Vocational Rehabilitation: VA Has Opportunities to Improve Services, but Faces Significant Challenges
Published: 2005-04-20T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Department of Veterans Affairs' Vocational Rehabilitation and Employment (VR&E) program has taken on heightened importance due, in large measure, to the number of servicemembers returning from Afghanistan and Iraq with serious injuries and their need for vocational rehabilitation and employment assistance. This statement draws on over 20 years of GAO's reporting on VA's provision of vocational rehabilitation and employment assistance to American veterans and focuses primarily on the results of two recent GAO reports. The first, issued in June 2004, commented on the report of the VA-sponsored VR&E Task Force, which performed a comprehensive review of VR&E activities and made extensive recommendations that, if implemented, would affect virtually every aspect of VR&E's operations. The second, issued in January 2005, focused on the steps VA has taken and the challenges it faces in providing services to seriously injured veterans returning from Afghanistan and Iraq.
section_title: What GAO Found
paragraphs: The past year has presented the Department of Veterans Affairs (VA) with an unprecedented opportunity to begin strengthening its provision of vocational rehabilitation and employment services to veterans. The VR&E Task Force has developed a blueprint for the changes needed to improve numerous programmatic and managerial aspects of VR&E's operations. We generally agree with the Task Force's three key findings. We also generally agree with the Task Force's key recommendations to streamline eligibility and entitlement, institute a new employment-driven service delivery process, expand counseling benefits, reorganize and increase VR&E staffing, and improve information technology capabilities and intra- and inter-agency coordination. VR&E faces three overriding challenges as it responds to the Task Force recommendations. First, providing early intervention assistance to injured servicemembers returning from Afghanistan and Iraq is complicated by (1) differences and uncertainties in the recovery process, which make it difficult for VR&E to determine when a servicemember will be able to consider its services; (2) the Department of Defense's (DOD) concerns that VA's outreach could work at cross purposes to the military's retention goals; and (3) lack of access to DOD data that would allow VA to readily identify and locate all seriously injured servicemembers. Second, VR&E needs to upgrade its information technology system. The Task Force report pointed out that VR&E's IT system is limited in its ability to produce useful reports. Third, VR&E needs to use new results-based criteria to evaluate and improve performance. The Task Force recommended that VR&E develop a new employment-oriented performance measurement system, including measures of sustained employment longer than 60 days. In fiscal year 2004, VR&E included four employment-based performance criteria in its performance and accountability report. However, as of February 2005, VR&E had not yet reported results using these longer-term measures.

section_title: Letter
paragraphs: We are pleased to be here today to provide our views on efforts of the  Department of Veterans Affairs (VA) to help disabled veterans obtain  suitable employment through its Vocational Rehabilitation and  Employment (VR&E) program. This program is crucial to helping veterans  with disabilities caused or aggravated by their service in the military  obtain and maintain employment, especially now as servicemembers  return from Afghanistan and Iraq. Further, at a time when the American  workforce is shrinking, the importance of VA’s VR&E program and other  federal programs that help individuals with disabilities return to work is  paramount. For this and other reasons, we have designated federal  disability programs, including VR&E, as “high risk.”
In 2003, the Secretary of Veterans Affairs established a VR&E Task Force  to conduct an independent review of the agency’s VR&E program and  make recommendations for improving its operation. At the time, there  were concerns regarding the management of the program. These concerns  included, among other things, the program’s continued focus on education  rather than employment, the time it took participants to become  rehabilitated, and the program’s poor track record for helping disabled  veterans find suitable employment.
As you requested, my comments are focused on GAO’s views about key  VR&E Task Force findings and recommendations and challenges that the  program currently faces in meeting the needs of disabled veterans. My  statement is based largely on prior GAO reports and testimonies. Since  1984, we have reported on the operation of VA’s VR&E program, the VR&E  Task Force findings and recommendations, and VA’s efforts to provide  vocational rehabilitation services to injured servicemembers returning  from Afghanistan and Iraq. We did our work in accordance with generally  accepted government auditing standards.
