Post-9/11 GI Bill: Additional Actions Needed to Help Reduce Overpayments and Increase Collections
Released: 2015-10-21T00:00:00


Highlights: section_title: Why GAO Did This Study
paragraphs: VA provided $10.8 billion in Post-9/11 GI Bill education benefits to almost 800,000 veterans in fiscal year 2014. GAO was asked to review overpayments for the program, which can create financial hardships for veterans who are generally required to pay them back and which can result in a significant loss of taxpayer dollars if they are not collected.

This report examines (1) the extent of overpayments, (2) how effectively VA has addressed their causes, and (3) the effectiveness of VA's collection efforts. GAO analyzed overpayment data for fiscal years 2013 and 2014, examined the causes from a generalizable sample of high-dollar overpayments (greater than $1,667), conducted a case file review of 20 overpayments (selected for a variety of causes), and reviewed VA's monitoring of overpayments. GAO also interviewed senior and frontline staff at two VA offices that process claims and collect debts, officials at nine schools (selected for variation in program length and their status as public, nonprofit, and for-profit), higher education associations, and veteran service organizations.

section_title: What GAO Found
paragraphs: The Department of Veterans Affairs (VA) identified $416 million in Post-9/11 GI Bill overpayments in fiscal year 2014, affecting approximately one in four veteran beneficiaries and about 6,000 schools. Overpayments most often occur when VA pays benefits based on a student's enrollment at the beginning of the school term and the student later drops one or more classes (or withdraws from school altogether). Students therefore receive benefits for classes they did not complete, and the “overpayment” must be paid back to VA. A small percentage of overpayments occurred because of school reporting or VA processing errors. GAO found that most overpayments were collected quickly, but as of November 2014 (when VA provided these data to GAO), VA was still collecting $152 million in overpayments from fiscal year 2014, and an additional $110 million from prior years, primarily owed by veterans with the remainder owed by schools.

Inadequate guidance, processes, and training have limited VA's efforts to reduce overpayments caused by enrollment changes and school errors.

Guidance for veterans. Many veterans may not realize they can incur overpayments as a result of enrollment changes because VA provides limited guidance to veterans on its policies. As a result, veterans may be unaware of the consequences of enrollment changes until after they have already incurred their first overpayment debt, according to school officials. Because VA is not effectively communicating its program policies to veterans, some veterans may be incurring debts that they could have otherwise avoided.

Enrollment verification process. While veterans using other VA education programs have to verify their enrollment each month, VA generally does not require those using the Post-9/11 GI Bill to do so. By not requiring veterans to verify their enrollment every month, which can cause significant time to lapse between when veterans drop courses and when this is reported, VA's process allows veterans to incur thousands of dollars in overpayments and also increases the program's costs associated with collecting these debts.

Training for school officials. Overpayments also occur when schools make errors, such as reporting enrollment information incorrectly, which VA officials said is sometimes attributable to a lack of training. For example, some school officials routinely made systematic errors reporting enrollment information, creating thousands of dollars in overpayments. Not all school officials attend the different training opportunities VA offers and VA officials said the agency lacks the authority to require school officials to participate in any of them. VA officials said they would like school officials to take a minimum level of training, which could help reduce errors and related overpayments.

The effectiveness of VA's collection efforts is hindered by its notification methods. VA relies solely on paper mail to notify schools and veterans of overpayments. VA generally sends veterans' notices to the addresses from veterans' initial benefit applications. However, these addresses can often be out-of-date, so some veterans do not receive the letters, leaving them unaware of their debts. This can cause veterans to unknowingly miss deadlines for disputing their debts and leave them unprepared to cover living expenses if VA begins withholding future benefit payments or offsetting tax returns for collection. This can also lead to delays in the collection of overpayments from veterans.

section_title: What GAO Recommends
paragraphs: Congress should consider granting VA explicit authority to require training for school officials. In addition, GAO is making a number of recommendations to improve VA's guidance and processes, including providing program guidance to veterans, verifying veterans' monthly enrollment, and developing additional debt notification methods. VA agreed with GAO's recommendations to the agency and plans to address these issues.

section_title: Letter
paragraphs: The Department of Veterans Affairs (VA) provided $10.8 billion in Post- 9/11 GI Bill education benefits to almost 800,000 veterans and other  beneficiaries in fiscal year 2014. For eligible veterans, VA sends tuition  and fee payments to schools, as well as housing benefits and book  payments directly to the veteran, based on the initial enrollment  information that schools submit to VA at the beginning of each term. If  veterans subsequently reduce their course load (or withdraw from school  altogether), it can reduce their eligible benefit amount, and any  “overpayments” of tuition or housing benefits must be paid back to VA.  Given the size and projected future growth of the Post-9/11 GI Bill  program, these overpayments can result in a significant loss of taxpayer  dollars if they are not recovered. In addition, overpayment debts can  create financial hardships for veterans and administrative burdens for  schools.

You asked us to review issues related to Post-9/11 GI Bill overpayments.  This report examines:  1.  What is known about the extent of Post-9/11 GI Bill overpayments and  collections, and how effectively VA monitors them?  2.  How effectively has VA addressed the causes of overpayments?  3.  How effectively do VA’s policies and procedures support the collection  of overpayments?

To examine the extent of overpayments, we reviewed available Post-9/11  GI Bill financial data from fiscal years 2013 and 2014. We also analyzed  data on all outstanding overpayment debts dating back to the start of the  Post-9/11 GI Bill program in 2009. We assessed the reliability of these  data by reviewing VA’s reporting systems and conducting electronic  testing of the underlying data, and we determined that the data were  sufficiently reliable for our reporting purposes. We also reviewed VA’s  monitoring of overpayments and collections by examining its data tracking  and reporting practices and assessed these efforts against guidance for  government receivables in OMB Circular A-129. To identify the causes of  overpayments, we reviewed VA’s Quarterly High-Dollar Overpayment  Reports and supporting documentation for fiscal years 2013 and 2014.  We assessed the reliability of these data through an in-depth file review of  20 overpayment cases and interviews with knowledgeable agency  officials and we determined that the data were sufficiently reliable for our  reporting purposes. We also reviewed a selection of school compliance  surveys, which VA uses to assess whether schools that receive VA  education benefits adhere to applicable laws and regulations. To examine  the effectiveness of VA’s efforts to address both the causes of  overpayments and the collection of overpayment debts, we reviewed  relevant federal laws, regulations, and policy guidance for processing and  collecting VA debts. We interviewed senior VA officials and visited one of  VA’s four Regional Processing Offices as well as VA’s debt collection  office, the Debt Management Center, to interview management and  frontline staff. We also interviewed representatives from several veterans  service organizations, higher education associations, and administrators  at nine schools about the effects of overpayments on veterans and  schools. We selected the nine schools to include a mix of program  lengths (2-year and 4-year schools), sectors (public, nonprofit, and for- profit), and student veteran populations ranging from 14 to more than  14,000. We assessed VA’s efforts to address the causes of  overpayments and collect overpayment debts against the requirements in  the Post-9/11 GI Bill’s statute and regulations, and government standards  for internal controls. For more information on our scope and  methodologies, see appendix I.

