United States General Accounting Office

GAO Report to the Chairman, Subcommittee

on Education, Training, Employment,

and Housing, Committee on Veterans’

Affairs, House of Representatives

September 1996 VOCATIONAL

REHABILITATION

VA Continues to Place

Few Disabled Veterans

in Jobs

G O A

years

1921 - 1996

GAO/HEHS-96-155

GAO United States

General Accounting Office

Washington, D.C. 20548

Health, Education, and

Human Services Division

B-270415 

September 3, 1996

The Honorable Stephen E. Buyer

Chairman, Subcommittee on Education,

 Training, Employment, and Housing

Committee on Veterans’ Affairs

House of Representatives

Dear Mr. Chairman:

Veterans with disabilities resulting from their service in the military often

need help in obtaining and maintaining employment. Since the 1940s, the

Department of Veterans Affairs (VA), previously the Veterans

Administration, has provided training to veterans with service-connected

disabilities to help improve their employability. In 1980, the Congress

enacted the Veterans’ Rehabilitation and Education Amendments, which

changed the focus of the veterans’ vocational rehabilitation program from

just providing training to improve the employability of disabled veterans to

helping them find and maintain suitable jobs.1

 However, in 1984 and again

in 1992, we reported and VA agreed that the vocational rehabilitation

program was still primarily focused on sending veterans to training, not on

finding veterans suitable employment.2

 In fiscal year 1995, VA spent about

$300 million to provide program services to about 48,000 veterans.

This letter responds to your concerns about whether VA’s vocational

rehabilitation program is achieving one of its primary goals of helping

disabled veterans obtain suitable jobs. Specifically, you requested that we

provide information on the status of the program—percentage of

rehabilitated veterans, services provided, characteristics of clients served,

and cost of rehabilitation.3

 You also asked us to provide similar

information on the Department of Education’s state vocational

rehabilitation program. Although both VA and Education programs are

designed to help disabled people obtain employment, significant

differences exist between the two in the kinds of clients served, the types

of services provided, and how successful rehabilitations are defined (for

example, under the state program, a suitable job can be a nonwage-earning

1

VA defines a suitable job as a position consistent with the veteran’s aptitudes, abilities, and interests.

2

VA Can Provide More Employment Assistance to Veterans Who Complete Its Vocational

Rehabilitation Program (GAO/HRD-84-39, May 23, 1984); Vocational Rehabilitation: Better VA

Management Needed to Help Disabled Veterans Find Jobs (GAO/HRD-92-100, Sept. 4, 1992).

3

Disabled individuals who obtain and maintain a suitable job for at least 60 days are classified as

“rehabilitated.”

Page 1 GAO/HEHS-96-155 VA’s Vocational Rehabilitation Program
B-270415 

position). For these reasons, we did not attempt to compare the two

programs. In addition, you asked us to identify VA efforts to improve

program effectiveness.

To address your request, we met with VA and Department of Education

officials responsible for managing their respective vocational

rehabilitation programs. We reviewed legislation, regulations, program

operating procedures, and program management reports. We also

analyzed national data on program participants and visited VA regional

offices and state rehabilitation agencies in four localities to obtain

examples from selected program case files of costs and services provided.

We did our work between September 1995 and July 1996 in accordance

with generally accepted government auditing standards. (See app. I for a

more detailed discussion of our methodology.)

Results in Brief Despite the 1980 legislation requiring VA to focus its rehabilitation program

on finding disabled veterans suitable employment and subsequent GAO

reports recommending that VA implement this legislation, VA continues to

place few veterans in jobs. For example, over the last 5 years (1991-1995),

VA rehabilitated about 8 percent of the approximately 74,000 veterans

found eligible for vocational rehabilitation program services, while about

50 percent of the eligible veterans continued to receive program services.

VA officials told us that the percentage of veterans classified as

rehabilitated is low because the program does not focus on providing

employment services. Instead, VA continues primarily to send veterans to

training, particularly to higher education programs.

Moreover, our analysis of national program data showed that the

characteristics of program participants are changing. For example, only

about one in four veterans in the vocational rehabilitation program has a

serious employment handicap,4

 and this ratio has been steadily declining

over the last 5 years. Furthermore, our analysis showed that VA does not

have readily available cost data associated with providing rehabilitation

services to individual veterans. Our review of over 100 case files, however,

showed that VA spent, on average, about $20,000 on each veteran who

gained employment and about $10,000 on each veteran who dropped out

of the program. Generally, over half of the total costs of rehabilitation

4

In general, VA classifies veterans with a 50-percent or greater disability as potentially having a serious

employment handicap. VA determines whether the applicant has a serious employment handicap after

evaluating the veteran’s history, including the effects of disability, prior training and employment, and

other pertinent factors.

