Processing Audit Error Worksheets (AEWs)

Overview

In This Section

This section contains the topic “ Processing AEWs.”

1. Processing AEWs

Introduction

This topic contains information on processing AEWs, including

• definition of an AEW
• how AEWs are generated
• maintaining control of AEWs
• automated AEW processing
• AEW types and messages
• initial review of an AEW
• adjusting an award based on an AEW
• sequential receipt of AEWs that cover
• the exact same time period, and
• some but not all of the same entitlement months
• special handling of AEWs
• that display an amount previously paid by the Defense Finance and Accounting Service (DFAS) (APPBD) or the Coast Guard (APPBC), and
• include negative Due From VA amounts
• special instructions
• about rounding down the amount in the Due From VA column, and
• for entitlement months of January 2014 or later
• processing AEWs that list a month in which the Department of Veterans Affairs (VA) adjusted disability compensation effective a day other than the first day of the month
• processing AEWs
• with an amount withheld for military retired pay (MRP) that is equal to or greater than the amount shown in the Due From VA column
• with an amount less than the amount shown in the Due From VA column
• when VA withheld benefits from either the first day of the month to a later date within the same month or from a day within the month to the end of the month, and
• when the Veteran is eligible for concurrent receipt of the full amount of compensation and MRP based on length of service, and
• notification of award adjustments associated with the processing of an AEW.

Change Date

November 19, 2025

VI.ii.4.E.1.a. Definition: AEW

An audit error worksheet (AEW) is a document containing data regarding a Veteran’s military retired pay (MRP) and entitlement to Concurrent Retirement Disability Pay (CRDP) or Combat-Related Special Compensation (CRSC).

VI.ii.4.E.1.b. How AEWs Are Generated

The table below describes how AEWs are generated.

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VI.ii.4.E.1.c. Maintaining Control of AEWs

Follow the instructions in the table below upon receipt of an AEW.

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Note: The proper date of claim for EP 298 is the date of the AEW, which is found in the upper right corner of the worksheet.

VI.ii.4.E.1.d. Automated AEW Processing

VA uses batch processing to automate the adjustment of many Veterans’ awards based on the audit data it receives from DFAS or the Coast Guard. This process includes the generation of an award in the Veterans Benefits Management System – Awards (VBMS-A) and the generation and mailing of a decision notice to the Veteran.

Exception: If an AEW contains more than 55 award lines, automatic generation of a decision notice during batch processing fails. In such cases, Compensation Service’s MILPAY Staff sends an e-mail to the station of origination with a request to prepare the decision notice and mail it, along with a copy of the AEW, to the Veteran within 10 days.

Note: The subject line of the e-mail from the MILPAY Staff will read CRSC/CRDP Batch – Automatic Letter Kick-Out.

VI.ii.4.E.1.e. AEW Types and Messages

The table below

• contains information about the various work items associated with AEWs, and
• describes the action to take upon receipt of each type of work item.

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VI.ii.4.E.1.f. Initial Review of an AEW

Follow the instructions in the table below when performing an initial review of an AEW.

Note: Defer processing an AEW until VA appoints a fiduciary if VA

• is withholding benefits to offset a Veteran’s receipt of MRP, and
• has rated the Veteran incompetent but has not yet appointed a fiduciary.

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Note: An AEW may include entitlement months during which a Veteran was not eligible for CRSC/CRDP (such as when a Veteran’s combined disability rating is less than 50 percent). DFAS and the Coast Guard include these entitlement months on the AEW when determining VA erroneously withheld compensation based on the Veteran’s receipt of MRP for those months, regardless of the Veteran’s eligibility for CRSC/CRDP. Accordingly, the amounts in the Due From VA column of the AEW for those months are valid and should be treated the same as the amounts in the Due From VA column of the AEW for time periods during which the Veteran is eligible for CRSC/CRDP.

VI.ii.4.E.1.g. Adjusting an Award Based on an AEW

Follow the steps in the table below when it becomes necessary to adjust an award based on an AEW.

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VI.ii.4.E.1.h. Sequential Receipt of AEWs That Cover the Exact Same Time Period

Take the actions described in the table below if multiple AEWs exist that cover the exact same time period.

Important: Anytime the table below refers to the amount of benefits VA owes a Veteran, it is referring to the net amount (the total of the amounts in the Due From VA column of an AEW minus the APPBD or APPBC (if present)).

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Reference: For more information about updating the PRIORS screen, see the AEW Job Aid.

VI.ii.4.E.1.i. Sequential Receipt of AEWs That Cover Some But Not All of the Same Entitlement Months

Take the action described in the table below when multiple unprocessed AEWs exist that cover some but not all of the same entitlement months. (It is acceptable to process these AEWs in the same award action.)

