VA to shift up to $25 million to handle data theft inquiries

VA to shift up to $25 million to handle data theft inquiries
by David Perera 

The Veterans Affairs Department is prepared to shift up to $25 million of its fiscal 2006 funding to handle initial costs associated with the theft of as many as 26.5 million veterans’ personal data from an employee’s suburban Maryland home. The overall price tag could climb.

Lawmakers on Wednesday granted VA authority to reprogram up to $25 million to pay for the call center supporting the toll-free number it has set up in the wake of its Monday announcement that personal information, including Social Security numbers, of possibly every living U.S. veteran discharged since 1975 was stolen from the employee’s house. Data on veterans discharged before 1975 but with claims filed at the agency since, as well as on some veterans’ spouses, also is at risk.

The department had received 84,309 calls as of 10 p.m. Tuesday, spokesman Matthew Burns said. Call volume more than doubled on the second day, according to figures he supplied…

Under the authority granted, money to pay for the call center could be taken from four information technology programs, according to a congressional source. VA management is uncertain whether all $25 million will be needed to support the call center. But the department must also shoulder other expenses, including the cost of printing and mailing notification letters.

About $12 million could be culled from a Veterans Health Administration program for computer infrastructure and network management. An additional $1.5 million could come from a Veterans Benefit Administration project on IT program integrity and data management. Also, an effort called One VA Eligibility and Registration could end up losing $4.5 million. The initiative was designed to ensure that veterans only have to register once with the department in order to receive all the benefits for which they are eligible.

Lastly, a program to create a common VHA electronic repository for health records could lose $7 million. The House Appropriations Committee instructed VA to touch those funds only if the other reprogrammed funds have been depleted, a congressional source said. The fiscal 2006 budget for the health record project is only $16 million, so the $7 million would amount to more than a 50 percent cut.

The $25 million price tag could prove just the beginning of the department’s expenses associated with the theft, however.

Sen. John Kerry, D-Mass., on Wednesday introduced a bill that would provide free credit monitoring for all veterans affected by the data theft. When the Alpharetta, Ga.-based data broker ChoicePoint disclosed in 2005 that personal information for about 145,000 people had been sold to criminals posing as a legitimate businessman, the incident ended up costing the company $11.4 million through June 30, 2005, according to company records. Two million of that was just for credit reports and credit monitoring for victims.

Both the House and Senate committees on veterans’ affairs will hold hearings on the theft on Thursday morning. Among the topics staffers say will be discussed is the more than two-week lag time between when the theft occurred — May 3 — and the day the department notified potential victims.

In a statement released Wednesday, department Secretary R. James Nicholson said he is “concerned about the timing of the department’s response once the burglary became known.” The department is conducting “a very extensive review of individuals up and down the chain of command,” he said.