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House of Representatives,
Subcommittee on Benefits,
Committee on Veterans' Affairs,
Washington, DC.

    The subcommittee met, pursuant to notice, at 2:05 p.m., in room 334, Cannon House Office Building, Hon. Jack Quinn (chairman of the subcommittee) presiding.
    Present: Representatives Quinn, Hayworth, Evans and Filner.

    Mr. QUINN. Mr. Filner and I and others who will join us a little bit later are here today to look into the recent performance of what should be the VA's premiere benefit group, vocational rehabilitation.
    We have several panels from the government, the veterans' service organizations and the vocational rehabilitation community and we are eager to hear from all of them this afternoon, but I and Mr. Filner both would like to begin with a few comments.
    We are told we should be prepared for a vote in about 10 or 15 minutes. We will see where we end up with with that schedule but we will adjourn, of course, for us to get over to votes when that occurs.
    First let me emphasize that this program, and all of us, I think, in the room know, is an employment program and not a training or an education program as such but if a veteran needs training or treatment to overcome an employment handicap, the law provides an excellent program that offers appropriate medical treatment and training opportunities.
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    I also believe it is fair to say that the program has been strongly criticized at times by the General Accounting Office on at least three occasions since 1982 and, unfortunately, the criticisms in each of the GAO reports seem to sound familiar.
    And if I may just review a few of the consistent findings from GAO, some things have been said and many repeated, for instance, that the VA doesn't emphasize finding jobs for veterans, that the VA doesn't know why most veterans drop out of the program. Standards for measuring need to improve. VA focuses on training and not employment. The purpose of the program is not sometimes well understood even by veterans. The VA staff are not skilled sometimes in job placement or caseloads are too high. And the VA is pointed to again as not having a good understanding of the cost of rehabilitation.
    Clearly such criticisms do not encourage a great deal of confidence in the program. To its credit though, VA formed an internal design team to look at these and other issues with the goal of providing a blueprint for change, and we would like to help you do that.
    About a year ago the design team submitted its final report and from what we can tell, it seems like it was buried in the bureaucracy for a while. GAO states that the new leadership at voc-rehab has begun pursuing some of the report's recommendations. So let's shed some light on some of the report's 15 wide-ranging recommendations on how to refocus vocational rehabilitation on the purpose of the program, and that purpose is putting disabled veterans into jobs.
    The design team recommended the following: to develop an employment assessment model to redefine its workforce, reducing reliance on contracting, improving assessment of employee performance, increasing veterans' access to the program, increased partnering, reorganizing the VR&C service, giving the service director direct line authority over field operations, streamline procedures, identify measurable outcomes and increase automation.
    We note here that the Steering Committee which reviewed the design team's efforts was largely, but not entirely, in agreement with the team's recommendations, which makes the low visibility of the report sometimes even more puzzling.
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    Judging from the written statements for today's hearing, it is difficult to get a handle on who is getting voc-rehab. Therefore today I would like to request that the Department provide this subcommittee with a detailed analysis of program participants, including who applies, who is authorized the benefit, who actually participates and who completes the program. I am especially interested in the types of rehab recommended by VA, and I would greatly appreciate it if we could have this analysis sometime by the end of March.
    As I mentioned this morning, of course, we are willing and able, all of us, I know Mr. Filner and I on the subcommittee and the full committee, to work with those timetables, as long as we are communicating among each other what they might be.
    Our hearing today also raises what I consider a larger issue and that one is being addressed by former Deputy Secretary Principi's Transition Commission, which is looking at how all of the benefits we provide for people leaving active duty fit together.
    While not the purpose of today's hearing, it seems to me that programs like vocational rehabilitation, the GI Bill and veterans' employment programs would integrate more efficiently if they were all under one roof, especially with the enormous changes taking place in the areas of employment services and education.
    Clearly these programs are intended to position a veteran to be successful in civilian life and I am concerned that the dispersion of these programs between multiple Federal agencies, which is confusing enough, is preventing them from reaching their full potential. We will look at this idea at a future hearing.
    And one final point before I yield to Mr. Filner and Ranking Member Lane Evans. As a joint initiative with the ranking member, I am announcing formation of a Chairman's review group to bring many of today's witnesses together regularly to assess the government's progress on meeting the recommendations of the design team and the Secretary's advisory group. The staff will be in contact with you and I hope that we will be able to speed up some of the improvements in the voc-rehab program.
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    At this point I would like to welcome ranking member Lane Evans and our friend and colleague on this side, Mr. Hayworth, and yield to Mr. Filner, for some opening remarks. Bob?

    Mr. FILNER. I thank the Chairman and with you, I welcome all of the witnesses here today. I would like to particularly note the first appearance of our new Undersecretary for Benefits, Joe Thompson.
    Joe, you have a reputation as a creative, innovative and uniquely skilled manager in your many years of service in the Department of Veterans Affairs and we are looking forward to that same type of leadership in Washington here and we are looking forward to working with you.
    And, of course, we also welcome an old friend, Al Borrego, who is testifying again for us for the first time in his new position as the assistant secretary of labor for veterans employment and training. You have been there before with us and we know you have done a good job and we are looking forward to your leadership in this new capacity.
    I think all of us in this room are committed to assisting those who are disabled in national service. This goes back hundreds of years. In fact, I learned that as long ago as 1636 the Plymouth colony enacted as its first law a requirement that payment be made to those disabled in the colonies' defense. And vocational rehabilitation in the modern sense was initiated back in 1917 when the War Risk Insurance Act established the first vocational rehabilitation program for war-injured citizens.
    The structure of the program has changed periodically but the purpose has remained the same; that is, to bring service-connected disabled veterans into maximum productive independence in the daily world and to achieve and succeed in the world of work.
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    Our purpose today is very simple. It is to determine if our national commitment is, in fact, being met. Are the men and women disabled in service receiving the highest quality services and assistance that they have more than earned? As VA's Vocational Rehabilitation and Counseling Service made the changes in its culture and changes in its structure that, as the Chairman noted, were recommended by Congress, GAO, VSOs and the internal reinvention team—as VR&C made the changes that reflect the understanding that for most veterans, the primary goal of vocational rehabilitation is to restore that individual's ability to take his or her place as a successful contributing member of the civilian workforce. I hope that these questions will be addressed today.
    Service-connected disabled veterans have always been, and must always continue, to be our first priority. Accordingly, the vocational rehabilitation program provided for these men and women, as noted by the VA's own redesign team, must be the best in its class. And I intend to join with Chairman Quinn and hold the leadership in the Veterans Administration, from the Secretary, who we heard from this morning on the budget, right on down, holding all of them responsible for providing VR&C whatever support and pressure that are required to accomplish the goal.
    I look forward to hearing from all of you and thank you for joining us this afternoon.
    Mr. QUINN. Thank you, Bob. Thanks very much.
    I yield now to the ranking member of the full committee, who joined me in Buffalo toward the end of 1997. Imagine that, a member of Congress coming to Buffalo in December.
    Mr. EVANS. It was the chicken wings.
    Mr. QUINN. Yes, it was the chicken wings that we had for him for lunch. Ranking member Lane Evans, thanks for visiting with me in December and thanks for being here this afternoon.
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    Mr. EVANS. Thank you, Mr. Chairman. I associate myself with your remarks and that of our ranking member of the subcommittee. I, unfortunately, do have a conflicting Armed Services Committee hearing that I have to get to right now but I appreciate your concern and active oversight on this particular issue. Thank you.
    Mr. QUINN. Thank you.
    Mr. Hayworth, opening remarks?
    [No response.]
    Mr. QUINN. Okay, our first panel is Miss Cynthia Fagnoni, Associate Director, USGAO, Veterans' Affairs and Military Health Care Issues, Health, Education and Human Services Division. That is a title and a half, Cynthia. We are pleased that you are with us this afternoon and you may want to introduce your colleagues.