Important:

• If an APPBD/APPBC is displayed on only the newest AEW, follow the instructions in the table in M21-1, Part VI, Subpart ii, 4.E.1.j, after following the instructions in the table below.
• Request guidance from the MILPAY Staff by sending an e-mail to VAVBAWAS/CO/MILPAY if
• the older AEW(s) has(have) not been completely superseded by the newest AEW (as explained in the last row of the table below), and
• an APPBD/APPBC is displayed on (any of) the older AEW(s).
• If all unprocessed AEWs are dated prior to June 1, 2011, the newest one supersedes the older one(s), regardless of the entitlement months any or all of the unprocessed AEWs cover.

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Example:

Scenario:

• The entitlement months of December 2004 through May 2005 appear on the older of two unprocessed AEWs.
• The following entitlement months appear on the newest of two unprocessed AEWs:
• January 2005
• March 2005, and
• April 2005.

Results:

• The Veteran is entitled to the Due From VA amount displayed on the older AEW for December 2004.
• The Veteran is entitled to the Due From VA amounts displayed on the newest AEW for January, March, and April 2005.
• The Due From VA amount for February and May 2005 is $0.00.

VI.ii.4.E.1.j. Special Handling of AEWs That Display an APPBD or APPBC

If an AEW displays an amount to the right of the text Amount Previously Paid by DFAS or Amount Previously Paid by Coast Guard,

• follow the steps in M21-1, Part VI, Subpart ii, 4.E.1.g for routine processing of the AEW, but
• postpone authorization of the award adjustment pending completion of the steps in the table below.

Notes:

• The Net Effect of the award adjustment the award-processing application displays should still match the total of all amounts displayed in the Due From VA column on the AEW.
• To calculate the amount of the Veteran’s payment (so it can be provided in the corresponding decision notice), subtract the Amount Previously Paid by DFAS from the total of all amounts displayed in the Due From VA column on the AEW.

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Reference: For more information on AEWs involving DFAS payment, see M21-1, Part VI, Subpart iii, 2.B.3.d.

VI.ii.4.E.1.k. Special Handling of AEWs That Include Negative Due From VA Amounts

Follow the steps in the table below when processing an AEW that includes a negative Due From VA amount(s).

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References: For more information on

• notice of proposed adverse action, see M21-1, Part X, Subpart ii, 3.A and B, and
• eliminating an overpayment resulting from an administrative error when processing an AEW, see M21-1, Part VI, Subpart iii, 2.B.3.f.

VI.ii.4.E.1.l. Special Instructions About Rounding Down the Amount in the Due From VA Column

When processing older AEWs, the practice of rounding down the amount in the Due From VA column will depend on the adjustment date shown on the AEW. The table below explains when rounding down is/is not appropriate.

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Important: Never round down the amount in the Due From VA column for entitlement months which include a rate change that takes effect on a day other than the first day of the month.

VI.ii.4.E.1.m. Special Instructions for Entitlement Months of January 2014 or Later

If the amount in the VA Withheld column of an AEW for an entitlement month of January 2014 or later differs from the amount in the Due From VA column for the same month by an amount less than one dollar,

• release the amount shown in the VA Withheld column for the same month, and
• include the following paragraph in the What Is Your Entitlement section of the decision notice:

The enclosed audit error worksheet may show amounts due that differ from what we have calculated. The worksheet is informational, showing VA may need to make an adjustment; however, we are required to double-check all calculations prior to releasing any funds to you. Therefore the amount we pay will be based on our final calculations and may not match the totals from the worksheet.

Example:

Scenario: Entries on AEW are as follows:

• Entitlement Month: March 2014
• VA Withheld: $213.15
• Due from VA: $213.00

Action: Since the difference between the two amounts is less than one dollar, reduce the MRP withholding for March 2014 by $213.15.

Note: The situation described in this block most commonly occurs when the subject of the AEW is a Coast Guard Veteran.

VI.ii.4.E.1.n. Processing AEWs That List a Month in Which VA Adjusted Disability Compensation Effective a Day Other Than the First Day of the Month

The amounts displayed on an AEW for a given entitlement month are applicable for the entire month. If either the gross or net amount of a Veteran’s disability compensation changed effective a day other than the first day of the month,

• the amounts displayed on the AEW for the same month will not match up with VA’s corporate record, but
• the amount in the Due From VA column of the AEW for that month
• will be correct, and
• represents the amount VA must release to the Veteran for that month.

Example: VA commonly reduces a Veteran’s benefits on a day other than the first day of the month when it removes a child from the Veteran’s award effective the day the child turns 18.

The methods for processing AEWs that list months in which either the gross or net amount of a Veteran’s disability compensation changed effective a day other than the first day of the month vary depending on a variety of factors. Follow the instructions in

• M21-1, Part VI, Subpart ii, 4.E.1.r, if
• VA withheld benefits during a month after
• December 31, 2013, in which the Veteran’s combined disability rating for service-connected (SC) disabilities was 50 to 90 percent, or
• December 31, 2004, if the Veteran is totally disabled (on a schedular basis or on the basis of a total disability rating based on individual unemployability (TDIU)) due to SC disabilities, and
• the Veteran retired based on length of service, or
• the table below in all other situations.