In summary, GAO’s past work and the recent Task Force report point to  the need for VR&E to increase its emphasis on finding jobs for veterans  with disabilities and managing its operations. We reported as early as 1984  that the VR&E program primarily focused on training veterans and not  finding them suitable employment. Twenty years later, the Task Force  reached similar conclusions and recommended most notably that VR&E  institute an employment-driven system for providing services to veterans  that would re-emphasize the importance of employment. We noted that  implementing a system focused on employment would require a cultural  shift away from VR&E’s long-standing emphasis on education.  VR&E  would also need to overcome the incentive for veterans to use its  education benefits, which provide more financial assistance than those  available though other VA education benefits programs. While we  generally agreed with the Task Force findings and recommendations, we  also reported that VR&E faces three important challenges. First, although  intervening early after a disabling injury increases the likelihood that a  disabled veteran would return to work, VA faces significant challenges in  expediting VR&E services to seriously injured servicemembers. We  recommended in January 2005 that VA improve its efforts to expedite  services for veterans returning from Afghanistan and Iraq and improve its  policies and procedures to ensure that veterans obtain the services they  need, which VA is in the process of doing. In addition, VR&E at this time  does not have the information technology systems needed to properly  manage its operations. Furthermore, it has just begun to initiate the  process of using results-based criteria to measure success; that is, whether  its services help veterans with disabilities achieve sustained employment.
subsections: section_title: Background
paragraphs: Since the 1940s, VA has provided vocational rehabilitation assistance to  veterans with service-connected disabilities to help them find meaningful  work and achieve maximum independence in daily living. In 1980, the  Congress enacted the Veterans’ Rehabilitation and Education  Amendments, which changed the focus of VA’s vocational rehabilitation  program from providing primarily training aimed at improving the  employability of disabled veterans to helping them find and maintain  suitable jobs. VA estimates that in fiscal year 2004 it spent more than $670  million on its VR&E program to serve about 73,000 participants. This  amount represents about 2 percent of VA’s $37 billion budget for  nonmedical benefits, most of which involves cash compensation for  service connected disabilities.
VR&E services include vocational counseling, evaluation, and training that  can include payment for tuition and other expenses for education, as well  as job placement assistance. Interested veterans generally apply for VR&E  services after they have applied and qualified for disability compensation  based on a rating of their service-connected disability. This disability  rating—ranging from 0 to 100 percent in 10 percent increments—entitles  veterans to monthly cash payments based on their average loss in earning  capacity resulting from a service-connected injury or combination of  injuries. To be entitled to VR&E services, veterans with disabilities  generally must have a 20 percent disability rating and an employment  handicap as determined by a vocational rehabilitation counselor. Although  cash compensation is not available to servicemembers until after they  separate from the military, they can receive VR&E services prior to  separation under certain circumstances. To make these services available  prior to discharge, VA expedites the determination of eligibility for VR&E  by granting a preliminary rating, known as a memorandum rating.
section_title: Implementing Task Force Recommendations Should Improve VR&E Services
paragraphs: We generally agree with the Task Force’s key findings, which broadly  address three areas of VR&E’s operations. (See table 1.)
First, the Task Force found that VR&E has not been a priority in terms of  returning veterans with service-connected disabilities to the workforce.  Between 1984 and 1998, we issued three reports all of which found that  the VR&E program had not emphasized its mandate to find jobs for  disabled veterans. In 1992, we found that over 90 percent of eligible  veterans went directly into education programs, while less than 3 percent  went into the employment services phase. We also found that VA placed  few veterans in suitable jobs. We reported in 1996 that VA rehabilitated  less than 10 percent of veterans found eligible for vocational rehabilitation  services and recommended switching the focus to obtaining suitable  employment for disabled veterans. VA program officials told us that staff  focused on providing training services because, among other reasons, the  staff was not prepared to provide employment services because it lacked  adequate training and expertise in job placement. Years later, the Task  Force similarly reported that top VR&E management had not  demonstrated a commitment to providing employment services and lacked  the staffing and skill resources at the regional offices to provide these  services.
The Task Force also found that VR&E has a limited capacity to manage its  growing workload. The Task Force had concerns about, among other  things, VR&E’s organizational, program, and fiscal accountability;  workforce and workload management; information and systems  technology; and performance measures. In our report on the Task Force,  we stated that, although we have not specifically reviewed VR&E’s  capacity to manage its workload, we agree that many of the VR&E  management systems identified by the Task Force as needing  improvement are fundamental to the proper functioning of federal  programs, regardless of workload.