    Ms. FAGNONI. Thank you. I have with me today Jeff Pounds, who has done a considerable amount of work in this area for us.
    Mr. QUINN. Hi. How are you? Thanks for coming. You may begin.
    Ms. FAGNONI. Thank you. Good afternoon, Mr. Chairman and members of the subcommittee. I am pleased to be here today to provide our views on efforts the Veterans' Benefits Administration has made to help disabled veterans find and maintain suitable jobs through its Vocational Rehabilitation and Counseling program. As you know, in 1980 the Congress enacted legislation which changed the focus of this program from just providing training to disabled veterans to helping them get jobs.
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    The information I am presenting today will focus on the past problems VBA has faced and the progress made in helping disabled veterans obtain suitable employment. My observations are based on our published reports, as well as recent discussions with program officials.
    First let me summarize what we have found in our years of reporting on this program. As you mentioned, Mr. Chairman, our work has shown that despite the legislative change enacted nearly two decades ago, VBA has continued to focus on sending veterans to training, rather than helping them get jobs.
    In 1992 and again in 1996, for example, we found that VBA placed over 90 percent of veterans directly into training programs, while less than 5 percent went directly into the program phase designed to help veterans find jobs. Our 1996 analysis of national data also showed that the vast majority of veterans in training were enrolled in higher education programs.
    For example, about 91 percent of such veterans were enrolled in a university or college. The remaining 9 percent were enrolled in vocational or technical schools or participated in other types of training programs, such as apprenticeships or on-the-job training.
    VBA officials we spoke with during our 1996 review offered several reasons why their staff emphasized training over finding veterans jobs. They told us, for example, that it was difficult for staff to begin exploring employment options early because veterans entering the program expect to be able to attend college. Veterans acquired this expectation because the program was often marketed as an education program, not as a jobs program. This image of the program as education-oriented was also evident among some VBA management.
    VBA officials also told us that their staff generally lack adequate training and expertise in job placement activities. They also said that large caseloads made it difficult for staff to spend time exploring employment options with veterans. Some staff were managing over 300 cases. One VBA official asserted that the optimal caseload would be about 125.
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    Not surprisingly, given this lack of focus on employment services, VBA has not been effective in placing veterans in suitable jobs. In our 1996 report, for example, we noted that VBA rehabilitated only 8 percent of eligible veterans. VBA has also not developed program goals and measures that would help in assessing program effectiveness.
    Now let me turn for my second point to talk about the improvements, or attempts at improvement, VBA has made since our last comprehensive look at that program. At the same time we were conducting our 1996 study, as you've mentioned, Mr. Chairman, VBA was in the process of having its design team look at how to restructure the program and address the concerns that we and others had raised over the years. This report came out in October 1996 with the 15 recommendations.
    Consistent with our findings and recommendations, the design team's recommendations focussed on the need for the vocational rehabilitation staff to emphasize employment throughout the program.
    Shortly after the design team finished its report, the director of the vocational rehabilitation program retired and the program was headed by an acting director for nearly 9 months. Based in part on this lack of permanent leadership, VBA is in the early stages of implementing the design team's recommendations.
    However, the new program director has told us that he and his management team support the need to refocus the program toward the goal of employment and described for us some of the specific actions they are taking. They are, for example, in the process of contracting out for assistance in reviewing and revising program applications and brochures to ensure that such documents clearly communicate the program's focus on employment.
    The first stage in a multi-year roll-out of the new automated management information system has also been completed. This system is being designed to help program staff streamline and simplify work processes, measure program outcomes and establish new work measurements nationwide.
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    Such steps, if continued, could help the program better emphasize employment. With new program leadership in place, VBA has an opportunity to implement recommendations it has failed to act on in the past. However, the problems I have discussed are long-standing and sustained efforts will be needed to improve program effectiveness.
    Mr. Chairman, this completes my testimony this afternoon. I would be pleased to respond to any questions you or members of the subcommittee may have.
    [The prepared statement of Ms. Fagnoni appears on p. 29.]

    Mr. QUINN. Thanks very much. We appreciate your original report and the written submission for today and we appreciate your staying within the 5 minutes allotted.
    I have a general question more than anything else. I know that there is some new leadership there and we have talked with them personally and here and at other committees. Are you satisfied with the amount of communication that is going on between your office and some of the new leadership that is there?
    Mr. FAGNONI. Well, I will have to say that from the time we did our 1996 report, which was in late 1996, we hadn't focussed a great deal on that program. We did do some work last year looking at the strategic planning efforts at the voc-rehab program and this was my first opportunity to work with Mr. Williams. VA officials were very helpful in our being able to get this testimony pulled together very quickly, and we look forward to working with them in the future.
    Mr. QUINN. Very well. And we also understand that with the hearing this morning on the budget, this hearing and another hearing tomorrow, everybody was a little bit busy on the Hill trying to get everything pulled together. Thanks very much.
    I don't hear any other questions. Thanks.
    Ms. FAGNONI. Thank you.
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    Mr. QUINN. Our next panel is actually our second and third panel. Mr. Ronald Drach is here first in his capacity as chairman of the Veterans Advisory Committee on Rehabilitation. Ron, if you want to come forward and share those words of wisdom with us, we would appreciate it.
    You are also on the third panel, I think, Ron. So we will let you begin, please. Thanks for being here today.

