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Veterans travel reimbursement system ripe for fraud

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The system to reimburse veterans for medical travel is susceptible to fraud, and $42.5 million from a recent 15-month period is unaccounted for, the Veterans Affairs office of inspector general says.

The Veterans Health Administration can reimburse veterans by the mile if they drive to receive medical care. In 2008, the reimbursement rate rose from 11 cents per mile to 41.5 cents per mile, and in the next year, the number of veterans who filed claims jumped 30 percent. In fiscal 2012, travel reimbursements cost the VHA about $861 billion.

But the agency's financial controls are inadequate, OIG auditors say in a recent report (.pdf). One problem is that the VHA hasn't always verified the home addresses that veterans list, and some have falsified their addresses so they can claim they traveled more miles.

Last April, one investigation found that a veteran had said he made hundreds of 330-mile round trips to a VA medical facility in Oklahoma City, when in fact he lived in the Oklahoma City area. The man was ordered to pay more than $36,000 in restitution after he pled guilty.

As of November, the OIG had open 133 criminal investigations into travel reimbursements. The number of investigations rose after the mileage rate went up in 2008, the report notes.

Additionally, if a veteran gets a cash payment for a batch of reimbursements, the VHA's system only records the total value, so its staff can't identify individual reimbursements. Auditors say a veteran could photocopy one approval for reimbursement and bring it in for payment even if it has already been reimbursed as part of a batch, and the VHA might not know about it.

The VHA also doesn't regularly reconcile approved reimbursements with paid reimbursements.

From January 2010 through March 2011, the VA paid about $89 million more for travel reimbursements than it approved. While auditors say much of that was because of miscoded expenses, $42.5 million remains unexplained because the VA's audit trail is inadequate, according to the report.

The VHA has begun an data-mining initiative to identify frequent address changes and suspicious payments, but it hasn't fully implemented it, so auditors say it's too soon to evaluate it.

For more:
- download the report, VAOIG-11-00336-292 (.pdf)

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