In addition, the Task Force found that the VR&E system must be  redesigned for the 21st century employment environment. The Task Force  reported that the VR&E program does not reflect the dynamic nature of  the economic environment and constant changes in the labor market. The  report suggested that, as a result, only about 10 percent of veterans  participating in the VR&E program had obtained employment. We agree  with the Task Force finding that the VR&E system needs to be  modernized. Our high risk report emphasized that outmoded criteria used  to establish eligibility need to be updated.
The Task Force made 105 recommendations, which we grouped into six  categories. (See table 2.) The first category of recommendations was  directed at streamlining VR&E program eligibility and entitlement for  veterans in most critical need, including (1) servicemembers who have  been medically discharged or are pending medical discharge; (2) veterans  with a combined service-connected disability rating of 50 percent or  greater; and (3) veterans receiving compensation for the loss, or loss of the  use, of a limb. In our report, we commented that, among other things, VA’s  outmoded disability criteria raise questions about the validity of its  disability decisions because medical conditions alone are generally poor  predictors of work incapacity. For example, advances in prosthetics and  technology for workplace accommodations can enhance work capacity by  compensating for impairments. As a result, the Task Force  recommendation to focus on severity of disability rather than on  employability may not ensure that veterans with the most severe  employment handicaps receive priority services from VR&E.
Second, the Task Force sought to replace the current VR&E process with a  5-track employment-driven service delivery system. The five tracks include  rapid access employment for veterans with skills, self-employment, re- employment at a job held before military service, traditional vocational  rehabilitation services and, when employment is not a viable option,  independent living services. We commented that the 5-track process could  help VR&E focus on employment while permitting the agency to assist  veterans less likely to obtain gainful employment on their own. We added,  however, that the new system would require a cultural shift from the  program’s current emphasis on long-term education to more rapid  employment. We also observed that, as long as the education benefits  available under VR&E provide more financial assistance than those  available through other VA educational benefits programs, eligible  veterans will have strong incentives to continue to use VR&E to pursue  their education goals.
Third, the Task Force recommended that VR&E expand counseling  benefits to provide VR&E services to servicemembers before they are  discharged and to veterans who have already transitioned out of the  military. We agreed that providing vocational and employment counseling  prior to military discharge is essential to enable disabled servicemembers  to access VR&E services as quickly as possible after they are discharged.
In prior reports, we highlighted the importance of early intervention  efforts to promote and facilitate return to the workplace. In 1996, for  example, we reported research findings that rehabilitation offered as close  as possible to the onset of disabling impairments has the greatest  likelihood of success.  In addition, receptiveness to participate in  rehabilitation and job placement activities can decline after extended  absence from work.
Fourth, the Task Force made several recommendations directed at  redesigning the VR&E central office to provide greater oversight of  regional office operations and to increase staff and skill sets to reflect the  new focus on employment. We agreed that program accountability could  be enhanced through more central office oversight.  We pointed out that,  over the past 3 years, VA Inspector General reports had identified VR&E  programs at regional offices that did not adhere to policies and procedures  and sometimes circumvented accountability mechanisms, such as those  for managing and monitoring veterans’ cases and those requiring the  development of sound plans prior to approving purchases for those  veterans seeking self-employment.
Fifth, the Task Force recommended that VR&E improve the capacity of its  information technology systems. Many of the Task Force’s  recommendations in this area are consistent with GAO’s governmentwide  work reporting that agencies need to strengthen strategic planning and  investment management in information technology. In addition, we  recognized that VR&E would benefit from a more systematic analysis of  current information technology systems before making further investment  in its current systems.
Finally, the Task Force recommended that VR&E strengthen coordination  within VA between VR&E and the Veterans Health Administration, and  between VR&E and the Departments of Defense (DOD) and Labor.  Improving coordination with agencies that have a role in assisting disabled  veterans make the transition to civilian employment should help these  agencies more efficiently use federal resources to enhance the  employment prospects of disabled veterans.
section_title: VA Continues to Face Significant Challenges in Improving Its VR&E Program
paragraphs: While VR&E responds to the Task Force recommendations, it faces  immediate challenges associated with providing vocational rehabilitation  and employment services to injured servicemembers returning from  Afghanistan and Iraq. As we reported in January 2005, VR&E is  challenged by the need to provide services on an early intervention basis;  that is, expedited assistance provided on a high priority basis. VR&E also  lacks the information technology systems needed to manage the provision  of services to these servicemembers and to veterans. In addition, VR&E is  only now beginning to use results-based criteria for measuring its success  in assisting veterans achieve sustained employment.