Page 2 GAO/HEHS-96-155 VA’s Vocational Rehabilitation Program
B-270415 

services consisted of payments to assist veterans in covering their basic

living expenses.5

With regard to Education’s state vocational rehabilitation program, our

analysis of national program data showed that over the last 5 years

(1991-1995) state agencies rehabilitated 37 percent of the approximately

2.6 million individuals eligible for vocational rehabilitation program

services, while about 31 percent continued to receive program services.

The state agencies provide a wide range of rehabilitative services, from

physical restoration6

 and transportation to college education and

on-the-job training. In addition, we found that a majority of the program

participants had severe disabilities.7

 Moreover, national program data

showed that state vocational rehabilitation agencies spent, on average,

about $3,000 on each client who achieved employment and about $2,000

on each client who dropped out of the program. The state program does

not provide funds to cover client living expenses.

In response to prior GAO and VA findings and recommendations, VA recently

established a design team to identify ways of improving program

effectiveness. The team’s overall objective is to increase the number of

veterans who obtain suitable employment through improvements in

program management. For example, one approach the design team is

considering involves exploring job options with veterans before sending

them to training. The team is also looking at ways to improve staff skills in

job finding and placement activities. VA hopes to begin implementing

program changes in fiscal year 1997.

Background In 1943, Public Law 78-16 authorized the vocational rehabilitation program

to provide training to veterans with service-connected disabilities.

Between 1943 and 1980, program features and criteria underwent several

legislative changes. In 1980, the Congress enacted the Veterans’

Rehabilitation and Education Amendments (P.L. 96-466), which changed

the program’s purpose to providing eligible veterans with services and

5

VA is required to pay a subsistence allowance to veterans who receive training to cover basic living

expenses (38 U.S.C. 3108 (1994)).

6

Restoration is defined as providing those medical and medically related services that are necessary to

correct or substantially modify a physical or mental condition. Restoration services include surgery,

therapy, treatment, and hospitalization.

7

A severe disability is a physical or mental impairment that seriously limits one or more functional

capacities (such as mobility, communication, self-care, self-direction, interpersonal skills, work

tolerance, or work skills) in terms of an employment outcome.

Page 3 GAO/HEHS-96-155 VA’s Vocational Rehabilitation Program
B-270415 

assistance necessary to enable them to obtain and maintain suitable

employment.

The vocational rehabilitation process has five phases. In the first phase, VA

receives the veteran’s application, establishes eligibility, and schedules a

meeting with the veteran. In phase two, a counselor determines if the

veteran has an employment handicap and, if so, the counselor and the

veteran jointly develop a rehabilitation plan.8

 The veteran then moves into

training or education (phase three), if needed, and on to employment

services (phase four) if training or education is not needed or after it is

completed. During phase four, VA, state agencies, the Department of Labor,

and private employment agencies help the veteran find a job. In phase five,

the veteran is classified as rehabilitated once he or she finds a suitable job

and holds it for at least 60 days.

Veterans are eligible for program services if they have a 20-percent or

higher service-connected disability and they have been determined by VA

to have an employment handicap.9 The law defines an employment

handicap as an impairment of a veteran’s ability to prepare for, obtain, or

retain employment consistent with his or her abilities, aptitudes, and

interests. Veterans with a 10-percent service-connected disability also may

be eligible if they have a serious employment handicap. The eligibility

period generally extends for 12 years, beginning on the date of the

veteran’s discharge. Veterans found eligible for services can receive up to

48 months of benefits during the 12-year period.

While in the program, most veterans receive services and equipment that

may be required for beginning employment. For instance, veterans

generally receive diagnosis and evaluation, as well as counseling and

guidance, and some receive such aids as prostheses, eyeglasses, and

educational supplies. They may also receive educational and vocational

training; special rehabilitative services, such as tutorial assistance and

interpreter services; a subsistence allowance; and employment assistance.

Similar to the 1980 amendments, which affect the VA program, the

Rehabilitation Act of 1973, as amended, authorized the Department of

Education to provide eligible people (usually nonveterans) with services

8

A rehabilitation plan outlines specific services to be provided the veteran, the duration of services,

and a basis for assessing progress toward the program goal.

9

Eligible veterans are assigned disability ratings ranging from 0 to 100 percent, in increments of

10 percent. The rating represents the average impairment in earning capacity resulting from

service-connected injuries or a combination of injuries.

Page 4 GAO/HEHS-96-155 VA’s Vocational Rehabilitation Program
B-270415 

and assistance to enable them to obtain and maintain suitable

employment. Education provides federal funds to help people with

disabilities become employed, more independent, and better integrated

into the community. The federal funds are chiefly passed to state

vocational rehabilitation agencies that directly provide services and

assistance to eligible people. The federal share of funding for these

services is generally about 80 percent; the states pay the balance. In fiscal

year 1995, about $2 billion in federal funds went to the state program, and

about 1.3 million people received program services.

