They have an unwritten yet clearly understood commandment in the military. It’s a rule that soldiers in combat live, and sometimes die, by. It is, like love of flag and country, inviolate: Never leave a buddy behind.

Understand this concept and you understand Jimmy Norris. The new CFO of the Veterans Benefits Administration (VBA), Norris has spent the better part of his life looking after injured comrades. When asked why, at nearly 60 years of age, he’s signed on at a vast federal agency that is underfunded, overworked, and often bashed by the very veterans it serves, Norris says simply, “I feel a connection to these people.”

That connection was first formed 37 years ago in the jungles of Southeast Asia. Barely a year out of ROTC and flight school, Norris found himself stationed north of Saigon. The second lieutenant flew Medevac helicopters, retrieving wounded soldiers from the front lines. It was extremely hazardous duty. Nearly 10 percent of the helicopter crews in Vietnam never made it back home. “When we had hot missions,” recalls Norris, “we’d hover at tree level. We’d have to get cover from Cobra [gunships].” Sometimes the cover wasn’t enough. Twice, Norris had his helicopter shot down by enemy fire. In both cases, the young pilot somehow managed to crash-land his crippled aircraft. Both times, he walked away unscathed.

Such grace under fire will serve Norris well in his new post. As CFO of the VBA, Norris is charged with overseeing the finance function at one of the three agencies that make up the enormous Department of Veterans Affairs (VA). (The other units include the Veterans Hospital Administration [VHA], responsible for medical care, and the smaller National Cemetery Administration). The VBA, with around 13,000 employees, has an annual budget that now tops $40 billion. Some of the money covers survivor benefits for spouses and dependents, but most of the agency’s funds go to the 2.7 million veterans with service-related disabilities.

That number is likely to swell. Existing vets, particularly those from the Vietnam War, are beginning to file additional or expanded disability claims as they get older. Those sorts of reopened cases constitute nearly 60 percent of disability claims filed with the VBA. At the same time, soldiers coming back from what is now referred to in Washington, D.C., as the GWOT (Global War On Terrorism) have started to enter the VBA system.

Coping with the impact of these returning soldiers presents a sizable challenge for Norris. He does not know exactly how many will be coming home, or when. He doesn’t know how many will need payments to cope with life-altering traumas like amputations or post-traumatic stress disorder (PTSD). And he cannot be entirely sure that staffing levels set by Congress and approved by the President will provide the manpower needed to process claims quickly.

Few CFOs in the private sector hold such a momentous responsibility. When companies in the private sector fail to predict — or service — increased demand, customers switch to competitors. When the VA underestimates demand, lives may be at stake. Indeed, for the poorest disabled veterans, delays in receiving VBA checks can lead to real suffering. Some end up on the street (see “The War at Home,” at the end of this article). “Congressmen spout platitudes about soldiers twice a year,” says David Gorman, executive director of the Washington, D.C., office of Disabled American Veterans. “They talk about providing Kevlar for the troops. But then they forget what happens when the uniform comes off.”

Modest and fiercely loyal, Jimmy Norris does not forget. A graduate of the ROTC program at Arkansas State University and, later, the Defense Comptrollership School at Syracuse University, the former Army officer exhibits an unwavering commitment to his comrades in arms. “The job of the VA is to take care of its people,” he says. This connection to the nation’s 25 million veterans has defined Norris’s postmilitary career. During the 1990s, he held civilian finance positions in Washington, including a budgeting post at the Department of Defense (DoD). Later, Norris was hired as a resource-allocation specialist at the VHA, which operates hospitals and community medical centers for former service personnel.

In 2000, Norris was promoted to acting CFO of the giant department, and a few months later he became its permanent finance chief. In a short time, the former helicopter pilot had gone from analyzing budgets to overseeing the finance function at the nation’s largest integrated medical system. “It was a big step up in scope,” he recalls.

During his tenure at the VHA, Norris was part of a team that engineered a remarkable turnaround at the health-care provider. By most accounts, the quality of care at the VHA has improved dramatically in recent years. And despite the difficulties of coping with a budget that is subject to political wrangling, the soft-spoken Norris won nearly universal praise for his work at the VHA (see “The Budget Battles,” at the end of this article). One Senate committee staff member who has worked with Norris calls him “top-notch.” A VA observer says Norris has a reputation for being “extremely competent.” Another describes the finance chief as a Washington rarity, noting that “he has credibility on the Hill on both sides of the aisle.”

Even critics of Veterans Affairs — and there are plenty of those among veterans groups — admire Norris’s dedication. “Some people are bureaucrats and some are public servants,” says Richard Weidman, director of government relations at Vietnam Veterans of America. “Jimmy Norris is a public servant.”