subsections: section_title: VR&E Challenged to Provide Services as Early as Possible
paragraphs: VR&E faces significant challenges in expediting services to disabled  servicemembers. An inherent challenge is that individual differences and  uncertainties in the recovery process make it difficult to determine when a  seriously injured service member will be able to consider VR&E services.  Additionally, as we reported in our January 2005 report, given that VA is  conducting outreach to servicemembers whose discharge from military  service is not yet certain, VA is challenged by DOD’s concerns that VA’s  outreach about benefits, including early intervention with VR&E services,  could adversely affect the military’s retention goals. Finally, VA is  currently challenged by a lack of access to DOD data that would, at a  minimum, allow the agency to readily identify and locate all seriously  injured servicemembers. VA officials we interviewed both in the regional  offices and at central office reported that this information would provide  them with a more reliable way to identify and monitor the progress of  those servicemembers with serious injuries. However, DOD officials cited  privacy concerns about the type of information VA had requested.
Our January 2005 report found that VR&E could enhance employment  outcomes for disabled servicemembers, especially if services could be  provided early in the recovery process. Unlike previous conflicts, a greater  portion of servicemembers injured in Afghanistan and Iraq are surviving  their injuries—due, in part, to advanced protective equipment and in-  theater medical treatment. Consequently, VR&E has greater opportunity to  assist servicemembers in overcoming their impairments. While medical  and technological advances are making it possible for some of these  disabled servicemembers to return to military occupations, others will  transition to veteran status and seek employment in the civilian economy.  According to DOD officials, once stabilized and discharged from the  hospital, servicemembers usually relocate to be closer to their homes or  military bases and be treated as outpatients by the closest VA or military  hospital. At this point, the military generally begins to assess whether the  servicemember will be able to remain in the military—a process that could  take months to complete. The process could take even longer if  servicemembers appeal the military’s initial disability decision.
We also reported that VA had taken steps to expedite VR&E services for  seriously injured servicemembers returning from Afghanistan and Iraq.  Specifically, VA instructed its regional offices to make seriously injured  servicemembers a high priority for all VA assistance. Because the most  seriously injured servicemembers are initially treated at major military  treatment facilities, VA also deployed staff to these sites to provide  information on VA benefits programs, including VR&E services to  servicemembers injured in Afghanistan and Iraq. Moreover, to better  ensure the identification and monitoring of all seriously injured  servicemembers, VA initiated a memorandum of agreement proposing that  DOD systematically provide information on those servicemembers,  including their names, location, and medical condition.
Pending an agreement, VA instructed its regional offices to establish local  liaison with military medical treatment facilities in their areas to learn who  the seriously injured are, where they are located, and the severity of their  injuries. Reliance on local relationships, however, has resulted in varying  completeness and reliability of information. In addition, we found that VA  had no policy for VR&E staff to maintain contact with seriously injured  servicemembers who had not initially applied for VR&E services.  Nevertheless, some regional offices reported efforts to maintain contact  with these servicemembers, noting that some who are not initially ready to  consider employment when contacted about VR&E services may be  receptive at a future time.
To improve VA’s efforts to expedite VR&E services, we recommended that  VA and DOD collaborate to reach an agreement for VA to have access to  information that both agencies agree is needed to promote  servicemembers’ recovery to work. We also recommended that the  Secretary of Veterans Affairs direct that Under Secretary for Benefits to  develop a policy and procedures for regional offices to maintain contact  with seriously injured servicemembers who do not initially apply for  VR&E services, in order to ensure that they have the opportunity to  participate in the program when they are ready. Both VA and DOD  generally concurred with our findings and recommendations.
section_title: Outmoded Information Technology Systems Pose a Challenge
paragraphs: GAO’s governmentwide work has found that federal agencies need to  strengthen strategic planning and investment management in information  technology. The Task Force expressed particular concern that VR&E’s  information technology systems are not up to the task of producing the  information and analyses needed to manage these and other activities. The  Task Force pointed out that VR&E’s mission-critical automated case- management system is based on a software application developed by four  VA regional offices in the early 1990s and redesigned to operate in the  Veterans Benefits Administration’s information technology and network  environments.
