veterans with existing skills who are looking for immediate employment. Self-Employment: For veterans who have the skills to start a business, and for whom self-employment is the best or only option for successful rehabilitation. fiscal year 2011 and is currently 2,700. VR&E anticipates an increase in future demand for IL benefits. All veterans are required to meet VR&E’s basic entitlement criteria before they are assigned to one of its five tracks. To be entitled to VR&E services, veterans must generally have at least a 20 percent service- connected disability rating and be in need of rehabilitation because of an employment handicap. The period of eligibility for which veterans can receive benefits from VR&E is 12 years and begins on either (1) the date of separation from active military duty, or (2) the date that VA notifies the veteran of his or her service-connected disability rating. The 12-year eligibility period may be deferred or extended if certain conditions prevent the veteran from participating in a rehabilitation program or if a veteran has a serious employment handicap. To be considered for the IL track, veterans must meet all of VR&E’s eligibility requirements and be deemed currently unable to pursue an employment goal. VR&E’s Central Office, located in Washington D.C., has responsibility for several areas, including (1) overseeing the implementation of the VR&E program, including the IL track, (2) developing program policies and procedures, and regional guidance, and (3) formulating and monitoring the agency’s budget and program expenditures. Currently, there are 56 VA regional offices with responsibility for administering the IL track in their jurisdiction. Reporting to these regional offices are 179 satellite offices that help ensure veterans who do not live near a regional office are able to access VR&E benefits, including those provided through the IL track (see fig. 1). The VR&E Officer in each regional office is responsible for ensuring that the office complies with national policies and procedures for monitoring performance to ensure VR&E’s national rehabilitation rate is met. In addition, this officer supervises regional Vocational Rehabilitation Counselors (VRCs) who are responsible for working directly with veterans to assess their IL needs and provide benefits. VR&E has established a formal process that all veterans must go through to receive any of the benefits offered through its five tracks (see fig. 2). It is not possible to be assigned to any of the five tracks without first applying and being accepted into the VR&E program. An individualized IL plan is developed for each veteran admitted to the IL track. This plan identifies the veteran’s IL goals, the benefits (goods and services) VR&E will provide to help the veteran meet those goals, estimated time frames for providing benefits, and how improvements in the veteran’s independence will be measured, among other areas (see fig. 3). In general, IL plans may not exceed 24 months except under certain circumstances. According to officials, there is also no statutory limit on the number of IL plans a veteran can have. Veterans can reapply to the VR&E program at any time. Furthermore, all IL plans are required to be reviewed and approved by the veteran, the VRC, and the VR&E Officer before the veteran is admitted to the IL track. Once the plan is approved, VRCs are required to meet with the veteran at least once a month to track progress in meeting the plan’s goals. In addition, VRCs are required to coordinate with other VA programs to determine if they can provide any of the goods and services identified in the veteran’s plan. The VA programs that officials told us they regularly coordinate with are: VBA’s Specially Adapted Housing (SAH) Program, which helps servicemembers and veterans with certain service-connected disabilities purchase or construct an adapted home, or modify an existing home to accommodate a disability. These modifications can include specially adapted bathrooms or the installation of exit ramps. VHA medical centers, which provide a wide range of health-related services to veterans, such as physical therapy and dental and optometry services. In addition, VHA’s Prosthetic and Sensory Aids Service (PSAS) provides a variety of medical devices and equipment to veterans, including artificial limbs, eyeglasses, hearing aids, hospital beds, and wheelchairs. PSAS also administers the Home Improvements and Structural Alterations grant to eligible veterans for home modifications, such as the widening of bedroom or bathroom doorways to allow wheelchair access. If the goods and services needed cannot be obtained through other VA sources, the VR&E program will purchase them directly or contract for them. VR&E may declare a veteran successfully “rehabilitated” when all goals in their IL plan have been achieved, or if not all achieved, when the following three conditions have been met: (1) the veteran has attained a substantial increase in the level of independence; (2) the veteran has maintained the increased level of independence for at least 60 days; and (3) further assistance is unlikely to significantly increase the veteran’s level of independence. “Rehabilitation” does not necessarily mean that a veteran’s disability has improved, but rather that the goals in the veteran’s IL plan have been met to facilitate their independence. When veterans are not successfully rehabilitated, their case may be closed as “discontinued.” When circumstances arise that affect the ability of VR&E to provide the goods and services identified in the IL plan to the veteran, VR&E can temporarily “interrupt” the veteran’s case until it becomes possible to continue. From fiscal years 2008 through 2011, the typical participant in the IL track was an older male Vietnam-era veteran. Of the 9,215 veterans who entered the IL track at some point during these years, most (67 percent) were males 50 years old or older. Most women in the IL track were in their 40s or 50s (see fig. 4). The gender and age distributions of IL track veterans were similar to those of veterans who were receiving VA Disability Compensation cash benefits. In fiscal year 2011, about 92 percent of these veterans were male, and almost 68 percent were age 55 or older. Most of the 9,215 veterans who entered the IL track during fiscal years 2008 through 2011 served in the Vietnam War. However, there was a slight increase in the number of “Global War on Terrorism” veterans— including those who served during the war in Afghanistan as part of Operation Enduring Freedom and the war in Iraq as part of Operation Iraqi Freedom—from 13 percent in fiscal year 2008 to 16 percent in fiscal year 2011 (see fig. 5). In addition, almost 60 percent of IL track veterans served in the U.S. Army and less than 1 percent served in the National Guard or Reserves. Forty-one percent served in the U.S Navy, U.S. Air Force, or U.S. Marine Corps (see fig. 6). With regard to severity of service-connected disabilities, more than three- quarters of IL track veterans had a combined service-connected rating of at least 60 percent. Thirty-four percent of IL track veterans had a combined service-connected disability rating of 100 percent. Many IL track veterans may have also been eligible for the VA Disability Compensation program’s Individual Unemployability cash benefit. Indeed, 38 percent of IL track veterans were eligible for this supplement to their disability compensation payments. Moreover, of those IL track veterans who were at least 60 years old, 85 percent had combined service-connected disability ratings of at least 60 percent and more than a third had combined ratings of 100 percent. IL track veterans had a wide variety of service-connected disabilities, and most had more than one. Regardless of disability rating level, the most prevalent disabilities among this group were Post-traumatic Stress Disorder (PTSD), tinnitus (“ringing in the ears”), and hearing loss. As shown in figure 7, many of these disabilities—7 of the top 10 we identified in these cases—are similar to the most prevalent conditions among veterans rated by VA’s Disability Compensation program in fiscal year 2011. Our review of the case files of 182 randomly selected IL track veterans in fiscal year 2008 shows that they were provided a wide range of goods and services to help them live independently. Goods and services ranged from individual counseling and the installation of ramps to improve accessibility of veterans’ homes, to a boat, camping gear, and computers intended by VA to help decrease veterans’ social isolation. Figure 8 provides examples of the types of benefits provided in four IL track cases we reviewed. (See appendix III for a complete list of goods and services we identified in 182 IL track cases.) While VR&E can provide a wide range of benefits to IL track veterans, VR&E’s policy as of November 2012 prohibits providing courses of study and training to veterans that would lead to academic