Inspectors surveying Philadelphia's Veterans Affairs benefits center in June found two stunning signs of disarray: mail bins brimming with claims dating to 2011 and other benefits that had been paid twice.

More alarming, the team from the VA Office of Inspector General found evidence that staff tasked with managing pensions for the eastern United States were manipulating dates to make old claims appear new, according to a report obtained by The Inquirer.

The findings are the first clear evidence that the city's VA system is not immune from controversies that have plagued other centers and sparked a growing scandal over delayed care and services affecting veterans nationwide.

Two whistle-blowers who work at the Philadelphia Veterans Affairs Regional Office, where the offenses were discovered, described the process the same: "cooking the books."

"They're hiding the real numbers from the people and saying, 'We're catching up to the backlog,' " said Ryan Cease, 31, who has worked at the Germantown facility for about five years. "But they're not. They're just hiding it."

The inspector general's review was released by the House Committee on Veterans Affairs ahead of a Monday night hearing in Washington at which it will be presented.

Separate from the ongoing probe into appointment-setting practices at the VA Medical Center in University City, the report focuses on the VA Regional Office on Wissahickon Avenue, which 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 nationwide, that services more than a dozen states and Puerto Rico.

In a statement released jointly, the Philadelphia and national VA offices said they have taken immediate actions to correct the practices in Philadelphia. The national office added that it is conducting on-site reviews at other regional offices where potentially similar issues have been identified.

The Inspector General's Office declined to discuss the review in Philadelphia, saying any public comments will be made at Monday's hearing.

Tip received

The probe at the city's regional office was sparked June 18, when the inspector general received a tip from a whistle-blower, according to the report.

A team visited the site the next day.

There, they found employees were manipulating dates through the misapplication of a May 2013 VA memo that allows claims overlooked in veterans' files to be marked with the date on which they were found, known as the "discovered date."

The clearance - which the VA gave a few months after it laid out an aggressive plan to eliminate its crushing backlog by the end of 2015 - was meant for rare occasions.

But staff at the Philadelphia regional office's Pension Management Center have used the clearance to mark the discovered date on claims that didn't fit the criteria, the inspector general found. The action made claims look as though they were newer than they were, the report said. The inspectors, whose investigation is ongoing, found 30 occurrences on the June visit.

Kristen Ruell, a lawyer and a whistle-blower from the Philadelphia office who is scheduled to testify at Monday's hearing, said the discovered-date loophole is widely used and has been since it was instituted.

She said managers first instructed those processing claims to use the discovered date for claims a year or older. As the 2015 deadline nears, that has changed, and more recently staff members were told to use it on claims as little as six weeks old, she said.

"They basically use this as a free ticket, like the golden ticket, to make their old stuff new," said Ruell, 39, who has worked at the center for about seven years.

When the VA instituted the discovered date in 2013, it said each use had to be accompanied by an explanation and approved by a top administrator, after which notice would be sent to a higher office. In each of the 30 cases found in Philadelphia, explanations were not given. But the center's assistant director still signed off on the change, the report found. Notices were never sent.

In a statement, the VA said the inspector general had discovered "confusion and misapplication" of the policy at the Philadelphia regional office and said that the discovered-date practice has since been suspended nationwide.

Regional offices found to have an unusual number of applications of the policy have been referred to the inspector general for review, and any cases impacted by the lapse will be identified and corrected, the agency said.

Acting VA Secretary Sloan Gibson said any employee found to have "intentionally misused this policy will be held accountable," according to the statement.

Other allegations

The VA Inspector General's Office said its probe also must address other allegations at the Philadelphia regional office. They include:

Staff "cherry picking" easy claims and processing them out of order to inflate performance.

Staff not addressing more than 32,000 electronic inquiries from veterans regarding the status of their claims.

Staff hiding mail.

Staff shredding military and returned mail that couldn't be delivered.

Managers being aware of duplicate payments being made to veterans and directing staff to write off the overpayments.

The agency said the regional office is providing additional guidance and training to address the duplicate payments.

It also said the 68 mail bins of papers dating to 2011 were sorted, and all the documents were found to be associated with completed claims and are now being electronically scanned. The inspector general said the old mail, which included both claims and supporting documents, was of concern because decisions on claims could have been made without all the necessary information.

The VA, in its statement, said the office is also being investigated on allegations that staff members have faced retaliation for speaking with the inspectors.

Ruell said the inspectors visited the site in June after she told a friend and former employee from the center about her concerns, and he notified the inspector general.

It's not the first time Ruell and Cease have gone up against their employer. In 2012, both spoke to the New York Times about finding duplicate records that were leading to duplicate payments.

Ruell said the practice of doctoring claim dates stems from staff being rated on performance through a point system and expected to process claims "perfect and fast."

"It's like a system designed to fail," she said. "So it breeds a lot of issues where people are trying to play tricks to look good for Washington."

As new controversy at the Philadelphia regional office comes to light, details of the ongoing review of the city's VA hospital are still being tightly guarded. The facility, the regional hub for more than 57,000 veterans, and a clinic it runs in Horsham, were flagged to receive added scrutiny in a nationwide VA audit released last month.

That review of 731 sites across the country found some employees have used alternate lists or changed dates to hide delays in service. Administrators at the hospital have said they do not expect willful manipulation of data to be found and suggested faulty bookkeeping might be to blame.