RAO Davao City

United States Military Retiree Activities Office Davao City, Philippines

VA RETRO PAY PROJECT UPDATE 1 August 2008

Posted by Service Officer on July 31st, 2008

The Pentagon’s accounting unit agreed 16 JUL to double-check requests by more than 25,000 veterans who were turned down for back benefits, concurring with U.S. Rep. Dennis Kucinich that “a veteran deserves better.” Kucinich, head of a domestic policy subcommittee House panel that found flaws in the military benefits system, also got the Pentagon’s acting inspector general to order an audit.

This will help determine whether more than 60,051 veterans who were approved for back benefits got the right amounts. The head of the Pentagon’s Defense Finance and Accounting Service (DFAS) said at a hearing that he thinks the error rate in granting benefits was less than 1%. And an executive of a DFAS contractor, Lockheed Martin, said past problems were caused by automation and data flaws that are now resolved. But DFAS director Zack Gaddy also disclosed at the House hearing that a high-level management team was sent to Cleveland two weeks ago to review DFAS operations. That would coincide with work by Kucinich’s staff on the domestic policy subcommittee of the House Oversight and Government Reform Committee, looking into denial of veterans’ benefits.

The controversy stems from a decision by Congress in 2003 and 2004 to allow veterans to collect their military disability pay as well as their veterans pensions. Previously, the amount of their disability pay was deducted from their pensions on retirement. The change created thousands of claims for retroactive payments — and to what Kucinich says may have been the improper denial of checks for more than 28,283 veterans, as well as errant payments to many others. Gaddy put the number of denials somewhat lower, at 25,448. Kucinich’s subcommittee staff reviewed thousands of pages of records and e-mail and determined that DFAS and Lockheed Martin only brought the backlog of 133,057 cases to date last month. After growing frustrated by numerous delays, DFAS lent its own federal workers to help Lockheed Martin with its Cleveland benefits call center, which freed up more of the contractor’s employees to clear the veterans backlog. That raises questions, Kucinich said, about whether taxpayers were billed for Lockheed Martin’s call center work even though federal workers were the ones performing it. The Pentagon audit will attempt to answer the question.

In helping its contractor, DFAS also reduced its oversight, Kucinich said, failing to double-check or audit Lockheed Martin decisions on benefits as frequently as it should have. The problem now, Kucinich said, is that no one knows whether the decisions on granting retroactive pay and benefits were proper. Even the ranking Republican on the subcommittee, Darrell Issa of California, agreed that a 100% review of all denials should be done, “so that if one case falls through the cracks, another doesn’t.” Joseph Cipriano, president of Lockheed Martin Business Process Solutions, blamed the problems on poor or incompatible data. A database from the Department of Veterans Affairs was inadequate for the new task, he said. Additional factors such as changes in veteran’s disability status and deaths complicated efforts, and a lot of information had to be input manually before it could be processed. Kucinich cited the case of a retired Army sergeant major, Harold Lewis, who appealed after his denial and ultimately got $15,000 in retroactive pay. This suggested the system was error-prone, Kucinich said. But Cipriano said Lewis case was one of the earliest ones handled. After realizing there was a problem, Lockheed Martin updated the data and fixed the problem, Cipriano said. [Source: [Source: Cleveland Sun Times Stephen Koff article 16 Jul 08 ++]

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