He is also ex-military, and, as a rule, ex-military tend to be a restless lot. This urge to move on explains, in large part, why Norris left the VHA for the VBA. “I’m an old army guy,” he says. “I never stay in one place for more than a few years.” Beyond that, he says he was intrigued by the challenge presented by his new job. “It’s different enough to be energizing.” That’s one word for it. The VBA remains a bureaucratic mess, buried in paperwork and struggling to keep up with demand. The problems at the VBA are evident in the time it takes the agency to sort out a claim. Currently, an applicant can expect to wait about 25 weeks for an initial disability claim to be processed. By contrast, a workers’ compensation claim in the private sector is usually sorted out in four to five weeks. If a veteran appeals the VBA’s decision, which happens about 13 percent of the time, it takes about 94 weeks — almost two years — for the appeal to be resolved.

Veterans’ advocates rail about the long delays, charging that they can leave poorer veterans homeless. Laggardly processing has also created a mounting backlog of cases, which the agency refers to as its “inventory.” As of January 6, the VBA’s inventory was threatening to take over the joint. The agency reported nearly 600,000 compensation and pension claims pending, as well as 150,000 cases awaiting appeal.

Certainly, the claims-processing process is not geared for speed. Take initial claims for disability compensation. Once a veteran submits a claim at one of 57 regional service centers, VBA employees must assemble all the relevant paperwork and medical information. If the veteran can’t supply that paperwork, the VBA staffer must attempt to collect it from either the VHA or the DoD — no small task. Eventually, the claim goes to a ratings specialist who makes a decision on the claim based on the available evidence and the VBA’s criteria for benefit entitlement. (The agency recognizes about 110 diseases considered to be related to special military-service conditions.) Award checks, which are sent monthly — usually for life — are intended to make up for lost earnings capacity. In 2006, the average payment for disability was close to $9,000 per year tax free.

Experts point out that the claims themselves are getting more complicated. They often include several “issues” (medical conditions), which ultimately get rolled up into one overall percentage rating. A decade ago, the VBA estimated there were 2.5 issues per claim. These days, raters say they often see claims with two and three times as many issues. Indeed, the VBA reckons that from 2000 to 2005, the number of claims with 8 issues doubled.

The number of claims being filed is going up as well. Part of this rise stems from aging veterans filing additional claims. The VA has also taken pains to make sure veterans know what they are entitled to, which has added to the pile. “The backlog of cases is getting bigger,” says Quentin Kinderman, deputy director of the national legislative service at the Veterans of Foreign Wars (VFW), “just as Iraq and Afghanistan vets are coming back.”

According to the most recent data from the VA, about 567,000 soldiers deployed in the war on terrorism have been mustered out of the service. An internal VA document shows that, so far, about one in four have filed disability claims. Not surprisingly, this influx of new vets is adding to the workload at the VBA. In total, the agency says that veterans filed more than 806,000 compensation and pension claims in fiscal 2006. That’s 50 percent more than the VBA received in 2000 and at least 40,000 more than the agency processed in 2005. “We’re very concerned about the returning soldiers,” says Gerald Manar, deputy director of the VFW’s national veterans service. “They add more and more burden to the system. And this is just the tip of the iceberg.”

Others agree. Linda Bilmes, a professor at Harvard University’s Kennedy School of Government, estimates that these most-recent veterans could end up filing well over 600,000 disability claims through 2012.

Addressing this glut of cases will fall, in no small part, to Norris and his 160-member finance team. As part of his job, Norris must report on the future liabilities of the compensation and pension program. He must try to predict future benefit payments over the next 75 years. The estimate is prepared by a contractor using actuarial standards, but Norris and his staff provide both data and input for the forecast. Beyond that, the finance group is responsible for monitoring how well the agency meets its own performance targets. The VBA has already announced it wants to reduce the claims-processing time to 145 days; Norris says the agency is “working hard to get the number down.”

Mostly, reducing the number will require sufficient staffing levels and an updating of the agency’s information technology. But the goal itself suggests which way the agency is headed. In 2001, the VBA’s stated aim for processing disability and pension claims was 74 days. One veterans’ service organization official refers to the current 145-day target as “wishful thinking.” Adds Robert Norton, deputy director for government relations at the Military Officers Association of America: “Today’s backlog is not going to go away anytime soon.”

The agency started falling behind on its workload in 2004. That’s around the time the Office of Management and Budget issued guidance to federal agencies to assume increased worker productivity in their budgets. (“Do the same amount of work with fewer employees,” is how a Government Accountability Office report put it.) In response, the VBA ordered a self-imposed 15-month freeze on hiring. At the same time, the agency was hit by a wave of retirements.

