$2.2 Billion in Payments the VA Can’t Vouch For

"Improper and unknown" is the federal government's own category for money out the door that either shouldn't have gone, went to the wrong place, or lacks the paperwork to prove it was right. In FY2024, the Department of Veterans Affairs reported $2.2 billion of it across seven programs. About $1.1 billion of that was classified as outright monetary loss.

The program that failed three dollars in four

The Purchased Long-Term Services and Supports program — the VA buying nursing-home and home-based long-term care for veterans — posted an improper and unknown payment rate of 72.8% in FY2021. It improved on paper each year after — 47.5%, then 38.7% ($1.42 billion), then 13.52% ($760.1 million) in FY2024 — and still failed the federal requirement to get under 10%. The OIG's recommendation that VA reduce the program's improper payments below that line has been repeated every year since the first payment-integrity report in FY2020. GAO's government-wide improper-payments analysis lists the program as noncompliant with the Payment Integrity Information Act year after year.

The VA's own FY2025 figures, published in its budget submission, put purchased long-term services' improper and unknown payments at $347.41 million for the year — in a single purchasing stream inside a single benefit category.

The pension program went the other way

While long-term care's rate fell, the VA Pension program's improper and unknown rate rose from 10.86% ($419.3 million) in FY2023 to 13.85% ($518.6 million) in FY2024 — also above the 10% compliance line, also carrying a repeat OIG recommendation, this one repeated from the previous two fiscal years. Pensions are paid to wartime veterans with limited income and to their survivors — a population least able to absorb a clawback letter when the VA later decides a payment was wrong.

Errors cut both ways

Payment failure is not only overpayment. A separate VA inspector general review of disability rating decisions found processors mishandled an estimated 9,300 of 27,100 cases involving proposed benefit reductions in 2024 — an error rate of about 34% — cutting some veterans' pay without required notice while erroneously paying others roughly $17 million. The same machinery that leaks money outward also takes it back from the wrong people.

Sources: VA OIG, Review of VA's Compliance with the Payment Integrity Information Act for Fiscal Year 2024; GAO, Improper Payments: Agency Actions Needed to Help Save Taxpayer Dollars (GAO-26-108044); VA FY2027 Budget Submission, Vol. 2. Part of the VA Fraud record.