CHAPTER II. THE PRESENT ORGANIZATIONAL SITUATION IN VA

The Prundle Engineering Company studied the VA on behalf of the Hoover Commission in 1948, and reported on September 10th of that year. The Task Force under Colonel Franklin D'Olier submitted its report to the Commission in November 1948. The Hoover Commission itself made its report to Congress on this subject on February 24, 1949.

The administration of veterans' affairs is not a static matter. Laws change; circumstances change. One program is of importance at one moment, only to be superseded by others. Activity ebbs and flows. Obviously, therefore, the facts. must be reevaluated; the VA's organization must be reevaluated; and the recommendations of the Hoover Commission must be reevaluated. Throughout, this Report, heavy weight has been given to this factor.

The Present Organization.-Facing this page is Chart 1 which details the VA organization as of January 1, 1952. It also indicates the number of employees in each major functional activity.

In observing Chart 1, several factors become apparent:

1. In spite of a major reduction in case load and a shift in the burden of work load, the top level organization is the same as it was in 1948.

2. The Chart shows that there are 17 major units in VA headquarters reporting directly to the Administrator. The ideal is to keep as close as possible to the old Army ratio, "one to six." That is: Not more than six subordinates should report to a superior officer.

3. The heads of some 229 field activities report directly to the Administrator; or, 77 outside of the medical services in which the primary reporting responsibility is channelled through the Chief of Medicine and Surgery.

4. There are Assistant Administrators with wide divergences in the numbers of personnel they control and in their duties. For example, the Assistant Administrator in charge of Legislation has only 60 persons, while his counterpart for Insurance has 3,463 persons in Washington. Apparently, all these gentlemen have equal access to the Administrator, even though some are providing internal staff services within VA; whereas, others operate programs servicing millions of veterans.

Changes Since 1948.-The VA situation is not a static one. Since the Hoover Commission made its Report, the VA organizational situation has changed somewhat. This has been particularly true in the field. There is set forth below a comparison of a number of major organizational units within the VA as between. 1948 and 1952. It shows that several changes have occurred:

Responsibility for direction of these various offices has remained practically unchanged since 1948.

Improvements Since 1948.-In fairness to the Administrator of VA, differences between the VA organization today and the VA as the Hoover Commission found. it in 1948 must be reflected. During the course of the Hoover Commission study and as a result of its findings, some organizational improvements were made which are reflected in the present VA structure. For example: (1) All branch offices were eliminated; (2) as of today, five district offices, serving the insurance function, primarily, have been created and their introduction follows many organizational changes and improvements suggested by the Trundle Engineering Company; (3) the VA Contact Offices have been reduced by 197 since 1948 to a present. total of 342, but so has the volume of VA services.

While these were important steps toward better organization, badly needed fundamental changes in the structure and management of the VA remain. These changes are basic to provide the most efficient and economical services to the Nation's deserving veterans.

CHAPTER III. OTHERS AGREE ON THE NEED FOR REORGANIZATION Much evidence exists to show that there continues to be a need for reorganization of the VA, just as urgent a need as when the Hoover Commission made its Report. The facts show clearly that the VA is overstaffed, overorganized, and all tied up with tangled lines of authority. In Chapters IV and V, it will be clearly shown that this is true.

It would not be fair, however, not to point out that the VA, at the time the Hoover Commission made its survey, had recently been inundated with a new veteran load. Some of the abuses which the Commission found were due to that. Also, it would not be fair not to note that the concept of veterans' service had expanded materially after World War II. GI loans, the so-called 52-20 Club, large-scale on-farm training, general educational benefits, and certain other services, were unknown at the advent of World War II.

The conviction that there is a continuing need for reorganization is based upon material obtained from five major sources:

1. THE CONGRESS CRITICIZES THE VA

Official committees of the Congress, the General Accounting Office, and individual Members have criticized the VA sharply. These criticisms have been based upon facts, facts which have come to light since the Hoover Commission reported to Congress on March 2, 1949. Some of these criticisms are set forth below.

(1) House Select Committee to Investigate the Educational, Training, and Loan Guaranty Programs under GI Bill.-This Committee, under the distinguished chairmanship of Mr. Olin E. Teague, and including many Members who have served, or are serving, with distinction on the Committee on Veterans' Affairs, made a most thorough study of major VA operations. From its findings three examples are cited:

(a) "The Veterans' Administration central office has overcentralized authority in the Washington office, which has resulted in indecision on the part of regional-office officials and has created delays, confusion, and reversals in the handling of many aspects of the training program.

