Morgan McGarvey To VA Official: What Was The 'Real Dollar' Value Of Improper Payments At VA?

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During a House Veterans' Affairs committee hearing prior to the congressional recess, Rep. Morgan McGarvey (D-KY) spoke about improper payments at the VA.

Transcript

00:00Thank you, Mr. Chairman. Thank you all for being here again. Ms. Tan, I'll start with you this

00:05morning. For fiscal year 24, what were the reported level of improper payments for both

00:10the compensation and pension services as real dollar numbers and as a percentage?

00:15Thank you for the question, sir. I'm going to ask our acting chief financial officer if she'll

00:19take that question, please. Good morning, and thank you for that question. For fiscal year 2024,

00:28for compensation overpayment debts, we established $1.14 billion in overpayment debts,

00:39and that is out of an outlay of $161.196 billion, which comes out to a fraction of 1% of improper

00:49payments. It's 0.72% of outlays were improper. The breakout for the pension service for 2024

00:58their overpayment debts were $227.4 million out of an outlay of $3.743 billion, which is a percent

01:10of outlays of 6.1%. In total, when you add both of those numbers together, the total compensation

01:19and pension overpayment debts established was $1.366 billion out of a total compensation and pension

01:28outlay of $161.196 billion for, again, a below 1% percentage of compensation and pension outlays.

01:39It's 0.85% were improper. Got it. And of those improper payments, what percentage were overpayments

01:50versus underpayments? So I can do the rough math here from the agency financial report for 2024.

02:00And again, these are projections that are given to us after a statistically valid sample of 300 cases

02:10is evaluated. But from the statistically valid sample, pensions improper payments were $404 million

02:19and the overpayments were $381.78 million. So in the magnitude of 80-ish percent.

02:31So, okay. Run through that one more time for me. The pensions were?

02:36Certainly. So improper payments as a whole, well, improper payments not including unknown payments,

02:44where we don't know whether the payment is improper or not because the individual,

02:49the payment may be going through due process. So for improper payments that actually have been

02:55identified in a projection as being improper, the total was $404 million. And the overpayments

03:05of that 404 were $381.78 million. Okay. Thank you. And do you think, do these numbers show an increase

03:15or a decrease in improper payments for these offices over prior years? So for pension service,

03:23this is an increase. The projection is an increase from 2023 to 2024.

03:35I'm taking my own notes. Thank you for that. And this for Ms. Tam, but you know, whoever has the

03:45answers for it, as I understand it, compensation service will be subject to more in-depth supervision

03:51under the Payments Integrity Information Act. Can you tell us why and what changed the comp service

03:57to make that necessary? Sure. Thank you for the question, sir. So what it is, is that in FY24,

04:02our compensation service underwent a risk assessment and because of the pure scale of our program,

04:08as was mentioned earlier, just the amount of outlays that we have, we are susceptible to more

04:13improper payments. And so it's not necessarily that anything wrong was done. We are in testing

04:19and evaluation right now, but that heightened awareness and risk assessment as an internal

04:24control will lead us to reporting again in 2025 after having being removed previously because we met the

04:32the PIA requirements and OIG concurred with that back in April of 2021, I believe.

04:36Okay. And we've got just a little bit of time left. Would you say this is a function of scale

04:40and not an issue of lack of proper controls or how would you characterize it?

04:43I think because of, as has been mentioned, the, just the amount of beneficiaries and veterans that we're

04:50paying and the vast dollar amounts that we're paying, we just are at heightened risk. It's a combination of

04:56factors, again, that you mentioned. I believe we have strong internal controls in place and we're

05:01constantly working to improve those. But I think it's just based off the risk assessment, we have

05:06a higher risk because of the amount of outlays that we have.

05:09We're out of time, so I yield back to you, Mr. Chairman.

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