Veterans Affairs allowed tens of millions of dollars in approved funding on veterans programs – such as death and disability benefits – to go unspent last year while exceeding its budget for internal services like communications.

A closer look by The Globe and Mail at the department's line-by-line public accounts shows the biggest source of the gap – or lapse – comes from the department's two biggest categories: the health-care program and disability and death compensation.

Last year, the department spent 6.9-per-cent less than its approved budget of $1.2-billion on its health-care program and re-establishment services, a savings worth $82.3-million. It also spent 3-per-cent less than its approved budget for disability and death compensation – a lapse worth $67.6-million. Since 2006, more than $1.1-billion in authorized spending at Veterans Affairs has gone unused.

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In contrast, a separate category last year for "internal services" that covers management, communications, legal services and human resources exceeded its approved budget by 17.1 per cent, coming in at $85.8-million instead of the approved budget of $73.3-million.

The spending issue is another controversy for Veterans Affairs Minister Julian Fantino who continues to face calls for his resignation. Last month, Mr. Fantino promised $200-million over six years for veterans toward mental-health initiatives – two days before the release of an Auditor-General's report that said many vets are waiting months or years to access mental-health benefits. Later, the government acknowledged the funding would be spread over decades.

Prime Minister Stephen Harper told the House of Commons Tuesday that the government is boosting service for veterans while cutting useless bureaucracy.

"What the Liberal Party and the NDP – what they want to do – is make sure they protect those bureaucratic jobs at Veterans Affairs instead of giving the services to the veterans. That's what we're doing," said Mr. Harper.

Measured in terms of year-over-year spending last year, Veterans Affairs actually spent 2-per-cent less on disability and death compensation, 2.1-per-cent more on health care and 6.8-per-cent more on internal services.

Opposition MPs say the Prime Minister's claims are at odds with the department's spending figures.

"It completely contradicts what the Prime Minister said," said Liberal MP Frank Valeriote. The Liberal MP also noted that another department, Employment and Social Development, announced this week that it is hiring 400 additional staff in response to complaints by Employment Insurance applicants of poor service.

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"Here we have 400 more staff being hired because of complaints of lack of service, delayed processing times and being left on hold on the phone. Is that not exactly what veterans have been experiencing and complaining about for several years? So my question really is why are veterans not entitled to the same service that EI claimants are entitled to?" he said.

At a high level, Conservative ministers portray large government-wide spending lapses as a sign of prudent financial management that helps Ottawa's improving bottom line. However, ministers, including Mr. Fantino, have bristled when it comes to questions over the details of those spending lapses.

Veterans Affairs argues that it is impossible to know exactly how many veterans and their families will request assistance like death and disability benefits in any given year and so estimates are calculated to ensure there is enough money on hand. Unused funds in these areas are then returned to general revenue and produce an improvement to Ottawa's bottom line.

The Parliamentary Budget Office has criticized large lapses in federal departments as a form of spending cut that is not explained in a clear and transparent way.

Veterans Affairs has shrunk from a peak of 4,137 full-time staff in 2009 to 3,188 this year.

NDP veterans affairs critic Peter Stoffer said the impact of poor service for veterans is that potential claimants get discouraged, allowing the department to save money.

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"It is simply unconscionable," he said. "We know the government has the 'no go' policy, which is you say no long enough and the veteran goes away. There's also the '3D' policy on older veterans: You delay, you deny and they unfortunately die."