Part VI, Subpart ii, Chapter 4, Section EProcessing Audit Error Worksheets (AEWs)

When the Department of Veterans Affairs (VA) establishes or changes an award of disability compensation, VA electronically transmits the award data to the Defense Finance and Accounting Service (DFAS) and the Coast Guard.

DFAS and the Coast Guard audit the VA award data against MRP records. Exception: Neither DFAS nor the Coast Guard audit VA award data against MRP records

• during time periods when the Veteran was not in receipt of MRP, or
• if the VA award action did not increase the gross award amount for any month covered by the award action.

If the audit reveals an adjustment of the Veteran’s disability compensation is necessary based on entitlement to CRSC or CRDP, DFAS or the Coast Guard electronically transmits audit data to the Hines Information Technology Center (ITC).

The Hines ITC

• generates an AEW from the audit data
• inserts the AEW into the corresponding electronic claims folder (eFolder), and
• places the AEW under system control by establishing an 840 work item.

Is an end product (EP) 298 already pending to control the current or a previous AEW?

• If yes , go to the next step.
• If no , establish EP 298, CRSC/CRDP Processing.

Add Potential Under/Overpayment as a special issue.

Clear the 840 work item that the Hines ITC established (if applicable).

Use VBMS to compare the amount of benefits the corporate record shows VA withheld each month (for MRP only) to the amounts shown in the VA Withheld column of the AEW for the same months to ensure they match. If the amounts do not match,

• follow the instructions in the embedded table below, and
• disregard the remaining steps in this table.

the difference between the amount in the VA Withheld column and the amount in the Due From VA column for each entitlement month displayed on the AEW matches the withholdings in the corporate record for each of the same months

clear the pending EP 298. (No additional award action is necessary because VA has already released to the Veteran the amounts shown in the Due From VA column on the AEW.) Important: If the award action that released the amounts in the Due From VA column did not result in the generation of a decision notice notifying the Veteran that VA released the funds due to entitlement to CRSC or CRDP, provide such notice to the Veteran.

• the difference between the amount in the VA Withheld column and the amount in the Due From VA column for each entitlement month displayed on the AEW does not match the withholdings in the corporate record for each of the same months, and
• the award action that released the amounts in the Due From VA column did not change the amounts in the Total column of the corporate record for the same months

adjust the Veteran’s withholdings so they match the difference between the amount in the VA Withheld column and the amount in the Due From VA column for each entitlement month displayed on the AEW. Note: Under the circumstances described in this row, another AEW will not be generated.

• the difference between the amount in the VA Withheld column and the amount in the Due From VA column for each entitlement month displayed on the AEW does not match the withholdings in the corporate record for each of the same months, and
• the award action that released the amounts in the Due From VA column changed the amounts in the Total column of the corporate record for the same months

another AEW will be generated. Leave the EP 298 running and defer action until the new AEW is generated. When the new AEW is generated,

• clear the corresponding 840 work item, and
• process the AEW under the pending EP 298.

2

If the earliest entitlement month displayed on an AEW is prior to November 2009, check for an out-of-system CRSC/CRDP payment. Rationale: VA made out-of-system CRSC/CRDP payments from October 2006 through November 2009. If the corporate record was never updated to reflect the payment, the potential for duplicate payments exists. References: For more information on

• identifying out-of-system CRSC/CRDP payments, see the AEW Job Aid, and
• processing an AEW after VA made an out-of-system CRSC/CRDP payment, see M21-1, Part VI, Subpart ii, 4.E.1.g and h.

3

Does the withholding in the corporate record exist solely to offset the Veteran’s receipt of MRP?

• If yes ,
  • disregard the remaining step in this table, and
  • follow the instructions in M21-1, Part VI, Subpart ii, 4.E.1.g.
• If no , go to the next step.

4

Follow the instructions in the table below. If VA is withholding compensation … Then …

for a reason other than to offset the Veteran’s receipt of MRP for all of the entitlement months the AEW covers

• do not release the withholding
• clear the EP 298, and
• follow the instructions in M21-1, Part VI, Subpart ii, 4.E.1.s, for providing notice that the Veteran is not entitled to a retroactive payment of benefits.

for a reason other than to offset the Veteran’s receipt of MRP for some but not all of the entitlement months covered by the AEW

• do not release the withholding for those months during which VA withheld compensation for a reason other than to offset the Veteran’s receipt of MRP, and
  • follow the instructions in M21-1, Part VI, Subpart ii, 4.E.1.s, for notifying the Veteran.

Important: When preparing the decision notice, select The amounts the VA withheld for reasons other than retired pay option in Step 5 of the AEW Assistant.

both to offset the Veteran’s receipt of MRP and for another reason during the same month

• release that part of the withholding that is to offset the Veteran’s receipt of MRP up to the amount in the Due From VA column of the AEW for that month, and
• follow the instructions in M21-1, Part VI, Subpart ii, 4.E.1.s, for notifying the Veteran.

Does the AEW display an entitlement month that is earlier than November 2009?

