Veterans Affairs Committee on June 5th, 2017

[Robert Reynolds]

That's not true at all. Probably the majority of our claims are for post-traumatic stress. Out of the 4.6 million service-connected disabilities, PTSD was probably within the top 10.

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Thank you.

Can a veteran's family member who is suffering from post-traumatic stress obtain individual counselling at the veterans centres?

[Robert Reynolds]

If it's a combat veteran, family members are also entitled to assistance at veterans centres along with active duty service personnel, and that really came about only a few years ago. Again, the active service member didn't want to bring that up within DOD, because if they were not fit, there would be other issues. They could come to the veterans centre and they would be cornered off and not share any information, but they could get the treatment they need. That's part of another thing, again, to get to zero for suicide.

[Irene Mathyssen, NDP, London—Fanshawe, ON]

You're talking about getting to zero for suicide. Have you seen a significant improvement in terms of family interaction when family members can access that?

[Robert Reynolds]

Yes. We're seeing that anytime you can incorporate the spouse, especially with the TAP, the transition assistance program I talked about, the service member—I didn't have TAP when I got out—is not thinking about it, but I can assure you their spouse is. She or he is going to make sure you do what you need to do to take care of it.

[Irene Mathyssen, NDP, London—Fanshawe, ON]

I also wonder about the process for appealing the department's decisions on monetary benefits and health care if benefits are denied. What's the process like in terms of appeals? Is it difficult for veterans? Do they have to go through a prolonged process or is there an ability for the department to help them along, to facilitate that?

[Robert Reynolds]

On the appeals process for disability compensation, which you've probably heard about on the news as well, we are hopeful. There is legislation on the Hill. It has passed the House. We're hoping it passes the Senate.

This is so old that it's never been tackled before to really make it easier. You can put in an appeal and just appeal and appeal.... If the legislation goes through, they'll have options for what they can do, which again will empower them a little more to say, “Okay, I want to do this process because I can get a decision quicker than if I just stay in the historical appeals process.” It's a two-way street. A lot of times they'll submit additional evidence down the road, so that could be a new claim or whatever.

We're hoping the legislation passes. Based on the discussions we've had, we are optimistic. We think it will. Then I think you'll see a whole new appeals process within the Department of Veterans Affairs.

[The Chair, Liberal, Neil Ellis]

You have 30 seconds.

[Irene Mathyssen, NDP, London—Fanshawe, ON]

You talked about supports for people who are in danger of losing their homes. Would there be counselling in addition to monetary support? How do you go about that? When you get into that kind of trouble, it can get pretty dicey.

[The Chair, Liberal, Neil Ellis]

I'm sorry, but you'll have to answer in 30 seconds.

[Robert Reynolds]

Again, for us, it's leveraging the data. We know now if you're going to be late on a payment or if you've become delinquent on a payment, and we can reach out to you, if need be.... Let's say you've been in that home for 20 years. You have equity there. Do we engage with the lender and reformat your loan and your payment to get you back to where you can afford your house payments and you're no longer delinquent on your home loan? In some instances, VA even can acquire that property and work out the loan with the veteran to keep them in their home.

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Thank you so much.

[The Chair, Liberal, Neil Ellis]

I'm going to suspend the meeting. We'll come back after the bells.

Mr. Reynolds, the clerk will stick around and we'll come back for more questions. We do have another witness coming up.

The meeting is suspended.

[The Chair, Liberal, Neil Ellis]

I would like to resume the meeting.

I just want to tell the committee that Mr. Reynolds might come back for some questions. He's going to try to arrange it in his day.

We're going to move to our second hour right now.

We have by video conference from Washington, from the Office of Inspector General, United States Department of Veterans Affairs, Michael Missal, Inspector General. I will just note here that his role is similar to that of the Canadian veterans ombudsman as well as the Auditor General with regard to finance and public accounting.

Mr. Missal, thank you for appearing today. The floor is yours for 10 minutes. Then we'll get into questioning.

[Michael Missal, Inspector General, Office of Inspector General of the United States Department of Veterans Affairs]

Thank you, Mr. Chairman, vice-chairs, and members of the committee. I appreciate the opportunity to discuss with you the Office of Inspector General. It really is a tremendous honour to have this opportunity to speak with you today.

