Appendix B 

VA Office of Inspector General 26 

miscellaneous diary date in the Fiduciary Beneficiary System (FBS) to control for the 

release of these payments. While a miscellaneous diary could have been inserted into 

FBS to control for the release of the retroactive payment, there is no manual reference 

regarding miscellaneous diaries for the monitoring of award actions after the completion 

of the 21-555. Miscellaneous diaries for award actions are not inserted into FBS to 

follow up, but are maintained by the F&FE Supervisor on a spreadsheet and checked 

every 30 days. 

The OIG also cited one error because a beneficiary was not afforded the maximum 

benefit under Medicaid provisions. The field examiner did not identify the widow as a 

Medicaid recipient. The field examiner stated he discussed the provisions of the effect of 

Medicaid if the widow entered into a nursing home and became Medicaid eligible. The 

beneficiary was not a Medicaid recipient. 

Fiduciary Beneficiary (FB): Of the 13 FB field exams reviewed, 4 errors were cited, 

only 1 of which had an impact on veterans’ benefits. The Nashville RO concurs on this 1 

error, but does not concur with the 3 FB errors which did not affect veterans’ benefits. 

These were not substantive errors and had no bearing on benefit entitlement for the 

beneficiary. 

Accountings: Of the 14 accountings reviewed during the OIG’s visit, a total of 5 errors 

were cited, all of which were said to have impacted veterans’ benefits. OIG cited four 

errors for the Fiduciary unit lacking documentation to support verification of 

beneficiaries fund controlled by the fiduciary. In the cited cases, there is verification of 

the funds in the control of the payee. The four cited cases did verify the amount of funds 

on hand for the fiduciary; however, the date of verification was different (by a matter of 

days) from the end date of the accounting period. Per manual reference (M21-1, Part XI, 

3 D b), minor discrepancies are not a reason to disallow an accounting if all other aspects 

of the accounting are complete and accurate. There were no discrepancies in the 

accounting balances and the accounting itself did not have any questionable entries or 

expenditures. 

The OIG cited one case, alleging the fiduciary was overpaid for the services provided. 

The amount of funds garnished from VA fees by the fiduciary was not excessive. The 

fiduciary appointed in this case is a professional organization which collects fiduciary 

fees one month in arrears. This practice has never been questioned by the F&FE STAR 

staff and is not considered to be unclaimed fees as stated by the OIG in their response 

spreadsheet. 

OIG Recommendation 8: OIG recommended the VA Regional Office Director take the 

appropriate action to recover the funds overpaid to Fiduciaries. 

Nashville RO Response: Concur. 
VARO Nashville, TN Inspection 

Appendix B 

VA Office of Inspector General 27 

Explanation: We will take appropriate action to recover overpaid funds. 

Observation Responses

Brokered Claims: VBA’s STAR quality process does not review brokered claims for 

quality assurance. Thus, VBA does not have a quality assurance program to review such 

work. During our review of claims processing, five of the claims were brokered to other 

ROs and all were in error. Therefore, those claims processed in error could not be 

attributed to the Nashville RO and would not have been identified by VBA. We plan to 

examine this issue further in future inspections of other ROs. 

Nashville RO Response: Concur that STAR errors incurred by brokered sites should not 

be counted against the Nashville RO; however, all five brokered cases were cited as 

Nashville RO errors in the OIG Draft Report (one Haas case and four PTSD cases). 

PTSD Evidence: The JSRRC Coordinator correctly prepared the formal finding 

memorandum. However, neither the VSCM nor a designee other than the JSRRC 

approved this formal finding. The VSCM stated his interpretation of the policy allows 

the JSSRC Coordinator to prepare and approve the finding. Although RO management 

disagreed with these errors, it is our position the intent of this policy is to provide for 

separation of duties to ensure a thorough independent review of the evidence before a 

claim is denied for lack of a verifiable stressor. Lack of separation of duties by RO 

management creates risk for potential errors to go undetected in this area. 

Nashville RO Response: Nonconcur.

M21-1 MR IV.ii.1.D.16 notes a formal finding should be made by the JSRRC 

Coordinator and approved by the VSCM. All files reviewed by the OIG concerning this 

issue properly contained memos signed by JSRRC Coordinators, as designated by the 

VSCM, and were co-signed by a different JSRRC Coordinator, also as designated by the 

VSCM. The JSRRC Coordinators are the approved VSCM designees to sign these 

formal findings. Thus, Nashville RO is in compliance with all manual provisions 

concerning JSRRC Coordinator duties, including separation of duties. 
 VARO Nashville, TN Inspection 

Appendix C 

Inspection Summary 

VA Office of Inspector General 28 

Reasonable 

Assurance 

of 

Compliance 

15 Activities 

Inspected Criteria 

Yes No 

Claims Processing 

1. Haas Determine if claims identified as a Haas claim were properly identified and if service 

connection was correctly granted or denied. (38 CFR 3.313) (M21-1MR Part IV, 

subpart ii, Chapter 1, Section H) ( Fast Letter 09-07 and 06-26) 

X 

2. Post-traumatic 

Stress Disorder 

(PTSD) 

Determine whether service connection for PTSD was correctly granted or denied. 