The state vocational rehabilitation process, like the VA program process,

comprises five phases, and state vocational rehabilitation clients who

obtain and maintain a suitable job for at least 60 days are also classified as

rehabilitated. However, in the state vocational program, suitable

employment may not always involve wages or salary and may include, for

example, working as an unpaid homemaker or family worker.10 To be

eligible for the program, people must have a disability that is a substantial

impediment to employment. However, when states are unable to serve all

eligible applicants, priority is given to serving individuals with the most

severe disabilities.

The state vocational rehabilitation program offers a wide range of services

to help its clients achieve their vocational goals. Examples of specific

rehabilitation services include diagnosis and evaluation, counseling and

guidance, vocational and educational training, physical restoration,

adjustment training,11 on-the-job training, and employment assistance. If

needed, services such as transportation to enable the individual to arrive

at appointments for rehabilitation services or to get to work and income

maintenance to cover additional costs incurred while the individual is

receiving specific rehabilitation services are also provided.

10The Department of Education defines an unpaid homemaker as someone who keeps house for

himself or herself or others living in the same home. An unpaid family worker is someone who works

without pay on a family farm or in a family business.

11Adjustment training helps the client adjust to a particular situation hindering his or her ability to

work. Such training includes work conditioning, developing work tolerance, mobility training,

remedial training, literacy training, lip reading, and braille.

Page 5 GAO/HEHS-96-155 VA’s Vocational Rehabilitation Program
B-270415 

VA’s Vocational

Rehabilitation

Program Faces

Challenges

The 1980 Veterans’ Rehabilitation and Education Amendments made a

significant change in VA’s vocational rehabilitation program by requiring VA

to assist veterans in obtaining and maintaining suitable employment. This

change expanded the scope of vocational rehabilitation beyond just

training and marked a fundamental change in the focus and purpose of the

program. However, despite previous GAO recommendations that VA fully

implement this amendment and VA’s agreement to emphasize employment

services, few veterans in the vocational rehabilitation program obtain jobs.

Instead, VA staff continue to focus on providing training services because,

among other reasons, they lack adequate training and expertise in job

placement.

In addition, our analysis of national program data revealed that the

percentage of veterans in the program with serious employment handicaps

has been steadily declining over the last 5 years. Our discussions with

program officials also revealed that VA does not have readily available cost

data associated with rehabilitating veterans. We found, on the basis of our

review of select case files, that VA typically spends about $20,000 to

rehabilitate each veteran.

VA Continues to Place Few

Veterans

In our 1992 report, we noted that approximately 202,000 veterans were

found eligible for vocational rehabilitation program services between

October 1983 and February 1991. About 62 percent dropped out of the

program before ever receiving a rehabilitation plan, and an additional

9 percent dropped out after receiving a plan. VA rehabilitated 5 percent of

the eligible veterans, while the remaining veterans (24 percent) continued

to receive program services.

From October 1991 to September 1995, 201,000 veterans applied to the

vocational rehabilitation program. VA classified approximately 74,000

(37 percent) veterans eligible.12 Of these veterans, 21 percent dropped out

before receiving a plan, and another 20 percent dropped out or

temporarily suspended their program after receiving a plan. VA

rehabilitated 8 percent of the eligible veterans, and the remaining veterans

(51 percent) were still receiving program services at the time of our

analysis.

VA officials told us that the vocational rehabilitation program has not been

effective in placing veterans in suitable jobs. The primary reason for the

12Of the 201,000 veterans who applied to the vocational rehabilitation program, 55,000 (27 percent)

were classified as ineligible, 11,300 (6 percent) were awaiting an eligibility determination, and 60,400

(30 percent) dropped out of the program.

Page 6 GAO/HEHS-96-155 VA’s Vocational Rehabilitation Program
B-270415 

low percentage of rehabilitations is the lack of focus on employment

services, according to VA officials. The director of VA’s vocational

rehabilitation program also acknowledged that the program’s

rehabilitation rate needs to be improved and has established a program

goal of doubling the number of successful rehabilitations over the next 2

years.

Our analysis of current program participants13 showed that almost half of

those veterans who were rehabilitated obtained employment in the

professional, technical, and managerial occupations—fields such as

engineering, accounting, and management. In addition, we found that the

average starting salary of these veterans was about $18,000 a year.

Moreover, veterans who were rehabilitated spent an average of 30 months

in the program, while those who dropped out spent 22 months in the

program.

VA Does Not Emphasize

Employment Services

VA’s vocational rehabilitation program is primarily focused on sending

veterans to training rather than on finding them suitable employment,

according to VA officials. In 1992, VA issued guidance that emphasized the

importance of finding suitable jobs for veterans and suggested that field

offices begin employment planning as soon as a veteran’s eligibility for the

program services was established. However, regional officials told us that

staff do not generally begin exploring employment options until near the

end of a veteran’s training.