First, let me provide a very brief introduction to the history of inspectors general. The Inspector General Act of 1978 established federal IGs at 12 agencies including VA. Today there are 73 federal IGs across the government, about one-third of whom are appointed by the President.

The stated purpose of the IG Act was to create independent objective units at an agency, the primary duty of which was to combat waste, fraud, and abuse in the programs and operations of that agency. It authorized IGs to conduct audits and investigations and to make recommendations for the purpose of promoting economy, efficiency, and effectiveness. IGs have law enforcement powers including the power to make arrests. IGs are also entitled to all records of an agency and can interview employees under oath and subpoena records from outside of the agency.

The IG Act also set up a dual reporting structure by requiring each IG to keep the agency head in Congress fully and currently informed about problems and deficiencies at the agency. IGs are required to provide both the head of the agency and Congress a semi-annual report that includes information on the IG's activities for the previous six months. Thus, IGs make reports to the agency heads and to Congress but do not report to them.

To promote independence of IGs, our budgets are separate from the agency's.

Although IGs do not report to anyone, there are some checks on them, including the ability of the President to remove an IG after notice to Congress, and the requirement that IGs adhere to professional standards.

With respect to me, prior to being the IG, I was in the private practice of law in Washington, D.C., for 29 years. I also served as the chairman of the independent review committee of Vanguard Canada based in Toronto. I was nominated by President Obama to be the IG of Veterans Affairs on October 2, 2015, and confirmed by the United States Senate on April 19, 2016. I've had the honour and privilege of serving as the VA IG since May 2, 2016.

To put in context some of the challenges of my position, let me provide you with some facts about VA. It is the second largest federal agency with over 370,000 employees and a fiscal year 2017 budget of about $180 billion. If VA were a public company, its budget would make it the sixth largest U.S. company, ahead of General Electric, AT&T, and General Motors.

There are over 21 million veterans in the United States, about 10% of whom are women, and VA provides well-earned services and benefits to many of them. VA operates 144 hospitals and 1,200 outpatient clinics that treat almost seven million veterans annually. To take it one step further, in the last fiscal year VA completed more than 58 million medical appointments and over 25 million community care appointments. VA also has 56 regional offices that are responsible for the distribution of benefits for veterans who have earned them. Around 4.5 million veterans receive disability compensation. About 300,000 veterans and over 200,000 survivors receive pension benefits.

VA also operates and maintains the largest national cemetery system in the United States with 135 national cemeteries. In fiscal year 2017, VA is projected to inter over 130,000 veterans and family members. VA operates the 10th largest life insurance program in the U.S. with over $1.2 trillion in face amount of insurance policies. VA also provides education assistance to over one million students. VA has a home mortgage program with over $2.5 million active loans guaranteed by VA. VA provides vocational rehabilitation and employment benefits to over 140,000 veterans. These numbers are staggering and highlight the size and complexity of VA.

On my first day on the job, I emphasized to my staff that we would always strictly adhere to the following three principles: First, we must ensure that we maintain our independence. Put another way, we make reports to the secretary and Congress, but we do not report to anyone. Second, we must be fully transparent by promptly releasing reports of our work that are not otherwise prohibited from disclosure. Third, we must maintain the highest integrity of our work. This means that each of our reports must meet at least these five standards. They must be accurate, timely, fair, objective, and thorough.

Let me tell you a bit about the structure of our office. We are currently at about 700 staff, with about 200 in Washington, D.C., and 500 in 40 offices around the country. Our fiscal year 2017 appropriation is about $159 million. This is an increase from fiscal year 2016. Even though we're about 700 staff, we're a relatively small office to conduct oversight of an organization that has a budget of $180 billion and includes so many important and complex services. Compared to other inspectors general offices, we are small with respect to both our budget as a percentage of the agency budget and the number of employees compared to number of employees of the agency overall.

We are divided into three directorates. The first and largest is audits and evaluations. They conduct performance and financial audits and other evaluations of VA programs and operations. The next largest of our directorates is investigations, with about 215 staff. Investigations conducts criminal investigations related to VA's programs and operations, as well as administrative investigations of allegations against senior VA officials. Next is our health care inspections, with about 125 staff. Health care inspections conducts inspections of the medical centres and community-based outpatient clinics, performs national reviews of health care issues, and also reviews individual cases.