• If yes , go to the next step.
• If no , go to Step 5.

Follow the instructions in the AEW Job Aid to determine whether an out-of-system adjustment was made during the time period the AEW covers. Important: Only automatic out-of-system adjustments are reflected on the document titled CRSC/CRDP One-Time Payment Notification from DFAS. Confirm that no manual , out-of-system adjustment was made based on receipt of an AEW by checking the Veteran’s eFolder for a corresponding decision notice.

Was an out-of-system adjustment made during the time period the AEW covers?

• If yes , go to the next step.
• If no , go to Step 5.

Update the PRIORS screen to reflect the out-of-system adjustment. Reference: For more information on updating the PRIORS screen, see the AEW Job Aid.

Subtract the amount (whether positive or negative) in the Due From VA column from the amount in the VA Withheld column to determine what the withholding (for MRP) will be for each month listed on the AEW.Note:Subtracting a negative Due From VA column amount, as directed above, will ultimately have the effect of adding its value to the VA Withheld column amount.Exception : If a prorated amount (as described in Step 1 of the table in M21-1, Part VI, Subpart ii, 4.E.1.f) appears in the VA Withheld column of the AEW, follow the instructions in M21-1, Part VI, Subpart ii, 4.E.1.n-r, to determine the amount of the withholding.Reference: For more information on handling AEWs that include negative Due From VA amounts, see M21-1, Part VI, Subpart ii, 4.E.1.k.

Enter the result of the calculation in Step 5 in the ADJUSTMENT AMOUNT field on the RETIRED PAY tab. References: For more information on

• making entries on the RETIRED PAY tab or where to view the net effect of an award adjustment, see the VBMS Awards User Guide , and
• processing an AEW, see the Military Pay webpage.

Generate the award. Important: Ensure the award generates from a date no later than the earliest date shown in the Entitlement Month column of the AEW.

Calculate the retroactive amount that VA owes the Veteran by totaling all the amounts displayed in the Due From VA column of the AEW.

Verify that the result of the calculation described in Step 8 equals the Net Effect of the award adjustment that is displayed in the award-processing application.

Follow the instructions in M21-1, Part VI, Subpart ii, 4.E.1.s for notifying the Veteran of the award adjustment.

none of the AEWs have been processed.

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process the newest AEW and disregard the older one(s).

one of the older of the AEWs was processed as an out-of-system adjustment

the amounts (including the amounts in the Due From VA column and the APPBD or APPBC (if present))** and the dates on all the AEWs are identical

• reduce the withholdings (for MRP only), during the time period the AEWs cover, by the corresponding amounts displayed in the Due From VA column
• update the PRIORS screen to reflect the out-of-system adjustment, and
• follow the instructions in M21-1, Part VI, Subpart ii, 4.E.1.s for providing notice that the Veteran is not entitled to additional benefits based on the newer AEW(s) (because VA previously paid the additional benefits that were due the Veteran when it processed the older AEW).

the newest AEW shows VA owes the Veteran more compensation than the older one

• process the newer AEW according to the instructions in M21-1, Part VI, Subpart ii, 4.E.1.g, and
• update the PRIORS screen to reflect the out-of-system adjustment.

the newest AEW shows VA owes the Veteran less compensation than the older one

request guidance from the MILPAY Staff by sending an e-mail to VAVBAWAS/CO/MILPAY.

• VA just recently processed one of the older of the AEWs (so recently that DFAS or the Coast Guard did not have the award data from the corresponding award adjustment when it performed the audit referenced in Stage 2 of the process described in M21-1, Part VI, Subpart ii, 4.E.1.b), and
• the amounts in the VA Award column of the newest AEW are identical to the amounts in the VA Award column of the AEW that was just processed

the newest AEW shows VA owes the Veteran less compensation than the older one request guidance from the MILPAY Staff by sending an e-mail to VAVBAWAS/CO/MILPAY.

the newest AEW shows VA owes the Veteran more compensation than the older one

take award action to adjust the withholdings (for MRP only) so that the difference between the amount in the VA Withheld column and the Due From VA column for each entitlement month displayed on the newer AEW matches the withholdings in the corporate record for the same months.

one of the older of the AEWs was processed

• manually in the award-processing application, or
• by the batch processing described in M21-1, Part VI, Subpart ii, 4.E.1.d

the amounts (including the amounts in the Due From VA column and the APPBD or APPBC (if present)) and the dates on all the AEWs are identical

• follow the instructions in M21-1, Part VI, Subpart ii, 4.E.1.s, for providing notice that the Veteran is not entitled to additional benefits based on the newer AEW(s) (because VA previously paid the additional benefits that were due the Veteran when it processed the older AEW), and
• clear the corresponding 840 work item and controlling EP 298.

the newest AEW displays an entitlement month

adjust the MRP withholding for that entitlement month based on that AEW.

any but the newest of the unprocessed AEWs displays an entitlement month that is earlier than the earliest entitlement month on the newest AEW

adjust the MRP withholding for that entitlement month using the Due From VA amount displayed on the newest of the AEWs that displays that entitlement month.

