Oakland VA office botched benefits, forgot about claims

The U.S. Department of Veterans Affairs’ regional office in Oakland shoved thousands of compensation and disability claims into a filing cabinet without processing them, leaving many veterans or their surviving family members without needed benefits, the agency’s inspector general said in a report issued Wednesday.

The claims, which dated back as far as the mid-1990s, were discovered in 2012 as a national scandal erupted over the VA’s sloppy and slow handling of benefits, which outraged veterans.

The report said the office in 2012 counted 13,184 informal claims for benefits that had been found in the cabinet, with 2,155 requiring “review or action.” Those files were assigned to a special team, the report said, but later, in spring 2014, office workers found a cart of the claims that the team had reviewed but failed to act upon.

“Management determined staff had not taken action on these informal claims as required,” the report stated. Inspectors quoted staffers as saying that processing the claims discovered in the cabinet “was not a priority” in the office.

When the inspector general’s office visited for a two-week probe in July, it learned the office had created a spreadsheet after 537 unprocessed claims were found in the cart. But the office had created no paper trail for the larger cache of claims. Inspectors couldn’t verify they had been taken care of due to “management’s poor record-keeping practices,” the report said.

The Oakland office, which reviews claims for Northern California veterans, “did not maintain adequate records and provide the oversight needed to ensure timely processing and storage of these informal claims,” the report said. “As a result, veterans did not receive consideration for benefits to which they may have been entitled.”

An informal claim is defined as any communication — from a veteran or their representative — that indicates an intent to apply for VA benefits. Employees at regional offices, once they receive an informal request, are required to send the veteran a formal application. The date an informal request is received is then used to mark the effective date of claim once the official claim is processed.

The inspector general’s report said the 537 unprocessed claims were discovered on the cart only because the office was undergoing a construction project. Inspectors looked at a sample of 34 of those and reported finding seven that needed processing — even though they had been “repeatedly reviewed” from 2012 to 2014.

One request investigators reviewed showed that a veteran seeking treatment for post-traumatic stress disorder was shorted almost $3,000 because his informal claim was never processed. His date of claim should have been July 2002 rather than November 2002. He had lost four months of benefits.

Vet was underpaid $1,200

Another veteran, seeking treatment for hearing loss and tinnitus, was underpaid about $1,200, the report said, because his formal claim was approved 10 months after his informal claim was received and ignored.

Referring to the other five claims that needed processing, the report said neither the VA nor the inspector general’s office “can determine entitlements to disability benefits without the veterans submitting formal applications. As a result, the veterans may not have received timely consideration for benefits to which they were entitled.”

Rep. Doug LaMalfa, R-Richvale (Butte County), had requested the inspector general’s review after a group of whistle-blowers came forward with information about the hidden claims.

He said Wednesday that he was disappointed in the report’s recommendations — that the Oakland office process the 537 claims found in the cart, institute more training and implement an oversight plan.

“The accountability for why these things happen doesn’t have any clear conclusion,” LaMalfa said. “They say all these files were missing, but there’s not enough information to confirm what’s wrong. That’s a self-perpetuating nonsolution. You need to step back and figure out why the information is not there or missing.”

Lauren Price, founder of the veterans advocacy group Veteran Warriors, said she was concerned that inspectors accepted the Oakland office’s assertion that only 2,155 of the 13,184 claims in the cabinet required action or review.

Under federal law, the VA not only has to “notify the claimant of any information or evidence necessary to substantiate the claim,” but make “reasonable efforts to assist a claimant in obtaining evidence necessary’’ to substantiate the claim.

Need to contact every vet

“According to the law, every single one of them needed to be verified and every veteran needed to be contacted,” Price said.

She added, “They’re just basically taking the leadership’s word for it, that 11,000 of them were junk. We’re just going to keep taking their word for it when they covered this up for two years?”

LaMalfa said he was pleased the claims in the cart were being processed, but concerned about the 12,647 other informal claims supposedly found in the cabinet, and whether or not the veterans who filed those claims got the help they needed.

“Who is looking out for the veterans?” he asked.

The Oakland office’s response to the inspector general’s findings was included in the report. Julianna Boor, the Oakland regional director, said she concurred with the recommendations, and noted that the staff had received training on the proper procedures for processing informal claims in June and October of 2014.

She said the office, after a transition in December, now routes all mail through a scanning vendor to be converted into an electronic file to accurately track informal claims.

Boor did not address how or why so many informal claims had been cast aside for so long. A representative from the VA office in Oakland did not immediately return calls for comment Wednesday.

The office, which serves veterans from Bakersfield to the Oregon border, has a history of backlogged claims and accuracy issues in processing those claims. Nationwide, officials have come under fire for lying to federal investigators and doctoring waiting lists for veterans seeking help.

Vivian Ho is a San Francisco Chronicle staff writer. E-mail: vho@sfchronicle.com Twitter: @VivianHo