We speak through our reports and produce about 300 work products a year. This includes the results of our investigations, audits, inspections, and reviews. Our goal is to make our reports of the highest quality.

The OIG provides a healthy return on investment. Over the past five years, we have averaged 475 arrests, 330 convictions, and $3.125 billion in monetary benefits, for a return on investment of $30 for every dollar expended on OIG oversight. This is a strong return and supplements the inestimable value we bring by helping VA improve its health care and benefits services that impact so many lives.

Let me answer some common questions that we have been asked.

How do we see our role? We see our role as helping VA become a more effective organization and ensuring that taxpayer money is spent as appropriated. We do not see it as an adversarial relationship with the department. Although we are independent and must always avoid even the appearance of an impairment to our independence, we meet with VA staff to better understand the programs and operations of the department. It also allows VA staff to get to know us better and learn more about our mission.

How do we get information? We do so in a number of different ways. We have a hotline that gets over 40,000 contacts a year, primarily through phone calls and emails. About 40% of these contacts are from veterans. We review each and every hotline contact we get. We also get numerous requests from members of our Congress. Unfortunately, we are not able to handle each and every matter, and we refer some of these matters to the department for action and follow-up as appropriate. As well, we get tips and other information from VA staff. A number of these are substantiated, so we take these and other tips we receive seriously. We also data mine, to be as proactive as possible. We have a data analytics group based in Austin, Texas, which has access to VA's databases. This allows us to sort and analyze data in numerous ways.

What do we include in our reports? We try to answer at least the following questions in our reports. Why is this report important? If the matter isn't important, then it's not something we should be doing. What happened here? Again, we try to present it in a fair and balanced manner. Why did it happen? This is really important to put the facts in context and to determine whether there are lessons to be learned. Finally, who, if anyone, is responsible for any wrongdoing? This promotes individual accountability.

How do we decide what matters to take? We can take only a small fraction of the potential matters brought to our attention. When deciding whether to take on a matter, we look at a variety of factors, including whether it impacts a large number of veterans, whether there is imminent harm, the impact on taxpayers, whether the conduct is widespread, the public interest, whether we have done something in that area before, whether the issue can be handled by VA or another federal agency, and whether Congress has legislated that we should conduct a certain activity. These are not the only factors but rather some of the more important ones that we consider.

What are our current priorities? We are focused on a number of areas. Among the most significant are the following:

Timely access to quality health care. We have recently issued a number of reports on wait times at VA hospitals, as well as allegations regarding how the quality of care may not have been acceptable, and we have many more reports pending.

Mental health services. VA is a leading provider of mental health services. Suicides of veterans remain tragic and significant in the United States, with recent estimates of 20 veteran suicides a day. We have issued a number of significant reports in this area, and have more pending.

Pain management. There is an opioid crisis in the United States, and we have reported on the use of opioids and other narcotics. Our reporting in this area will continue.

The veterans choice program and other care in the community programs. After the wait time scandal in 2014, Congress appropriated $10 billion for VA to enhance its care in the community. It allows veterans who cannot get an appointment for preauthorized care within 30 days or who live more than 40 miles from a VA facility to get care in the community from a provider who is on an approved VA network. We have issued a few reports on the challenges faced by VA in establishing this program and have more reports to come. The funding for veterans choice was just extended, and Congress will be considering the future of care in the community programs.

Construction. VA has an outdated infrastructure and is in need of remodelled and new facilities. One facility being constructed is for the replacement of the Denver medical centre in Colorado. Congress appropriated $800 million and it was hoped that the facility would have been finished several years ago; however, construction is ongoing. We issued a report last year which showed that the current cost estimates to finish construction are around $1.675 billion, or almost $1 billion above budget. There are a number of other major construction projects set for VA, and we will be watching them closely.

Procurement is another focus area. VA buys billions of dollars' worth of different products, including drugs and prosthetics. We have a number of active investigations related to allegations of fraud and waste of these products and many others.

Information technology. VA has many antiquated IT systems, including its system to prepare its financial statements and schedule appointments. We have issued a number of reports of VA's IT challenges and have a number of other ongoing IT projects.