degrees, and purchasing certain types of equipment, such as lawn tractors. Our review of fiscal year 2008 IL cases shows instances where VR&E purchased lawn tractors and a riding mower. However, VR&E officials told us that there was no specific guidance prohibiting provision of such equipment in that year. As shown in table 1, we classified the wide range of goods and services we found in the 182 IL track case files we reviewed into nine general categories: Although we were unable to estimate the number of times certain goods and services were provided in the 182 IL track cases we reviewed, we generally found that the most common type of goods or services provided in the cases we reviewed were in three categories: 1) counseling, 2) education and training, and 3) computer and camera equipment. We were, however, able to estimate the costs of the goods and services purchased for IL track cases. For all veterans who entered the IL track in fiscal year 2008, we estimate that VR&E purchased a total of almost $14 million in goods and services. The average spent on purchases of goods and services per IL track case that year was nearly $6,000. In the 182 IL track cases we reviewed, the total amount VR&E spent on purchases of goods and services per veteran varied from $20 to over $33,000. Nearly 40 percent of the 182 veterans received $4,000 or more on purchases of goods and services (see fig. 9). Based on our analysis of IL track veterans who began only one plan during fiscal year 2008, we found that most of these veterans were classified by VR&E as “rehabilitated”—successfully reaching and maintaining the goals identified in their IL plan. By the end of fiscal year 2011, as shown in figure 10, about 89 percent of veterans who began an IL plan in fiscal year 2008 had been classified by VR&E as “rehabilitated.” About 5 percent of cases were “discontinued” or closed by VR&E because the rehabilitation goals in the veteran’s IL plan were not completed. The remaining 6 percent of veterans’ cases were still open at the end of fiscal year 2011. Of the 122 IL cases from fiscal year 2008 that had been discontinued, we found that about half were discontinued because the veteran declined benefits or did not respond when VA attempted to contact them. Another 29 percent were discontinued because the veteran died. Also, some VR&E officials and staff we spoke with during our site visits told us that veterans may drop out of the IL track for other reasons, such as their condition worsens or they experience family problems. Furthermore, while most veterans were classified by VR&E as “rehabilitated,” we found that the nature and complexity of IL plans can vary based on veterans’ individual disabilities and needs. As such, some plans are easier for VR&E to close as rehabilitated than others. For example, in one case we reviewed, the IL plan for a veteran with rheumatoid arthritis only called for the purchase and installation of eight door levers and a grab rail for the bathtub, so that the veteran could enter the rooms of his home without pain or assistance, and be able to safely enter and exit the bathtub without fear of falling. Other cases were more complex to close as rehabilitated because of the nature of services being provided to the veteran. For instance, another case we reviewed called for providing a veteran who used a wheel-chair with medical, dental, and vision care as needed and about $24,000 in modifications to the veteran’s home, including modifying the veteran’s bathroom, widening doors and modifying thresholds, and installing an emergency exit ramp in a bedroom. While the overall IL rehabilitation rate nationwide of 89 percent is fairly high, we found that the percentage of veterans who began an IL plan in fiscal year 2008 and were rehabilitated by the end of fiscal year 2011 varied by regional office. IL rehabilitation rates in these cases ranged from 0 to 100 percent across regional offices, although about two-thirds of regional offices had rehabilitated 80 percent or more of 2008 IL track veterans by the end of fiscal year 2011. (See appendix IV for a complete list of rehabilitation rates for all regional offices.) In addition, VR&E’s IL rehabilitation rate was higher in regional offices with larger IL caseloads. Among veterans who entered the IL track in fiscal year 2008, an average of 90 percent were rehabilitated at offices with more than 25 IL entrants, compared to an average of 79 percent at offices with 25 or fewer IL entrants (see fig. 11). Furthermore, we found that fiscal year 2008 IL track veterans nationwide completed their IL plans, i.e., were classified rehabilitated, in an average of 384 days (about 13 months). About 50 percent of these veterans completed their IL plans within 1 year, 79 percent within 2 years, and 88 percent within 3 years. Average days for these IL track veterans to complete their plans varied by regional office from a low of 150 days at the St. Paul Regional Office to a high of 895 days at the Roanoke Regional Office. However, at most regional offices (49 of 53) the average time to complete IL plans ranged from 226 to 621 days (8 to 21 months). (See appendix V for a complete list of rehabilitation times for all regional offices.) Also, as shown in figure 12, IL track veterans generally completed their plans in less time at regional offices with larger IL caseloads than at offices with smaller caseloads. The average time for veterans to complete their IL plans also varied by veteran age. The oldest veterans completed their plans slightly more quickly than the youngest. More specifically, veterans who were 70 to 79 completed their plans in an average of 369 days, while those who were 20 to 29 completed them in an average of 413 days (see fig. 13). Because differences in the length of time to complete IL plans could have occurred by chance or be explained by many factors—including the type and severity of disability or veteran age—we used a statistical model to estimate the amount of time it would take certain groups of IL track veterans to complete their IL plans while controlling for type and severity of disability and other demographic characteristics. (See appendix II for more detailed information on our model and analysis.) The results of our model showed that the chance of rehabilitation within 2 years varied by regional office. At four regional offices the chance of being rehabilitated within 2 years was less than 50 percent. At 18 offices the chance was between 50 and less than 90 percent. At 16 offices the chance was 90 percent or greater. Our model also estimated that a veteran served by a regional office with a large IL caseload had a higher probability of completing an IL plan more quickly than a veteran served by an office with a small IL caseload. More specifically, we determined that a typical IL track veteran at an office with a total of 75 IL cases entering the IL track during fiscal years 2008 through 2011 had a 48 percent chance of completing an IL plan within 1 year and a 92 percent chance of completing an IL plan within 3 years, while a veteran at a regional office with 700 IL cases had a 57 percent chance of completing an IL plan within 1 year and a 96 percent chance of completing their plan within 3 years (see fig. 14). Finally, based on our model we estimated that older veterans had a higher probability of completing an IL plan more quickly than younger veterans. For example, a 75 year old veteran had a 41 percent chance of completing an IL plan within one year, while a 30 year old veteran had a 33 percent chance. We found no meaningful differences in the time it takes to complete an IL plan as “rehabilitated” according to veteran gender and most disability types. However, we found small differences according to length of military service, education, and combined service-connected disability rating (see appendix II). National oversight of VR&E’s IL track is limited in four key areas: (1) ensuring compliance with case management requirements; (2) monitoring regional variation in IL track caseload and benefits provided; (3) adequacy of policies and procedures for approving expenditures on goods and services for IL track veterans; and (4) availability of critical program management information. Based on VR&E’s compliance reports from two of the regional offices we visited and interviews with staff in these offices, we found that some offices may not be complying with certain VR&E case management requirements governing the IL track. Specifically, some Vocational Rehabilitation Counselors (VRC) are not fulfilling VR&E’s requirement to meet in-person each month with IL track veterans to monitor progress in completing their IL plans. Site visit monitoring reports from two regional offices we visited indicated that these offices faced difficulties complying with this requirement. According to these reports, some VRCs were not able to schedule monthly in-person meetings with IL track veterans to check their progress in completing their