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(b) "The study of these 258 cases by this committee reveals some amazing inaccuracies as reported to the Congress by the Administrator of Veterans' Affairs which, in the view of this committee, are inexcusable. It has required much time and effort on the part of this committee to obtain the true facts regarding these 258 cases. The report is further questionable upon the fact that 258 schools are reported as abusing the education and training provisions of the Servicemen's Readjustment Act, as amended, by an agency of the Federal Government without first ascertaining the facts. * * *

(c) "It follows that there is validity in the criticism voiced by the major veterans' organizations that regional offices lack the authority to render the service which the veteran expects and to which he is entitled. There must be some degree of uniformity, but the interference of the central office in even the most trivial matters is evidence of regimentation and centralization of authority in its most extreme and undesirable form. Such interference manifests itself in indecision and lack of action on the part of regional officials and creates serious doubt as to the administrative competence of centraloffice administrators."

(2) The Humphrey Subcommittee of the Senate Committee on Labor and Public Welfare. This Subcommittee, under the highly competent chairmanship of Senator Hubert Humphrey, concentrated its efforts upon the alleged maladministration which caused the abrupt departure from VA of the distinguished Chief of the Department of Medicine and Surgery, Dr. Paul R. Magnuson, and several of his chief lieutenants. After extensive study, the Humphrey Subcommittee had these comments to make regarding the general maladministration of VA:

(a) "The many examples of lack of administrative coordination and of improper delegation and exercise of authority with which the testimony is replete condemn the VA's organization pattern and admiˇistrative practices as having been unwieldy, inefficient, and confused. The VA's comments on those examples and its attempts to justify the specific practices which had been questioned and not only fail to carry conviction but in themselves lend further strength to our conclusions

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(b) "There is considerable doubt on the part of the subcommittee that the present VA administrative organization ever has operated smoothly and efficiently since its inception. It fairly mushroomed in the wake of

demobilization in 1945 but has never been thoroughly overhauled since that enormous deluge of business hit the agency

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(c) "From 1946 to 1948, VA's organizational charts, faulty as they seem to the subcommittee to have been in their application to the medical care program, were of negligible significance. From 1948 until today, they have assumed more and more disproportionate importance. The one curently in existence depicts relationships so much at variance with the promises and protestations of the Administration that to professional men it seems to symbolize nothing but double-talk."

2. INDIVIDUAL MEMBERS OF CONGRESS HAVE CRITICIZED THE VA

There have been numerous and widespread complaints by individual Members regarding the conduct of veterans' affairs. These complaints came from all over the country. For example, Chairman Rankin back in the 81st Congress, expressed his concern regarding a statement by the VA that they had lost the records of one disabled veteran. The statement of the VA in this instance was as follows:

"Since Mr. Willis' application for education was mishandled, he did not get a check for subsistence for three and one-half months." That is scarcely an admission of managerial competence.

Mrs. Rogers, in her constant desire for better services to veterans, has also been critical of the VA, both of the insurance phases and of other VA matters. In the last Congress, one important statement regarding the bungling of the GI bill by the Veterans Administration was placed in the Congressional Record by Mrs. Rogers. It reads as follows:

"Mr. Speaker, the Veterars' Administration has issued some very arbitrary and bungling regulations regarding the training of GI's in schools and colleges. As a result, some of them will not get their compensation perhaps even until January. They will have another month in order to file their applications if they want to change from one college to another, but as a result of the mistake some of them will not get their compersation checks for their training for some time. I am very much disturbed by the delays in payments by the Veterans' Administration. The veterans need the money immediately when it is due. They are unable to wait several months with the uncertainty of not receiving it. I have asked General Gray to take whatever action is necessary in order to correct the situation."

Quoted below are just a few more instances of criticism by distinguished Members of the House:

(a) Congressman O'Konski inserted in the record a radio broadcast regarding false economy in the VA through firing disabled veterans:

"It is a story of 45 young men, veterans from New York City, now employed by the Veterans' Administration in its regional office. All of them are either amputees with a leg or arm, or minus two limbs, or they are blind * * * The Veterans' Administration budget for the next fiscal year is $5,500,000,000. If they can't make that cover continued employment of badly disabled veterans in VA jobs, some people think there needs to be a shake-up in the top leadership of the VA."

