STATEMENT OF
JOSEPH THOMPSON
UNDER SECRETARY FOR BENEFITS
VETERANS BENEFITS ADMINISTRATION
DEPARTMENT OF VETERANS AFFAIRS
BEFORE THE
SUBCOMMITTEE ON BENEFITS
COMMITTEE ON VETERANS' AFFAIRS
UNITED STATES HOUSE OF REPRESENTATIVES

February 4, 1998

Mr. Chairman and Members of the Subcommittee:

It is a pleasure to appear before the Subcommittee today to discuss initiatives that are improving the administration of the Department of Veterans Affairs (VA) Vocational Rehabilitation Program for service disabled veterans. This program has faced many challenges in recent years. While we have successfully addressed many of them, we know we need to do much more.

We recognize that we have many things to accomplish if we are going to improve the program to the point where we are meeting all our veterans' needs and stakeholders' concerns. We also realize that we have a history in which our actions may not have been as responsive as they could have been in addressing criticisms or recommendations by organizations such as the General Accounting Office (GAO) and the Veterans' Advisory Committee on Rehabilitation (VACOR).

While acknowledging these shortcomings, I am pleased to be able to tell you what we are doing to meet criticisms and to further improve this critically important program. When I assumed the leadership of the Veterans Benefits Administration a few months ago, I was familiar with the GAO reports and the Vocational Rehabilitation and Counseling (VR&C) Service's responses to GAO recommendations for program improvement. Therefore, I will begin by discussing our progress in addressing recommendations GAO has made. Then I will bring you up to date on implementation of Government Performance and Results Act (GPRA) outcomes and measurements for the VA Vocational Rehabilitation Program. Finally, I will comment on recent recommendations that VACOR has proposed.

Mr. Chairman, as you know, the primary purpose of the VA Vocational Rehabilitation Program is to help service-connected disabled veterans get and keep suitable employment or to achieve the maximum independence in daily living. A statutory change to this program in October 1980 focused us on employment as the goal. Training, counseling, rehabilitation, job placement, and other services should support a suitable employment outcome. We directed increased attention on such activities as employment services and the examination of existing and transferable work skills. We trained our staff members; we developed regulations and procedural manuals; and we regularly conducted oversight surveys of the program. Despite these activities, we recognize that we still have a large challenge ahead of us to get our staff members to focus more on employment services.

We have made progress, however, in the employment area. In FY 1992, we began to increasingly emphasize suitable employment i.e.; employment that is consistent with the veteran's interest, aptitudes and abilities. By FY 1995, 6,075 disabled veterans achieved suitable employment through this program, an increase of 33 percent over the preceding year. In FY 1996, the number of disabled veterans achieving suitable employment rose to 7,199 an increase of 19 percent over FY 1995. Most recently, in FY 1997, 8,398 disabled veterans entered suitable employment an increase of 18 percent over FY 1996. I would like to point out that these suitably rehabilitated veterans in this most recently completed fiscal year represent a 166% increase over the number of such rehabilitated veterans in FY 1992, the year GAO first recommended that VR&C needed to improve its employment placements for Vocational Rehabilitation Program participants.

One of the resources we are increasingly using in our efforts to identify employment opportunities for veterans in our program is the Veterans' Employment and Training Service (VETS) of the Department of Labor (DOL). We have developed an effective working arrangement with VETS for providing job placement services to disabled veterans. On August 1, 1995, VA and DOL signed a Memorandum of Understanding that establishes a framework for mutual cooperation and coordination of services. In 1996, the National Veterans' Training Institute (NVTI) developed a joint VA/DOL training curriculum to improve the working relationship between VA and DOL staff members. In 1997, a joint VR&C/VETS task force began to examine what more VR&C could do to improve our services to the employment needs of disabled veterans. We agreed to develop a Technical Assistance Guide to provide guidance to our staffs. We are currently working on this initiative and expect to complete it within the next four months. This year, we will develop and hold a training program based on the recommendations in this guide.

Our efforts to improve our working arrangements with VETS/DOL are continuing. For example, VR&C Service Director Julius Williams and DOL Assistant Secretary for Veterans' Employment and Training Espiridion Borrego have initiated quarterly meetings to develop a better understanding of the challenges they face in that partnership. I believe the dramatic increase in employment of disabled veterans over the past several years is evidence of the emphasis the VR&C program has placed on working with VETS to increase the employment of disabled veterans who complete vocational rehabilitation programs.