The Task Force identified specific concerns with the operation of VR&E’s  automated case management system. For example, 52 of VR&E’s 138 out- based locations cannot efficiently use the automated system because of  VBA’s policy to limit staff access to high-speed computer lines. As a result  of this policy, many VR&E locations use dial-up modem capabilities, which  can be unreliable and slow. The Task Force concluded that VR&E’s  automated system is so intertwined with the delivery of VR&E services  that lack of reliable access and timely system response has degraded staff  productivity and its ability to provide timely services to veterans.
In addition, the Task Force pointed out that the number of reports that  VR&E’s automated case management system can generate is limited. For  example, workload data available from the automated system provide only  a snapshot of the veterans in the VR&E program at a given point in time.  The automated system cannot link a veteran’s case status with the fiscal  year in which the veteran entered the program so that the performance of  veterans entering the program in a fiscal year can be measured over a  period of time. Also, the Task Force reported that VR&E does not have the  capabilities it needs to track the number of veterans who drop out of the  program or interrupt their rehabilitation plans.
section_title: VR&E Faces the Challenge of Developing Meaningful Outcome Measures
paragraphs: VA faces the challenge of using results-oriented criteria to measure the  long-term success of the VR&E program. The Task Force recommended  that VR&E develop a new outcomes-based performance measurement  system to complement the proposed 5-track employment-driven service  delivery system. Currently, VR&E still identifies veterans as having been  successfully rehabilitated if they maintain gainful employment for 60 days.  In its fiscal year 2004 performance and accountability report, VR&E  included four employment-based performance measures: the percentage  of participants employed during the first quarter (90 days) after leaving the  program, the percentage still employed after the third quarter (270 days),  the percentage change in earnings from pre-application to post-program,  and the average cost of placing a participant in employment. However, as  of February 2005, VR&E was still in the process of developing data for  these measures and had not reported results.
Until VR&E is farther along in this process, it will continue to measure  performance using the 60-day criteria, which may not accurately predict  sustained employment over the long-term. In 1993, we reported that the  60-day measure of success used by state vocational rehabilitation agencies  may not be rigorous enough because gains in employment and earnings of  clients who appeared to have been successfully rehabilitated faded after 2  years. Moreover, the earnings for many returned to pre-vocational  rehabilitation level after 8 years. As VR&E further develops its four  employment-based performance measures, it will also face challenges  associated with coordinating its efforts with those of other federal  agencies, including the Departments of Labor and Education, as they seek  to develop common measures of vocational rehabilitation success.
Mr. Chairman, this concludes my prepared remarks. I will be happy to  answer any questions that you or other Members of the Subcommittee  may have.
section_title: Contact and Acknowledgments
paragraphs: For further information, please contact Cynthia A. Bascetta at (202) 512- 7215. Also contributing to this statement were Irene Chu and Joseph  Natalicchio.
section_title: Related GAO Products
paragraphs: VA Disability Benefits and Health Care: Providing Certain Services to  the Seriously Injured Poses Challenges (GAO-05-444T, Mar. 17, 2005)
Vocational Rehabilitation: More VA and DOD Collaboration Needed to  Expedite Services for Seriously Injured Servicemembers (GAO-05-167,  Jan. 14, 2005)
VA Vocational Rehabilitation and Employment Program: GAO  Comments on Key Task Force Findings and Recommendations (GAO-04- 853, Jun. 15, 2004)
Vocational Rehabilitation: Opportunities to Improve Program  Effectiveness (GAO/T-HEHS-98-87, Feb. 4, 1998)
Veterans Benefits Administration: Focusing on Results in Vocational  Rehabilitation and Education Programs (GAO/T-HEHS-97-148, Jun. 5,  1997)
Vocational Rehabilitation: VA Continues to Place Few Disabled Veterans  in Jobs (GAO/HEHS-96-155, Sept. 3, 1996)
Vocational Rehabilitation: Evidence for Federal Program’s Effectiveness  Is Mixed, (GAO/PEMD-93-19, Aug. 27, 1993)
Vocational Rehabilitation: VA Needs to Emphasize Serving Veterans  With Serious Employment Handicaps (GAO/HRD-92-133, Sept. 28, 1992)
VA Can Provide More Employment Assistance to Veterans Who Complete  Its Vocational Rehabilitation Program (GAO/HRD-84-39, May 23, 1984)
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