• an entitlement month appears on an older , unprocessed AEW that does not appear on the newest AEW, and
• that entitlement month is later than the earliest entitlement month on the newest AEW

the Due From VA amount for that month is $0.00.

none of the entitlement months on the older , unprocessed AEW(s) are earlier than the earliest date on the newest AEW

ignore the older, unprocessed AEW(s) (including any APPBDs or APPBCs that appear on it(them)), since the newest AEW completely supersedes the older one(s).

Use the AEW Assistant to generate the AEW Letter to Finance.

E-mail a copy of the letter to the finance activity. Note: The letter asks the finance activity to establish the APPBD or APPBC as a “collectible receivable.”

Upload a copy of the letter to the Veteran’s eFolder.

After the finance activity establishes the collectible receivable, refer the award adjustment for authorization. No t e : The award adjustment must be authorized within two days in order to avoid Debt Management Office involvement.

1

Calculate the overpayment by totaling the negative Due From VA amounts on the AEW.

2

Was the overpayment the result of an administrative error as described in M21-1, Part VI, Subpart i, 2.B.3.a and b? (For example, was compensation withheld for a timeframe less than required, or at an amount less than directed by the Retired Pay Withholding Calculator?)

• If yes ,
  • clear the pending EP 298, and
  • follow the instructions in M21-1, Part VI, Subpart i, 2.B.3.g (to include issuance of notice of proposed adverse action).
  • If no , go to the next step.

References: For more information on

• erroneous payments and administrative errors, see M21-1, Part VI, Subpart i, 2.B.1 and 3, and
• adjusting an award affected by MRP, see 21-1, Part VI, Subpart ii, 4.B.2.

3

Use the table below to determine the appropriate action. If the net amount due is … Then ...

negative (the total of the negative Due From VA amounts exceeds the total of the positive Due From VA amounts)

• clear the pending EP 298
  • establish EP 600
  • issue notice of proposed adverse action in accordance with M21-1, Part X, Subpart ii, 3.A.2
  • upon expiration of the adverse action proposal period take action to adjust the award as necessary, and
  • prepare and send a decision notice as described in M21-1, Part VI, Subpart i, 1.B.

​​​​​​​ Important : Follow the instructions in M21-1, Part X, Subpart ii, 3.B.3.c if a request for a hearing is received.

positive (the total of the positive Due From VA amounts exceeds the total of the negative Due From VA amounts)

• follow the instructions in M21-1, Part VI, Subpart ii, 4.E.1.c, and
• process the AEW using the procedures in M21-1, Part VI, Subpart ii, 4.E.1.g.

prior to December 2013

round down the amount in the Due From VA column.

December 2013 or later

do not round down the amount in the Due From VA column.

• VA withheld benefits to offset the Veteran’s receipt of MRP from the
  • first day of the month to a later date within the same month, and
  • a day within the month to the end of the month, and
• both withholdings are equal to or greater than the amount shown in the Due From VA column of the AEW

M21-1, Part VI, Subpart ii, 4.E.1.o.

the amount of benefits VA withheld to offset the Veteran’s receipt of MRP is less than the amount shown in the Due From VA column of the AEW

M21-1, Part VI, Subpart ii, 4.E.1.p.

VA withheld benefits to offset the Veteran’s receipt of MRP from either (not both) the

• first day of the month to a later date within the same month, or
• a day within the month to the end of the month

M21-1, Part VI, Subpart ii, 4.E.1.q.

Subtract the smaller of the amounts VA records show VA withheld (to offset the Veteran’s receipt of MRP) during the month in question from the larger amount that VA records show VA withheld for the same reason during the same month.

Subtract the smaller of the amounts VA withheld during the month in question from the amount shown in the Due From VA column on the AEW for the same month.

Divide the result of the calculation described in Step 2 by the number of days of the same month during which VA withheld the larger amount of benefits.

Multiply by 30 (days) the result of the calculation described in Step 3.

Subtract the result of the calculation described in Step 4 from the result of the calculation described in Step 1.

During the time period when the smaller withholding was in effect, withhold $0.00.

During the time period when the larger withholding was in effect, withhold the result of the calculation described in Step 5.

Divide the amount shown in the Due From VA column on the AEW for the month in question by the number of days VA withheld benefits.

Multiply by 30 (days) the result of the calculation described in Step 1.

Subtract the result of the calculation described in Step 2 from the amount of the withholding (to offset the Veteran’s receipt of MRP) that is shown in VA records for the same month. Note: The result of the calculation described in this step represents the new withholding (to offset the Veteran’s receipt of MRP) for the month in question.

• The month in question is January 2005 or later.
• The AEW shows the Veteran is authorized CRDP for the same month.
• A VA rating of 100-percent disability or TDIU due to SC disabilities was in effect for the same month.

• The month in question is January 2014 or later.
• The AEW shows the Veteran is authorized CRDP for the same month.

The AEW shows the Veteran is authorized 100 percent of CRSC for the month in question.