(b) Congressman Teague made the following statement regarding questionable and arbitrary rulings by the VA to the impairment of the GI Bill: "If there has evern been an example of a Government agency doing by regulation what they could not secure by legislation, this is the most perfect by far."

(c) Congressman Angell has indicated that there are vast numbers of complaints, a fact which is well known to all Members of Congress:

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66* * * but I do know from my congressional experience in Washington that thousands of complaints are coming from GIs having to do with similar problems * The result of such practices is poor morale and an exodus of employees who are good enough to find jobs elsewhere; 42 out of every 100 employees hired by the VA refuse to stay employed as long as a

year." These are but a few examples. The records of the Congress are replete with others.

3. OUTSIDE SURVEYS HAVE CRITICIZED THE VA

There have been surveys by outside agencies regarding the inadequacies of the VA. From these a few are listed: (a) "* but appraisal of the fiscal aspects must be tempered somewhat by the fact that examinations by the General Accounting Office has disclosed over

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payments of one kind or another at two-thirds of the schools examined. The number examined necessarily was limited, but large enough to be representative. Many of these overpayments were the result of carelessness in keeping records or in complying with VA regulations, but an unusual number resulted from irregular and apparently fraudulent practices. * * *

(b) "One eastern university receiving the nonresident rate decided to negotiate a contract providing for compensation based on the estimated cost of teaching personnel and supplies for instruction. However, this school was so successful in its dealings with the VA that it was able to collect both the negotiated credit hour rates and, in addition, its customary 'fixed charge' which was the only charge made other students on account of tuition. This resulted in payments of tuition in excess of the costs of teaching personnel and supplies for instruction allowable under the statute.

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(c) "Most of the matters developed in this report have been referred to the Administrator for consideration and appropriate action. In the early stages of the program the Administration disclosed little inclination to adopt remedial measures. However, as time progressed cooperation increased and some corrective actions were effected.'

The President's Committee on Veterans' Medical Services composed of Dr. Howard Rusk, Admiral Robert L. Dennison and Dr. Arthur Abramson had this comment to make on the general inadequacies of the VA organizational pattern: "Witnesses who have appeared before your committee, have almost without exception, adversely criticized the organizational structure and administrative policies of the Veterans' Administration.'

The Hoover Commission, in its extensive surveys, recognized that the VA needed an overhauling. Clearly it was not alone in this view.

The need for improvement has apparently been recognized further by the Administration and by the VA. Although the VA has not put into effect the organizational pattern recommended for the VA by the Hoover Commission, it has hired an eminent management engineering firm at a cost of over $500,000 to overhaul the VA. It would be presumptuous to allege that this firm was hired to protect the VA against the Hoover Report. Therefore, it must have been hired because of the well-known deficiencies in that organization. This is one of the largest management engineering contracts in history.

4. THE PRESS AND THE PUBLIC HAVE CALLED FOR REORGANIZATION OF VA The mail of the Citizens Committee indicates there is widespread dissatisfaction on the part of veterans to the service which the VA is giving. Most Member of Congress could also testify to that point.

The press also have been insistent on the need for reorganization of the VA. The Citizens Committee's files bulge with clippings on this matter. Five samples are cited below.

(1) The New York Times.-"If both Houses of Congress were genuinely interested in improving the treatment of veterans, they would take some action on the recommendations made long ago by the Hoover Commission for a sweeping reorganization of the Veterans' Administration and other agencies of the Federal Government."

(2) The New York Herald-Tribune.-"The fact is that the Hoover Commission found 'startling evidence of inefficiency, confusion and waste' in the VA, and the further fact is that two years have gone by with literally nothing done."

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(3) The Washington Times-Herald.—"* (The) Veterans' Administration has a sorry record of graft and inefficiency, yet it has done the least, excepting only the graft-ridden Agriculture Department, toward putting into effect the recommendations of the Hoover Commission."

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(4) The Washington Post.-"It is a little short of scandalous that the Veterans' Administration, which has been repeatedly criticized for inefficiency, is still a badly organized conglomerate."

(5) The Manitowoc, Wisconsin, Herald-Times. "The Hoover Report merely proposes changes in the Veterans' Administration organizational setup. It would reorganize the agency to give veterans faster and better service at less cost to the taxpayer. This could be accomplished by eliminating much waste and inefficiency.