In 1992, we reported that 92 percent of veterans who received a plan

between October 1983 and February 1991 went from the evaluation and

planning phase directly into training programs, while only 3 percent went

into the employment services phase. The remaining 5 percent went into a

program designed to help them live independently or were placed in a

controlled work environment. These figures remained virtually unchanged

for the period we examined. For example, from October 1991 to

September 1995, 92 percent of veterans who received a plan went from the

evaluation and planning phase into training programs, while 4 percent

went directly into the employment services phase. The remaining

4 percent entered an independent living program or were placed in

extended evaluation, as shown in figure 1.

13We define current program participants as veterans who were in the program from October 1, 1994,

through February 1996.

Page 7 GAO/HEHS-96-155 VA’s Vocational Rehabilitation Program
B-270415 

Figure 1: Services Provided After

Evaluation and Planning, 1991-95

92% • Training

•

4%

Employment Services

•

4%

Independent Living/Extended

Evaluation

Source: VA’s computerized data system, October 1991-September 1995.

Moreover, our analysis of national program data on current program

participants showed that the vast majority of veterans in training were

enrolled in higher education programs. For example, about 91 percent of

such veterans were enrolled in a university or college.14 The remaining

9 percent were enrolled in vocational/technical schools or participated in

other types of training programs, such as apprenticeships and on-the-job

training.

VA regional officials offered several reasons why staff continue to

emphasize training over employment services. First, VA officials told us

14VA’s national database captures the number of veterans enrolled in college or vocational/technical

schools. However, several regional office staff told us that a significant number of veterans classified

as attending college are actually enrolled in a vocational/technical training program provided by a

community college. VA officials are not able to estimate how many veterans belong in this category.

Page 8 GAO/HEHS-96-155 VA’s Vocational Rehabilitation Program
B-270415 

that it is difficult for staff to begin exploring employment options early

because veterans entering the program expect to be able to attend college.

Veterans acquire this expectation, according to VA officials, because the

program is often marketed as an education program and not a

jobs-oriented program. This image of the program as education oriented

was also evident among some VA management. For instance, the director

at one regional office we visited described the vocational rehabilitation

program as the “best education program in VA.”

A second reason for emphasizing training over employment, according to

VA officials, is that program staff generally lack adequate training and

expertise in job placement activities. At one office, for example, a

counseling psychologist told us that program staff are not equipped to find

veterans jobs because they lack employer contacts and detailed

information on local labor markets. In fact, counseling psychologists at the

regional offices we visited described the employment services phase as

“the weakest part of the program.”

Third, VA officials told us that large caseloads make it difficult for program

staff to spend time exploring employment options with veterans. As one

counseling psychologist responsible for managing over 300 cases said,

“with such a large caseload it’s just easier to place veterans in college for 4

years than it is to find them a job.” According to VA’s Vocational

Rehabilitation Service’s Chief of Program Operations, the optimal caseload

per staff person is about 125.

Characteristics of

Participants Have Changed

In recent years, there has been a shift in the type of disabled veteran

participating in VA’s vocational rehabilitation program. For example,

during the period 1991 to 1995, the percentage of program participants

classified by VA as having a serious employment handicap declined from

40 percent to 29 percent, as shown in figure 2.

Page 9 GAO/HEHS-96-155 VA’s Vocational Rehabilitation Program
B-270415 

Figure 2: Percentage of Program

Participants With Serious Employment

Handicaps, 1991-95

Percentage of Total Program Participants

0

5

10

15

20

25

30

35

40

1991 1992 1993 1994 1995

Fiscal Year

Source: GAO analysis of VA Chapter 31 Target System.

During the same period, the percentage of program participants with

disabilities rated at 50 percent or higher declined from 26 percent to

17 percent.15 Meanwhile, the percentage of program participants with

disabilities rated at 10 and 20 percent increased from 34 percent to

42 percent. Figure 3 shows the changes in program participants’

characteristics for the period 1991 to 1995.

15As we reported in Vocational Rehabilitation: VA Needs to Emphasize Serving Veterans With Serious

Employment Handicaps (GAO/HRD-92-133, Sept. 28, 1992), this trend began in 1985.

Page 10 GAO/HEHS-96-155 VA’s Vocational Rehabilitation Program
B-270415 

Figure 3: Program Participation by

Percentage of Disability, 1991-95 Percentage of Total Program Participants

0

5

10

15

20

25

30

35

40

45

50

1991 1992 1993 1994 1995

Fiscal Year

Disabilities of 50 Percent and More

Disabilities of 10 and 20 Percent

Source: GAO analysis of VA Chapter 31 Target System.

In addition, our analysis of national program data provided demographic

information on current program participants. For example, over

90 percent of the veterans who applied for program services were male,

and the median age was 44 years. Also, at the time of their application,

over 90 percent of the veterans had completed high school; of these,

almost 25 percent had also completed 1 or more years of college.

VA Does Not Have Readily

Available Data on the Cost

of Providing Rehabilitation

Services

VA headquarters and regional agency officials did not know the costs

associated with providing rehabilitation services to individual veterans. VA

officials told us that, although cost information is located in individual

veterans’ case files, it is not compiled or analyzed.