It has yet to catch up. Critics say a quota system designed to reduce the inventory has actually made the problem worse in some instances. “The raters do all they can to meet quotas,” explains Gorman. “What’s sacrificed is quality.” Even Norris concedes, “there is some pressure to move cases.”

That pressure can result in poor decisions. About a third of claims decisions are remanded — that is, sent back for further work — while 12 percent of the decisions are flat-out wrong. The percentage could increase, as soldiers from the ongoing war enter the system. Experts say many of the injuries sustained in the wars in the Middle East can be tricky to assess, particularly post-traumatic stress disorder. In fact, a survey conducted by the VA’s Office of the Inspector General found that one-quarter of PTSD claims were processed incorrectly by the VBA.

That’s troubling, considering early reports show that one out of every four soldiers serving in Iraq suffers from PTSD or related mental illnesses (although soldiers are often reluctant to file claims for psychological problems). “The [VBA raters] can tell the worst from the best,” says Kinderman. “But they have serious problems in between.”

Adopting more-stringent performance standards could help reduce the number of flawed assessments. It’s a tactic Norris has used before. At the VHA, he developed a financial indicators report covering 21 different measures, including receivables and outstanding accounts. Those metrics were then incorporated into managers’ performance plans. Norris says that when the benchmarks were first adopted, a 70 percent score was considered successful. Over time, the bar was raised. “Now it’s 85 percent,” he says. Still, it will likely be slow going at the VBA. Raters (who assess initial claims) and decision-review officers must keep up with a slew of ever-changing guidelines on injuries. Field-station employees, for example, receive updates through several delivery methods. One of the most common: so-called Fast Letters, designed to advise field employees on policy and procedural changes and legal revisions (typically stemming from court decisions). In 2005, the compensation and pension service issued 23 Fast Letters.

Veterans’ advocates say the raft of new information can be confusing. In a survey of raters conducted by the VA’s Inspector General, over half responded that they could support two or more different ratings for the same medical condition. And while the VBA does conduct a “National Quality Review,” critics say the look-back is little more than a random sampling of cases. Says Steve Smithson, the American Legion’s deputy director for claims services, Veterans Affairs and Rehabilitation Division: “There’s not a lot of accountability.”

That lack of accountability is underscored by the agency’s current performance standards. Last year, 54 of the VBA’s 57 regional offices received an “outstanding” rating. “There’s a backlog of 600,000 cases,” says Weidman, “and all but 3 offices got outstanding ratings.”

When asked about the crush of claims facing the VBA, a Capitol Hill insider is blunt about the substantial challenges facing the agency’s new CFO. “Why are there perennial backlogs? Staffing is part of the equation. For that, Norris has to find the dollars.”

Norris agrees that hiring more staff is a “matter of identifying and defending requests for resources.” At press time, the $80 billion VA appropriation for 2007 was still being debated by Congress, nearly six months into the fiscal year.

The Administration reportedly aims to cut veterans’ funding in its 2009 budget. The appropriation for 2007 holds about $40 billion for the VBA, including $39 billion for mandatory costs (payments) and $1.2 billion for discretionary spending (general operating expenses). While the proposed operating budget is an almost 11 percent increase from 2006, critics say it won’t be enough. They point out that the Administration’s budget sets aside funds for 9,445 full-time employee (FTE) equivalents for compensation and pension services (including raters) — a reduction of 149 workers. The Independent Budget, a yearly forecast published by several veterans’ service organizations, estimates the VBA actually needs 10,821 FTEs in 2007 to address the inventory backlog. If that projection is correct — and The Independent Budget is usually fairly accurate — the VBA may find it nearly impossible to cope with an increasing workload.

It wouldn’t be the first time. “For the last 20 years or more, managers at the VA have tried to live within their means,” says the VFW’s Manar. “They do what they can with what they have.”

Despite the controversy surrounding the War on Terrorism, legislators continue to insist they’ll support the troops. But this support has led to an unintended consequence: Some veterans’ advocates claim that veterans from the latest war are getting preferential treatment within the VA system. To date, more than 100,000 have been granted disability compensation. This influx of new vets, these advocates say, is pushing other soldiers to the rear of the column. Says the VFW’s Kinderman: “We’re hearing that in claims processing, older veterans are getting less attention.”

Norris seems genuinely surprised at this contention. “If it’s true,” he replies, “it’s not the intent.” Veterans’ advocates, however, fear it’s only the beginning. Says Gorman: “All of a sudden, Vietnam vets are becoming second-class citizens within the VA.”

This is a particularly disturbing development for Gorman, who lost both his legs in Vietnam. The Disabled American Veterans spokesman notes that the VA does pay to replace his artificial limbs. “A guy can make me two legs for $12,000,” he says. But Gorman claims that disabled soldiers returning from the war in Iraq are receiving state of-the-art, computer-designed prosthetics that cost around $80,000 to build. “They’re practically giving those away,” he insists.