Benefits fraud. There are numerous instances of benefits fraud committed by veterans, families, and others. We have aggressively investigated and helped criminally prosecute a number of benefit frauds.

I thank you again for inviting me here today, and I hope you have a better understanding of our work. In the time remaining, I'm happy to answer any questions that you may have.

[The Chair, Liberal, Neil Ellis]

Thank you.

We'll begin with Mr. Brassard for six minutes.

[John Brassard, Conservative, Barrie—Innisfil, ON]

Thank you, sir, for being here today.

We have an Auditor General who oversees all aspects of the federal government in terms of spending, and we have a veterans ombudsman, who looks after veterans issues. We also have a Department of National Defence ombudsman who deals with DND issues. One of the challenges we have is with the reports that are written. You talked about the many reports, sir, that you've done over the years. There's almost an industry that has been created of not doing anything with these reports, some of which have very solid recommendations dealing with, for example, mental health or issues of veterans or forces members transitioning into civilian life.

Do you share that frustration? Do you see that in the United States, that reports are done but nothing gets done?

[Michael Missal]

Yes. We've seen examples where some of the same issues seem to come up over and over, so what are we doing about that?

Most of our reports include recommendations. The way our process works is that when we have a draft report with recommendations, we provide it to the department for two reasons. First, we want to make sure that we got it right; that's paramount to what we do. We want to make sure that we got it right. If the department thinks we got it wrong, we'll certainly listen to what they say. It's our report, though, so we stand by it. Second, for recommendations, we want to know if they agree or disagree. Again, they're our recommendations, and even if they disagree with them, we might say that we still want them to do it—

[John Brassard, Conservative, Barrie—Innisfil, ON]

I'm sorry, but maybe I could ask you this, then. In the process of drafting these reports, what you're saying is that there's a lot of departmental involvement in the drafting to get some feedback, or am I not understanding that correctly?

[Michael Missal]

There's no involvement in the initial drafting of the report. We will have a full report, with recommendations, and that is our work, our thinking. Before we publicly issue it, we give the department a copy of the draft of that report and say to them to let us know if they have any comments on it. That's on the text.

Also, on the recommendations, if they concur in the recommendations, we ask them to give us an action plan on how they're going to implement those recommendations, including a timetable, so that we have what we expect them to do and a timetable. We then have something that we can judge them on. We expect all recommendations to be fully implemented within a year. If they are not, we include that in our semi-annual report to Congress and the head of the agency to alert them to the fact that they're open recommendations.

[John Brassard, Conservative, Barrie—Innisfil, ON]

What type of accountability system is in place if they don't implement any of the recommendations of those reports after that year? Is it simply another report that goes to Congress and it's then up to congressional members to force the issue at that point? Walk me through the process at that point.

[Michael Missal]

Sure. There are really two ways in which you have accountability. The first is within the department. The secretary of VA wants to close out all the open recommendations. Remember, these are recommendations that the department is committed to implementing. It reflects on the secretary if they're not implemented. Second, Congress has been very active in looking at the open recommendations. Again, they control the purse, so they have significant leverage over the department to ensure that recommendations are implemented.

[John Brassard, Conservative, Barrie—Innisfil, ON]

Okay.

On the issue of individual veterans, what are some of the issues that you're hearing about and some of the concerns that individual veterans are having with the veterans administration? The reason I'm asking is that I'm trying to get a sense of whether there are similarities here in Canada. I suspect that there are very similar situations. What are some of the top things that you're hearing about from your veterans?

[Michael Missal]

In terms of some of the top things, there's a whole score of issues that we hear about from veterans.

Access to quality health care is a very significant issue. There are about seven million or so veterans who get treatment or a service of some kind at a VA medical facility. They want to make sure that they get in on a timely basis and that they're given the highest quality of care.

We also hear about benefits. Again, you have to apply for benefits. There's a grading that goes on for veterans as to what kinds of benefits they qualify for. We hear from a number of veterans who feel that they're not properly tested or assessed as to the kind of benefit. In addition, if veterans want to appeal the VA's decision on benefits if they disagree with it, it could take up to five years for that appeal to be done, so they're very frustrated by how long the appeal process takes.

There's just a host of things relating to health care and benefits that we hear about.

[John Brassard, Conservative, Barrie—Innisfil, ON]

Right. Now, on the issue of—