We conducted this performance audit from April 2014 to October 2015 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
subsections: section_title: Background
subsections: section_title: Post-9/11 GI Bill Benefits
paragraphs: The Post-9/11 GI Bill, which took effect on August 1, 2009, is now VA’s  largest educational program. In fiscal year 2014, the Post-9/11 GI Bill  program had 790,000 participants and made $10.8 billion in payments for  tuition, fees, housing, and books. This program provides benefits  generally to veterans who served on active duty for at least 90 days on or  after September 11, 2001. Full benefits are available to those who  served on active duty for 36 months, for which VA will pay the full in-state  tuition and fees at any public school and up to an annual maximum  amount at nonprofit and for-profit schools ($21,085 in academic year  2015-16).

VA pays schools directly for tuition and fees and sends additional  payments for housing and books directly to veterans who are eligible for  these payments. Housing benefits are provided to veterans through a  monthly housing allowance, paid at the beginning of each month based  on the previous month’s enrollment, and the amount depends on the  veteran’s rate of academic pursuit (e.g., full- or part-time) and the  geographic location of the school they are attending.

For veterans to start receiving Post-9/11 GI Bill benefits, school  employees, known as school certifying officials, must certify to VA that  they are enrolled in classes (see fig. 1). VA recommends that schools  certify veteran enrollments prior to the start of the school term.

section_title: Post-9/11 GI Bill Overpayments
paragraphs: Post-9/11 GI Bill overpayments occur when VA makes a payment in  excess of what a veteran is entitled to. This can result from either  erroneous payments or subsequent changes in the veteran’s enrollment  status or tuition or fee amounts after benefits have already been paid.  Enrollment changes cause overpayments because the Post-9/11 GI Bill  program, by design, pays tuition to schools in advance based on  individual veterans’ expected enrollment. These types of overpayments  are not considered “improper” (i.e., made in error) because the payments  were originally correct when issued. Once VA begins paying Post-9/11  GI Bill benefits, veterans and schools are responsible for notifying VA of  any changes in the veteran’s enrollment (e.g., dropping a class or  withdrawing from school) and schools are responsible for notifying VA of  any subsequent adjustments in tuition or fees. VA processes these  changes, which can increase or decrease the payment amounts veterans  are eligible for. When enrollment changes decrease a veteran’s  calculated benefit amount, an overpayment is created for any excess  funds VA has already paid. For example, tuition and fee overpayments  can be created for any tuition and fees paid for classes that a veteran did  not complete. Changes in a veteran’s enrollment can also affect the  amount of housing and book stipend payments that the veteran is eligible  to receive.

VA sends tuition and fee payments directly to schools on behalf of  students, and VA often holds veterans liable for tuition and fee  overpayments in accordance with its statutory authority. Veterans are  generally responsible for repaying any overpayments resulting from  enrollment changes during the school term (see table 1). Schools are  only responsible for repaying these benefits to VA in certain  circumstances, such as when the veteran completely withdraws from the  school on or before the first day of the term. Veterans are solely  responsible for repaying any overpayments of housing or book stipend  benefits. VA does not hold veterans liable for overpayments that result  from administrative errors or an error in judgment on the part of VA,  unless the veteran should have known the overpayment was patently  excessive (such as a duplicate payment or a payment amount that  exceeds the amount displayed on an award letter), according to VA  officials.

VA determines the type and amount of any overpayments based on the  enrollment and tuition information submitted by schools or after identifying  and correcting any school reporting or internal processing errors. When  an overpayment is caused by an enrollment change, VA establishes an  overpayment debt for the veteran, the school, or both depending on the  circumstances (see fig. 2).

section_title: VA Collection Process
paragraphs: Overpayment debts are forwarded to VA’s centralized collection office,  the Debt Management Center, for collection. Once schools or veterans  receive a collection letter from the Debt Management Center, they can  arrange to repay the debt in full, set up a payment plan, dispute the  existence or amount of the debt, or request a waiver of the debt due to  financial hardship or special circumstances. If schools or veterans do  not initiate one of these options to address the debt, VA begins pursuing  more aggressive collection methods. These can include offsetting—that  is, reducing or withholding—future Post-9/11 GI Bill payments or tax  returns and reporting debts to credit rating agencies, as illustrated in  figure 3. Since veterans are liable for most overpayments, VA collects  debts from hundreds of thousands of individual veterans.

section_title: Comparison with Department of Education Processes
paragraphs: We have previously compared VA’s processes to those of the  Department of Education. The Department of Education uses a different  structure than VA for processing and collecting federal student aid  overpayments. In contrast to VA, Education generally works directly with  schools to return overpayments of federal student aid funds, focusing its  collection efforts on a few thousand schools rather than working directly  with hundreds of thousands of students. The Department of Education  payment systems also allow schools to reconcile any enrollment changes  before the term by adjusting the school’s aggregate receipt of federal  student aid funds, rather than issuing individual debts and new payments  to the school. In contrast, VA processes each tuition payment and  collection separately.

In reaction to our prior work comparing VA’s processes with the  Department of Education’s, VA officials raised concerns about adopting  similar practices to the Department of Education. For example, according  to VA officials if VA started collecting all tuition overpayments from  schools, schools would still be able to bill veterans for overpayment debts  and potentially would not allow veterans to reenroll for class until these  debts were repaid. In addition, veterans would have to repay any  overpayment debts to their school out-of-pocket, rather than through  offsets to their Post-9/11 GI Bill housing payments.

section_title: VA Identified Over $400 Million in Post-9/11 GI Bill Overpayments in Fiscal Year 2014 and Does Not Effectively Monitor These Debts
subsections: section_title: One in Four Beneficiaries and 6,000 Schools Incurred Overpayments in Fiscal Year 2014, Caused Primarily by Veteran Enrollment Changes after VA’s Initial Payments
paragraphs: VA made $416 million in Post-9/11 GI Bill overpayments in fiscal year  2014, or 4 percent of the over $10 billion in benefits paid during that  period. The bulk of these overpayments went to veterans instead of  schools, as shown in figure 4. Overpayments increased by nearly 20  percent from fiscal year 2013 to 2014, the only 2 years for which data  were available, while total program payments increased by just 6 percent.

Most overpayments are caused by veteran enrollment changes, over  which VA has limited control. In these cases, VA’s original payments were  correct based on the veteran’s planned enrollment, but some or all of the  original payment became an overpayment when the veteran  subsequently dropped a class or withdrew from school. VA estimated that  veteran enrollment changes caused 90 percent of high-dollar Post-9/11  GI Bill overpayments (see fig. 5). The remaining high-dollar  overpayments were caused by school reporting errors (e.g., submitting  incorrect enrollment or tuition information) and VA processing errors (e.g.,  duplicate payments or data entry errors).

Approximately 1 out of 4 beneficiaries incurred an overpayment in fiscal  year 2014—more than 225,000 veterans. The median amount that  veterans had to repay was about $570, which could correspond to  dropping a single class during the term and can be a sizable debt for a  college student with limited income. Some veterans incurred much larger  overpayments. For example, over 7,000 veterans had overpayments of  more than $5,000, which can occur when a veteran completely withdraws  from school or receives several months of housing overpayments (see fig.  6).

