For nearly a year, hints of the problems plaguing Philadelphia's Veterans Affairs benefits office had seeped out. On Wednesday, the agency's own inspectors finally confirmed nearly all the allegations - and added new ones - in a searing report that painted the most damaging portrait to date of dysfunction at the Germantown office.

The VA inspector general's 10-month probe found more than 31,000 veteran inquiries had languished, on average, for almost a year. Sorters had stamped as "unidentifiable" thousands of pieces of mail from veterans, ignoring phone numbers or other information that would have made many easy to track. Duplicate records led to more than $2.2 million in overpayments to veterans.

The 78-page report stopped short of faulting specific employees, or even naming any. But it directed the agency to launch a deeper review to determine who should be held accountable, signaling that the Philadelphia office - among the most scrutinized in a national VA scandal - is likely to remain in the spotlight.

"There is an immediate need to improve the operation and management" of the Philadelphia office, Assistant Inspector General Linda Halliday wrote. "Leadership must work to restore the trust of employees and promote open communication."

The office oversees benefits for 825,000 veterans in eastern Pennsylvania, South Jersey, and Delaware, and manages the distribution of $4.1 billion annually. It also houses one of the nation's three pension management centers for veterans.

When the facility came under investigation in June, many veterans across the region wondered if reports of document mismanagement explained why their inquiries were often met with silence. One Philadelphia man who had tried for two years to secure benefits for his mother said forms he sent there seemed to end up in "a black hole."

On Wednesday, VA officials said that the report "reflects the conditions as they were over a year ago" and that the office has made vast improvements since Diana Rubens became director weeks after the investigation began. Allison Hickey, undersecretary for benefits, has said a majority of the problems have been fixed.

Halliday said she disagreed with the assertion that the report paints an entirely outdated picture of the office. She said that while the inspector general completed site work at the office in August, allegations continued to roll in. Last month, an employee reported a "scheme to credit . . . staff for training they did not complete," Halliday said.

The report also gave new clarity on the claim that first drew investigators to Philadelphia: that a VA policy allowing old claims to be marked as new was being widely applied to hide the office's backlog.

VA officials have said the mistakes stemmed from a misunderstanding of agency policy. But in the report, investigators said managers changed how the policy was applied based on the backlog of pending mail, a practice that "seems to contradict VA core values of integrity."

For example, in July 2013, staff members were told to put new dates on claims older than 264 days, the inspectors found. In December 2013, that changed to claims older than 212 days. On March 11, 2014, staff members were told to not establish any claim with a date prior to Feb. 26, 2014 - making the oldest possible claim 13 days.

Investigators found problems across the facility. They estimated that sorters in the pension division failed to log more than 6,000 pieces of mail because they claimed they couldn't identify the affected veterans, even though investigators in many cases easily found a phone number or a return address. That left veterans and their family members in the dark - and "more alarming," investigators wrote, may have resulted in the premature destruction of mail.

They found 20 unmonitored date-stamping machines in one office, which "created an environment where anyone . . . would have the opportunity to manipulate dates of claims without detection."

And they found one VA worker responsible for quality control who routinely doctored benefit forms to cover up mistakes made by coworkers. Managers knew and didn't stop the employee, investigators said.

Some allegations were not substantiated, including that office management attempted to conceal two pallets of potentially old claims ahead of a visit by congressional staffers and that employees processing claim appeals cherry-picked easy cases to inflate performance numbers.

The VA has convened an investigative review board to delve further into several concerns and consider disciplinary action. The group's report is expected no later than June 30.

On Wednesday, the VA notified staff at the Philadelphia office that the manager of its pension center, Gary Hodge, would be temporarily reassigned to the VA's Washington office effective Monday, according to an internal e-mail obtained by The Inquirer.

Marisa Prugsawan, spokeswoman for the Philadelphia office, said Hodge's relocation was not in response to the inspector general's report but was so officials can bring in a new leader "to see if having different eyes on the problem will bring new solutions."

Prugsawan said Hodge will be replaced by an employee from another VA pension management center, one of five subject-matter experts from around the country temporarily assigned to help implement the inspector general's recommendations in Philadelphia.

Rep. Jeff Miller (R., Fla.) chairman of the House Committee on Veterans Affairs, on Wednesday called on the VA to "fire those responsible for these failures." The committee is holding a hearing next week at which VA officials will be called to testify about the Philadelphia office.

Members of Congress from around the region responded harshly to the report, with many saying the findings were worse than expected. Rep. Ryan Costello, a Chester County Republican who is also a member of the House VA Committee, echoed Miller's sentiment and said firing those responsible for the office's "dysfunctional daily operations" should be the first step in changing the office's culture.

Kristen Ruell, a whistle-blower who was one of several who sparked the inspector general's review, said the findings confirmed many of her concerns. But she said the report would mean nothing if those who caused the problems are left to fix them.

"The VA is big on committees and meetings and training, but I don't feel like they have the kind of stuff to fix a manager who lacks morals and integrity," she said. "I don't think training can fix any of this."


Tens of thousands of inquiries from veterans sat unanswered for an average of 10 months.

More than 22,000 pieces of returned mail, dating to August 2010, had not been processed.

Documents containing personal information of veterans and office employees weren't securely stored.

One worker responsible for quality control routinely doctored benefit forms to cover up mistakes made by coworkers.

Conclusion: "Many employees do not trust management, and that distrust has hurt the service provided to veterans."


215-854-2730 @TriciaNadolny