Our review of 59 rehabilitated case files at four regional offices showed

that VA spent, on average, about $20,000 to rehabilitate each veteran. The

exact cost associated with rehabilitating veterans depends on the type and

Page 11 GAO/HEHS-96-155 VA’s Vocational Rehabilitation Program
B-270415 

duration of services provided. Our analysis also showed that, generally,

over half of the total cost of rehabilitation services consisted of

subsistence allowances. Following are specific examples of costs

associated with rehabilitating some clients.

• VA spent about $23,000 to rehabilitate a veteran who had a 10-percent

disability for lower back strain. While in the program, the veteran obtained

a BS degree in education and eventually obtained a job as an elementary

school teacher earning $25,000 a year.

• VA spent over $20,000 to rehabilitate a veteran who had a 20-percent

disability for lower back strain. The veteran, who was attending college

under the Montgomery G.I. Bill and working part time before entering the

program, obtained a bachelor’s degree in sociology and, ultimately, a

position as an advocate for the elderly, earning less than $20,000 a year.

Our review of 43 program dropout case files—“discontinued” case

files—showed that VA spent, on average, about $10,000 each on veterans

who did not complete the program. Following are specific examples of

costs associated with veterans who did not complete the program.

• VA spent over $46,000 on tuition and subsistence to rehabilitate a veteran

who had a 10-percent disability. The veteran dropped out of college after 4

years because of medical treatment for depression and marginal academic

progress.

• VA spent over $6,000 on a 20-percent-disabled veteran who dropped out of

the program after about a year. The veteran stopped attending college

classes because of unsatisfactory academic progress.

Experience of State

Vocational

Rehabilitation

Program

The state vocational rehabilitation program places over one-third of its

clients in employment. Our analysis of 1993 national program data, the

most current data available, showed that state agencies provide a mix of

services to meet their clients’ rehabilitation needs.16 Our analysis also

showed that most clients in the state program had severe disabilities.

Furthermore, the state program spends, on average, about $3,000 on each

rehabilitated client.

16In this section, we addressed issues such as services rendered, client characteristics, and program

cost by analyzing data in the Department of Education’s 1993 Case Service Reports. Information in the

Case Service Reports covers all accepted clients whose cases were closed in 1993—clients were

rehabilitated, dropped out before a rehabilitation plan was developed or before services were initiated,

or dropped out after receiving some services.

Page 12 GAO/HEHS-96-155 VA’s Vocational Rehabilitation Program
B-270415 

Over One-Third of State

Program Clients Obtain

Employment

From October 1991 through June 1995, about 2.6 million individuals were

found eligible for state vocational rehabilitation program services. About

10 percent of these individuals dropped out of the state program before a

rehabilitation plan could be initiated, and an additional 22 percent dropped

out after a plan was initiated. The state agencies rehabilitated 37 percent

of the eligible individuals, and the remaining individuals (31 percent) were

still receiving program services at the time of our analysis.

Clients in the state program are considered successfully rehabilitated even

if they achieve outcomes other than employment that provides a wage or

salary. For example, in fiscal year 1993, clients who obtained unpaid work

or attained homemaker status composed about 9 percent of all

rehabilitations. However, the majority of clients rehabilitated under the

state program obtained such salaried positions as janitor, baker, office

clerk, or cashier. On average, a person rehabilitated under the state

program typically earned a starting salary of about $10,000 a year.

Moreover, clients who were rehabilitated spent on average 17 months in

the program, and clients who dropped out of the program after receiving a

plan and at least one rehabilitative service spent 23 months.

State Vocational

Rehabilitation Program

Provides a Mix of Services

The state vocational rehabilitation program provides a wide range of

services designed to help people with disabilities prepare for and engage

in gainful employment to the extent of their capabilities. In fiscal year

1993, the state agencies provided evaluation and counseling services to

almost all program participants. Additional services provided included

restoration (33 percent of participants); transportation (33 percent); job

finding services, such as resume preparation and interview coaching

(31 percent); and college/university (12 percent), business/vocational

training (12 percent), and on-the job training (6 percent).

Most State Program Clients

Are Severely Disabled

Our analysis of 1993 national program data showed that people with

severe disabilities make up the majority of clients in the state vocational

rehabilitation program. For example, people with severe disabilities

composed 73 percent of the state program’s total client population.

Our analysis of national data also provided demographic information on

the clients who applied to the program. For example, almost 60 percent of

the clients who applied for program services were male, and the median

age was 34 years. In addition, at the time of their application, 43 percent of

Page 13 GAO/HEHS-96-155 VA’s Vocational Rehabilitation Program
B-270415 

the clients had not completed high school, while 17 percent had completed

1 or more years of college.