Almost 6,000 schools incurred overpayments in fiscal year 2014, often for  multiple veterans, with a total median debt of $7,800 per school. School  overpayments arise when veterans never attended classes or withdrew  from school on or before the start date, although they can also be caused  by VA and school error in certain cases. About 5 percent of schools  accounted for almost half of all school overpayments.

section_title: VA Has $152 Million in Uncollected Overpayment Debt from Fiscal Year 2014 and an Additional $110 Million from Prior Years, Primarily Owed by Veterans
paragraphs: VA had $262 million in outstanding Post-9/11 GI Bill overpayment debts,  as of November 2014, primarily owed by veterans. More than half of  these uncollected debts are from overpayments that occurred in fiscal  year 2014, some of which were still in the initial stages of collection and  likely have been repaid since VA provided these data. VA has had more  time to collect debts from prior years. However, $110 million in  uncollected debts are older than 1 year, some of which date back to 2010  (see fig. 7).

Veterans are responsible for the vast majority of uncollected overpayment  debts since VA has less success collecting debts from veterans than from  schools. Of the total amount outstanding, more than 90 percent was owed  by veterans rather than owed by schools. Schools had already repaid  almost all of the overpayment debts they incurred in fiscal years 2013 and  2014, while veterans had so far repaid 75 percent of overpayments from  fiscal year 2013 and 46 percent from 2014. School overpayments are  generally collected through direct payments (e.g., check, credit card,  electronic funds transfer), while veteran overpayments are collected  through several methods, most commonly by deducting the debt amounts  from subsequent GI Bill or other VA payments. VA also collected from  veterans through direct payments, offsetting other federal payments such  as federal tax returns, and private debt collection agencies.

section_title: VA Does Not Monitor the Full Extent of Overpayments and Collections, Which Hinders Its Ability to Manage the Post-9/11 GI Bill Program
paragraphs: VA does not monitor the full extent of Post-9/11 GI Bill overpayments and  collections. For example, VA does not regularly track the number of  overpayments or the amount of uncollected student debts. Although VA  was able to provide this information in response to our data request, it is  not something the agency actively monitors on a regular basis. VA has  instead focused its current monitoring efforts on one subset of  overpayments, those that are considered “improper.” As it is legally  required to do, VA reports an estimated improper payment rate for  different benefit programs. While these rates are a useful government- wide accountability measure, they do not capture the vast majority of  Post-9/11 GI Bill overpayments that occur due to subsequent enrollment  changes. The approximately 90 percent of overpayments resulting from  veteran enrollment changes are not categorized as improper since the  payments are correct when issued and only become overpayments at a  later date after the veteran makes an enrollment change. As a result,  VA’s estimated improper payment rate for the Post-9/11 GI Bill provides  little insight into the over $400 million in overpayments the agency made  in fiscal year 2014. As for collections, the only specific data on the Post- 9/11 GI Bill that the Debt Management Center actively monitors is for  school debts, which only account for about a third of program  overpayments. VA officials do not regularly monitor collection rates for  student overpayments, which represent the majority of uncollected debts.

VA’s limited monitoring of overpayments and collections makes it difficult  to effectively manage the Post-9/11 GI Bill program. OMB Circular A-129  instructs all federal agencies to use comprehensive reports on the status  of overpayments and other receivables to monitor their effectiveness and  enable data-driven decision making. VA’s limited monitoring efforts fall  short of this standard. VA’s ability to monitor historical trends in  overpayments and collections is in some ways constrained by the  limitations of its data systems. Specifically, debts are removed from VA’s  main payment and collection database and archived 2 years after  repayment. While this limits the availability of summary information for  analyzing prior historical trends and performance, VA could replicate the  analysis we conducted for this study by periodically calculating key  measures from the available data records. One area where VA has made  some strides is by monitoring school debts on a monthly basis. However,  as evidenced by its significantly limited monitoring activity, VA has not  prioritized the need to actively monitor veteran overpayments and  collections for the Post 9/11 GI Bill program, although VA officials  acknowledged that additional monitoring would help improve program  management. By not actively monitoring available data on overpayments  and collections, VA cannot assess its efforts to reduce overpayments nor  can it gauge the effectiveness of its collection efforts. This also limits VA’s  ability to proactively manage the program to address overpayment or  collection issues, for example, by identifying trends and targeting  outreach to the small number of schools that account for the majority of  overpayment dollars.

section_title: Inadequate Guidance, Controls, and Training Have Limited VA’s Effectiveness in Reducing Overpayments from Enrollment Changes and School Errors
subsections: section_title: VA Lacks Adequate Guidance and Controls That Could Reduce Overpayments from Enrollment Changes
paragraphs: Despite enrollment changes being responsible for most overpayments,  VA provides limited guidance to veterans about the possible  consequences of enrollment changes. Staff from VA’s Debt Management  Center and its Education Call Center, as well as staff who conduct school  compliance surveys, said that many veterans who incur overpayments as  a result of enrollment changes may not realize that they are doing so. VA  informs veterans about their potential liability for overpayment debts  resulting from enrollment changes in the letter it sends veterans when  they become eligible for benefits. VA also posts responses to some  overpayment-related questions on the Post-9/11 GI Bill website.  However, VA does not explain—either in the benefits letter, on the Post- 9/11 GI Bill website, or in other places veterans are likely to seek program  information—how to avoid creating debts once enrolled in school. The  letter veterans receive simply tells them that they are responsible for all  debts resulting from reductions or terminations of their enrollment. It does  not explain, for example, the difference between VA overpayments and  school refund policies or that failure to promptly notify VA of enrollment  changes can increase the incidence and amount of housing  overpayments. In addition, VA does not disclose its formula for calculating  overpayments in any of the guidance it provides to veterans or schools,  which makes it difficult for veterans—and school certifying officials who  advise them—to accurately estimate the potential tuition overpayments  veterans might incur for dropping a class. In contrast, VA requires schools  to include information about school refund policies for unused tuition and  fee payments in information available to all veterans.

As a result, officials at two of the schools we interviewed said that the  majority of overpayment issues arise among new student veterans who  are not aware of the consequences of enrollment changes until after they  have already incurred their first overpayment debt. In other cases,  veterans are confused about when overpayments are created. For  example, staff from VA’s Debt Management Center explained that some  veterans incorrectly think they will not incur a debt if they drop a class  before their school’s deadline to add or drop classes. Moreover, our  review of complaints veterans have made to VA also demonstrates some  veterans’ confusion about how the Post-9/11 GI Bill works. For example,  one veteran was shocked to learn he had incurred a debt of over $5,000  stemming from his enrollment changes. According to federal internal  control standards, all agencies should ensure they are using adequate  means of communicating with external stakeholders who may have a  significant impact on the agency achieving its goals. If VA does not  enhance its guidance to veterans about its overpayments policies,  veterans may continue to incur debts that could be avoided.

VA has an optional process for schools to report veteran enrollments that  can help prevent overpayments due to enrollment changes, but only a  small proportion of schools currently use it. Typically, a school certifying  official sends a veteran’s enrollment information (e.g., tuition, fees, term  dates) to VA soon after a veteran enrolls in an upcoming term. Once VA  processes the claim and makes tuition and fee payments to the school,  any subsequent enrollment changes can create overpayments. As an  alternative, VA gives schools the option of using a two-stage process,  called dual-certification. Schools can initially precertify a veteran’s  enrollment for $0 for tuition and fees before the term begins, which allows  VA to start paying housing benefits without delay. The school can then  recertify the enrollment with the actual tuition and fees amount at a later  date—e.g., after the period to add or drop classes ends when many  enrollment changes have already occurred. Since VA does not send  tuition payments until the school certifies an actual tuition and fee  amount, dual-certification can help prevent tuition overpayments that  occur when a veteran drops a class at the beginning of the term.