IL plans. In addition, VRCs we spoke with during our site visits said that compliance with this requirement continues to be a challenge due to the size of their caseloads and the distances that they have to travel to meet with veterans. While VR&E’s Central Office acknowledges that it can be challenging for some offices to comply with this requirement, officials stated that face-to-face contact with IL track veterans is extremely important due to the nature of their disabilities and the need for more intensive rehabilitation services. Furthermore, while VR&E and VHA both have policies that require them to coordinate on the provision of goods and services for IL track veterans, we found that some VRCs experience challenges in doing so. Specifically, VA regulations governing VR&E’s IL track require that if a veteran needs special equipment and is eligible for such equipment under another VA program, the items will be provided under that program. Therefore, prior to VR&E purchasing services for veterans, officials told us that VRCs are required to refer cases to other VA providers, such as VHA’s Home Improvements and Structural Alterations (HISA) program and VA medical centers, to determine whether veterans are eligible to receive the goods and services identified in their plan from these providers. In addition, VHA ‘s policy directive for coordinating with VR&E is intended to ensure that all VR&E participants, including those in the IL track, receive timely access to VHA health care services. The directive requires medical center directors to (1) provide clinically appropriate care to VR&E participants, (2) establish procedures to manage these participants’ timely access to care, and (3) ensure that clinical staff are trained in these procedures, including how to alert appropriate VBA officials when timeliness of care could be an issue, among other requirements. Despite these VR&E and VHA policies, our review of 182 IL track records found some instances where VR&E purchased goods and services that appear to be medically related, such as ramps and grab bars, and could have been provided by VHA. There may have been little coordination on IL track cases because, as VR&E officials and staff at the five VA regional offices we visited told us, coordinating with VHA medical center staff can be challenging. Several VRCs indicated that when they refer IL track cases to VHA physicians to determine whether any of the medical-related benefits identified in the IL plans—such as grab bars, wheelchairs, and safety rails—had been or could be provided by VHA, in many instances, VHA physicians do not respond or respond too late. As a result, services for IL track veterans were either delayed or purchased by VR&E instead of VHA. According to some VHA staff, lack of or delays in coordination are sometimes due to differences in VR&E rehabilitation goals and VHA long-term medical goals for veterans. For example, VHA staff members mentioned they would not approve VRCs’ requests for lift chairs unless veterans absolutely needed them because VHA staff members said their medical goal is to promote continued mobility. While IL track caseload size and benefits vary across regions, VR&E does not systematically monitor these variations. We found regional differences in the size of IL caseloads, the range of needs covered in a veteran’s IL plan, and the types of goods and services provided. As shown in figure 15, the total IL track caseload during fiscal years 2008 through 2011 ranged from over 900 cases in the Montgomery Regional Office in Alabama to 4 cases in the Wilmington Regional Office in Delaware. (See appendix VI for annual IL caseload data.) While one would expect differences in caseload size based on the number of veterans in an office’s service area, some differences in IL caseload could not be explained by the size of the veteran population in an office’s service area. For example, while the estimated size of the veteran populations in Alabama and Massachusetts are similar, Montgomery’s IL caseload of over 900 veterans was more than 100 times as large as Boston’s IL caseload of 8 veterans. VR&E officials told us they are aware that some offices have low IL participation levels, and attributed some of the difference to factors, such as the presence of specialized treatment centers in certain areas of the county that can increase caseload numbers in those regions. However, evidence from our site visits suggests that there may be other factors that drive the number of veterans entering a region’s IL track. For example, officials from the Detroit Regional Office—which had the second highest total IL caseload across fiscal years 2008 through 2011—attributed the size of their caseload to their office’s focus on IL cases and community outreach efforts, including the involvement of veteran service organizations. The Atlanta Regional Office also mentioned that in addition to the size of the veteran population in Georgia and the presence of army bases, the size of their IL caseload is influenced by increased community interest in the IL track in recent years, and the informal efforts of past IL participants to provide information about the IL track to other veterans. Based on discussions with regional personnel and our review of the results of past studies, IL plans and the goods and services provided can also vary by region. According to VR&E officials, the law gives VA broad discretion in defining the range of needs covered in an IL track plan, as well as in choosing the types of goods and services required to achieve the plan’s goals. VR&E’s policy does, however, prohibit the agency from providing courses of study and training leading to academic degrees, and purchasing certain types of equipment, such as lawn tractors. As a result, some regions appear to develop IL plans that address a broader range of needs while others elect to develop more focused plans. Officials we spoke with during our site visits also confirmed that regions differ in their approach to developing IL plans, and in one region, officials commented that some regions may develop simpler plans with fewer benefits to achieve VR&E’s rehabilitation goal. Moreover, VR&E’s 2008 study of the IL track reported that some regions relied repeatedly on the same types of benefits to meet veterans’ IL needs. For example, in the New York and Hartford regional offices, nearly 90 percent of IL participants were provided computer training. This was almost twice the rate of Detroit—the office with the next highest rate of providing veterans with computer training—in 44 percent of its IL cases. Other offices focused more heavily on providing goods or services to support veterans’ avocational interests or on finding veterans volunteer opportunities, while some consistently focused on providing veterans with health club memberships. For example, the St. Petersburg Regional Office accounted for 33 percent of veterans receiving volunteer opportunities. In addition, the 2004 VR&E Task Force report noted significant differences in field office philosophy regarding the scope and administration of the IL track, and also recommended providing VR&E Central Office greater “line-of-site authority” over VR&E field operations. As noted earlier, VBA’s Office of Field Operations rather than VR&E’s Central Office has direct line of authority over regional VR&E staff and operations. While VA officials acknowledged the existence of regional variation in these areas, VR&E’s current oversight approach may not be adequate to ensure consistent administration of the IL track across regions. The standards for internal control in the federal government emphasize the need for federal agencies to have timely information to effectively monitor and mitigate program risks. To oversee administration of the IL track, VR&E has relied on the information provided through its general quality assurance (QA) activities and a series of periodic ad hoc studies. The QA activities are conducted by each region as well as VR&E’s QA staff located in Nashville, Tennessee. However, these activities are limited in scope, frequency, and how the information is used. At the national level, a team of VR&E QA staff are required to perform periodic site visits to each VA regional office at least every 3 years, although officials told us they have not been able to meet this goal in recent years because of budgetary constraints. This team also periodically reviews a sample of veterans’ records from VR&E’s IL and employment tracks in selected regions. After each site visit and case review, the QA team produces a report for the particular region under review. While VR&E officials told us that QA results are “analyzed to determine trends,” it is unclear how VR&E uses these results to ensure that consistent procedures are used by regional offices nationwide. In addition to these QA activities, VA has funded two studies over the past several years on the VR&E program, including implementation of the IL track, and