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VI.ii.4.E.1.o. Processing AEWs With an Amount Withheld for MRP That Is Equal to or Greater Than the Amount Shown in the Due From VA Column

Reduce the amount of both withholdings (for MRP only) for the month in question by the amount shown in the Due From VA column on the AEW for the same month if

• there is a withholding in place for MRP
• from the first day of the month, and
• from a day other than the first day of the month, and
• each of the amounts withheld for MRP is equal to or greater than the amount shown in the Due From VA column of the AEW for the same month.

Note: Follow the instructions in M21-1, Part VI, Subpart ii, 4.E.1.p if any of the withholdings for MRP during the month in question are less than the amount shown in the Due From VA column of the AEW for the same month.

VI.ii.4.E.1.p. Processing AEWs With an Amount Less Than the Amount Shown in the Due From VA Column

Follow the instructions in the table below if

• there is a withholding in place for MRP
• from the first day of the month, and
• from a day other than the first day of the month, and
• any of the amounts withheld for MRP are less than the amount shown in the Due From VA column of the AEW for the same month.

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Example:

Scenario:

• VA records show a withholding (to offset the Veteran’s receipt of MRP) of
• $1,457.00, effective December 1, 2012
• $1,491.00, effective September 9, 2013, and
• $1,614.00, effective October 1, 2013.
• The Due From VA column on an AEW shows
• $1,457.00 for the month of August 2013
• $1,481.00 for the month of September 2013, and
• $1,614.00 for the month of October 2013.

Calculations: Following the procedures described in this block, the result of the calculation described in

• Step 1 is $34.00 ($1,491.00 minus $1,457.00)
• Step 2 is $24.00 ($1,481.00 minus $1,457.00)
• Step 3 is $1. 0909 ($24.00 divided by 22 (days))
• Step 4 is $32.73 ($1.0909 multiplied by 30 (days)), and
• Step 5 is $1.27 ($34.00 minus $32.73).

Action: Withhold no benefits for the month of September until September 9, 2013. Effective this date, begin withholding $1.27. Continue the withholding until October 1, 2013.

VI.ii.4.E.1.q. Processing AEWs When VA Withheld Benefits From Either the First Day of the Month to a Later Date Within the Same Month or From a Day Within the Month to the End of the Month

Follow the instructions in the table below to calculate the proper withholding when VA records show VA withheld benefits (to offset the Veteran’s receipt of MRP) from either (but 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.

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Example:

Scenario:

• VA records show
• a cost-of-living adjustment, effective December 1, 2004, with no withholdings
• an adjustment in the Veteran’s award, effective September 26, 2005, with a withholding of $63.00 (to offset the Veteran’s receipt of MRP), and
• a third adjustment, effective October 1, 2005, with a new withholding of $109.00 (to offset the receipt of MRP).
• The Due From VA column on an AEW for the Veteran shows
• $93.00 for the month of October 2005, and
• $10.00 for the month of September 2005.

Calculations: Following the procedures described in this block, the result of the calculation described in

• Step 1 is 2 ($10.00 divided by 5 (days))
• Step 2 is $60.00 (30 (days) multiplied by 2), and
• Step 3 is $3.00 ($63.00 minus $60.00)

VI.ii.4.E.1.r. Processing AEWs When the Veteran Is Eligible for Concurrent Receipt of the Full Amount of Compensation and MRP Based on Length of Service

If the subject of the AEW is eligible for concurrent receipt of the full amount of disability compensation and MRP (based on length of service, not disability), eliminate the entire withholding (that VA established to offset the Veteran’s receipt of MRP) shown in VA records for the month in which VA changed either the gross or net amount of the Veteran’s disability compensation effective a day other than the first day of the month.

A Veteran is eligible for concurrent receipt of the full amount of disability compensation and MRP if one of the three sets of conditions listed in the table below is met.

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Note: Assume a Veteran retired based on length of service (rather than disability) if the

• MILITARY HISTORY segment in the Veterans Information Solution (VIS) displays A, B, or C in the column labeled Ret Type
• DFAS/CG PAYMENTS screen in VIS displays A, B, or C in the column labeled Ret Type Cd, or
• HUNT MBRENT screen in the Retired Casualty Pay Subsystem (RCPS) displays something other than
• no RET LAW field, or
• a RET LAW field that is blank or contains one of the following entries: 1201, 1202, 1204, 1205, or 0000.

References: For more information about using

• RCPS, see the Hunt User’s Guide, and
• VIS, see the VIS User Guide.

VI.ii.4.E.1.s. Notification of Award Adjustments Associated With the Processing of an AEW

After processing an AEW, notify the Veteran (or eligible survivor(s), when processing accrued benefits) who was the subject of the AEW of any associated award adjustments.

Notes:

• Enclose a copy of the AEW with the notice.
• Use of the AEW Assistant to generate the notice is mandatory.

Reference: For more information on accrued benefits, see M21-1, Part XI, Subpart ii, 3.