Cost Varies Slightly Among

Rehabilitated and

Dropouts

Our analysis of national program data showed that in fiscal year 1993, the

state vocational rehabilitation agencies spent, on average, about $3,000 on

each client who was rehabilitated. State agency staff spent funds providing

or arranging services on behalf of clients, including assessment, training,

medical services, transportation, and personal assistance. These costs

exclude costs incurred for program administration and for salaries of

counselors and other staff, and the state vocational program does not

provide clients money for basic living expenses.17 Following are examples

of costs associated with rehabilitating clients, which we obtained from our

review of case files of 41 rehabilitated clients at four regional offices.

• In one case, the state program spent about $4,000 to rehabilitate an

illiterate client suffering from mild retardation. The client was severely

disabled and had not completed high school. The client was provided

adjustment training and obtained a job working 3 hours a week as a stock

person at a hardware store making $4.50 an hour.

• In a second case, the state program spent about $6,000 to rehabilitate a

client with a learning disability and chronic back pain. The client was

severely disabled but had graduated from high school. The client was

provided clerical training and obtained a job working full time as a food

service attendant making $4.50 an hour.

The national data also showed that the state program spent, on average,

about $2,000 on each client who did not complete the program after

receiving a plan. Following are examples of costs associated with clients

who did not complete the program, which we obtained from our review of

40 discontinued case files.

• In one case, the state program spent about $4,500 on a client who dropped

out because she became pregnant. The client was deaf and classified as

severely disabled. She had problems communicating and had not

completed high school. The client’s rehabilitation goal involved pursuing

an associate’s degree and obtaining a job as an office clerk.

• In a second case, the state program spent about $3,500 on a client who

dropped out because he lacked the motivation to continue in the program.

17Although the state vocational program does not provide monthly monetary benefits in the form of a

subsistence allowance, it may provide clients with money to cover additional costs incurred while they

are receiving certain vocational rehabilitation services. In 1993, 21 percent of clients received this

service, which is called income maintenance.

Page 14 GAO/HEHS-96-155 VA’s Vocational Rehabilitation Program
B-270415 

The client, who suffered from epilepsy and moderate retardation and was

classified as severely disabled, was provided work adjustment training.

VA Has Begun to Take

Steps to Improve

Program

Effectiveness

In response to prior GAO and VA reports that recommended that VA

emphasize finding jobs for veterans, VA has begun to reengineer its

vocational rehabilitation program.18 The overall objective of VA’s

reengineering effort is to increase the number of veterans who obtain

suitable employment through improvements in program management.

Under new program leadership, VA’s Vocational Rehabilitation and

Counseling Service established a design team in 1995 to restructure the

program by focusing on finding veterans suitable employment, making use

of automation, and identifying factors that detract from program

efficiency. VA consulted with state and private-sector vocational

rehabilitation officials, veterans’ service organizations, the Department of

Labor, and private contractors to help it identify needed program

improvements.

VA’s design team has identified several key initiatives aimed at improving

program effectiveness. For example, VA plans to emphasize employment

by exploring job options with veterans before sending them to training. VA

also plans to develop marketing strategies that emphasize employment

services. This initiative may involve revising existing pamphlets and

brochures and developing informational videos. Further, VA plans to assess

and develop program staff skills to ensure that staff have the necessary

expertise to provide employment services.

VA is also piloting an automated data management system designed to

capture key information on program participants, such as the cost of

providing rehabilitation services. VA officials told us that this information

would be helpful in targeting ways to make the program more cost

effective.

VA also plans to conduct nationwide telephone surveys to determine why

veterans drop out of the program. Officials told us that knowing this

information will help them better identify problems veterans encounter

with program services and develop plans that enhance veterans’ chances

of successfully completing the program.

18GAO/HRD-84-39, May 23, 1984; GAO/HRD-92-100, Sept. 4, 1992; and Veterans Benefits Administration,

Study of Vocational Rehabilitation and Counseling Service (Washington, D.C.: VA, Sept. 7, 1993).

Page 15 GAO/HEHS-96-155 VA’s Vocational Rehabilitation Program
B-270415 

VA is in the early stages of its reengineering effort and has not implemented

any of the design team’s initiatives. The Chairman of VA’s design team told

us that VA plans to begin implementing these initiatives nationwide by the

end of fiscal year 1997.

Conclusions Despite a legislative mandate enacted 16 years ago requiring VA to help

program participants obtain suitable jobs and prior GAO reports

documenting VA’s limited success, VA’s vocational rehabilitation program

continues to rehabilitate few disabled veterans. Currently, new program

leadership recognizes the need to refocus the program toward the goal of

employment and has taken steps to improve the program’s effectiveness.

However, the concerns addressed in this letter are long standing, and VA’s

reengineering efforts have not been completed. The success of VA’s efforts

will depend on which initiatives VA adopts and how they are implemented.

Agency Comments We received comments from the Department of Education and VA on a

draft of this report. Education agreed with our findings and offered some

technical suggestions, which we incorporated where appropriate.