Despite the potential benefits, dual-certification has not been widely  adopted, in part because VA’s guidance to schools does not explain the  benefits of using this process. According to a 2013 survey by the National  Association of College and University Business Officers, 30 percent of the  239 schools responding to the survey reported that they used dual- certification. Only one of the nine schools we interviewed uses this  approach, and an official at this school said that switching to the dual- certification process was responsible for reducing the school’s  overpayment amount from $500,000 to $50,000 each semester. In  contrast, six of the schools we interviewed send tuition and fee  information to VA by the start of the term. An official at one of these  schools does not like to use dual-certification because it requires  submitting enrollment information to VA twice. A VA official further  explained that many schools want to be paid up front, so they submit the  course enrollment and expected tuition and fees before the term.  Recognizing that dual-certification may not work well for some schools,  given the additional work involved and delay in receiving tuition  payments, VA does not require this approach. Nevertheless, this can be a  useful option for some schools and VA’s guidance to schools does not  explain how dual certification can prevent overpayments. Internal control  standards stipulate that adequate communication with external parties  through guidance and other methods is essential for achieving agency  goals. By not providing guidance to schools about the benefits of using  dual-certification, VA is missing an opportunity to reduce a potentially  large number of overpayments as well as the burden placed on veterans  and schools to repay those debts.

Finally, unlike most other GI Bill programs, VA has not required veterans  in traditional degree and certificate programs using the Post-9/11 GI Bill  to regularly verify their enrollment throughout the school term, which  exacerbates the incidence and amount of housing benefit overpayments  due to delayed reporting of enrollment changes. When veterans reduce  their enrollment, they continue to receive housing benefit overpayments  each month until VA is notified of the change. Even though VA’s  guidance to veterans instructs them to promptly notify their school  certifying official and VA of any enrollment changes, they do not always  do so. In one case file we reviewed, the veteran withdrew from school  one day before the term began in mid-August, but the enrollment change  was not reported to VA until late October. As a result, this veteran  received an extra 2 months of housing benefits after withdrawing, which  created an overpayment of over $3,000. In another case file review, a  veteran’s enrollment changes were reported to VA 3 months after they  happened. As a result the veteran incurred a housing overpayment of  $2,200. These housing overpayments would have been avoided if  veterans using the Post-9/11 GI Bill were required to verify their monthly  enrollment.

VA officials said they would like to require veterans using the Post-9/11  GI Bill to verify their monthly enrollment but would need to develop a new  verification process. One option VA has considered is developing a new  online system, but VA officials said the agency has not yet developed the  system due to budgetary constraints. A VA contractor estimated in 2013  that it would cost approximately $10 million to implement an online  verification system, although VA officials were unsure if this estimate is  still accurate. Such an investment would provide substantial long-term  savings for VA in comparison with the current system by reducing  housing overpayments and also help VA comply with federal  requirements to establish practices that ensure funds are safeguarded  against waste or loss. For example, VA made almost $111 million in  housing overpayments in fiscal year 2013, almost $29 million of which  was still uncollected as of November 2014. Although requiring veterans to  verify their enrollment would not eliminate all of these overpayments, if  the contractor’s prior cost estimates are still correct, the new system  could still pay for itself in 1 year if it reduced uncollected housing  overpayments by just one-third. The potential savings from an enrollment  verification system would likely increase in future years as the size of the  Post-9/11 GI Bill program continues to grow, creating a long term benefit  for VA and taxpayers. Federal internal control standards state that  agencies need effective policies and procedures to help achieve results  and ensure stewardship of government resources.

section_title: School Officials with Inadequate Training Contribute to Reporting Errors
paragraphs: Schools cause overpayments when they make processing errors, such as  reporting the wrong enrollment dates or billing VA for non-allowable fees.  VA estimated that these errors account for 8 percent of high-dollar  overpayment cases in fiscal years 2013 and 2014, while we estimated  that they account for around $28 million of the $280 million in high-dollar  overpayments VA made in fiscal year 2014. School errors also  accounted for over half of the overpayment findings in VA’s initial analysis  of compliance surveys conducted in fiscal years 2014 and 2015. Similarly,  we identified a variety of school errors that resulted in overpayments  among the 24 compliance surveys we reviewed. For example, in one  compliance survey, the school certifying official did not know how to  correctly report the last day of the school term, resulting in overpayments  of $7,000, $4,000, and $3,500 for three different students. School officials  can also create overpayments when they are unfamiliar with what types  of school fees VA allows under the Post-9/11 GI Bill program. For  example, in one school compliance survey we reviewed, a school  certifying official billed VA $200 for non-allowable book fees for multiple  students. At another school, the school certifying official billed VA for a  variety of unallowable fees, all of which resulted in overpayments. VA  compliance survey specialists used these reviews to educate school  officials on VA payment policies and sometimes recommended that the  school certifying officials obtain additional training.

School officials without adequate training were commonly cited as a  source of school errors in our interviews with staff from VA’s Regional  Processing Office and Debt Management Center. Regional processing  office staff described some common errors made by school certifying  officials. For example, some school officials do not adjust the tuition or fee  amount when reporting an enrollment change; they submit conflicting  information in the comments field; and they sometimes report the wrong  withdrawal date (e.g., using the date the form was submitted, rather than  when the enrollment change occurred). VA Debt Management Center  staff stated that school certifying officials often have trouble reporting  enrollment changes correctly and could benefit from additional training on  Post-9/11 GI Bill policies. For example, school certifying officials  sometimes do not understand that veterans will incur an overpayment for  dropping classes after the term has begun and are often confused by  VA’s definition of school terms. Compliance survey officials noted that  there is a high level of turnover among school certifying officials, and that  staff who are new to the job face a steep learning curve. Additionally, a  2014 VA Inspector General report identified multiple school reporting  errors and noted that if school certifying officials completed VA’s  recommended training, it could improve the timeliness and accuracy of  their submitted claims.

VA offers a variety of training opportunities for school officials, but VA  officials said the agency lacks the authority to require that school  certifying officials complete any of its training about how to correctly  process enrollment information, despite the fact that the Post-9/11 GI Bill  program is complex for schools to administer and that schools caused an  estimated $28 million in high-dollar overpayments in fiscal year 2014. In  addition to publishing a handbook for school certifying officials, VA offers  a 40-hour, self-paced, online course to provide a comprehensive  overview of schools’ responsibilities and GI Bill payment processes.  Prior GAO and VA Inspector General reports have recommended that VA  do more to encourage school certifying officials to take advantage of VA  training opportunities. While VA has taken some steps to address these  recommendations and officials said they have conducted outreach  through conferences and workshops, the number of school officials  completing VA’s online training remains low. In 2014, only 29 percent of  school certifying officials (666 of 2,259) who accessed this training  completed it; the same percentage have completed the training so far in  2015 (358 of 1,218 as of June 2015). According to VA officials, VA lacks  direct legal authority to require school certifying officials to complete a  minimum level of training on how to implement the program, although  they indicated that they would like the ability to do so. However, school  officials have essential duties in processing Post-9/11 GI Bill payments  and need to possess and maintain a level of competence to do their job,  which includes receiving training. This would be consistent with federal  internal control standards. In the absence of minimum level training  requirements for school officials, VA lacks reasonable assurance that  staff with key responsibilities in the payment process know how to avoid  creating overpayments.