    Mr. DRACH. Thank you, Mr. Chairman. I appreciate the opportunity to be here today as chairman of the Veterans Advisory Committee on Rehabilitation. This is the first time that we have been invited to appear as a committee and I really appreciate that. I was most recently reappointed by Acting Secretary Hershel Gober back in December as chairman of the Advisory Committee and the committee has been very active.
    While the statute that set us up, 96-466, requires us to look at all rehabilitation programs, I am here today only to talk about the vocational rehabilitation programs because that is the subject of today's hearing.
    In my prepared testimony I give you some background on the committee and how it was established and what our mission is and so forth, so I won't go over that. But I do want to point out that the committee was very pro-active when the design team got started. We looked at a couple of their documents, their social analysis and environmental scan, and offered comments to the design team as a committee and asked them to look at certain things within their jurisdiction as they were progressing, and a copy of those recommendations and those comments is attached to my prepared statement.
    Also, the committee was very interested in particularly the 1996 GAO report. While we had looked at earlier GAO reports, we took a more active role, if you will, in the 1996 report because we wanted to make some comments to the Secretary on the GAO report of 1996.
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    Quite frankly, we don't agree with the—I shouldn't say we don't agree—we don't share the same concern that others have that a lot of veterans are placed in college programs. We are concerned that they are not given employment at the end of those training programs, but we look at the education part of it as a means to an end. And in today's economy, good careers, for the most part, require a college education. So I am not alarmed by that.
    Mr. QUINN. Excuse me, sir. May I interrupt? We will add on to your time.
    Would it be your thought that some of this education could take place along with employment?
    Mr. DRACH. Absolutely. And when I wear my other hat we will talk a little bit more about that.
    Mr. QUINN. I happen to agree with you on that.
    Mr. DRACH. Because I have some recommendations from the DAV that are not recommendations of the Advisory Committee.
    Mr. QUINN. I have some recommendations that aren't Bob Filner's recommendations, either, but that is okay. Sometimes we get caught up in thinking that we have to exclusively do one or the other, and I don't happen to think that is true.
    Mr. DRACH. I will just give you one example that came to my mind yesterday in some discussions. When you take somebody and enter them into an education program, a lot of times people aren't really sure what they want to do. Ninety percent of people who graduate from college today don't work in the jobs that they graduated in, were trained in.
    What I would recommend is that we look at the VA working closer with employers early on, early on, like maybe first semester or first year, and do some shadowing. Let that veteran go in and let's say the veteran's goal is to be an accountant. Well, let them shadow with Deloitte Touche or one of the big accounting firms and they may find out real quickly that that is not the right thing for them, that they really don't want to be an accountant.
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    Mr. QUINN. Excuse me again but it is as important to learn for one of these individuals that it is not the career to go into as it is to say it is.
    Mr. DRACH. Absolutely.
    Mr. QUINN. We always think that we are going to shadow somebody, we are going to put you in this situation, we are going to have you intern somewhere and you are going to turn around and end up an accountant, but it is just as important sometimes to learn that that is not your thing.
    Mr. DRACH. Exactly. And under a shadowing concept or an internship or a work/study program, the veteran gets an opportunity, the employer gets an opportunity and it is a win/win situation in my opinion, with no cost.
    Mr. QUINN. I agree. I didn't mean to interrupt, but I agree with you.
    Mr. DRACH. That is quite all right.
    So anyway, when the Advisory Committee looked at the GAO report there were a couple of other areas that we had some concerns about so we expressed our response to the Secretary, which is our role, to give the Secretary advice on rehabilitation issues. That was done and a copy of those comments are attached also to my report.
    I will go into some of the committee recommendations that we have made over the last 3 fiscal years in the most recent meeting we had a couple of weeks ago, again restricting it to the vocational rehabilitation program.
    The Advisory Committee, for as long as I can remember, has been working on upgrading qualification standards for vocational rehabilitation specialists. It has now been approved for a new position called vocational rehabilitation counselor. The committee received a letter from former Secretary Jesse Brown saying that his office approved it. The Office of Personnel Management approved it. The unions basically approved it. Everybody said okay, and it is not being implemented.
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    I understand that people are still being hired under the old standards. I haven't seen any implementing instructions. I would like to see implementing instructions go out.
    Almost every meeting the Advisory Committee has, we make a recommendation to the Secretary that these new qualification standards be put into place. And I don't know how many positions have been filled using these new standards but my understanding is that there are very, very few.
    We would like to see on-going education and training be provided to the VHA staff regarding voc-rehab, VR&C people. I have talked to a lot of VHA staff over the last couple of years, don't even know VR&C exists. There needs to be some on-going work there.
    VHA needs to be part of case management. For the most part they are not part of case management.
    The committee recommends that an MOU be developed between VHA and VBA, particularly the VR&C service, that every VA installation have a local MOU that details education and communication strategies, which is a measurable outcome, identification of a case manager and proper technical interaction between the two administrations.
    We did recommend that more money be allocated to the committee for more meetings, which I have been assured is forthcoming.
    The committee supports the efforts of the design team. We can't say we support the recommendations of the design team because we haven't seen it yet. We are still waiting, like everybody else, for a copy of the design team report and I understand it is coming out later this month. So the committee will be looking at that report and offering comments.
    That concludes my prepared statement, Mr. Chairman. I will be happy to answer any questions.
    [The prepared statement of Mr. Drach, with attachments, appear on p. 38.]