VA said it generally agreed with our findings and that its current

reengineering initiative will successfully address all of the concerns we

raised. However, VA cited a number of concerns with the information

contained in the draft. For example, VA took issue with our finding that

8 percent of eligible veterans are rehabilitated. Instead, VA claims that

32 percent are rehabilitated and that this rate compares favorably with the

37-percent rehabilitation found in the state program. We disagree. VA based

their rehabilitation percentage on the number of veterans who left the

program (about 19,000)—a combination of veterans who dropped out or

interrupted their program of services, as well as those who were

rehabilitated—as opposed to the total number of eligible veterans (about

74,000). VA’s approach inflates the VA rehabilitation rate. Using VA’s

approach, the state program would have an even higher rehabilitation

rate—more than 60 percent. The fact remains, however, that of the 74,000

veterans found eligible for program services, 6,000 successfully completed

the program.

VA also took exception with our discussion of its lack of focus on

employment services. VA contends it has consistently focused on the

necessity of providing meaningful employment services, a goal that is

outlined in policy directives and reinforced with comprehensive staff

Page 16 GAO/HEHS-96-155 VA’s Vocational Rehabilitation Program
B-270415 

training. Our report acknowledges that VA issued guidance in 1992 that

emphasized employment services. However, VA staff that administered and

implemented the program in the four locations we visited told us that they

do not emphasize employment until near the end of a veteran’s training.

Furthermore, the Chairman of VA’s design team, an individual charged with

evaluating and restructuring the program, told us that the primary reason

for the program’s low rehabilitation rate is VA’s lack of focus on

employment services. Regarding VA’s claim it provides comprehensive staff

training, the Program Operations Chief told us that other than a week-long

seminar on employment services presented about 2 to 3 years ago, VA

headquarters has not sponsored staff training in employment assistance.

Further, as already reported, staff in the regional offices that we visited

told us they are not adequately trained in job placement activities.

VA also took issue with our discussion of its lack of knowledge of the costs

associated with providing rehabilitation services to individual veterans. VA

claims that it has this information and can retrieve it at any time, although

doing so is a laborious process. However, we saw no evidence that VA

officials knew the costs associated with providing rehabilitation services.

Neither the Chief of Program Operations nor officials located in the four

regional offices that we visited could provide us with the costs associated

with rehabilitating a veteran. Instead, we were always directed to the case

files and, in some regional offices, to the finance section to obtain this

information.

VA also expressed concern that our random sample of program participant

cases was not representative of the veterans that VA serves. VA asserted

that “a more appropriate sample could readily come up with examples of

veterans with more profound disabilities who are earning handsome

salaries as a result of their participation in VA’s vocational rehabilitation

program.” As we have pointed out, the results of our sample of 102

individual veteran case files are neither representative nor generalizable to

all program participants. Our purpose in sampling program participants

was to furnish examples of costs associated with providing rehabilitation

services, not to demonstrate the severity of disabilities represented in the

program or the average salaries of program participants. We addressed the

issues of disability severity and salary using VA’s national database and

discussed them in other sections of the report.

VA’s comments in their entirety appear as appendix II.

Page 17 GAO/HEHS-96-155 VA’s Vocational Rehabilitation Program
B-270415 

As agreed with your office, unless you publicly announce its contents

earlier, we plan no further distribution of this report until 30 days from the

date of this letter. At that time, we will send copies to the Secretary of

Veterans Affairs and other interested parties.

This work was performed under the direction of Irene Chu, Assistant

Director, Veterans’ Affairs and Military Health Care Issues. If you or your

staff have any questions, please contact Ms. Chu or me on (202) 512-7101.

Other major contributors to this report are listed in appendix III.

Sincerely yours,

David P. Baine

Director, Veterans’ Affairs and

 Military Health Care Issues

Page 18 GAO/HEHS-96-155 VA’s Vocational Rehabilitation Program
Page 19 GAO/HEHS-96-155 VA’s Vocational Rehabilitation Program
Contents

Letter 1

Appendix I 

Scope and

Methodology

22

Appendix II 

Comments From the

Department of

Veterans Affairs

24

Appendix III 

Major Contributors to

This Report

31

Figures Figure 1: Services Provided After Evaluation and Planning,

1991-95

8

Figure 2: Percentage of Program Participants With Serious

Employment Handicaps, 1991-95

10

Figure 3: Program Participation by Percentage of Disability,

1991-95

11

Abbreviations

VA Department of Veterans Affairs

Page 20 GAO/HEHS-96-155 VA’s Vocational Rehabilitation Program
Page 21 GAO/HEHS-96-155 VA’s Vocational Rehabilitation Program
Appendix I 

Scope and Methodology

We designed our study to collect national information on the

characteristics of VA and state vocational rehabilitation clients, the

services they received, and the outcomes they achieved. We also obtained

information on the costs associated with providing rehabilitation services

to clients in each program. In doing our work, we examined VA and

Department of Education databases. We also interviewed VA and

Education officials at the national and regional levels during site visits at

VA and state vocational rehabilitation facilities in four judgmentally

selected locations.