section_title: VA Uses Quality Controls to Address Internal Processing Errors
paragraphs: VA causes overpayments when it issues a duplicate payment or makes  data entry errors regarding tuition or fee amounts, training time, and other  key enrollment data. VA estimated that these errors caused 2 percent of  the high-dollar overpayment cases in fiscal years 2013 and 2014 and we  estimated that they account for around $6 million of the $280 million in  high-dollar overpayments VA made in fiscal year 2014. In one of the  case files we reviewed, a veteran had to repay $7,200 in tuition debt  because VA erroneously calculated a larger benefit than he was eligible  for based on his years of service. In another case, VA sent a tuition  payment to the wrong school, which the school then had to repay. In the  case of a veteran housing overpayment we reviewed, VA accidentally  processed a veteran’s enrollment certification twice, so that it looked like  he was enrolled for more classes than he actually was. As a result of this  error, VA provided housing payments to the veteran, although he should  have been ineligible because he was enrolled less than half-time. The  veteran ended up with a $3,000 overpayment when the error was  detected.

VA has taken steps to address processing errors through technology  improvements, quality assurance reviews, and training. For example,  agency investments in technology improvements have allowed a  proportion of claims to be processed automatically, reducing the  possibility of human error, according to VA officials. In fiscal year 2014,  VA automatically processed 51 percent of Post-9/11 GI Bill claims. VA  also monitors overall payment accuracy at the four regional offices. A  quality assurance team reviews a sample of 25 Post-9/11 GI Bill  payments from each regional office every quarter. VA officials said any  common errors identified during these reviews are addressed through  additional training or guidance. In addition, officials from the regional  office we visited said that each month they review five claims processed  by each employee to monitor payment accuracy. VA also ensures that  claims processers stay up-to-date on program policies by requiring 24  hours of refresher training each year.

section_title: VA’s Notification Methods and Overpayment Calculations Hamper Its Collection Efforts
subsections: section_title: VA’s Notification Methods Can Leave Veterans and Schools Unaware of Their Overpayment Debts
paragraphs: VA relies on mailed letters to notify veterans and schools of  overpayments, which can leave some veterans and schools unaware of  their debts until VA begins collecting them. Once an overpayment debt is  created, VA mails a sequence of letters to notify the responsible veteran  or school of their debt. For veterans, these letters are generally sent to  the addresses listed on their initial application for Post-9/11 GI Bill  benefits, according to VA officials. However, students are a highly  transient population and Post-9/11 GI Bill benefits can be used over  multiple years, so for many veterans the addresses VA relies on may no  longer be accurate, according to VA and school officials.

When veterans do not receive notification letters for their debts, they may  not know they have a debt, causing them to miss key deadlines.  Specifically, VA will not suspend collection actions if a veteran requests a  waiver or disputes the amount of a debt more than 30 days after the initial  notification letter. Then, if VA begins collecting the debt by offsetting other  benefits, such as monthly housing payments, veterans may be  unprepared and unable to cover their expenses, potentially creating  financial obstacles towards continuing their education, according to  officials from veteran service organizations. Although VA does not keep  data on undeliverable mail, VA call center staff said they frequently  receive calls from veterans who were unaware of their overpayment debts  until their federal tax returns were offset, which makes it difficult for these  veterans to proactively plan and budget for how to cover their living  expenses in light of impending collections. If veterans do not receive a  notification letter, these deadlines will pass without the veterans’  knowledge, leaving them with limited recourse to halt collection actions  and potentially having negative effects on their credit rating.

For schools, VA mails the letters to the school’s central address, leaving  the school responsible for directing the letter to the appropriate  administrator or office. However, some school administrators told us that  these letters sometimes get lost in transit, putting schools at risk of having  future federal grants offset for collection. These problems with mailed  letters not only create complications for veterans and schools, but they  also make it more difficult for VA to collect debts since veterans and  schools are less likely to repay their debts in a timely manner if they are  unaware that the debts exist.

VA is required to notify veterans and schools of any debts in writing.  According to federal internal control standards, all agencies should  ensure they are using adequate means of communicating with external  stakeholders. To effectively communicate with veterans and schools,  VA may also need to use other notification methods in addition to mailed  letters. For example, administrators at six of the nine schools we  interviewed expressed a preference for VA to use electronic rather than  mailed correspondence. Students are also generally accustomed to  electronic communication, as one school official noted, and could benefit  from electronic communication, therefore alleviating potential issues with  out-of-date mailing addresses. VA already has existing online portals that  could be leveraged to inform veterans and schools about their  overpayment debts. VA’s eBenefits portal, for example, already provides  over 3 million veterans with access to personalized information about  their VA benefits. VA officials said this system could be upgraded to  provide veterans with online access to debt notification letters; however,  the agency has not implemented this proposal due to other funding  priorities. Officials at six of the nine schools we interviewed suggested  email as another potential low cost option; however, VA would need a  mechanism to ensure it is using up-to-date email addresses. By not  pursuing alternative mechanisms to supplement mailed letters, significant  numbers of veterans and schools may remain unaware of their  overpayment debts and unprepared for the financial consequences,  which could also complicate and prolong VA’s collection efforts.

VA’s debt notification letters also provide essential information in two  separate letters, making it difficult for veterans and schools to reconcile  and repay overpayment debts. VA is required to provide debtors with  information on the amount of the debt, the reason for the debt, their right  to dispute the debt or request a waiver, and how to repay it. However,  VA conveys this information in two separate letters, neither of which  contains all the information a veteran or school needs to understand the  overpayment and how to repay it (see fig. 8). For example, VA’s regional  offices mail veterans an initial notification letter which includes information  on the amount and cause of their overpayment debt. However, it is not  until more than 30 days later that VA’s debt collection office mails the  veteran a second letter with information on how to repay the debt,  according to VA officials. Since each of these letters only provides  veterans with half of the information they need, they can create confusion.  Specifically, VA debt collection staff said they frequently receive  questions from veterans who are confused because information on the  cause of overpayments and the collection process is conveyed in  separate letters. For example, officials from the debt collection call center  said one of the most common questions they receive from veterans is to  ask why their debt was established, since this information is not included  in the second letter veterans receive from the debt collection office. This  delay in receiving all of the information associated with their debt could  also delay the collection process since veterans may be less likely to  repay their debts until they understand both the cause of overpayments  and have the information they need on how to repay them. VA similarly  mails this information to schools in two separate letters, and school  officials told us this creates some confusion since they must wait to repay  any overpayment debts until they can match up both letters from VA,  which can also delay collections. One school administrator told us that it  can be particularly difficult to keep track of the two separate letters at  larger schools that enroll thousands of veterans, so they had to hire two  new staff to deal with the administrative burden of researching  overpayment debts.