a third is under way. In 2003, VA appointed a task force to evaluate the overall VR&E program and recommend ways service delivery could be improved. In 2008, as mentioned, a study was issued by VR&E on the types of services received by IL track participants and the impact those services had on veterans. This study found, among other things, that IL participants received a broad range of services, and that some regional offices favored providing certain types of services to IL track veterans. Finally, in October 2012, VR&E awarded a contract for about $890,312 to study the IL track service delivery process, barriers and incentives for field staff when considering the provision of services, current and future training strategies, and other areas. VR&E officials anticipate receiving the final results from this study in July 2013. Considering the broad discretion VR&E provides to regions in determining the range of needs covered in IL track plans and the types of goods and services selected to meet these needs, VR&E’s current policy for approving IL track expenditures may not be adequate. To guard against fraud, waste, abuse, and mismanagement, the standards for internal control emphasize the need for agencies to have appropriate levels of supervision and controls in place to prevent one individual from having responsibility for all key aspects of a transaction or event. VR&E Central Office is responsible for managing the program’s national budget. While officials told us that VRCs are required to include all cost estimates when they submit veterans’ IL plans to be reviewed and approved by the region’s VR&E Officer, VR&E was unable to provide any written policy or guidance that explicitly states this requirement for all IL expenditures. VR&E’s current written policies allow each region to unilaterally approve construction-related expenditures up to $25,000 per case and non- construction expenditures up to $100,000 per case without approval from VR&E Central Office. In addition, VRCs can spend up to $2,000 on construction-related expenditures and up to $25,000 on non-construction expenditures without supervisory review of any kind (see table 2). Under this policy, regional offices are permitted to purchase a broad range of items without any Central Office approval, resulting in some offices purchasing goods and services that may be questionable or that are costly. For example, in one of the 182 IL cases we reviewed, VR&E Central Office would not have been required to approve total expenditures of $18,829 for a riding lawn mower—which VR&E policy prohibits—and other IL goods and services including a bed, bed frame, desktop computer, and woodworking equipment. In another case, VR&E Central Office approval would not have been required for the purchase of a boat, motor, trailer, and the boat’s shipping cost to Molokai, Hawaii, among other items, totaling about $17,500. Without appropriate approval levels, VR&E’s IL track may be vulnerable to potential fraud, waste, and abuse. VR&E does not collect or report critical program management information—such as the costs of goods and service purchased, the types of benefits provided, and the number of IL veterans served—that would help the agency in its oversight responsibilities. Specifically, VR&E’s Corporate WINRS case management system—commonly referred to as “CWINRS”—lacks information on the total amount of funds VR&E expends on IL benefits because the agency does not maintain specific cost information on each of its five tracks or the key program areas these tracks represent, which are employment services and independent living. VR&E aggregates costs across all its tracks, despite VA’s managerial cost accounting policies that require the costs of products and services to be captured for management purposes. Federal financial accounting standards also recommend that costs of programs be measured and reported. According to officials, they do not collect cost information on the IL track alone because they view the five tracks as a single program with the same overarching goal—to help veterans achieve their employment goals. However, in our 2009 report on the VR&E program, we reported that VR&E serves veterans with fundamentally different program goals and outcomes—those seeking to obtain employment and those seeking to live independently. As a result, we recommended that VR&E separately track its IL rehabilitation rate. In addition, the CWINRS system does not collect information on the types of IL benefits provided to veterans in a standardized manner that can be easily aggregated and analyzed for oversight purposes. Currently, VRCs are required to write in a description of the benefits they purchased for IL track veterans in CWINRS. We found, however, that the recorded descriptions lack consistency and vary in their level of detail. In several of the IL track cases we reviewed, the goods and services purchased were grouped together under a general description, such as “IL equipment” or “IL supplies,” without any further details. In other cases, VRCs recorded each purchase separately. For instance, in one case, the VRC created separate entries for each item purchased, for example, “desktop computer,” “computer desk,” “Queen Mattress,” “all in one printer,” “USB cable and ink,” “threshold ramp,” and “washer.” In addition, we found that controls for data entry are not adequate to ensure that all important data is recorded. For example, we estimated that the service provider field was either missing or unclear for one or more services in about 15 percent of all IL cases that began in fiscal year 2008. Moreover, in another 7 percent of IL cases that began during fiscal year 2008, we found that service provider data was unavailable because CWINRS had overwritten veterans’ 2008 IL plans with subsequent plans. CWINRS only retains veterans’ current IL plan. Furthermore, CWINRS does not provide VR&E with the information it needs to account for the actual number of IL track veterans it serves to monitor its statutory entrant cap and program operations. The law allows VR&E to initiate “programs” of independent living services and assistance for no more than a specified number of veterans each year, which is currently set at 2,700. A VR&E policy letter to VA regional offices, dated December 14, 2010, states that “VR&E Service will monitor new IL programs by tracking the number of veterans entering independent living case status in each fiscal year and notify the field of any necessary action if the 2,700 statutory limit is being approached.” However, in analyzing VR&E’s administrative data, we found that VR&E counts the number of IL plans developed annually and not the number of individual veterans admitted to the track. VR&E officials told us that the law does not limit the number of IL plans that can be developed for a veteran in a single fiscal year. Because multiple IL plans can be developed for an individual veteran during the same fiscal year, veterans with multiple plans are counted more than once towards the statutory cap by CWINRS. Based on data from CWINRS, 403 (4 percent) of the 9,215 veterans beginning an IL plan during fiscal years 2008 through 2011 had more than one plan during that time. About 22 percent of these veterans had more than one IL plan in the same fiscal year. From fiscal years 2008 through 2011, VR&E did not exceed the statutory cap (see fig. 16). Moreover, VR&E officials indicated that they were unaware that CWINRS was calculating the number of plans and not individual veterans. As a result, VR&E lacks complete information on the number of veterans it is serving through the IL track at any given time—information it could use to better manage staff, workloads, and program resources. According to the standards for internal control, it is important for program managers to have reliable and timely “operational” information to ensure agency goals are met, resources are used efficiently and effectively, and requirements under various laws and regulations are being complied with. Finally, recent evaluations of CWINRS have determined that the system does not meet VR&E’s current needs and limits its oversight abilities because important data elements are not captured to support the agency’s “evolving business needs.” According to a 2012 VR&E report, VR&E plans to improve CWINRS by (1) increasing data automation to reduce instances of human error, and (2) enhancing system controls to improve the accuracy and comprehensiveness of the data, among other improvements. However, it appears that the CWINRS redesign will not enable VR&E to obtain data on IL track expenditures from the system or to use the system to accurately and efficiently track the types of goods and services the IL track provides. While officials told us that they plan to modify the system to enable them to track individual veterans served through the IL track, they could provide no time frame for this project and noted that it could take up to 3 years to obtain