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    Mr. QUINN. Thanks very much. I suppose I got one of my questions in when I interrupted you before, and I'm sorry.
    Mr. DRACH. That is quite all right.
    Mr. QUINN. Let me just say that in part of your written testimony, and you touched on it here orally, as well, you talk about some on-going education and training for the staff, as well. This is not a question except to say that when you are talking about memoranda of understanding and on-going training and education, it gets back, for me, to this whole communication thing, that people are talking to each other.
    And I would only say to you that that comes through loud and clear in your testimony in a lot of different areas and I appreciate that. That is why I asked the question of the first panel, in terms of how that communication is going.
    Bob? No questions from Mr. Filner.
    Stay where you are, then, Ron. We will ask the third panel to come forward.
    Good afternoon, everybody. We are pleased to have you here with us this afternoon. I haven't determined any kind of order for anybody to testify. If it is okay with all of you, Mr. Thomas, I will start from my left and we will make our way across to Mr. Naschinski and then Mr. Drach again and Miss West finally.
    We would ask, if it is possible, for you all to keep your opening comments at least to about 5 minutes or so and we will get to questions when the whole panel is finished. Thank you. You may begin.
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    Mr. THOMAS. Thank you, Mr. Chairman and members of the subcommittee. On behalf of the Paralyzed Veterans of America, it is an honor to participate in today's hearing.
    From the inception of the Vocational Rehabilitation and Counseling program following World War II until 1980, the goal of rehabilitation was completion of training. Public Law 96-466, enacted in 1980, changed that mandate to employment being the ultimate goal of vocational rehabilitation.
    In spite of that legislative change, VA has been slow to alter the culture within the VR&C to assure employment outcomes.
    Beginning in 1988, as a result of recommendations made by the Secretary of Veterans Affairs' Veterans Advisory Committee on Rehabilitation, VR&C, began to review the qualification standards for counseling psychologists and vocational rehabilitation specialists. Following discussions with the Office of Personnel Management, the recognized unions and others involved in approving position descriptions, a new qualification standard was established for the position of vocational rehabilitation counselor.
    Although the qualifications have been developed and the new position has been established, they have not been implemented satisfactorily. There is considerable confusion among the VA field staff on appropriate hiring practices for vacancies in VR&C throughout the country. PVA recommends that the VA should immediately implement nationwide the new counseling position with the attendant qualification standards for the appropriate vacancies that become available in VR&C.
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    PVA's foremost concern rests with the VR&C's ability to provide timely and comprehensive services to catastrophically disabled veterans. The primary goal of rehabilitation is to prepare the disabled veteran to become a productive member of society by helping them regain the ability to compete for gainful employment.
    Veterans who sustain injuries that impair major bodily functions, like spinal injury, SCI, and spinal cord dysfunction, SCD, require comprehensive, clinical and rehabilitative care to return to their homes. That care, which is provided in a hospital setting, does not always prepare disabled veterans for immediate transition back into the workforce. Many catastrophically disabled veterans require a complex, coordinated array of services, including training, equipment, counseling and accommodations to reenter the job market.
    Unfortunately, high priority has not been given to coordinating the flow of these services in a proper case management approach. Vocational rehabilitation for catastrophically disabled veterans should be one of the highest priorities of the VA.
    In the context of catastrophic SCI and SCD, rehabilitation is a process by which medical, psychological and social functions are restored or developed to a level that allows veterans with SCI/SCD to achieve personal autonomy in a noninstitutional environment.
    One of the most frequent complaints of severely disabled veterans is the current inadequacy of employment opportunities in placement. VR&C must provide assessments and benefits in a timely manner that meets basic quality of service standards and be both accurate and compassionate in their determinations.
    According to vocational counseling experts, to be effective, rehabilitation counseling and training must begin as soon as possible following medical rehabilitation. The array of rehabilitation and job counseling services must be orchestrated in a case management approach. Successful employment requires placing a veteran in a job that is compatible with his or her background, skills, experience, expertise and expectations. Once placed in the job, aggressive follow-up is required to address problems the veteran may face.
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    VR&C's current 60-day follow-up may not be sufficient. Earlier initial follow-up and additional subsequent follow-ups may be a more efficient technique.
    Legislation to renew the Rehabilitation Act of 1973 was approved by the House Education and Workforce Committee and passed by the House of Representatives in April of 1997. Introduction of a Senate version of the Rehabilitation Act reauthorization legislation is expected soon in the Senate Labor and Human Resources Employment and Training Subcommittees.
    Problems identified under the old Rehabilitation Act are also being seen within the VA Vocational Rehabilitation program. PVA believes that the VA should also make necessary changes to bring about a more efficient program designed around employment outcomes. The subcommittee should monitor improvements made in the Rehabilitation Act to address problem areas in the VA Vocational Rehabilitation program in the same fashion. Changes must include training to secure, retain or regain employment consistent with the strengths, resources, priorities, concerns, abilities, capabilities, interests and informed choice of the individual which will result in skills marketable in the local economy.
    Additionally, current labor market information should be used to ensure that jobs for which the veteran is being trained exist in the geographic area where the veteran resides.
    Mr. Chairman, thank you for holding this important hearing. This concludes my testimony. I will be happy to respond to any questions you or members of the committee have.
    [The prepared statement of Mr. Thomas appears on p. 60.]

    Mr. QUINN. Thank you, Harley. I appreciate that very much. I think, as I mentioned, we will save our questions until the whole panel has had a chance to issue their statement.
    I understand that this is your first appearance here before us. You did great. We appreciate you coming forward today. Also your biography shows that you are a retired Navy Chief data processing technician and we appreciate your past service and certainly your service with us here on behalf of the Paralyzed Veterans of America. Thank you.
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    And representing the American Legion—before I looked up and saw it was Jim Hubbard I had some other name from my script here but Jim, welcome this afternoon. We appreciate your being here. Please proceed.