If all service is honorable, say veterans’ advocates, then all treatment should be equal. “The rhetoric is, we’re taking care of these young guys, and we are,” Gorman says. “But we’re not taking care of the ones who came before them.”

Since Jimmy Norris joined the VBA in December, President Bush has committed another 21,000 troops to Iraq. Whatever the impact of this “surge” may be, it’s a dead certain lock that the buildup will create more customers for the VBA. Those who come home with missing limbs — about 6 percent of those injured in Iraq — will require medical and monetary help. Norris, as ever, remains committed to his band of brothers. “Everyone is behind these folks,” he says. “Whatever they need they’ll get.” While the cost in shattered lives is incalculable, the monetary obligation for the war could be staggering. According to Harvard’s Bilmes, disability payments for the returning soldiers could top $109 billion over 40 years. “The financial price of this war goes way beyond the current war budget,” says Norton. “These new veterans will be around long after this war is over.”

John Goff is a senior editor of CFO.

The War at Home

If truth is the first casualty of war, sanity runs a close second. A recent study in the New England Journal of Medicine found that one group of U.S. soldiers in Iraq exhibited a high incidence of anxiety, depression, and post-traumatic stress disorder. For some, those afflictions can make it nearly impossible to readjust to civilian life. “They can’t handle it,” says Robert Webster, a case manager at the Veterans Outreach Center in Rochester, New York. “So they drink to stop the madness.”

Self-medication with alcohol or drugs makes it next to impossible for many to hold down a job. Likewise, physically disabled soldiers sometimes find it hard to get work once back in civilian life. Some end up on the street. According to the Department of Veterans Affairs (VA), on any given night, 194,000 veterans are homeless. All told, vets make up about a quarter of the adult homeless population in the United States.

There’s no easy fix for this problem. Ellen Warren, director of development for the Veterans Outreach Center Inc., claims the Department of Defense (DoD) does “a terrible job of transitioning people.” Requiring vets to manage a raft of documentation only complicates that transition. “If a guy doesn’t keep all his paperwork in order,” says Webster, “he’s screwed.”

Jimmy Norris is aware of the problem. The Veterans Benefits Administration CFO says there has been considerable effort in the last few years to try to improve the flow of information between the VA and the DoD. “We’re trying to get some commonality [in the data systems],” he notes, “but we’re never going to have the same database.”

The lack of integration, along with a lack of staff, can lead to sizable holdups in processing claims. The delays put some disabled veterans, particularly poorer ones, at risk. “On a complicated claim, it can take a year or two,” says Richard Weidman, director of government relations at Vietnam Veterans of America. “If they win, they get a lump-sum payment. But at that point, they’ve already lost the house.”

One ray of hope: last year, Congress reversed a law (dating back to the Civil War) that prohibited veterans from hiring attorneys to help file initial claims. Veterans advocates say outside counsel could improve the odds for some deserving veterans. “The guys most in need,” says Weidman, “are often the ones least capable of presenting their cases.” — J.G.

The Budget Battles

In June 2005, Jimmy Norris and several high-ranking Department of Veterans Affairs (VA) officials testified before angry members of the House Committee on Veterans Affairs. The lawmakers were looking into a funding gap at the Veterans Hospital Administration (VHA) — a $1.3 billion underestimate of the money needed to provide medical services to vets that year.

It’s not entirely clear what caused the shortfall. Officials at the VHA blamed much of the gap on a larger-than-predicted increase in demand caused by returning veterans of the Global War on Terrorism. For his part, Norris, who was the VHA’s CFO at the time, says some of the problems stemmed from overly optimistic projections about cost savings in the agency’s long-term-care operations.

But VA critics insist that the budgeting process itself is partly to blame. They note that the agency’s annual appropriation is generally subject to an intense amount of political posturing and behind-the-scenes wrangling. Members of Congress are often eager to divert funds to home states, say the critics, while White House officials typically attempt to keep spending increases from spiraling out of control. Notes Quentin Kinderman, deputy director of the national legislative service at the Veterans of Foreign Wars: “Initial figures come out of an Administration intent on keeping numbers lower than needed.”

As with managers in the private sector, VA officials generally try to stay within the budgets set by their boss — in this case, the President of the United States. Says Steve Smithson, deputy director of claims services, Veterans Affairs and Rehabilitation
Division, at the American Legion: “The Secretary [of Veterans Affairs] says, ‘Yes sir, Mr. President, we can handle this.'”

Norris refuses to lay blame for the snafu. — J.G.