VBA Did Not Always Properly Implement Compensation Cost-of-Living Adjustments

VA provides tax-free monthly compensation payments to veterans for service-connected disabilities, including special monthly compensation for certain serious disabilities or combinations of disabilities. As part of its Veterans Benefits Administration (VBA) oversight, the VA Office of Inspector General (OIG) identified instances where VBA did not properly implement annual disability compensation cost-of-living adjustments (COLA). First, the OIG team found that certain special monthly compensation amounts had been calculated incorrectly for each annual COLA since December 1, 2016. This resulted in some monthly payments to veterans being slightly higher or lower than they should have been. Second, the OIG team found that the increased amounts for disability compensation, additional compensation for dependents, and clothing allowance for the COLA effective December 1, 2022, were not published in the Federal Register, as required by law. VBA received the Federal Register notice signed by the VA Secretary containing the increased amounts; however, VBA did not forward the notice to the next office for publication. Although the increased amounts were available on VA’s website, including them in the Federal Register is important because it is the official publication for notices of federal agencies and organizations. In November 2023, the OIG team notified VBA representatives of the improper implementation of these compensation COLAs. The VA OIG issued the management advisory memorandum to formally and transparently convey this information so that VBA can determine if additional actions are warranted. The OIG requested that VBA inform the OIG of what action, if any, VBA takes regarding the incorrect special monthly compensation amounts identified in this memorandum and the increased disability compensation amounts effective December 1, 2022, that were not published in the Federal Register.