Summary

The Department of Veterans Affairs' (VA) disability compensation and survivor benefit programs in the Philippines provide payments to Filipino veterans as a result of their service with U.S. armed forces during World War II. VA had planned to close its Manila office in March 1994 and move claims processing to Seattle, Washington. GAO concludes that VA should not make this change until it has ensured that only proper benefits are made and that only those eligible receive benefits. Even though it has been nearly 50 years since the end of World War II, many claims are still submitted for compensation benefits, most of which are denied by VA's Manila office because of an insufficient basis or because they involve fraud. Careful review by claims examiners knowledgeable of the local situation should continue until VA can develop an effective alternative to processing claims in Manila.

GAO found that: (1) VA compensation payments totalled $50.6 million in 1985, $38.4 million in 1988, and $50.9 million in 1992; (2) the number of Filipino beneficiaries has declined by 23 percent since 1985; (3) the average compensation payment made to Filipino beneficiaries in 1991 was 200 percent of the Philippine median family income; and (4) premature closure of the VA Manila office could hamper the detection of fraudulent activities resulting in increased program costs, increased personnel costs, and an adverse effect on services to beneficiaries.