    Mr. HUBBARD. I apologize for the change in cast here, Mr. Chairman. My colleague is home with the flu and we didn't want him spreading it around here or the office. So for the record, my name is James Hubbard, as in Old Father Hubbard.
    Mr. Chairman, thank you for holding this hearing and thank you for inviting us to come here this afternoon.
    Vocational rehabilitation of service-connected disabled veterans, especially those with serious employment handicaps, is a national obligation and it must not be taken lightly or accomplished half-heartedly.
    The Department of Veterans Affairs strategic plan for 1998 through 2003 serves as a pretty good set of marching orders for the Voc-Rehab and Counseling Service. However, given its mission and the current workload, it is critical that the resources, both financial and personnel, are available to meet the challenges. Let me briefly outline the goals and the objectives of the strategic plan.
    The general goal is to assure the vocational rehabilitation program is meeting the needs of veterans. Objective one is to increase the number of disabled veterans who acquire and maintain suitable employment and are considered to be rehabilitated. Objective two, provide for all services and assistance necessary to enable veterans with service-connected disabilities to achieve the maximum independence in daily living in a timely manner. Objective three, to provide vocational evaluation services to children with spina bifida.
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    The proposed strategies appear to be rational and realistic. Proposed performance goals seem to be logical and measurable. A quality reassurance program must also be implemented to closely monitor Vocational Rehabilitation and Counseling Service activities at each of the regional offices.
    Adequacy of funding, staffing requirements and cooperation internally and with other government agencies to provide disabled veterans with the level of service they need and expect from the VA is paramount.
    The key to successful job-hunting is networking. The Vocational Rehabilitation and Counseling Service must establish and maintain a strong employment network which includes the Veterans Employment and Training Service at the Department of Labor, the Office of Personnel Management and any other Federal and/or State agencies.
    We also believe the National Veterans Training Institute is an invaluable resource for continuing educational opportunities.
    The overall quality of the program can be measured by the quality of the personnel, but even the most qualified professionals have a maximum number of cases that can be effectively managed. One only needs to compare the caseloads of the VA with those of other Federal or State programs to see the nearly impossible tasking placed on VA Vocational Rehabilitation and Counseling staff. The private sector caseload is about one-third that of the VA.
    Staffing levels should be increased to meet demand. Reducing the demand by restricting eligibility is immoral, unethical and dishonorable. The numbers of disabled veterans needing vocational rehabilitation should drive the resources rather than the resources available driving how many disabled veterans will receive vocational rehabilitation.
    To those who say we cannot afford to meet the demand for voc-rehab, we say that this is simply an issue of priority assessment. The American Legion would support increased spending of tax dollars for vocational rehabilitation and job placement of service-connected disabled veterans. More importantly, the American people would see it as a national obligation and commitment to those who served this country.
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    The American Legion, along with everybody else, is still looking forward to reviewing the Vocational Rehabilitation and Counseling design team's final report. We are optimistic that the recommendations will both energize and empower the entire program. The report should offer observations, evaluations and recommendations of those on the firing line and in the trenches. Good intentions, however, alone will not achieve success. Congress and the VA must provide the tools, the resources and the personnel to implement effective changes.
    Mr. Chairman, that concludes my statement. Thank you for offering us the opportunity and we'll look forward to questions.
    [The prepared statement of The American Legion appears on p. 70.]

    Mr. QUINN. Thanks very much, Jim.
    Ron is back this time as the National Employment Director for Disabled American Veterans. We are pleased to hear from you.

    Mr. DRACH. Thank you very much, Mr. Chairman. With your indulgence, I would like to introduce three of our national service officers who are here with me today, all of whom have recently graduated or fairly recently graduated under the VA's Vocational Rehabilitation program, on-the-job training program through the DAV approved program.
    Jeannette Genovese has gone to the point where she is now our supervisor in the Providence, Rhode Island office. Christine Bell is a service officer in Hartford, Connecticut and Michelle Vickery in Seattle, WA.
    Mr. QUINN. Welcome. We are pleased you could be with us, even if it is in the back row.
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    Mr. DRACH. They are in town for some additional training. We thought it would be helpful for them to come up with us today.
    Mr. QUINN. Absolutely. Thank you.
    Mr. DRACH. Mr. Chairman, before we go any further I would like to point out that both the VA and Department of Labor have taken some very aggressive steps, some very positive steps to make significant improvements. While we haven't seen actual results yet, we can see some positive steps going on, and they are to be commended for those.
    We would like to recommend another possibility and that would be to create a pilot project between the vets and the VR&C service and partnering with a private sector employer, maybe through a contractor, to look at how they can make better placements with some of the more severely disabled and harder to place disabled veterans. So we would like to see some sort of a pilot on that.
    Mr. Chairman, late yesterday I received a copy of the budget and as a consequence of that, I am going to digress from my prepared statement and ask for your indulgence. I know I am not going to be able to cover all of this material and would ask that the record be kept open so I can supplement my earlier prepared statement with some additional comments.
    Mr. QUINN. Without objection, so ordered.

    (See p. 40.)

    Mr. DRACH. Thank you so much, Mr. Chairman.
    I am not going to go in order here, only in order of what I feel to be most important that was in the budget document. They talked about the VR&C position, the vocational rehabilitation counselor position, and the new qualification standards. I have already commented on that as the chairman of VACOR. It is in my prepared testimony for the DAV. Paralyzed Veterans of America has echoed us on that issue.
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    I guess I am prepared to say now that if they don't move forward with this position that perhaps it should be added to the law. That way they would have to do it, make it part of the law and we can go from there. This has been too long in coming and it has been approved too long ago for it to only have a few positions filled.
    In the budget document they talk about starting work as soon as possible for effective job search campaign, resume-writing development, job interview skills. We have a recommendation on that. One would be to reestablish the old career development centers. That is in my prepared testimony, also.
    Another would be, and this could be a pilot perhaps, to take those skills, if you will, and make them part of an academic curriculum and maybe do a pilot with the University of Colorado at Denver, Boulder and Colorado Springs because they have NVTI housed out there right now. You could perhaps tie these classes in and make them a one-, two- or three-credit course and offer them perhaps in the first semester of the final year of college before graduation.
    What we fail to do in this country today is teach people how to find jobs. We may prepare them with a degree in a particular discipline but we don't teach them how to find jobs, and this might be a good pilot also to do something like that. We would hope that you would agree with that.
    I already mentioned the shadowing, the internships. In our prepared testimony we recommend that work study be expanded to the private sector. Right now work study programs are only working with veterans within the VA structure and with state and local governments and the Federal Government. We would like to see it expanded to private sector employers and not-for-profit sector employers.
    Mr. QUINN. Again if I may, you mentioned that private sector earlier just before you began here. Give me a quick example of who we would look for in the private sector.
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    MR. DRACH. You could go to almost any corporation and say we would like to work with you on this; we want either a shadowing thing or do a pilot project with us to— —
    Mr. QUINN. One that comes to mind for me, I was involved in the ET Phone Home situation with Bell Atlantic and the rest of those companies. Is that something you think— —
    Mr. DRACH. Sure, Bell Atlantic. You can even use a smaller employer. It wouldn't necessarily have to be a major Fortune 500 employer. Find somebody who is interested. Perhaps find somebody who has done VA OJT back in the 1970s that would still be interested in doing it. I think we are limited only by our imagination and our effort to contact employers that might be willing to do that.
    Mr. QUINN. Thank you.
    Mr. DRACH. Providing on-going training was mentioned earlier for existing staff. There is a requirement in law that that be done. We would like to see that training go on. We would like to see the VA consider using NVTI for some of that training.
    There is some comment in the budget document about transferring the claims processing from adjudication to the VR&C staff. They said if they approve it—I think they are looking at October 1998 to perhaps implement it—I would suggest that they do it now, get it started early on. It would help cut back the backlog in adjudication and it would help speed up the adjudication process for eligibility determinations.
    They are to be commended. They are in the process now of revising their publications documents and forms to communicate the purpose of the program more clearly. We think that is a great idea. That is a design team recommendation. And we look forward to more positive things coming from that.
    Including the family members in the rehab process—that gets back to the broader issue of case management. Who should be part of case management? VHA, VBA, the VR&C people, the family and certainly the DVOP. The DVOP is the one that best knows labor market information. VA doesn't, for the most part, have a good handle on labor market information.
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    We have heard complaints from DVOPs that they get voc-rehab graduates who have been trained for jobs that are not available in the local economy. That could be avoided if the DVOP is part of the case management early on, not 6 months before completion, early on, the first day of counseling.
    That completes my testimony, Mr. Chairman.
    [The prepared statement of Mr. Drach appear on pp. 38 and 73.]

