Poor planning, slow software and cost overruns raise the spectre that the $500 million electronic document system being deployed by the Department of Veterans Affairs will not break the months-long delays to process disability compensation claims, according to a report released today by the agency's Inspector General.

The Veterans Benefits Management System (VBMS) is touted by agency officials as the high-tech cure-all which will allow claims processors to electronically search documents now kept in bulky paper files, thereby cutting the time to process claims.

But the IG found the early phases of the system have been riddled with problems. It took longer to process a claim using VBMS than the VA's old records system, the IG found in its review of the four regional offices where system was deployed under a pilot program.

Frustrated workers in those offices frequently reverted to the old system because they could not get VBMS to work. The system was slow and sometimes inserted errors that were not easily corrected. Ultimately, not a single claim was processed using the VBMS alone.

"Such issues have made the claims process more difficult, rather than improving efficiency as intended," the IG concluded in its review of the early deployment of VBMS.

"Although increased timeliness is critical to reduce the backlog of pending claims, ultimately the issues identified have added to instead of reducing delays in claims processing, which consequently adversely affects veterans awaiting disability awards."

There are almost 900,000 disability and pension claims awaiting an initial rating in the VA's 57 regional offices. More than 70 percent of them have lingered longer than 125 days, the arbitrary date at which the agency considers them backlogged.

It takes about nine months, on average, for VA to rate a claim filed by a veteran seeking payments for service-connected disabilities. At 11 VA offices, it takes longer than a year.

The VBMS is the lynchpin of VA Secretary Eric Shinseki's directive that all disability and pension claims will receive an initial rating within 125 days with 98 percent accuracy by 2015.

Rather than searching paper folders for relevant documents, claims raters will be able to instantly search a veteran's records for needed information, according to VA.

The IG noted that since VBMS is being put in place incrementally, it is too early to judge whether the system will work. Among the glitches found in the four offices that were the first to start using the system:

• Agency raters were unable to create a new claim, forcing them to use the existing system to even begin processing a file. It took about four minutes to create a claim file in the old system, 18 minutes in VBMS.

• Poor organization of electronic records forced workers to spend hours searching files to find the documents they needed.

• Slow processing and limited memory caused long delays in opening documents, sometimes taking three or four minutes to open a single record.

The IG also slammed the agency for proceeding with document scanning without a clear plan. In May 2010, VA entered into an agreement with the National Archives to begin scanning records, which will cost about $27 million through the current fiscal year.

Boxes of claims files were shipped to the archives without clear direction as to how they should be organized. As a result, agency employees and organizations assisting veterans had to wade through hundreds of pages of electronic documents, sometimes for hours, to find the information they needed, the IG said.

In July 2012, VA contracted with two private vendors to scan documents at a cost of $337 million, about $17 million more than initially reported to the IG.

VA officials say VBMS will be in all regional offices by the end of the year.

Mark Flatten is a member of The Washington Examiner's Watchdog investigative reporting team.