VA officials said the initial notification letters are sent separately from the  debt collection letters to promptly notify veterans about their debts and to  allow veterans time to dispute them. Although this may justify sending two  separate letters, it would still help avoid confusion for veterans and  schools if the later debt collection letters included information on both the  cause of the overpayment and repayment options. The collection letters  mailed by VA’s debt collection office do not include details on the cause  of debts because VA’s regional offices do not currently share this  information when referring debts for collection. Officials from VA’s debt  collection office told us they would like to include some basic information  on the cause of debts in their letters, such as the term dates associated  with a veteran withdrawal. However, VA officials responsible for  administering the Post-9/11 GI Bill said the cause of the overpayments is  already clearly communicated in the initial notification letters.  Nevertheless, this should not preclude the regional processing offices  from sharing basic information on the causes of overpayments so it could  be included in subsequent letters along with information on how to repay  debts. Given VA’s regulatory requirement to provide students and schools  with information on both the cause of their debts and how to repay them,  VA could improve its efforts to convey this information. This would also be  consistent with federal internal control standards for information sharing.  The current lack of information sharing between offices limits VA’s ability  to communicate both the overpayment cause and repayment options in at  least one of the letters VA sends to veterans and schools. This process  can lead to confusion and cause delays in veterans and schools repaying  their debts in a timely manner.

section_title: VA’s Formula for Prorating Tuition Overpayments Reduces Total Collections
paragraphs: VA’s formula for prorating overpayments gives veterans credit for extra  days of attendance after they drop a class, thereby reducing the amount  subject to collection. When a Post-9/11 GI Bill beneficiary drops a class  during the term, VA prorates the resulting overpayment as though the  veteran attended class through the end of the month rather than using the  actual date of the withdrawal. For example, if a student drops a class on  September 1, VA would prorate the overpayment amount as though the  student had been enrolled through September 30. This in effect credits  students for up to 30 extra days of classes they did not attend, which can  reduce the overpayment amount subject to collection by hundreds of  dollars per veteran (see fig. 9). VA officials said this policy was designed  for monthly housing benefits, and then applied to tuition benefits that are  paid separately under the Post-9/11 GI Bill. Although crediting a student  for a full month of enrollment may be appropriate for benefits that are paid  on a monthly basis, such as housing, it is less appropriate for benefits  that are paid as up-front lump sums, such as tuition, particularly since the  law stipulates that education benefits shall only be paid for the period of  time during which the veteran is enrolled. Since VA’s overpayment  calculation is crediting veterans for school days they did not attend, it is  inappropriately increasing the cost of the program.

In addition, VA’s formula for prorating overpayment amounts does not  account for schools’ own internal refund policies, and can sometimes  result in veterans receiving surplus funds that VA is not collecting. Some  schools have fairly generous tuition refund policies when students drop a  class or withdraw from school early in the term. In these cases, a school  may send the veteran a tuition refund that is larger than the overpayment  amount the veteran owes to VA, leaving the veteran with a potential  financial gain. For example, one of the community colleges we examined  provided a 100 percent tuition refund if a student withdrew within the first  two and a half weeks of the term, so a veteran withdrawing from school  would receive a full refund of $2,100 from the school. However, VA will  create an overpayment debt of $1,750 for this veteran since they had  attended two and half weeks of the 15 week term before withdrawing.

This would leave the veteran in this example with an extra $350 after  repaying their overpayment debt. The excess tuition payments VA is not  collecting are even larger at schools with higher tuition rates (see fig. 10).

Three of the nine schools included in our review had institutional refund  policies that provided all students with a 100 percent refund for  withdrawals within the first two or three weeks of the term. Officials at  one of these schools estimated that the difference between their refund  policy and VA’s overpayment calculations had resulted in over $136,000  in excess tuition payments for 53 veterans between 2009 and 2014,  averaging over $2,500 per veteran. These officials said they had  attempted to return these excess funds to VA, but VA would not accept  them. Officials at another school said they attempt to return any excess  funds to VA three times, but since VA usually will not accept these funds,  the school eventually just gives them to the veteran. VA officials told us  they cannot accept funds in excess of the overpayment debt that is billed  to veterans and said that some of these situations might occur when  schools do not correctly account for school refund policies when reporting  enrollment and tuition changes. The Post-9/11 GI Bill’s authorizing statute  specifies that benefits are only payable in an amount equal to the actual  cost of tuition and fees charged by the institution, but in these cases VA’s  tuition and fees payments exceed the amounts charged by the schools  once the refund policies are accounted for—that is, VA is making  payments for tuition amounts that were not charged by the school. As a  result, VA is overpaying for tuition and these excess funds are being  retained by schools or returned to veterans rather than collected by VA.

section_title: Conclusions
paragraphs: The Post-9/11 GI Bill has provided valuable education benefits to millions  of veterans, but the program’s structure of collecting debts directly from  veterans creates certain risks. Although the program could have been  designed differently from the beginning to avoid some of the subsequent  problems with overpayments, at this point, a complete overhaul, such as  collecting tuition and fee overpayments directly from schools, would  require significant restructuring of VA’s payment operations as well as  legislative changes. However, current problems with overpayments can  still be addressed through process improvements and proactive  management on the part of VA. For example, VA currently collects and  monitors only limited data on Post-9/11 GI Bill overpayments and  collections, overlooking the most common types of overpayments and  collections. Overpayments increased to over $400 million in fiscal year  2014, affecting approximately one in four beneficiaries. Effective program  management requires monitoring of key data elements. Unless VA  expands its monitoring of overpayment debts and collections, it will not be  able to ensure that it is taking appropriate steps to safeguard taxpayer  funds.

Overpayments are an inevitable byproduct of the Post-9/11 GI Bill since  some veteran enrollment changes are to be expected. However, there are  ways that VA can reduce the number and amount of future  overpayments. For example, if VA provided more information to veterans  about potential overpayment debts, veterans would better understand the  financial consequences of dropping a class or withdrawing from school  and could take steps to avoid some overpayments. In addition, VA  provides schools with an optional process for certifying tuition and fees  that could reduce the effect of enrollment changes, although it does not  explain in its guidance to schools the potential advantages of this  process. Moreover, since veterans using the Post-9/11 GI Bill are not  required to regularly verify their enrollment, overpayments from  enrollment changes are also magnified by any delays in reporting these  changes to VA since veterans continue to receive monthly housing  payments. These potentially avoidable overpayments will continue to  occur unless VA proactively addresses issues associated with enrollment  changes. Similarly, unnecessary school reporting errors will lead to  overpayments if school certifying officials do not receive appropriate  training to understand VA’s payment and reporting processes. Although  VA offers online training that would address these issues, school officials  are not required to take part in this minimum level of training, because VA  officials believe the agency does not have the statutory authority to  require them to do so.

VA is responsible for recovering all debts in an efficient and effective  manner, but these efforts are hampered by the processes VA uses to  notify and collect debts from veterans and schools. Mailed letters alone  are not an effective method of notifying students and schools, particularly  since other electronic options are also available. This can leave veterans  unaware of their debts and create financial hardships for them when VA  offsets other income sources to collect these debts. In addition, the lack  of a single source of information on both the cause of debts and  repayment options creates unnecessary confusion for veterans that can  lead to delays in repayment as well as an administrative burden for  schools. Finally, VA also needs to ensure that it is appropriately  calculating overpayment debts in accordance with the law and recovers  any excess payments. However, VA’s current method of calculating  overpayments credits veterans for extra days of attendance and does not  account for school refund policies, which unnecessarily increases the cost  of the program.

section_title: Matter for Congressional Consideration
paragraphs: To address Post-9/11 GI Bill overpayments resulting from school errors,  Congress should consider granting VA explicit authority to require a  minimum level of training for appropriate school officials.

section_title: Recommendations for Executive Action
paragraphs: To improve the administration of the Post-9/11 GI Bill, reduce the  occurrence of overpayments, and increase debt collections, we  recommend that the Secretary of Veterans Affairs take the following eight  actions:  Improve program management by:

Expanding monitoring of available information on overpayment debts  and collections. This could include regularly tracking the number and  amount of overpayments created and the effectiveness of collection  efforts.