    Mr. QUINN. Thanks very much, Ron.
    You heard the bells. We have 15 minutes. Ms. Kelli West is here representing the Vietnam Veterans of America as its Director of Government Relations. I am sure that you plan on about a 5-minute or so opening remarks. If we could hear from you and then Mr. Filner and I will excuse ourselves to vote and return, but we would like to hear you first, Kelli.

    Ms. WEST. Sure. I will try to be very brief and to the point.
    VVA appreciates the opportunity to be here and share our perspective on the voc-rehab program. As members of Congress often do, I would like to associate myself with the comments of my colleagues, especially the two gentlemen sitting to my right. I consider them to be preeminent experts on these issues and frankly, I rely on them for a lot of guidance and information.
    Mr. QUINN. So do we.
    Ms. WEST. Just a couple of general comments. VVA strongly supports the voc-rehab program. There are obviously some improvements that can be made. I think this is a very important program for many disabled veterans. It helps them get reintegrated back into the civilian workforce.
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    In general, one concern I had with the GAO report, and this may have been part of the initial request. I learned a lot looking at that report, but comparison of VA voc-rehab clientele to the States' voc-rehab programs presents some real distinctions that make it very difficult to compare client-for-client or dollar-for-dollar.
    In general, VA voc-rehab participants are more highly educated and consequently are going to be seeking higher training and education and more high level jobs.
    Working with the Department of Labor Advisory Committee on Veterans Employment and Training and the President's Committee on Employment of People with Disabilities Subcommittee on Disabled Veterans, we are aware that there are many improvements under way, as Mr. Drach said, that should show improvement in the job placement rates. It is too soon to see any results yet. In particular, though, coordination between Veterans Employment and Training Service, DVOPs and LVERs and voc-rehab should lead to some substantial improvement in placement rates, especially involving those employment specialists earlier in the process to avoid training people for jobs that don't exist in the local job market.
    One point GAO raised that I thought was particularly interesting is again in the distinction between the State voc-rehab programs and VA's voc-rehab program. A ''successful'' rehabilitation in the State program can be a nonwage-earning job. I think many veterans want to find a paying job at the conclusion of their training, but some veterans may find it desirable to find voluntary employment. So perhaps that could be added to the success stories of VA voc-rehab, if you will.
    Another point which I failed to highlight in my written statement, but thought about further over the weekend as I was at a homeless symposium in Las Vegas is the potential goal of self-employment. I am not certain if GAO looked at self-employment as an end goal or a successful rehabilitation. But for many disabled veterans we hear often that self-employment is very desirable, specifically because of the nature of their disabilities or schedules. So SBA should be integrated into this process, as well when, through the counseling process, that appears to be the desirable goal.
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    Along these lines, I know members of this committee—I believe Mr. Filner has legislation introduced—have been involved in the issue of beefing up SBA programs for veterans. We would very much like to see that happen and it is my understanding that the House Small Business Committee may be more amenable than ever before to that kind of initiative.
    In closing, again I would like to reiterate some of the points made by my colleagues and express our interest, willingness and enthusiasm for working with this committee to make improvements. Thank you.
    [The prepared statement of Ms. West appears on p. 79.]

    Mr. QUINN. Thank you very much, Kelli. Let me thank all the members of this panel for their testimony.
    I don't believe either of us have any questions for you so we are going to allow you to leave and just announce to everybody who is here, Al, you are going to be next, I think, on panel number four and then Joe, you are going to make up, with your team, panel five.
    So we are told that there is at least one vote and the possibility of a motion to recommit, so why don't you plan on giving us maybe about 15 or 20 minutes and we will reconvene back here as soon as we can.
    Mr. QUINN. Al, do you want to come up?
    We are back to finish up our last two panels here. We are very pleased that Secretary Al Borrego is here to talk with us. We have talked many times before, both here at this committee and with the full committee and a couple of meetings we have had in my office. Thanks for helping us with all those things.
    Mr. Filner is on his way. We expect that we will have enough time to finish both panels, with questions, before we are interrupted for another vote.
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    We ask, as we have all afternoon, that you limit your remarks, at least at this point, to about 5 minutes or so and we are thrilled that you can be with us.

