Over the past five years, since Republicans won control of the House, the Department of Veteran Affairs has been flogged publicly many times, often for allowing a mountain of backlogged disability compensation claims.

As the backlog fell, lawmakers now are learning, they should have paid more attention to how much VA was spending on its primary tool for the task – developing a paperless claim system. They’re paying attention now.

The cost of VA’s electronic claims network, called the Veterans Benefits Management System, is $1 billion so far and soon will reach $1.3 billion, VA conceded last week to the House Veterans Affairs Committee.

That’s more than double VA’s original estimate of $580 million for the benefit system in 2009. Costs are continuing to grow too because, by design, the benefit system gets a software upgrade every three months. And apart from quarterly upgrades, VA plans for major innovations to the benefit system starting in 2018.

Rep. Jeff Miller (R-Fla.) said he called last week’s to focus on “yet another VA project that is over budget and underachieving.”

Amid the waves of criticism that followed, including testimony on results of troublesome audits by VA’s Office of Inspector General and the Government Accountability Office, doubts surfaced as to what impact the benefit system alone might have had on the backlog melt. A VA claim is said to be in backlog status if awaiting a decision beyond 125 days of being filed. The size of the backlog peaked in March 2013 at 611,000. It stands today between 75,000 and 80,000, said Beth McCoy, VA’s deputy under secretary for field operations. She credited the decline in large part to the increasing effectiveness of the benefit system.

Miller complained that the backlog wasn’t eliminated by 2015 as VA had vowed it would be. And both Miller and Brent Arronte, deputy assistant inspector general for VA audits and evaluations, questioned how much credit the benefit system deserves for the backlog’s sharp decline.

Miller noted that the Veterans Benefits Administration also had hired 7,300 more fulltime employees from 2007 to 2014. Arronte said VBA spent a combined $255 million on mandatory over time to work the backlog, and VA implemented a fully developed claims process to shorten processing times.

Whatever The benefit system contributed to the backlog’s decline, Arronte said, its costs “continue to spiral upward and final end state costs remain unknown.” Consequently, VA cannot be sure if its paperless claims system is providing “an effective return on its investment,” he said.

Cost overruns, Miller said, “would be bad enough but, after six years in development, the benefit system is still not able to fully support disability claims and pension applications.” And for claim decisions on appeal, he said, the benefit system “only acts as a document repository.” So even as the backlog of original claims has fallen, Miller said, the number of claims awaiting appeal decisions jumped 70 percent the past three years to 433,000.

In VA’s defense, McCoy and Dawn Bontempo, director of Veterans Benefits Management System Program Management Office, suggested lawmakers are wrong to label the benefit system spending increases as cost overruns.

“Scope and cost increases were planned, essential and approved to move beyond just an initial electronic repository functionality,” McCoy said.

To better serve veterans as well as veteran service organizations and VA claim processors, VA steadily is increasing “automation functionality,” McCoy said. “That’s something we will probably never finish.”

The benefit system, added Bontempo, was never meant to be a project where all requirements are defined upfront, a system is built to meet them, and “years later you have something delivered that may not be meeting your user needs. That’s a traditional IT project; we did not go down that path.”

The benefit system design, she said, “allowed us to build requirements as we were going along.” So the system has benefited from “seventeen major software releases and 56 minor releases in just four years,” McCoy said.

As the benefit system tools and processes improve, as more files are scanned into the system, VA can better serve veterans seeking compensation, she said.

However, recent audits and feedback from benefit system users suggest a system plagued by weaknesses and defects. Though 95 percent of records related to veterans’ disability claims are now electronic and reside in the benefit system, it still can’t fully support disability and pension claims, GAO said.

Many of the software releases touted by VA, it added, contained defects “that reduce system functionality” and “adversely affect users’ ability to process disability claims in an efficient manner.”

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