The Office of Inspector General (OIG) conducted this audit to evaluate whether VA regional offices (VAROs) effectively managed mailroom operations and controlled the timely and accurate processing of claim-related mail. In fiscal year (FY) 2008, VBA processed about 20 million pieces of incoming mail and 13 million pieces of outgoing mail. Both the significant number of claim-related documents handled by VARO mailrooms and the potential effect on the processing of veterans claims that can occur if documents are inappropriately handled or destroyed make this a high-risk area for VBA.

VAROs needed to improve the handling, processing, and protection of claim-related documents, as well as in meeting mailroom security and other operational requirements. The use of amnesty periods and the extensive volume of mail recovered while taking these proactive initiatives are strong indicators that controls over mail management in VAROs were ineffective. The audit found some claim-related documents at the four VAROs visited were inappropriately placed in shred bins, a problem that appeared to be systemic. We also noted that VBA mail processing deficiencies led to unnecessary delays in establishing control of claims in VBA’s "SHARE" system after receipt, and some claim dates were incorrectly entered into the system. In addition, VAROs do not effectively use X-ray machines to scan mail for threat objects and improvements are needed to strengthen mailroom security plans and practices.

The OIG has identified the lack of timeliness for processing compensation and pension claims as a serious management challenge for the Department for the past several years. During this audit, we were informed some VAROs held "mail amnesty" periods to encourage VARO employees to turn in unprocessed claim-related documents in their possession without penalty or repercussions. Although these mail amnesty periods were considered necessary to ensure all veterans’ claim information was processed, the use of mail amnesty periods and the numerous documents recovered while taking these proactive initiatives indicates that controls over processing claim-related mail in VAROs were ineffective. For example,

• In July 2007, the Detroit VARO reported that almost 16,000 pieces of unprocessed mail that were apparently being held by VARO employees. They included an estimated 700 claims not put under proper control and 2,700 medical records and/or pieces of medical information not in VBA information systems or associated claim files. In response to our draft report, VBA indicated that the majority of the remaining documents recovered were drop-file mail requiring no action by the VARO except to be filed in the claims folders.

• In October 2008, a mail amnesty at the New York VARO resulted in the recovery of over 700 documents from its employees. 　

After learning about the mail amnesties, we requested and obtained representations from the Directors of the four VAROs visited indicating they were not aware of any significant issues or problems related to processing of incoming mail at their VARO that were not disclosed to the OIG or occurred subsequent to completion of our on-site work.　

VAROs needed to improve the handling, processing, and protection of claim-related documents, as well as in meeting mailroom security and other operational requirements.

VARO staff inappropriately placed documents needed for claims-processing in shred bins. An employee at the Detroit VARO told us that veterans’ claim-related documents may have been placed in VARO shred bins for destruction. OIG auditors searched the shred bins located near the VARO mailroom and Triage Team areas and found documents needed for processing veterans’ claims in shred bins awaiting routine destruction.

A similar search of shred bins at the other three VAROs where we had planned our audit work identified similar documentation. Our review of the contents of 37 (30 percent) of 125 shred bins at 4 VAROs identified a total of 132 claim-related documents inappropriately placed in the bins. The 132 claim-related documents consisted of 45 documents that could affect the benefits of 44 claimants and 87 documents that would not have affected claimants’ benefits but should have been retained in claim files. After hearing the results of our probes, VBA directed all VAROs to search and inventory the contents of every shred bin within their VAROs, and verify that the contents did not include documents needed for processing claims. Based on this inventory VBA discovered claim-related documents in shred bins awaiting destruction at 41 VBA locations nationwide, including 40 of the 57 VAROs and VBA’s Records Management Center in St. Louis, MO.

In response to these findings and VBA’s own administrative review results, VBA issued a new and comprehensive policy in November 2008 regarding procedures for the maintenance, review, and appropriate destruction of veterans’ paper records located in all VBA facilities and work sites.

VARO mail processing deficiencies contribute to unnecessary delays in establishing control of claims. VBA mail processing deficiencies led to unnecessary delays in establishing control of claims in VBA’s "SHARE" system. In FY 2008, VBA placed 82 percent of claims under control (entered claim information into SHARE application to officially establish claim) in seven days or less after receipt; however; it took an average of 32.5 days to place the remaining 18 percent of claims under control. VAROs could improve control time proficiency by improving procedures to identify, analyze, and monitor conditions that contribute to the delays in establishing control of claims, and ensuring that VAROs follow established and improved procedures.

The date of receipt for claim-related documents was not always entered correctly. Our review at four VAROs revealed incorrect dates entered for 22 (9 percent) of 238 claims established during May 1 through July 31, 2008. These incorrect dates did not appear to be intentional, but rather the result of human error. In response to the OIG’s February 2009 report, Review of VA Regional Office Compensation and Pension Claim Receipt Dates (Report No. 09-00189-81) on this issue, VBA indicated they were establishing new procedures to test the accuracy of claim dates. Therefore, we offered no additional recommendations.

• VAROs did not effectively use X-ray machines to scan incoming mail.

• VARO mailrooms did not fully comply with critical mailroom operations security requirements recommended by Federal regulations and General Services Administration (GSA) guidance.

• VARO mailrooms did not follow all required procedures for the proper handling of negotiable instruments.

• One VARO mailroom visited did not adequately protect Personally Identifiable Information (PII) awaiting destruction or in outgoing mail.

VBA has adequately addressed our concerns by establishing controls to ensure that important claim-related documents are not improperly discarded, and establishing new procedures to test the accuracy of claim dates. Nevertheless, improvements need to be made in mailroom operations management to ensure that a higher percentage of incoming claims are put under timely control. VARO security could also be improved by more effectively using X-ray machines to scan incoming mail and implementing guidance in accordance with recommended, government-wide mailroom security standards and guidelines. Until VBA completes the actions necessary to address these issues, VBA cannot be assured claims are being processed in a timely manner and government property, VARO employees, visitors, and other tenants are protected from unnecessary risks.

Recommendations

Management Comments and OIG Response

The Under Secretary for Benefits concurred with our findings and recommendations. VBA will revise and/or issue new policy and guidance in the areas of improving control over establishing new claims, and addressing mailroom security requirements and lapses noted during the audit, including the use of X-ray machines to scan incoming mail for threat items. VBA should be commended for taking proactive actions in advance of issuance of this report to address some of the concerns uncovered during the audit and as a result of previous OIG and internal VBA reviews. We incorporated VBA’s technical comments to our report where appropriate.

In particular, in November 2008, VBA officials put new controls in place to help ensure applications for benefits and other official documentation are not improperly destroyed in response to work uncovered during the audit and briefings provided to senior VA and VBA management. In addition, during the course of our audit, VBA took action to improve controls over claim dates subsequent to the discovery of the problem at the New York VARO and in response to a February 2009 OIG report.

Therefore, for both of these areas, no additional recommendations were provided to VBA. Planned corrective actions for our recommendations were responsive to our concerns and we will close the recommendations when all proposed actions have been completed by VBA. Appendix D contains the full text of the Under Secretary’s comments.