    Mr. BORREGO. Mr. Chairman, thank you for this opportunity to discuss with you the good work that the Veterans' Employment and Training Service at the Department of Labor and the Department of Veterans Affairs are doing together for our nation's disabled veterans. I ask that my complete statement be entered into the record.
    Mr. QUINN. Without objection, so ordered.
    Mr. BORREGO. In the mid-1990s staff at VETS and VA concluded that there needed to be better coordination and cooperation between the agencies in order to place more voc-rehab graduates into good jobs. The result was a memorandum of understanding between the parties in 1995. The MOU calls for local representatives of the two agencies to work as a team in connection with program participants to track their employment progress and to encourage workshops which would further cooperation and coordination.
    Each state VETS and VA office was urged to enter into similar MOUs. Several action items were set out: ensuring effective coordination and liaison between voc-rehab centers and employment services, particularly at the local level; developing procedures for notifying DVOPs and LVERs when voc-rehab clients are within 90 days of completion of a training program or recognized as job-ready; ensuring that the full range of job services were made available promptly to clients; and monitoring all clients until they are considered to have entered suitable employment.
    After one year of implementation, 33 percent of those who were referred to the employment service entered employment. This was considered to be a major achievement. However, it was discovered that while a majority of localities had very successful programs, others were contributing less to the success of the initiative.
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    VETS took these shortcomings seriously. VETS' field staff was instructed to conduct a state by state review. They were asked to focus on the concrete results; namely, an increase in placement of voc-rehab clients. The director of VETS in each state meets quarterly with each regional office and employment services official to discuss their local program. Groups began to meet to work out problems. Staff engaged in training sessions. In some instances DVOPs and LVERs began traveling with voc-rehab case managers to assist with job development. Teams were created to devise plans for comprehensive tracking and reporting procedures and also to ensure a smooth hand-off during referral of clients from the VA to the employment service.
    To further the effectiveness of the program, VETS instituted a placement specialist course in 1996. The training helps DVOPs and LVERs understand the marketplace for disabled veterans and enhances the unique skills needed to assist disabled veterans.
    In early 1997 a task force was formed consisting of voc-rehab officers, state directors of VETS, employment service staff and representatives from the VETS national office and VA central office. The groups were asked to suggest specific recommendations for action, specific methodology for implementing recommendations, the responsibilities of each agency and time lines to carry out the recommendations. Programs that were working successfully were studied to see if they could be replicated elsewhere.
    It was decided to put the recommendations of the working groups' deliberations in a manual for joint use by all field staff. Under current plans, the manual, entitled ''Operating Guide for Improved Customer Service for Chapter 31 Veterans,'' is scheduled to be published in the next few months. Training sessions will follow soon after in six states. It is hoped that over 500 staff, including VA personnel, will attend.
    Quarterly activity is analyzed at the national level by VETS and shared with VA's central office and a feedback report is sent out to each regional administrator. These reports let each region know how it is doing overall, how it is doing compared to the national average, and which states need to show improvements.
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    At the national level, VETS and VA staff meet quarterly to discuss the status of the program, to examine problems that have arisen and to make recommendations.
    During fiscal year 1997 8,452 voc-rehab veterans registered with the job service replacement assistance. This is an increase of 50 percent from fiscal year 1996. 3,411 of these veterans entered into what the VA defines as suitable employment. Suitable employment is employment in line with the skills, aptitudes and abilities of the veterans and that does not aggregate the veterans' disability.
    3,693 disabled veterans obtained employment. This is an increase of 98 percent over fiscal year 1996. (see footnote 1) The VETS strategic plan projects that an additional 2 percent will enter employment every year over the next 5 years. Therefore it is VETS' goal to have over 50 percent of those who complete the voc-rehab program enter employment by 2002.

    I am very pleased with the progress that VETS and VA have made together to make the voc-rehab program an integral part of VETS' mandate to provide training and employment to our nation's veterans. I am confident that our joint effort on behalf of disabled veterans will provide the success we are truly capable of achieving.
    Thank you. I would be pleased to respond to any questions you may have.
    [The prepared statement of Mr. Borrego appears on p. 85.]

