By David Lawder
WASHINGTON, July 14 (Reuters) - Still reeling from the scandal over healthcare delays, the Department of Veterans Affairs also is struggling to reduce a backlog of disability claims, the agency's inspector general said on Monday.
In written testimony to be delivered to the House Veterans Affairs Committee, VA Assistant Inspector General Linda Halliday detailed numerous problems with the Veterans Benefits Administration's handling of claims, ranging from mail bins full of untouched documents and correspondence and payment of millions of dollars in unsupported claims.
Halliday said that her office found serious problems with the accuracy of the VA's claims reporting. Over 7,800 disability claims more than two years old had been removed from the agency's backlog even though these veterans were still waiting for final decisions, she said.
The inspector general found another 17,600 claims had been inaccurately processed by regional offices, resulting in $40.4 million in improper payments being made over a two-year period.
At the same time, VA's backlog of claims appeals cases has grown at an "alarming rate", she said, to 267,944 on June 30, up 18 percent from 2011.
Claims for disability benefits and other compensation for war wounds, injuries and illnesses linked to military service have grown significantly in recent years as hundreds of thousands of veterans returned home from wars in Afghanistan and Iraq and because of the VA's decision in 2009 to allow claims for conditions such as exposure to the Agent Orange defoliant in Vietnam and post-traumatic stress disorder.
Payments on such claims are expected to total about $73 billion this year, about half of the VA's annual budget.
The findings put additional pressure on President Barack Obama's nominee to head the VA, Bob McDonald, in fixing the VA's problems. The former Procter and Gamble chief executive was named to replace Eric Shinseki, a four-star retired Army general who resigned as VA secretary in May amid a scandal over the cover-up of months-long delays for veterans to get medical appointments at VA hospitals and clinics.
"These are challenging times for VA," Halliday said in her testimony, adding that her office continues "to identify a high rate of errors" in claims processing.
The picture contrasted with testimony of VA benefits undersecretary Allison Hickey for the Monday night hearing. She focused on the reduction of the agency's total disability claims backlog to 275,000 from a peak of 611,000 in March 2013, and the agency's progress toward a goal of processing all claims within 125 days at a 98 percent accuracy level.
"Too many veterans still wait too long to get the benefits they have earned and deserve, and that's unacceptable," a VA spokesman said in a statement issued in response to the inspector general's findings. (Reporting By David Lawder; Editing by Ken Wills)