funding for it. VR&E’s IL track can provide a wide range of benefits to help veterans with service-connected disabilities maximize their ability to live independently when the achievement of an employment goal is not currently feasible. Under the law, each VA region has broad discretion in determining the range and types of goods and services each IL track veteran should receive. Consequently, adequate oversight at the national level is extremely important in ensuring that IL track case management requirements are met, the track is administered consistently across regions, expenditures for goods and services are appropriate, and critical IL track information is collected and used. In this context and absent better coordination with VHA, VR&E will continue to face challenges in ensuring goods and services for IL track veterans are provided by VHA, when appropriate, in a timely manner. With regard to VR&E’s Central Office oversight, its current policy governing the review and approval of expenditures might not effectively mitigate the risk of fraud, waste, abuse, or mismanagement inherent in activities, such as the development and implementation of IL plans, where there are few limitations on the types and cost of goods and services that can be provided. Furthermore, without collecting information on cost and the types of benefits regional offices provide to IL track veterans, and maintaining an information system that ensures IL track data are recorded consistently and are accurate and complete, VR&E cannot effectively oversee the performance and activities of its IL track. Finally, as more servicemembers from the conflicts in Iraq and Afghanistan transition into civilian life and veterans’ programs and as the overall veteran population ages, the demand for IL services will likely increase. VR&E must, therefore, be able to accurately count the number of individual IL track veterans served to ensure it can effectively manage its cap and assess program performance and resource needs. The Secretary of Veterans Affairs should direct the Undersecretary for Benefits to take the following actions: 1. Work with the Undersecretary for Health to explore options on ways to enhance coordination to ensure IL track veterans’ needs are met by VHA, when appropriate, in a timely manner. This could include improving staff education, response times to IL referrals, and the provision of medically related goods and services. 2. Implement an oversight approach that enables VR&E to better ensure consistent administration of the IL track across regions. In developing this approach, consider ensuring that VR&E’s CWINRS system: Tracks the total cost and types of benefits provided to each veteran in the IL track by regional office. Accounts for the number of individual veterans served to ensure that the agency has the information it needs to adequately manage the IL track. Contains stronger data entry controls to ensure that IL track information is recorded in a consistent manner and is accurate and complete. 3. Reassess and consider enhancing the agency’s current policy concerning the required level of approval for IL track expenditures, given the broad discretion individual regional offices have in determining the types of goods and services IL track veterans receive. We provided a draft of this report to the Secretary of Veterans Affairs for review and comment. VA generally agreed with our conclusions, and concurred with our three recommendations. VA’s written comments are reproduced in appendix VII. In addition, VA provided technical comments that we have incorporated in the report where appropriate. With regards to our recommendation that VA enhance coordination between VR&E and VHA on the provision of IL benefits to veterans, VA noted there are efforts underway that will permit VR&E counselors to make IL referrals to VHA providers through VHA’s Compensation and Pension Record Interchange system, also referred to as CAPRI. In addition to these efforts, we encourage VR&E and VHA to continue to explore other options to enhance coordination, such as engaging in staff education and training efforts to improve the timely provision of IL benefits and prevent any duplication. Furthermore, with regards to our recommendation to improve IL track oversight, VA said that it will perform an assessment of its current IL track oversight procedures and consider including enhancements to CWINRS. Because having a sound information system plays such a critical role in helping program managers monitor agency performance and operations, we urge VA to take steps to prioritize enhancements to CWINRS. Finally, VA noted that, in response to our recommendation that it reassess its current policy for approving IL track expenditures, it plans to make any needed improvements by March 2014. As part of its assessment process, we believe that VA should review its existing cost- thresholds for approving all IL expenditures, including non-construction related expenditures, to ensure adequate oversight of goods and services purchased for veterans. We are sending copies of this report to the appropriate congressional committees, the Secretary of Veterans Affairs, and other interested parties. The report is also available at no charge on the GAO web-site at www.gao.gov. If you or your staff members have any questions about this report, please contact me at (202) 512-7215 or at bertonid@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. Staff members who made key contributions to this report are listed in appendix VIII. The objectives of this report were to examine (1) the characteristics of veterans who have participated in the IL track, as well as the types and costs of benefits they were provided; (2) the extent to which their independent living plans were completed, and the time it took; and (3) the extent to which the IL track has been administered appropriately and consistently. To answer these objectives, we used a variety of methodologies, which are described in greater detail below. Specifically, we analyzed VA administrative data from fiscal years 2008 through 2011 to provide information on the characteristics and outcomes of veterans who participate in the IL track, and how long it takes to achieve these outcomes. We also used statistical models to determine any differences in rehabilitation times. In addition, to determine the types of benefits provided and their costs, we conducted a case file review of a random, generalizable sample of 182 veterans who started in the IL track during fiscal year 2008. Lastly, to examine the administration of the IL track, we visited five VA regional offices and interviewed officials and staff from VR&E, Specially Adapted Housing (SAH), Prosthetics and Sensory Aid Service (PSAS) under the Veterans Health Administration (VHA), and veteran service organizations. We also reviewed relevant federal laws and regulations, standards for internal controls and managerial cost accounting, as well as VR&E policies, procedures, and other relevant studies and documentation. We analyzed VA administrative data in the Corporate WINRS system— commonly referred to as “CWINRS”—from fiscal years 2008 through 2011 to describe the characteristics and outcomes of veterans in the IL track, and how long it takes veterans to achieve these outcomes. VR&E has used the CWINRS system since 2001 to track veteran cases through its process and to manage program costs. The “WINRS” part of the acronym represents the first 5 regional offices that tested the original system. These offices include Waco, Texas; Indianapolis, Indiana; Newark, New Jersey; Roanoke, Virginia; and Seattle, Washington. we found the data to be sufficiently reliable for our purpose, unless otherwise noted. To identify our universe of 9,215 veterans who started in the IL track during fiscal years 2008 through 2011, we counted the number of individual veterans who had an “IL status” recorded in CWINRS during our time frame. While veterans can enter into the IL track more than once in a given fiscal year, we counted a veteran only once if he or she had more than one IL status during these years. To determine the characteristics of the 9,215 veterans who began in the IL track during fiscal years 2008 through 2011, we examined several demographic variables in CWINRS, including veterans’ age, gender, types of disabilities, and combined disability rating. Data on the war era in which veterans served was obtained from VA’s Benefits Delivery Network. To examine the outcomes of veterans in the IL track, we limited our analysis to veterans who began only one IL plan at some point during fiscal year 2008. This accounted for about 92 percent of the 2,465 veterans who began an IL plan during fiscal year 2008. The remaining 8 percent of veterans who had more than one plan were excluded from our analysis because of potential data reliability issues associated with how certain case actions were recorded. In our analysis of IL veteran rehabilitation rates, we