    Mr. QUINN. Thanks very much and thanks for adhering to the 5-minute policy. We appreciate that. Everyone in the room appreciates that, I'm sure.
    Ninety-eight percent increase in one category. That is almost double.
    Mr. BORREGO. Yes, sir.
    Mr. QUINN. We are pleased with that, as well. Thank you. We did have a couple of questions, one or two very brief ones.
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    You talk about the new memorandum of understanding that has been in place now for about the year?
    Mr. BORREGO. A little bit more.
    Mr. QUINN. A little bit longer than a year. And in the written part of your statement, as I looked through it, I was trying to find out if I missed something or trying to get a handle on how many of the States have complied, to make sure that there are memoranda of understanding at the State level. How are you doing with that?
    Mr. BORREGO. All the States have MOUs. We have MOUs at all the States.
    Mr. QUINN. Good. That's great.
    I don't have any other questions. Mr. Filner couldn't be here but left a question, if I could get a start on an answer for it.
    Because most vocational rehabilitation trainees pursue college level training, their employment needs are perhaps more difficult to fulfill than those with vocational technical skills. What special efforts can the DVOPs make to find suitable employment now for college graduates? And this sort of matches up with what Ron Drach might have been talking about a little bit earlier this afternoon.
    Mr. BORREGO. Well, we do two measures of employment. Suitable employment is the VA's definition and that is jobs that are in line with the education that they got. The other one is jobs, just that they get jobs. Ninety-two percent of the jobs for all the voc-rehab were suitable employment. A lot of the jobs that our folks, that the DVOPs are getting for them, are in line with the education and training they received.
    The other piece is the class that we have, the Placement Specialist, we have run 471 people through that class. It emphasizes a lot marketing veterans with disabilities to employers; so the marketing part is very important. And having now run 471 people through, I think we are beginning to see the effects. And when you see that large increase in job placements, a lot of it comes from the training in that class.
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    So we are emphasizing putting people through NVTI, giving them the skills that allow them to place veterans with disabilities. And the marketing has been one area that we really emphasize that leads to our success.
    Mr. QUINN. Thank you. And I have one more. That was Mr. Filner's question.
    Can you comment on the VETS national performance goals for the DVOPs and the LVERs in placing disabled veterans in jobs? Do you have some national performance goals, some numbers that we are trying to get to? Can you share those with us?
    Mr. BORREGO. What we have done, in line with GAO's recommendation that we move to absolute goals, in fiscal year 1997 we had a placement rate into jobs of 43.7 percent for the voc-rehab. Of those, 40 percent, or 92 percent of the total, were suitable employment.
    What we are projecting for our performance goals is that each year until 2002, that we increase placement, and that includes suitable employment, as well, by 2 percent a year to give us a 10 percent increase by 2002, putting us well over the 50 percent mark.
    Mr. QUINN. That would put you at 52, no?
    Mr. BORREGO. Right.
    Mr. QUINN. 42, 2 percent a year, 10, by 2002. Thank you.
    Mr. BORREGO. Thank you.
    Mr. QUINN. Thank you, sir. We appreciate your being here and let us move now if we can to our fifth panel, the Honorable Joe Thompson, Under Secretary for Benefits, Department of Veterans Affairs, to be accompanied by Mr. Julius Williams, the director of the VA Vocational Rehabilitation Service, and anybody else you want to have join you at the table, protection-wise, security, moral support, friends of friends.
    Joe, thanks for being patient with us today. I know you were here most all of the morning and we were interrupted then and we were interrupted this afternoon. I really appreciate it. On behalf of Mr. Filner and all the committee, many of whom couldn't get here, we appreciate your waiting for us and we are interested in hearing your testimony.
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    Mr. THOMPSON. Thank you, Mr. Chairman.
    I would like to enter my written testimony for the record and try to summarize my thoughts.
    Mr. QUINN. Without objection it is so ordered.
    Mr. THOMPSON. Thank you. First of all, I do want to apologize for the lateness in getting my testimony over to the Committee. I promise that will not happen again.
    I would like to thank the Chairman for demonstrating your support to veterans, particularly veterans in this program, by hiring some of our graduates in both your Buffalo office and here in Washington. I think that really demonstrates your support.
    Mr. QUINN. Joe, let me interrupt you for a second to thank you and everybody involved, Julius and others, who were very, very accommodating to us in placing Mark in Buffalo and Brian here in Washington. We are just thrilled with the results. We are trying to talk to as many people as we can; I worked on Filner here a few minutes ago. He promises me his staff is working on it. And we will do what we can to help you with that. That is great. Thank you.
    Mr. THOMPSON. We appreciate that. Thank you.
    Although this is the smallest of our programs in terms of the numbers and dollars involved, it really is the one that it is my belief goes to the heart of what VBA is all about and our nation's commitment to veterans.
    I am proud to have the responsibility for this program. I am pleased that we have made some progress in the last few years in rehabilitating veterans, but I am concerned by some of the things I have seen.
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    First of all, I need to say that I agree with much, if not most, of the concerns that have been expressed in the previous panels. I am chagrined that after two GAO studies, IG studies, internal analyses with our own design team, reports from the Veterans Advisory Commission on Rehabilitation, all of whom arrive at largely the same conclusions, and 18 years after the law was changed, we are still sitting here discussing why we haven't moved the focus of the program from training to jobs.
    I can tell you, Mr. Chairman, I am committed to changing that. I will strive to make sure that we don't have hearings where you are asking us this question anymore. That will be a goal of the service, to make sure that, in fact, we place veterans in jobs.
    We do have good things going on. Al Borrego just mentioned the partnership with DOL. I think it has been a real positive development. Over the last few years, we have been developing joint training with them. We are looking to develop employment services training for our own staff. We are getting started on that right now, to make sure that our folks are aware. It is a needed skill in regional offices today.
    We are also looking to publicize what the true focus of the program is. There are broad misconceptions, as was mentioned in your earlier panels, about what voc-rehab is all about. It is not simply training; the focus is on employment.
    We are reinstituting our quality reviews, a practice we had dropped. This will help us make sure that the service being provided in regional offices is up to standards.
    We are instituting new measures on how we measure success, one that aren't quite so narrowly focused or so focused on VA concerns but focused more on whether we are really doing the job for veterans.
    We have contracted with Booz Allen to do a study as to why veterans drop out of the program. It's a question, rightly pointed out, that we can't provide an answer to today. So we hope to be able to provide that answer.
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    And probably the most compelling thing I think we have going on now is our business case study, where we are really starting with the premise that the program needs some significant revisions. We are taking all of the earlier reports—our own design team, the GAO recommendations, VACOR, the IG—and we're going to cross-walk these against our initiatives and our plans. We are bringing our stakeholders in. We are going to invite them into this process so that we can come out with a plan that really will meet the rehabilitation needs of disabled veterans.
    That is really all I wanted to say in summary, Mr. Chairman. I am ready for your questions.
    [The prepared statement of Mr. Thompson appears on p. 90.]

    Mr. QUINN. Well, thank you. We appreciate the testimony. And, as I said this morning, and you and I had a conversation as we went to some votes, we are ready, willing and able to help you in any way we can. You have a full plate right now and I know when we met in my office; I flew in during the break up in December; Nora joined you and we went through all kinds of things in the office, which turned the tables on me because then I had a lot of homework to do.
    But you have had a full day today and I don't have any further questions. We appreciate your coming over today and appreciate the attention of everybody. Julius, thanks for being with us.
    Mr. Filner, do you have anything you would like to add?
    If you don't mind, at the late hour today we may submit some questions in writing. If we could have them back both to Mr. Filner and any of the members on the subcommittee, we would appreciate that.
    Mr. THOMPSON. Mr. Chairman, if I could mention two things. Number one, you asked for some statistics on the program. As you know, the data we keep is just to make payments, so we have a very thin amount of information. But we do have a project under way that we hope will be able, by matching against DOD records, to come up with some more pertinent information about the people that utilize the program.
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    The second thing, I would like to state on the record that there were a lot of concerns about the new positions in vocational rehabilitation. We have, in fact, been utilizing that authority in this new job classification. We have 59 people nationwide that are working as—I forget the title of the new job, Julius.
    Mr. WILLIAMS. Vocational rehabilitation counselor.
    Mr. THOMPSON. Vocational rehabilitation counselor.
    We have a few more pieces of bureaucratic information to get out and our expectation is that will be out shortly. But we have begun to make that transition.
    Mr. QUINN. Thank you. So in response to the suggestion earlier that we may have to go the route of enacting some kind of legislation to get that done, you are saying we are doing okay without it?
    Mr. THOMPSON. That is correct. In fact, Ron Drach said it was his testimony that spurred us to this and I have to agree with him.
    Mr. QUINN. We agree with him, too, but it is good to hear that you are making some progress. 59, you say?
    Mr. THOMPSON. Fifty-nine nationwide, and the number would be greater but we are simply not hiring too many folks. It is a relatively small program.
    Mr. QUINN. Okay, great. Thanks very much.
    I am going to suggest we recess and adjourn.
    [Whereupon, at 4:13 p.m., the hearing was adjourned.]

(Footnote 1 return)
In fiscal year 1997, the entered employment rate was 43.7 percent.