(M21-1MR Part III, Subpart iv, Chapter 4, Section H.28.B) X 

3. Traumatic Brain 

Injury (TBI) 

Determine whether service connection for TBI and all residual disabilities was correctly 

granted or denied. (Fast Letters 08-34 and 36, Training Letter 09-01) X 

 4. Diabetes Determine whether service connection for Diabetes related to herbicide exposure 

(Agent Orange) and all related disabilities were correctly granted or denied. (38 CFR 

4.119) (Fast letter 02-33) (M21-1MR Part III, Subpart iv, Chapter 4, Section F) 

X 

Data Integrity

5. Date of Claim Determine if VAROS accurately record the correct date of claim in electronic records. 

(M21-1MR, Part III, Subpart ii, Chapter 1, Section C) 

 X 

6. Control Of 

Veterans Records 

System (COVERS) 

Determine if VAROs are complying with the use of COVERS to track claims folders. 

X 

 

Management Controls

7. Systematic 

Analysis of 

Operations (SAO) 

Determine if VAROs are performing a formal analysis of their operations through 

completion of SAOs. (M21-4, Chapter 5) X 

 

8. Systematic 

Technical 

Accuracy Review 

(STAR) 

Determine if VAROs timely and accurately correct STAR errors. (M21-4, 3.03) 

X 

9. Date Stamp 

Accountability 

To determine if VAROs are accounting and safeguarding date stamps. (M23-1 1.12, b. 

(1), (2), (3), (4)) (VBA Letter 20-09-10 Revised dated 3-19-09) X 

10. Claims Process 

Improvement (CPI) 

Determine if VAROs are complying with VBA’s CPI Implementation Plan 08-05. X 

Information Security

11. Mail Handling 

Procedures 

Determine if VAROs are complying with mail handling procedures. (M23-1) (M21-4, 

Chapter 4) (M21-1MR Part III, Subpart ii, Chapter 1 & 4) X 

12. Destruction of 

Documents 

Determine if VAROs are complying with VBA policy regarding proper destruction of 

documents. (VBA Letter 20-08-63 dated November 14, 2008) X 

Public Contact 

13. Inquiry Routing 

and Information 

System (IRIS) 

Determine if IRIS responses are accurately and timely processed. (Fast Letter 06-10) 

X 

14. Congressional 

Inquiries 

Determine if Congressional Inquiries are timely processed. (OFO Letter 201-02-60) 

(OFO Letter 201-02-64) (Fast Letter 01-40) (VA Directive 8100) X 

15. Fiduciary Determine if the Fiduciary unit is properly overseeing the welfare of beneficiaries to 

include protecting their assets, assuring their benefit entitlement rights, and selecting 

and monitoring the best suited fiduciary. (38 CFR 13.100-13.111) ( M21-1MR, Part 

XI) (FBS Users Guide) (LIE Program Guide) 

X 
VARO Nashville, TN Inspection 

Appendix D 

OIG Contacts and Staff Acknowledgments 

VA Office of Inspector General 29 

OIG Contact Brent Arronte (727) 395-2436 

Acknowledgments Kristine Abramo 

Brett Byrd 

Robert Campbell 

Danny Clay 

Kelly Crawford 

Maya Ferrandino 

Karen Gooden 

Kerri Leggiero-Yglesias 

Lisa Van Haeren 
VARO Nashville, TN Inspection 

Appendix E 

Report Distribution 

VA Office of Inspector General 30 

VA Distribution

Office of the Secretary 

Veterans Benefits Administration 

Assistant Secretaries 

Office of General Counsel 

VBA Eastern Area Director 

VARO Nashville Director 

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 

U.S. Senate: Lamar Alexander, Bob Corker 

U.S. House of Representatives: David Philip Roe, John J. Duncan, Zach Wamp, Lincoln 

Davis, Jim Cooper, Bart Gordon, Marsha W. Blackburn, John Tanner, Steve Cohen 

This report will be available in the near future on the OIG’s Web site at 

http://www.va.gov/oig/publications/reports-list.asp. This report will remain on the OIG 

Web site for at least 2 fiscal years after it is issued.