excluded veterans whose cases were transferred to one of VR&E’s employment tracks. To estimate the difference in rehabilitation times across regional offices and groups of veterans with various characteristics, we used different statistical models. These “survival modeling” methods allowed us to appropriately estimate rehabilitation probabilities at various points in an IL plan, even when a significant proportion of the cases are discontinued or in progress. Our models used the same VA administrative data noted above for veterans in the IL track who began only one IL plan at some point during fiscal years 2008 through 2011. Consequently, our model results only apply to a subset of veterans, which make up about 95 percent of the veterans who began in the IL track during this time frame. For a detailed discussion of our statistical models, see appendix II. To obtain information on the types of benefits provided through the IL track, as well as the costs and coordination of these benefits, we conducted a case file review of a random, generalizable sample of 182 veterans whose cases started in the IL track at some point during fiscal year 2008. To track and manage IL cases, VR&E utilizes both paper records located at each regional office, and electronic case records in the CWINRS system. For the purpose of our file review, we used veterans’ electronic records in CWINRS, and found the information in these records to be sufficient for our purpose. We selected fiscal year 2008 because it allowed us to follow veterans’ progress in the IL track beyond 24 months—the authorized benefit duration time frame unless a 6-month extension is approved. We stratified our sample of 182 cases into three groups—those veterans’ whose cases were (1) rehabilitated, (2) discontinued, or (3) still open. We used this approach to obtain information on any differences in IL benefits and expenditures by veteran groups. We also elected to use a sample design that mixes the features of a proportional allocation and equal sample per stratum. Table 3 provides more detailed information on our sample stratification. To produce population estimates from our sample of cases, information collected from each case reviewed was weighted in the analysis to account statistically for the total population of all IL track cases started in fiscal year 2008. Because our estimates for the entire population of IL track cases that started in fiscal year 2008 are based on a probability sample of these cases, they are subject to sampling error. To recognize the possibility that other samples drawn from this population might yield different results, we express our confidence in the precision of our sample’s results as a 95 percent confidence interval. A 95 percent confidence interval is expected to include the actual value for the population in 95 out of 100 samples drawn from the population. With regard to expenditures in IL track cases, at the 95 percent confidence interval, the amount of total expenditures across all IL track cases that started in fiscal year 2008 falls between $11.3 million and $16.6 million; the actual amount expended, on average, in these cases falls between $4,835 and $7,104. To conduct our case file review, we developed a web-based data collection instrument to record information from the electronic printouts VR&E provided us with of veterans’ records. After these records were collected, GAO staff members entered the information into the electronic data collection instrument for each veteran case in our sample. Once the data was entered, a second GAO staff member reviewed each entry for clarity and accuracy. With regard to the types of benefits provided to IL track veterans, we cannot generalize the types of goods and services provided because we recorded in our data collection instrument information on only eight goods and services identified in each of the 182 IL case files we reviewed. However, we were able to generalize information we obtained on IL track service providers from the IL cases we reviewed because in less than 3 percent of these cases, there were at least eight service providers. Our estimate of the number of cases where service provider information was missing, unclear, or overwritten in CWINRS may be slightly understated. The 95 percent confidence interval for the 15 percent of cases where the service provider information was unclear or missing for one or more service ranged from 9 to 21 percent. The 95 percent confidence interval for the 7 percent of cases we reviewed where one or more service was overwritten in CWINRS ranged from 4 to 11 percent. To better understand the extent to which the IL track is being effectively administered, we visited five VA regional offices—San Diego, California; Atlanta, Georgia; Detroit, Michigan; Philadelphia, Pennsylvania; and the District of Columbia. We selected these sites because they were geographically diverse, and have varying levels of IL track participation and success in achieving VR&E’s IL rehabilitation goal. During each of our site visits, we interviewed VR&E Officers and vocational rehabilitation counselors (VRCs) using a standard set of questions to identify how IL cases were managed and any factors that may have affected the administration of the IL track. In particular, during our Detroit and Atlanta site visits, we interviewed VRCs who specialized in working on IL cases. Moreover, we obtained the perspectives of veteran service organizations that work with IL track veterans at two regional offices we visited—Detroit and Atlanta. Furthermore, we interviewed SAH and PSAS officials at the national level and relied on our case file review to determine the extent to which the IL track cases were referred to VA and non-VA service providers. In addition, we interviewed SAH and PSAS staff during our site visits to determine the extent to which VR&E, SAH, and PSAS coordinate in the provision of goods and services to IL track veterans. We used statistical models to estimate the difference in rehabilitation times across regional offices and groups of veterans with various characteristics. These “survival modeling” methods can appropriately estimate rehabilitation probabilities at various points in an IL plan, even when a significant proportion of the cases are discontinued or in progress. In addition, survival methods allowed us to estimate the unique association between rehabilitation times and various other factors, described below. In this appendix, we describe the data we used to fit the models and their structure, assumptions, and estimates. We estimated our models using VA administrative data on veterans who began exactly one IL plan from fiscal years 2008 through 2011. Due to the data reliability issues described in appendix I, our analysis excluded veterans who began multiple IL plans during this period. Consequently, our results only apply to this subset of 8,737 veterans, who made up 94.8 percent of the original population. We measured the length of time each veteran spent in his or her IL plan as the duration between the start of the plan and one of three later times: entering rehabilitation status, discontinuing the plan, or being in progress on September 30, 2011, the end of our observation period. We modeled rehabilitation as the outcome of interest, treating discontinued or in progress plans as having rehabilitation times that were censored. Among the veterans starting IL plans from fiscal years 2008 through 2011, 3.2 percent discontinued their IL plans prior to rehabilitation, and 35.9 percent had plans that were in progress on September 30, 2011. These data imply that 91.7 percent of the censored observations were in-progress cases, which suggests that most of the censoring is likely to be uninformative. We found no large differences in the probability of dropping out of an IL plan across the covariates we included in our models. This group also excluded veterans who transferred to a VR&E employment track and veterans who had more than one instance of rehabilitation. Missing data on age and length of service further reduced our sample size to 8,655 veterans for modeling purposes. We fit the data to several types of Cox proportional hazards models. The primary model took the following form: 𝜆𝑖𝑗(𝑡) denotes the hazard rate of rehabilitation at time t after veteran i enters an IL plan, and 𝜆0𝑗 (t) denotes the baseline hazard rate for the reference veteran with covariates equal to zero, served by one of j = 1, 2, to 908. 