In its 1992 report, GAO recommended that we take the lead in developing an effective working arrangement with DOL for providing job placement services to disabled veterans. I believe the record demonstrates that we have done so. We value this resource for employment of disabled veterans. We will continue our effort to improve and enhance this partnership as part of our mission to help disabled veterans find and keep suitable employment.

The GAO also identified a lack of employment services expertise in VR&C staff members. We agree with this finding. VR&C is working with VBA training elements to identify appropriate training opportunities and obtain additional employment services expertise. Although we work closely with DOL and third party placement elements, building greater staff expertise in developing and executing overall employment services and placement strategies is essential.

Mr. Chairman, we have been and are concerned, as we know you and the other members of the Subcommittee are, about determining why veterans drop out before completing their vocational rehabilitation programs. In addition, GAO has expressed concern about the number of veterans who drop out of the program. We know that significantly large numbers of veterans who apply for the program do not complete their claims to the point of entering a program of services. Some veterans' circumstances change after they apply for the program. Other veterans apply without an adequate understanding of the program for which they are applying.

We believe that the majority of the veterans who drop out do find employment, but often this employment is incompatible with the limitations of their disabilities. Such unsuitable employment does not qualify as a program success. Unsuitably employed veterans may later return to us because they could not continue in that employment.

We have not determined all the reasons this happens, but we do have some ideas. To examine this issue more thoroughly and to fulfill our need for carefully developed information about unplanned program terminations, we hired a widely recognized consultant firm in October 1997. The consultant is to identify the reasons why veterans prematurely exit the program and to recommend ways we can be more effective in getting veterans to complete their programs. The consultant's findings are due in September of this year.

The VR&C Service has received justifiable criticism for not emphasizing to veterans, veterans service organizations, and other stakeholders that the primary purpose of the Vocational Rehabilitation Program is suitable employment following a planned program of rehabilitation services. This is essentially a problem of communications. Even though the program changed its focus from training to employment following training in 1981, many stakeholders continue to think of the program as only an education and training program.

To address this issue, we have developed a statement of work and are currently in the process of identifying a consultant to assist us in developing and executing a communication strategy. This strategy will enhance our up front communications with veterans and other stakeholders to provide a clearer understanding of the program's purpose. This strategy will also allow us to better use employment services to communicate with potential employers about the benefits to them of hiring rehabilitated disabled veterans. This will create a pool of employers eager to hire qualified disabled veterans we refer to them.

Mr. Chairman, in recent years the VR&C Service has increasingly relied on contracting with non-government service providers to timely meet the rehabilitation needs of disabled veterans. This contracting activity began with the crushing workload caused by post-Gulf War military downsizing. In FY 1993, VA spent $5.5 million on contracting support for vocational rehabilitation. By FY 1997, this annual expenditure had increased to $27.5 million. Contracting for services has allowed us to timely continue serving disabled veterans and has created hundreds of additional access points for disabled veterans to receive services.

The Director of the VR&C Service, however, recognized the immediate need to take a close look at this contracting activity to determine if it is cost-effective in meeting the needs of disabled veterans. In December 1997, he formed a task force to study VR&C contracting and to report its results by May 1998. This interdisciplinary team comprises VR&C field and headquarters staff, contracting officers, persons with backgrounds in finance and support services from field offices, and contract specialists from VA Central Office's Acquisitions and Materiel Management Office.

We anticipate that the recommendations of this Task Force will likely enable us to further increase access to veterans through contracting. Although outbasing VR&C staff is the primary way to improve local delivery of evaluation, counseling, and case management services, we believe that initiatives leading to more access points through contracting are also valuable. More access points make services more readily available to our customers. When the results of this task force's study are in, we in VBA will use the recommendations to establish the proper role of contracting. We will then determine the best direction for contracting for rehabilitation services to disabled veterans.

Mr. Chairman, this Subcommittee received testimony on June 5, 1997, detailing our progress in establishing realistic Government Performance and Results Act (GPRA) performance measures for the VA Vocational Rehabilitation Program. At the time of that testimony, a VR&C Task Force was working to revise the VR&C performance standards initiated in FY 1997. As a result, new performance standards or indicators went into effect in FY 1998 that better reflect the strategic goals of both GPRA and the VR&C Vocational Rehabilitation Program. Accomplishment of these goals will directly contribute to helping veterans get suitable jobs. These performance indicators are:

Claims Processing Timeliness and Completion. VR&C staff members will work closely in face-to-face contacts with veterans whom VA has found eligible for the Vocational Rehabilitation Program. As a result of these contacts, VR&C staff members will provide each veteran a timely, comprehensive evaluation and entitlement decision.