Address overpayments resulting from enrollment changes by:

Providing guidance to educate student veterans about their benefits  and consequences of changing their enrollment.

Providing guidance to schools about the benefits of using a dual  certification process where schools wait to certify the actual tuition  and fee amounts until after the school’s deadline for adding and  dropping classes.

Identifying and implementing a cost-effective way to allow Post-9/11  GI Bill beneficiaries to verify their enrollment status each month, and  require monthly reporting.

Improve efforts to notify veterans and schools about overpayment debts  by:  Identifying and implementing other methods of notifying veterans and  schools about debts to supplement the agency’s mailed notices (e.g.,  email, eBenefits).

Including information on both the cause of the debt and how to repay  it in debt letters.

Revise policy for calculating overpayments to increase collections by  prorating tuition overpayments when veterans reduce their enrollment  during the term based on the actual date of the enrollment change rather  than paying additional benefits through the end of the month during which  the reduction occurred.

Ensure it is recovering the full amount of tuition and fee payments if a  school does not charge a veteran for any tuition or fees after dropping a  class or withdrawing from school. For example, VA could adjust its  overpayment calculation to account for these situations or provide  schools with guidance on how to account for school refund policies when  reporting enrollment and tuition changes.

section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to VA for review and comment and  received a written response, which is reproduced in appendix II. VA  agreed with each of our recommendations and identified steps it plans to  take to implement them. To expand monitoring of overpayments and  collections, VA plans to develop recurring reports to identify trends and  areas for improvements. To address overpayments resulting from  enrollment changes, VA plans to provide information on the  consequences of enrollment changes in benefit letters and veteran  guidance, expand outreach to schools about dual certification, and  develop a system for verifying veterans’ monthly enrollment. To address  collection issues, VA plans to pursue additional methods of notifying  veterans about overpayment debts, include information on the cause of  debts and how to repay them in notification letters to schools and  veterans, and adjust its regulations and procedures for prorating  overpayments and accounting for school refund policies. VA also  provided technical comments that we incorporated, as appropriate. We  also provided selected portions of the draft to the Department of  Education for review; the department did not have any comments.

We are sending copies of this report to the appropriate congressional  committees; the Secretary of Veterans Affairs; the Secretary of the  Department of Education; and other interested parties. In addition, the  report is available at no charge on the GAO website at  http://www.gao.gov.

If you or your staff have any questions about this report, please contact  me at (617) 788-0534 or emreyarrasm@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made key contributions to this  report are listed in appendix III.

section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: The objectives of this report were to examine: (1) what is known about the  extent of Post-9/11 GI Bill overpayments and collections, and how  effectively the Department of Veterans Affairs’ (VA) monitors them, (2) the  effectiveness of VA’s efforts to address the causes of overpayments, and  (3) how effectively VA’s policies and procedures support the collection of  overpayments.
subsections: section_title: Federal Agencies, Laws, and Regulations
paragraphs: We reviewed relevant federal laws, regulations, Office of Management  and Budget circulars, and federal standards related to financial  management and the Post-9/11 GI Bill. We also reviewed documents and  guidance from VA. This included claims processing and debt collection  manuals, and examples of correspondence with schools and  beneficiaries. We also analyzed VA’s monitoring of overpayments and  collections by reviewing its internal data tracking and relevant public  reports, such as VA’s annual Performance and Accountability Report and  Quarterly High-Dollar Overpayment Reports, and assessed these efforts  against guidance for government receivables in OMB Circular A-129.

We interviewed senior officials from VA about the process for establishing  and collecting Post-9/11 GI Bill overpayments. We also visited one of  VA’s four Regional Processing Offices in Muskogee, OK for interviews  with management and frontline staff. We selected this location because it  is co-located with VA’s Education Call Center. During this site visit we met  with claims processers, telephone representatives, and management to  discuss the causes of overpayments and VA’s actions to address them.  We also visited VA’s debt collection office, the Debt Management Center,  which is located near St. Paul, MN. During this site visit we interviewed  management and frontline staff about the various mechanisms and  timelines they use to collect overpayment debts. We assessed VA’s  efforts to address the causes of overpayments and collect overpayment  debts against the key requirements in the Post-9/11 GI Bill’s statute and  regulations, and government standards for internal controls. As a point of  comparison, we reviewed selected documents and interviewed officials  from the Department of Education about the collection policies and  procedures for federal student aid programs.

section_title: Data Analysis and Case File Review
paragraphs: To examine the extent of overpayments and collections, we reviewed  available Post-9/11 GI Bill financial data from VA. We primarily focused  on overpayments that originated in fiscal years 2013 and 2014, since  VA’s data systems only maintain overpayment records in an accessible  format for 2 years once the debts have been repaid. We reviewed  summary and record level data on the frequency, type, and amount of  overpayments and collections for these two fiscal years. We also  analyzed data on all outstanding debts dating back to the start of the  Post-9/11 GI Bill in 2009. We assessed the reliability of these data by  reviewing VA’s reporting systems and conducting electronic testing of the  underlying data, and we determined that the data were sufficiently reliable  for our reporting purposes.

To identify the causes of overpayments, we reviewed VA’s Quarterly  High-Dollar Overpayment Reports and supporting documentation for  fiscal years 2013 and 2014 because they are VA’s only source of  generalizable data on overpayment causes. For these reports, VA  randomly selected a sample of 251 overpayments each quarter that were  over $1,667 and reviewed each claims file to identify the cause of the  overpayment. These samples were all drawn from overpayments for any  VA education program and we estimated Post-9/11 GI Bill overpayments  as a subgroup analysis, which accounted for 1,710 of the 2,008  overpayments reviewed in fiscal years 2013 and 2014. We analyzed  these reports to calculate the types and frequency of issues that created  overpayments and report aggregate data on high-dollar overpayments.  We used methods appropriate for a stratified random sample, using  weights and stratification that reflect a quarterly sample design. We  convey the sampling error in the form of confidence intervals at the 95  percent confidence level. All results from a statistical sample are subject  to sampling error that would result if a different randomly selected set of  units from the same population had been selected. If the same sampling  procedure were repeated many times, we would expect the 95 percent  confidence intervals for an estimate to contain the true population value in  about 95 out of 100 samples. For the last fiscal year of 2014, the number  of high-dollar overpayments (the population size) was not known. We  assumed it is the same as that of the previous quarter, quarter 3, and  assured our estimates were not sensitive to this assumption. Specifically,  we compared estimates for high-dollar amounts and overpayment causes  while under three assumed scenarios for the number of high-dollar  overpayments for the last quarter of fiscal year 2014: (1) the same as the  previous quarter; (2) the same as the smallest observed in fiscal years  2013 and 2014; and (3) the same as the largest observed in fiscal years  2013 and 2014. Results did not substantively differ. We assessed the  reliability of the data in these quarterly reports through our case file  reviews and by interviewing VA officials about the processes and systems  they use to develop the reports, and we determined that the data were  sufficiently reliable for our reporting purposes.