𝑥ij is a vector of the following covariates: age, length of military … ,36 regional offices. We combined a number of offices that served less 𝜆𝑖𝑗(𝑡)=𝜆0𝑗 (t) exp(𝑥ij𝛽) reference veteran with covariates equal to zero, served by one of j = 1, 2, … ,36 regional offices. We combined a number of offices that served less than 50 veterans into a residual group, in order to ensure sufficient sample within each office. The sample sizes within offices ranged from 58 service, and indicators for sex, branch of service, era of service, education, year the IL plan began, partial vs. full disability, and disability type. We coded the covariates such that the baseline reference veteran was substantively meaningful—a male Army veteran with a high school education, who served in the Vietnam era, entered an IL plan in fiscal year 2008, was processed by the Detroit Regional Office, and had a full musculoskeletal disability—either by setting values of categorical variables to the appropriate levels or by centering continuous variables at their means. All categorical variables included levels for missing data. In this application, the proportional hazard structure of the model implies that the instantaneous rate of rehabilitation at any time during an IL plan, or the hazard, varies across values of the covariates by a constant amount over time. For example, the model assumes that rehabilitation rates vary by the same amounts among veterans with different types of disabilities after 12 months, 18 months, or any other point in an IL plan. In our initial exploratory data analysis, Kaplan-Meier estimates of the hazard and survival functions suggested that the hazard was not proportional across regional offices. Using an unstratified version of the model above that included fixed effects for regional offices, we found that the Schoenfeld residuals for many offices were correlated with time at a sufficiently high level to reject the hypothesis that the hazard functions were proportional across the covariates (p < .0001). These results are consistent with our interviews and document reviews suggesting that program administration varied across offices, which could produce variation in hazard functions. (The body of this report summarizes these administrative inconsistencies in more detail.) For these reasons, we stratified the baseline hazard function by regional office, and we used this version of the model to calculate hazard rate ratios and elasticities, along with their standard errors, in table 3. Under the stratified model, we failed to reject the proportional hazards assumption for 𝛼 < .47. The estimated rehabilitation (failure) probabilities discussed in the body of this report came from a version of the model that did not stratify by office and, instead, assumed office fixed effects. This allowed us to calculate illustrative rehabilitation probabilities by various follow-up points and for specific covariate values, without having to produce 36 sets of estimates implied by separate hazard functions for each office. The differences in the estimated probabilities across covariate values should resemble estimates that we would have calculated from the stratified model, because estimates of 𝛽 and their variances were similar in both versions. The hazard rate ratios and elasticities in table 3 are consistent with our estimated rehabilitation probabilities in the body of the report. To calculate these probabilities, we fixed the value of each covariate at its sample mode or mean, depending on whether the variable was categorical or continuous. For this profile of covariate values, we calculated survival probabilities at various times using the estimated parameters of the unstratified model, and transformed them to failure probabilities by subtracting the survival estimates from 1. We estimated a final version of the model that used neither office strata nor fixed effects. This allowed us to estimate the association between office workload, measured by the total number of IL plans developed from fiscal year 2008 through 2011, and rehabilitation timeliness. Stratifying the model by office or estimating fixed effects would have absorbed the variation needed to estimate the coefficient on workload, as an office- level covariate. Table 3 provides estimates of 𝛽 and hazard ratios derived from them, along with standard errors and p values for the hypothesis that each ratio equals 1. These estimates come from the stratified model above. Figure 17 presents the failure functions implied by the separate hazard functions the model assumes for each regional office. These results are generally consistent with those discussed in the body of this report, where we interpret the results in more detail. The table below lists the goods and services as they were recorded in the 182 cases we reviewed in the CWINRS system. Goods and Services Provided Counseling Services “(1) Specialized Contractial Counseling Services 637” “(1) Specialized Contractual Counseling” “(1) Specialized Contractual Counseling Services 637, Vocational, Educational, Psychological or Personal adjustment counseling which I” “(1) Specialized Independent Living Services 638” “(1) Specialized Rehabilitation Service 631” “(1) Specialized Rehabilitation Services” “(1) Specialized Rehabilitation Services 631, Specialized services involving unique skills and techniques, such as learning di” “(1) Specialized contractual counseling services 637; IILP Initial Assessment” “(316) Contract Counseling Assistance 451” “(343) Rehab Services 556, All services not otherwise described to advance the objectives of the rehabilita” “(343) Rehab Services 556; Connections Vocational Services; IILP Evals; All service not otherwise described to advance the objectives of the rehabilita” “(372) Independent Living Services 644, Provide Independent Living services (i.e. IL Evaluation, Occupational Therapy Ev” “(372) Psychotherapy 667; provide psychotherapy and adjustment counseling” “Rehabilitation Counseling Services 158, Specialized counseling services as required to assist and support veteran in ful” “SRS/IL Special Rehab Service/Independen Li” “SRS/V Special Rehab Service/Vocaational; Center for Independent Living; IL Case Mgmt” “SRS/V Special Rehab Service/Vocational” “Special Rehab Service/Independent Living” “Special Rehab. Srvs/Indepen. Living 24” “Special rehab service/Independent Living” “VA MEDICAL CENTER - ANN ARBOR” “YMCA East Belleville Center; YMCA Membership; YMCA annual fee” Residential Adaption and Repair “(317) Independent Living Residence Adaptation 645” “(317) Independent Living Residence Adaptation 645, Residential adaptations to allow a veteran to complete ILP.” “A&E services for home modification per ILP” “Basic construction as approved on IL plan” “Ch 31 One Time Miscellaneous Items Purchase—Reconstruction of front porch per IL plan” “Gould’s Discount Medical — Home Improvements” “Herrera Engineering; house modifications; special contractual services” “Home Reab Equipment — Supply and set up bath mods (up)” “Home Rehab Equipment — custom railing” “buyrailings.com; stair railing w/brackets” “smoke detectors/fire extinguisher/co2 detector” “IHL Institutions of Higher Learning – for period 2/5/08-7/23/08” “IHL Institutions of Higher Learning; 24 training session” “IHL Institutions of Higher Learning (College books)” “IHL Institutions of Higher Learning; Central Community College-Hastings Degree” “Individual/Independent Instruction / Trg 164” Jewish Vocational Services; non college degree “Kendall & Davis, Inc.; computer training” “Mastering MS Office Made Easy (CD-ROM version)” “OJT On the Job Training/Apprenticeship” 1 “1-year audio book subscription (2 CDs/month)” “All Temperature system; IL- Heating System” “CPI*Contour living web; wedge cushions/with massage; shipping charge” “Ch 31 non-Contractual Speicial . . . \r\n” Computer Evaluation Services 21, Technical evaluation for computer hardware and software needs. “Installation of Camera Security System” “KID 1240 talking dictionary with headphones” “King size adjustable bed with massage” “Pride GL 358M lift chair w/set up and delivery” “Sports authority; Treadmill, delivery & assembly, 4 yr warranty” Goods and Services Provided “US Computers Inc; Shipping/handling fees for computer and furnitures” “set and instruct on scooter lift with swing arm.” Adaptive Equipment “All in one accessibility - adaptive equipment” “ALI*AMIMED INC.; Backrest air obusforme grey; shipping charge” “Alex Orthopedic; Walking Cane; Shipping charge” “COLDERS, INC.; Bed & Chair - Independent Living” “Colder’s; TempurPedic King Size Solution Mattress and Box Sp; HTC-1650 Massage Chair” “Deluxe swivel seat cushion, UpEasy lifting cushion seat assist (plus shipping)” “Glide rail & shower wand,PT-WR28R,LABOR” “Grab bar specialists, Inc.; handi-grip portable grab bar and shipping” “IL Adaptive Equipment \r\nCh 31 Special Equipment” Goods and Services Provided “IL Adaptive equipment, Shipping and Handling\r\nCh 31 Special Equipment” “Lamp for independent living and surge protector” “MAXIAUDS; CO2 Alarm; shiping charge” “Medication dispenser, phone, printer, mouse” “Mother Earth Design INC.; Trigger point pillow; shipping charge” “Ontime supplies; ergonomic chair, dry erase board” “Perching Stool, Height Adjustable, 250lb Capacity” “Portable Lift Cushion, 250 1b Capacity” “Queen Matt, Box, Tempura Symphony pillow” “Rehab Engineering Inc.; Large Handle cups; walker, 3-inch wheels, 300lbs. capacity; 24-inch grab bar, inside tub” “Rolling laundry cart & ergonomic grabber” “Sliding Shelves (for Bathroom Cabinet)” “Special equipment — one-handed jar opener, suction cup plates, suction cup bowls” “Tub safety bar and lever door handles (QTY 6)” “Vocational Resource Services; good grips eating utensils; sock assist; elastic shoelaces” “Vocational Resource Services; locking elevated toilet seat w/ arms; special equipment” “Walker Furniture; mattress, frame and bed cover” “computer w/19 inch monitor, 4n1 printer + internet” “2hp soft start fixed and plunge base router” “Craftsman fixed base router/table combo” “Embroidery Machine & Accessories, Classes” “Jarvi Facetron; Facitron Machine with grit; shipping” “Rikon 18 inch bandsaw, excess weight charge” “Searrs; rts bit saw nailer plnr sander warrenties” “Tracrac T3B portable miter saw sta Bosch” “drill press, protection agreement, shipping” “The Rock Shed; Thumlers tumbler; 5lbs 60/90 grit; 5lbs 120/220 grit” “Accessory Kit, Bench Clamp and shipping for workbench” Goods and Services Provided “Shipping/delivery charges for CD-ROM” “Voc Rehab Panel, PO 348-08-039 dtd 7/23/08” “McGavic Outdoot power equipment; lawn tractor and delivery” Transfers to a VR&E Employment Track 4 n.a. n.a. The Denver Regional Office includes totals for the Cheyenne, Wyoming office. This office is considered a satellite office of Denver. The Washington Regional Office, located in the District of Columbia, was renamed the National Capital Region Benefits Office in November 2012. The Denver Regional Office includes totals for the Cheyenne, Wyoming office. This office is considered a satellite office of Denver. The IL entrant total for the Denver Regional Office includes the total number of veterans who entered the Cheyenne, Wyoming, office. This office is considered a satellite office of Denver. The Washington Regional Office, located in the District of Columbia, was renamed the National Capital Region Benefits Office in November 2012. Daniel Bertoni, (202) 512-7215 or bertonid@gao.gov. In addition to the contact listed above, individuals making key contributions to this report were Clarita Mrena (Assistant Director), James Bennett, Melinda Bowman, David Chrisinger, Mary Ann Curran, David Forgosh, Danielle Giese, Angela Jacobs, Mitch Karpman, John Lack, Kirsten B. Lauber, Karen O’Conor, James Rebbe, Martin Scire, Almeta Spencer, Jeff Tessin, Jack Warner, and Ashanta Williams. Veterans’ Employment and Training: Better Targeting, Coordinating, and Reporting Needed to Enhance Program Effectiveness. GAO-13-29. Washington, D.C.: December 13, 2012. VA Health Care: Spending for and Provision of Prosthetic Items. GAO-10-935. Washington, D.C.: September 30, 2010. Veteran Affairs: Opportunities Exist to Improve Potential Recipients’ Awareness of the Temporary Residential Adaption Grant. GAO-10-786. Washington, D.C.: July 15, 2010. Veterans Affairs: Implementation of Temporary Residence Adaptation Grants. GAO-09-637R. Washington, D.C.: June 15, 2009. Federal Information System Controls Audit Manual (FISCAM). GAO-09-232G. Washington, D.C.: February 2009. VA Vocational Rehabilitation and Employment: Better Incentives, Workforce Planning, and Performance Reporting Could Improve Program. GAO-09-34. Washington, D.C.: January 26, 2009. VA Vocational Rehabilitation and Employment: Service Contract Management Is Improving, but Challenges Remain. GAO-07-568R. Washington, D.C.: April 23, 2007. Managerial Cost Accounting Practices: Leadership and Internal Controls Are Key to Successful Implementation. GAO-05-1013R. Washington, D.C.: September 2, 2005. VA Vocational Rehabilitation and Employment Program: GAO Comments on Key Task Force Findings and Recommendations. GAO-04-853. Washington, D.C.: June 15, 2004. Internal Controls Management and Evaluation Tool. GAO-01-1008G. Washington, D.C.: August 2001. Managing For Results: Barriers to Interagency Coordination. GAO/GGD-00-106. Washington, D.C.: March 29, 2000. Standards for Internal Control in the Federal Government. GAO/AIMD-00-21.3.1. Washington, D.C.: November 1999.

Summary: The IL "track"--one of five tracks within VA's VR&E program--provides a range of benefits to help veterans with service-connected disabilities live independently when employment is not considered feasible at the time they enter the VR&E program. These benefits can include counseling, assistive devices, and other services or equipment. GAO was asked to review issues related to the IL track. This report examines (1) the characteristics of veterans in the IL track, and the types and costs of benefits they were provided; (2) the extent to which their IL plans were completed, and the time it took to complete them; and (3) the extent to which the IL track has been administered appropriately and consistently across regional offices. To conduct this work, GAO analyzed VA administrative data from fiscal years 2008 to 2011, and reviewed a random, generalizable sample of 182 veterans who entered the IL track in fiscal year 2008. In addition, GAO visited five VA regional offices; interviewed agency officials and staff; and reviewed relevant federal laws, regulations, and agency policies and procedures. Of the 9,215 veterans who entered the Department of Veterans Affairs' (VA) Independent Living (IL) track within the Vocational Rehabilitation and Employment (VR&E) program in fiscal years 2008 to 2011, most were male Vietnam era veterans in their 50s or 60s. Almost 60 percent served in the U.S. Army, and fewer than 1 percent served in the National Guard or Reserve. The most prevalent disabilities among these veterans were post-traumatic stress disorder and tinnitus. GAO's review of 182 IL cases from fiscal year 2008 found that VR&E provided a range of IL benefits to veterans. Among these cases, the most common benefits were counseling services and computers. Less common benefits included gym memberships, camping equipment, and a boat. GAO estimated that VR&E spent nearly $14 million on benefits for veterans entering the IL track in fiscal year 2008--an average of almost $6,000 per IL veteran. Most veterans completed their IL plans, which identify their individual goals to live independently and the benefits VR&E will provide. About 89 percent of fiscal year 2008 IL veterans were considered by VR&E to be "rehabilitated," that is, generally, to have completed their IL plans by the end of fiscal year 2011. VR&E discontinued or closed about 5 percent of cases for various reasons, such as the veteran declined benefits. Six percent of cases were open at the end of fiscal year 2011. Because the complexity of IL cases varied depending on veterans' disabilities and needs, some cases were fairly simple for VR&E to close. For example, one IL case only called for the installation of door levers and a bathtub rail. Another more complex case involved the provision of a range of IL benefits, including home modifications. Rehabilitation rates across regions varied from 0 to 100 percent, and regions with larger IL caseloads generally rehabilitated a greater percentage of IL veterans. While IL plans nationwide were completed in 384 days, on average, completion times varied by region, from 150 to 895 days. VR&E exercises limited oversight to ensure appropriate and consistent administration of the IL track across its regions. First, some regions may not be complying with certain case management requirements. For instance, while VR&E is required to coordinate with the Veterans Health Administration (VHA) on IL benefits, VR&E counselors have difficulty obtaining timely responses from VHA. VHA physicians respond to VR&E's IL referrals late or not at all, resulting in delayed benefits or VR&E providing the benefits instead of VHA. Second, VR&E does not monitor regional variation in IL caseloads and benefits provided. Instead, it has relied on its quality assurance reviews and ad hoc studies, but these are limited in scope. Third, given counselors have broad discretion in selecting IL benefits, VR&E's written policies for approving IL expenditures may not be appropriate as regions were permitted to purchase a range of items without any Central Office approval, some of which were costly or questionable. For example, in one case, Central Office review would not have been required for expenditures of $18,829 for a riding mower, which is prohibited, and other items. Finally, VR&E's system does not collect IL costs and benefits provided. VR&E also lacks accurate data on the number of IL veterans served. While the law currently allows 2,700 veterans to enter the IL track annually, data used to monitor the cap are based on the number of IL plans developed, not on the number of individual veterans admitted. Veterans can have more than one plan in a fiscal year, so one veteran could be counted multiple times towards the cap. GAO recommends that VR&E explore options to enhance coordination with VHA; strengthen its oversight of the IL track; and reassess its policy for approving benefits. VA generally agreed with GAO's conclusions and recommendations.