Misguided policies, unreasonable workloads and poor leadership at the Veterans Affairs Department are to blame for mismanagement of disability and pension claims in Philadelphia, according to a government audit obtained Wednesday by The Associated Press that points to widespread failures and spending waste.

Opening a new front of criticism beyond its ongoing review of wait times for medical care, the VA inspector general's blistering 78-page report takes aim at the department's handling and timely payment of compensation claims. It concludes the Philadelphia VA regional office was especially troublesome in its litany of problems, all part of a rush to reduce persistent backlogs: piles of mishandled or neglected mail, untimely responses to more than 31,000 veterans inquiries into its call center, manipulation of dates to make old claims look new and millions of dollars in improper duplicate benefit payments.

At least one VA supervisor altered 53 of 87, or 61 percent, of quality reviews with the knowledge of office management over a three-month period, rendering the VA's reported accuracy rates in the processing of claims "unreliable," according to the report.

Still, the 10-month investigation stops short of identifying specific culprits, calling on the VA to launch a high-level administrative review to determine who should be held responsible and implement department-wide measures to deter further manipulation of data and waste. Last month, the VA said it had initiated such a review, with results expected by June.

"There is an immediate need to improve the operation and management" in the Philadelphia VA office, states the report by acting VA inspector general Richard Griffin in urging more effective oversight.

Responding in the report, the VA said it fully concurred with 31 of the IG's 35 recommendations, pointing to a new director it installed last July as well as increased training, employee town halls and other efforts to improve communication and morale. It declined to commit for now to any disciplinary action, pending completion of its internal review.

The VA's official in charge of benefits, Allison Hickey, has made it clear that since hearing of whistleblower complaints last summer, the VA moved aggressively to fix problems in Philadelphia with some "90 to 95 percent" of issues in the IG report fully addressed or actively being addressed.

"This is not a new thing, this is a last-year thing," Hickey told the AP.

Among the audit's findings:

--VA employees handling pension claims did not respond to thousands of inquiries pending on average for 312 days, due to inadequate staffing. The VA has a five-day standard for response. But as of last July in the Philadelphia office, inquiries were still being mismanaged, leaving veterans without answers of assistance.

--VA regional staff did not act quickly to eliminate duplicate records, resulting in improper payments of about $2.2 million, due in part to poor communication with its headquarters in Washington.

--One VA employee hid four bins of unprocessed mail.

--Staff mishandled more than 6,400 "military file mail," or correspondence deemed to lack sufficient identifying information, even though VA databases could have identified them.
  The Philadelphia regional office oversees the administration of benefits to 825,000 veterans in eastern Pennsylvania, southern New Jersey and Delaware. The site also houses a Pension Management Center, one of three in the nation, which services more than a dozen states and Puerto Rico.

The audit comes as the VA continues to grapple with fallout related to wait times and falsified records in its health network, separate from its claims processing. The VA last summer found that problems with long patient waits at the Phoenix VA medical center were "systemic," leading to the resignation of VA-secretary Eric Shinseki.

In terms of claims processing, the IG's office described the Philadelphia office as "very bad" compared with other facilities. The inspector general said Philadelphia's list of allegations -- which grew each time investigators visited, causing delays to the investigation's completion -- was emblematic of the various allegations it had reviewed at other VA offices. Those trouble spots include Oakland, Calif.; Los Angeles; Little Rock, Ark.; Baltimore; Houston; and Honolulu.

A House committee was scheduled to hold a hearing next week on the VA's handling of claims, titled, "Philadelphia and Oakland: Systemic Failures and Mismanagement."