We conducted an in-depth case file review of 20 overpayment cases to  identify specific examples of how overpayments are created and  calculated and to help assess the reliability of VA’s data systems for  reporting on overpayments. We selected this non-generalizable sample  from the 251 cases sampled in VA’s high-dollar overpayment report from  the first quarter report for fiscal year 2014. From the 251 cases, we  selected all four caused by VA error and randomly selected 6 of the 21  caused by school errors. We then randomly selected a sample of 10 of  the 226 overpayments caused by student enrollment changes (see table  2). To review these cases, we analyzed claims processing documents,  school reporting forms, and debt notification letters to determine the  circumstances that created the overpayment. We also interviewed VA  officials responsible for analyzing the cases for quarterly reports about the  process and quality control measures.

We also examined other VA data sources for information on  overpayments. For example, we reviewed available summary data and a  selection of VA’s school compliance surveys to identify instances of  school reporting errors, reviewed a selection of 24 school compliance  surveys to identify examples of school reporting errors, and reviewed  veteran complaints about overpayment issues submitted through VA’s GI  Bill Feedback system.

section_title: Interviews with Schools, Veteran Organizations, and Others
paragraphs: We interviewed administrators at nine institutions that enroll Post-9/11 GI  Bill beneficiaries about their experiences with overpayments. We selected  this nongeneralizable sample to include a mix of program lengths, sectors  (public, private nonprofit, and private for-profit), schools with student  veteran populations ranging from 14 to more than 14,000, and regions  representing all four of VA’s Regional Processing Offices, which process  Post-9/11 GI Bill claims (see table 3).

We interviewed representatives from several veteran service  organizations and higher education organizations to obtain their  perspective on the causes and effects of overpayments. These  organizations included Student Veterans of America, Iraq and  Afghanistan Veterans of America, the National Association of Veterans  Program Administrators, Veterans of Foreign Wars, The American  Legion, American Council on Education, National Association of College  and University Business Offices, and the American Association of  Collegiate Registrars and Admissions Officers. We also interviewed  directors from three state approving agencies—state agencies that are  responsible for reviewing and approving schools for participation in VA  education programs—about the findings from compliance surveys they  conduct to assess whether schools are adhering to applicable laws and  regulations.

We conducted this performance audit from April 2014 to October 2015 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.

section_title: Appendix II: Comments from the Department of Veterans Affairs

section_title: Appendix III: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact

section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, individuals making key  contributions to this report were Michelle St. Pierre, Assistant Director;  William Colvin, Analyst-in-Charge; Jennifer Cook; and Karen L. Cassidy.  In addition, key support was provided by Julia DiPonio, Kathy Leslie, Ying  Long, Phillip McIntyre, Sheila McCoy, Mimi Nguyen, Ronni Schwartz,  Barbara Steel-Lowney, Walter Vance, Sonya Vartivarian, Charlie Willson,  and Craig Winslow.


Question-summary annotations: questions: question: What over payments did the VA identify?
answer: The Department of Veterans Affairs (VA) identified $416 million in Post-9/11 GI Bill over payments in fiscal year 2014, affecting approximately one in four veteran beneficiaries and about 6,000 schools.
child_questions: question: How do most of these over payments occur?
answer: Overpayments most often occur when VA pays benefits based on a student's enrollment at the beginning of the school term and the student later drops one or more classes (or withdraws from school altogether).
child_questions: question: What do students receive as part of this overpayment?
answer: Students therefore receive benefits for classes they did not complete, and the “overpayment” must be paid back to VA.

question: How else do overpayments occur?
answer: A small percentage of overpayments occurred because of school reporting or VA processing errors.

question: How successful was the VA in collecting these over payments?
answer: GAO found that most overpayments were collected quickly, but as of November 2014 (when VA provided these data to GAO), VA was still collecting $152 million in overpayments from fiscal year 2014, and an additional $110 million from prior years, primarily owed by veterans with the remainder owed by schools.

questions: question: What do many veterans not realize regarding enrollment changes?
answer: Many veterans may not realize they can incur overpayments as a result of enrollment changes because VA provides limited guidance to veterans on its policies.
child_questions: question: What problem can this cause for veterans?
answer: As a result, veterans may be unaware of the consequences of enrollment changes until after they have already incurred their first overpayment debt, according to school officials.
child_questions: question: How is the VA causing this issue?
answer: Because VA is not effectively communicating its program policies to veterans, some veterans may be incurring debts that they could have otherwise avoided.

questions: question: How are Post-9/11 GI Bill beneficiary different from other VA benefits?
answer: While veterans using other VA education programs have to verify their enrollment each month, VA generally does not require those using the Post-9/11 GI Bill to do so.
child_questions: question: How does this lead to overpayments?
answer: By not requiring veterans to verify their enrollment every month, which can cause significant time to lapse between when veterans drop courses and when this is reported, VA's process allows veterans to incur thousands of dollars in overpayments and also increases the program's costs associated with collecting these debts.

questions: question: How do schools cause overpayments?
answer: Overpayments also occur when schools make errors, such as reporting enrollment information incorrectly, which VA officials said is sometimes attributable to a lack of training.
child_questions: question: How does a lack of training exacerbate these issues?
answer: Not all school officials attend the different training opportunities VA offers and VA officials said the agency lacks the authority to require school officials to participate in any of them.
child_questions: question: What changes does the VA want to make regarding training?
answer: VA officials said they would like school officials to take a minimum level of training, which could help reduce errors and related overpayments.

questions: question: What hinders the VA's collection efforts?
answer: The effectiveness of VA's collection efforts is hindered by its notification methods.
child_questions: question: How are overpayment notifications provided?
answer: VA relies solely on paper mail to notify schools and veterans of overpayments.
child_questions: question: What issues do this technique raise?
answer: VA generally sends veterans' notices to the addresses from veterans' initial benefit applications. However, these addresses can often be out-of-date, so some veterans do not receive the letters, leaving them unaware of their debts.

question: How are VA’s current collection practices harmful to veterans?
answer: This can cause veterans to unknowingly miss deadlines for disputing their debts and leave them unprepared to cover living expenses if VA begins withholding future benefit payments or offsetting tax returns for collection. This can also lead to delays in the collection of overpayments from veterans.

questions: question: What does the GAO report examine?
answer: This report examines (1) the extent of overpayments, (2) how effectively VA has addressed their causes, and (3) the effectiveness of VA's collection efforts.
child_questions: question: What data did the GAO access to complete this report?
answer: GAO analyzed overpayment data for fiscal years 2013 and 2014, examined the causes from a generalizable sample of high-dollar overpayments (greater than $1,667), conducted a case file review of 20 overpayments (selected for a variety of causes), and reviewed VA's monitoring of overpayments.
child_questions: question: How did the GAO utilize interviews to collect data?
answer: GAO also interviewed senior and frontline staff at two VA offices that process claims and collect debts, officials at nine schools (selected for variation in program length and their status as public, nonprofit, and for-profit), higher education associations, and veteran service organizations.