National Databases We examined VA and Education vocational rehabilitation databases to

obtain national information on the percentage of clients rehabilitated,

client characteristics, and services provided. However, we did not verify

the information included in the databases. To determine the percentage of

veterans rehabilitated, we analyzed VA’s Chapter 31 Target System

database for the period October 1991 through September 1995. We also

compiled information on client characteristics of and services provided to

veterans currently participating in the program. We define current

participants as veterans who were not rehabilitated or discontinued prior

to the beginning of fiscal year 1995 and were in one of the program’s five

phases on February 7, 1996.

For the state vocational rehabilitation program, we analyzed data from

two Education databases. To address the percentage of the clients

rehabilitated, we reviewed Education’s Quarterly Cumulative Caseload

Reports for October 1991 through June 1995. This report provides

aggregate data on the cases handled by state rehabilitation agencies.

To obtain information on demographic characteristics and services

provided, we analyzed Education’s Case Service Reports. The Case Service

Reports contain information collected from the state agencies at the end

of each fiscal year on the characteristics of each client whose case was

closed that year, as well as on the general types of services that each client

received and his or her employment status in the week of case closure. At

any particular time, Education may be waiting for original or corrected

data from one or more states for 1 or more years. At the time we began our

study, the most recent full year for which largely complete data were

available was fiscal year 1993.

Page 22 GAO/HEHS-96-155 VA’s Vocational Rehabilitation Program
Appendix I 

Scope and Methodology

Site Visits We conducted site visits at VA regional offices and state vocational

rehabilitation agencies at four locations from January 1996 through

March 1996. We visited VA and state vocational rehabilitation facilities in

Milwaukee, Wisconsin; New Orleans, Louisiana; Roanoke, Virginia; and

Portland, Oregon. We selected the sites judgmentally to include VA and

state agencies that (1) were located in different regions, (2) were varied in

staff size and workload, and (3) had ongoing initiatives to improve their

vocational rehabilitation program.

During these site visits, we interviewed vocational rehabilitation officials

on various aspects of the program operations, reviewed selected case files,

and discussed the specific cases with program specialists. At each VA

regional office and state agency visited, we randomly selected and

reviewed 9 to 12 case files of program participants who had been

rehabilitated or had dropped out of the program between January 1 and

June 30, 1995. Because the total number of rehabilitated cases available at

VA’s field office in Portland, Oregon, was relatively small, we reviewed all

30 cases. We reviewed a total of 183 vocational rehabilitation cases: 102 at

VA’s regional offices and 81 at the state agencies. These cases did not

compose a representative sample of each site’s rehabilitation or dropout

cases; thus, our results cannot be generalized.

From case file reviews and discussions with program specialists, we

obtained detailed information on client characteristics; services provided;

and, when applicable, the type of employment obtained and starting

salary. Also from the case files, we determined the costs associated with

providing rehabilitation services to program participants, such as how

much was spent for basic education and vocational training, readjustment

training, physical restoration, and other support services.

Page 23 GAO/HEHS-96-155 VA’s Vocational Rehabilitation Program
Appendix II 

Comments From the Department of

Veterans Affairs

Page 24 GAO/HEHS-96-155 VA’s Vocational Rehabilitation Program
Appendix II 

Comments From the Department of

Veterans Affairs

Now on p. 6.

Page 25 GAO/HEHS-96-155 VA’s Vocational Rehabilitation Program
Appendix II 

Comments From the Department of

Veterans Affairs

Now on p. 2.

Now on p. 2.

Page 26 GAO/HEHS-96-155 VA’s Vocational Rehabilitation Program
Appendix II 

Comments From the Department of

Veterans Affairs

Now on p. 12.

Now on pp. 6-12 and pp.

12-15.

Page 27 GAO/HEHS-96-155 VA’s Vocational Rehabilitation Program
Appendix II 

Comments From the Department of

Veterans Affairs

Page 28 GAO/HEHS-96-155 VA’s Vocational Rehabilitation Program
Appendix II 

Comments From the Department of

Veterans Affairs

Page 29 GAO/HEHS-96-155 VA’s Vocational Rehabilitation Program
Appendix II 

Comments From the Department of

Veterans Affairs

Page 30 GAO/HEHS-96-155 VA’s Vocational Rehabilitation Program
Appendix III 

Major Contributors to This Report

Irene Chu, Assistant Director, (202) 512-7101

Jaqueline Hill Arroyo, Evaluator-in-Charge, (202) 512-6753

Julian Klazkin, Senior Attorney

Steve Morris, Evaluator

Michael O’Dell, Senior Social Science Analyst

Jeffrey Pounds, Evaluator

Pamela Scott, Communications Analyst

Joan Vogel, Senior Evaluator (Computer Science)

(105744) Page 31 GAO/HEHS-96-155 VA’s Vocational Rehabilitation Program
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