Outcome Success. We expect that monitoring and improving this critically important indicator will contribute to the suitable employment of disabled veterans.

Success Outcome Unit Cost. The VR&C Service now determines the average unit cost to assist a veteran to complete a rehabilitation program. This is consistent with overall Veterans Benefits Administration efforts to acquire appropriate cost information and function in an environment of reduced resources. This average unit cost consists of VR&C salary expenditures and contracting expenditures over all rehabilitation services that place the veteran in a successful outcome.

Accuracy Review Outcomes. VR&C Service will now review at least 4 percent of all cases for quality work. The goal is to reduce the number of cases needing improvement. We are near completion of a major revision to our quality assurance system. This revision will allow us to ensure consistency and accuracy in our processes and will be integrated into the overall VBA Quality Assurance Program.

In addition to these performance measures, we have planned a customer satisfaction survey to assure that we have candid responses from the disabled veterans we serve. We are now designing this survey, building on the experience of the other business lines and hope to benefit from their experience. Further, consistent with GPRA requirements, the VR&C Service will undergo a formal program evaluation.

We expect all these initiatives will ensure a greater understanding of what we have done that is good and what we still need to do to improve the performance of the Vocational Rehabilitation Program as it works to return disabled veterans to suitable employment and productive lives.

Mr. Chairman, as you know, I am concerned about VBA data integrity. A part of this concern is the lack of comprehensive program data with which to manage the Vocational Rehabilitation Program as well as the other programs that the VR&C Service administers. I am pleased to report that the VR&C Service has taken a significant step to address this concern. We implemented the first stage of a new management information system, WINRS, at VR&C field offices in October 1997. This system will enable VR&C Service to better manage in a number of important ways the Vocational Rehabilitation Program, as well as other benefit programs for which VR&C Service is responsible. We are now evaluating the performance and have begun work toward delivering stage two of this basic system.

Stage one of WINRS primarily facilitates case management in the field to directly support our delivery of benefits and services. It contains substantial information about our program participants. Stage two increases this pool of information, but, more significantly, places the information into a corporate data environment. This corporate data environment will provide nationwide information to support program evaluation and strategic planning. We expect to deliver elements of stage two processing by November 1998.

The 1996 GAO report correctly cited the lack of readily available data on the cost of providing rehabilitation services. We feel that WINRS is a substantial initiative to address these data deficiencies.

Mr. Chairman, the Veterans' Advisory Committee on Rehabilitation recently released its two-year report for calendar years 1996 and 1997. The Committee made 15 recommendations to improve the rehabilitation of disabled veterans. VA is now reviewing these recommendations. Most of the recommendations concern the Veterans Health Administration. We in VBA are studying the recommendations for the VR&C program and will provide the Subcommittee with our response in the near future.

Mr. Chairman, under Mr. Williams' leadership, VR&C is developing a Business Case, which is the next logical step in the VR&C reengineering effort. Let me explain a few of the purposes and elements of this Business Case.

First, the Business Case will map VR&C's reengineering efforts and plan for achieving needed program improvements. It will link each initiative to meeting a need and achieving a goal. It will recommend steps to achieve each goal. It will also identify VR&C's direct contribution to VBA's and ultimately VA's strategic plan.

Second, the Business Case will chronicle our progress toward implementing initiatives and achieving goals. This document will contain comprehensive data to measure performance, evaluate trailing indicators, and establish leading indicators. The Business Case will be a living document that will reflect future adjustments to VR&C's plan as program requirements, resources, and strategic goals warrant.

Third, there is an element of the Business Case that we feel will be especially helpful to this governing body as well as other stakeholders. This document will contain a crosswalk that identifies each recommendation from reports and studies, such as those by GAO, VACOR, and VR&C's Design Team, and directly links them to initiatives, strategies, and VA's positions. We believe this will enhance accountability and will keep everyone better informed about what we are doing and why we are doing it.

Finally, the Business Case will chronicle VR&C's history and activities from this point forward. This will be an invaluable tool for strategic planning, evaluating program performance, as well as communicating with stakeholders. I would like to note that this process will be enhanced as our data and information management improve.

Mr. Chairman, I hope I have conveyed the progress VA's Vocational Rehabilitation and Counseling Service is making toward providing the quality services that our nation's disabled veterans need and deserve. We recognize we still have a long way to go, but I am confident we will successfully meet this challenge.

Mr. Chairman, this concludes my testimony. I would be pleased to answer any questions you or members of the Subcommittee may have.