40,000 Packages of Backlogged Claims Material Discovered at Single VA Office

Watchdog: Improper storage of unprocessed claims put veterans at risk of identity theft, fraud

Phoenix VA Health Care Center / AP
• January 6, 2016 5:20 pm


More than 40,000 backlogged mail packages of veterans’ disability claims material were discovered at a VA regional office in Florida, according to a new report from the VA inspector general.

Investigators also found more than 1,600 boxes of unprocessed veterans’ claims material at a scanning facility with which the St. Petersburg, Florida, regional office was contracting.

The report, published Wednesday, comes just after VA officials touted the reduction of backlogged claims to just under 75,000 cases, a decrease of 88 percent from the highest point in 2013. While the agency had committed to reducing claims backlog to zero by the end of fiscal year 2015, VA officials have since admitted that it may never reach "absolute zero."

The investigation into the St. Petersburg regional office was launched in response to an anonymous allegation about massive claims backlog at the facility in July 2014.

In reviews that occurred at the end of 2014 and beginning of 2015, the inspector general discovered that over 41,900 pieces of mail containing veterans’ claims information were backlogged at the Florida facility. Additionally, investigators found more than 1,600 boxes of claims material waiting to be processed at a CACI International Inc. scanning facility in Georgia that was helping to scan and store claims information from veterans using the Florida office.

The boxes at the contractor facility contained "significant amounts" of unprocessed claims information that were more than 30 days old, despite the VA’s contract with CACI requiring the company enter claims material into the online database within five calendar days of its arrival.

While officials with the Veterans Benefits Administration told investigators they were aware of delays in processing, the inspector general found no evidence of the VA "prioritizing this issue and taking effective corrective action."

Furthermore, the veteran information sent by various VA offices to the CACI facility was improperly stored and disorganized, the boxes containing loose papers with sensitive information mixed up with other unrelated VA documents.

"Despite VA’s information security requirements, in the contractor facility’s rear storage areas, we observed a large amount of hard copy sensitive veteran information haphazardly commingled with contractor company documentation, excess office furniture, and empty computer boxes that appeared to be trash," the inspector general wrote.

The disorganized boxes ran counter to the VA’s standard operating procedure for shipping hard-copy claims. According to VA personnel, the condition of the boxes of documents was "unacceptable" and needed to be returned to their respective offices to be organized properly and reshipped.

The improper storage of veterans’ personal information at the scanning facility put the patients at risk for identity theft and fraud, the inspector general warned.

"Without implementing effective controls for storing and safeguarding sensitive VA information, hard copy veterans’ claims evidence is potentially vulnerable to loss, theft, and misuse to include identity theft or fraud," the report read.

"The risk of unauthorized disclosure veteran information is further heightened as we observed malfunctioning video surveillance of the rear storage area, employees freely roaming in this area, and adjacent unlocked and unarmed exit doors to the outside of the building."

Investigators faulted the VA regional office for not overseeing the contractor’s work to ensure veteran information was processed efficiently and with proper safeguards. The inspector general also knocked the scanning facility for not sufficiently preparing claims material to be scanned.

The watchdog recommended that the acting undersecretary for benefits, Danny Pummill, order onsite reviews of CACI scanning facilities and ensure that the St. Petersburg office is organizing and mailing hard copy claims information properly.

While the Veterans Benefits Administration agreed with the findings in the report about the backlog, officials argued that it "was not due to poor preparation or handling and the boxes onsite did not affect mail-processing time." However, the VA officials did not offer specific reasons for the backlog. They also insisted that nearly half of the information in boxes at the scanning facility had already been inputted into the electronic system.

The St. Petersburg office has been subject to a later visit from the inspector general to determine whether document shredding played a role in veterans’ delayed claims. The facility was one of 10 across the country investigated last August after the inspector general found evidence of improper document shredding at the Los Angeles VA regional office.

For years, the VA has been pushing to reduce its claims backlog, which reached a peak of over 600,000 claims in March 2013. The agency promised that year to reduce its count of unresolved claims aged 125 days or older to zero by Sept. 30, 2015. However, more than 75,000 disability claims were still backlogged at the end of last September.

Still, officials have celebrated the reduction in claims.

John Cooper, press secretary for Concerned Veterans for America, said that the massive backlog at the St. Petersburg office undercuts the VA’s purported success at resolving old claims.

"This is simply another reason why the VA’s self-congratulatory rhetoric about ‘reducing’ the claims backlog was premature and misguided. If things are this bad at a single VA facility in Florida, it’s pretty clear that any success the VA claims on eliminating the backlog should be taken with a larger-than-average grain of salt," Cooper told the Free Beacon in a statement Wednesday.

"Not counting more than 40,000 pieces of veterans’ claims correspondence sitting in warehouses is a clever way for the VA to game the numbers, but unfortunately, it’s also blatantly dishonest. Given the VA’s aversion to accountability, however, the American public shouldn’t hold its breath waiting for the veterans affected to get justice."

Published under: Veterans Affairs