DEPARTMENT OF TRANSPORTATION 

BOARD FOR CORRECTION OF MILITARY RECORDS 

 
Application for the Correction of 
the Coast Guard Record of: 
 
                                                                                BCMR Docket No. 1999-028 
 
 
   

 

 
 

FINAL DECISION 

 
ANDREWS, Attorney-Advisor: 
 
 
This  proceeding  was  conducted  according  to  the  provisions  of  section 
1552 of title 10 and section 425 of title 14 of the United States Code.  It was com-
menced  on  November  25,  1998,  upon  the  BCMR’s  receipt  of  the  applicant’s 
application. 
 
 
appointed members who were designated to serve as the Board in this case. 
 

This  final  decision,  dated  August  19,  1999,  is  signed  by  the  three  duly 

RELIEF REQUESTED 

 
 
The applicant, a xxxxxxxxxxxxx on active duty in the Coast Guard, asked 
the  Board  to  correct  his  records  to  make  him  eligible  for  educational  benefits 
under the Montgomery GI Bill (MGIB).1  
 

APPLICANT’S ALLEGATIONS 

 
 
The  applicant  alleged  that  on  September  10,  1996,  he  timely  applied  to 
restart his account under the Veterans Educational Assistance Program (VEAP)2 
by signing an Allotment Worksheet so that the account could be converted to an 

                                                 
1   38 U.S.C. § 3001. 
2      38  U.S.C.  § 3201.    Money  deposited  in  a  VEAP  account  is  matched  two  to  one  by  the 
government, whereas funds deposited in an MGIB account are matched approximately twelve to 
one.    In  addition,  almost  twice  as  much  money  can  be  withdrawn  each  month  from  an  MGIB 
account for educational costs. 

MGIB account under the Veterans’ Benefits Improvement Act of 1996 (VBI Act).3  
However,  he  alleged  that  the  Coast  Guard  delayed  processing  his  paperwork 
until after the statutory deadline for conversion, October 9, 1996. He alleged that 
other members who applied at the same time as he in September 1996 were not 
denied MGIB benefits because the Coast Guard processed their paperwork in a 
timely  manner.    Moreover,  he  was  wrongly  counseled  that  his  ineligibility  for 
conversion to MGIB was due to the fact that there was no money in his VEAP 
account on October 9, 1996.   
 
 
The applicant alleged that in September 1997, he learned that he should 
have been eligible for the MGIB conversion because he had signed his Allotment 
Worksheet to reopen his VEAP account prior to October 9, 1996.  Therefore, he 
reapplied,  but  was  unjustly  denied  educational  benefits  by  the  Department  of 
Veterans Affairs (DVA) because the Coast Guard had not reopened his account 
the first time he applied, in September 1996.  The applicant provided copies of 
electronic  communications  concerning  his  application  to  restart  his  VEAP 
account to support his allegations concerning the delay. 
 

SUMMARY OF THE RECORD 

 
 
The  applicant  enlisted  in  the  Coast  Guard  on  November  17,  19xx,  after 
having served several years in the Marine Corps and the Marine Corps Reserve.  
A copy of a DVA Chapter 32 Participant Account Summary indicates that, while 
serving in the Marine Corps, the applicant participated in VEAP, but he was per-
mitted to withdraw his money in September 1981 due to hardship. 
 
 
On September 28, 1996, Congress passed the VBI Act.  Under that Act and 
ALDIST 001/97, members who were enrolled or re-enrolled in VEAP not longer 
than  October  9,  1996,  could  have  their  VEAP  accounts  converted  to  MGIB 
accounts if they applied for conversion by October 9, 1997.  
 
 
On September 10, 1996, the applicant signed an Allotment Worksheet to 
restart  his  VEAP  account  by  depositing  $50.    His  request  was  emailed  to  his 
PERSRU (unit personnel office) on September 12, 1996.  On September 17, 1996, 
the  PERSRU  forwarded  it  to  the  Coast  Guard’s  Human  Resources  Service  & 
Information  Center,  which  denied  his  request  on  September  24,  1996.    His 
request  was  denied  because  they  did  not  find  a  record  for  his  participation  in 
VEAP since his participation in VEAP had occurred when he was in the Marine 
Corps  rather  than  the  Coast  Guard.    The  applicant  was  stationed  in  xxxx  and 
received the denial on September 26, 1996.  On that day, he contacted the DVA 
for  proof  of  his  participation  in  VEAP  during  his  service  in  the  Marine  Corps.  
                                                 
3  38 U.S.C. § 3018C. 

The  DVA  provided  that  proof  on  September  30,  1996.    He  immediately  for-
warded  it  to  his  PERSRU.    The  applicant’s  PERSRU  signed  an  affidavit  to  the 
effect that the applicant had applied to reopen his VEAP account prior to Octo-
ber 9, 1996, and should therefore be eligible to enroll in MGIB. 
 
 
On October 30, 1996, the applicant signed an Allotment Worksheet to have 
his VEAP account converted to an MGIB account under the VBI Act.   The chief 
yeoman  of  his  unit  forwarded  the  Allotment  Worksheet  to  the  PERSRU.    In 
response, the chief yeoman received the following message: 
 

Chief, appreciate your proactiveness on this, but we need to ask you to 
hold  these  types  of  requests  for  the  time being.  …   HQ …  is  attending 
meetings with DOD and the VA to iron out the specifics of the new leg-
islation, and develop policy and procedures.  There are still several unan-
swered questions … .  Anyway, we need to wait until we get a promulga-
ting ALDIST and a VA Program Infrastructure set up before we can begin 
enrollments in this new program. 

 
 
On September 23, 1997, the applicant reapplied to have his VEAP account 
reopened because, for reasons not apparent in the record, the Allotment Work-
sheet he signed on September 10, 1996, had never been processed.  On October 6, 
1997, the applicant was informed that his VEAP account had been reopened. 
 
 
On October 7, 1997, the applicant applied to have his VEAP account con-
verted to an MGIB account.  His application was rejected on October 21, 1997, 
because his VEAP account had not been reopened prior to October 9, 1996. 
 

VIEWS OF THE COAST GUARD 

 
 
On July 22, 1999, the Chief Counsel of the Coast Guard recommended that 
the  applicant’s  request  for  relief  be  dismissed  “without  prejudice  for  lack  of 
jurisdiction and because effective relief cannot be granted by the BCMR.” 
 
 
The Chief Counsel stated that the applicant’s request was similar to those 
of several other BCMR applicants who had alleged that “the Coast Guard failed 
to take timely action on an allotment request to redeposit VEAP funds prior to 
the cut-off date of 9 October 1996.”  The Chief Counsel admitted that the allega-
tions  had  merit  but  argued  that  the  Coast  Guard  and  the  BCMR  are  “without 
authority to effect the relief requested because the critical record, the member’s 
VEAP account, is not administered by the Coast Guard, but by the Department 
of Veterans Affairs (DVA).”  He cited 38 U.S.C. § 501(a) and 38 C.F.R. § 21.5001 as 
the basis for this position.  He stated that it is “beyond the jurisdiction of both the 
Coast Guard and the Board to ‘correct’ this account so as to make applicant eligi-
ble for the MGIB conversion.”  The Chief Counsel further argued that “even if 

the  Board  had  the  authority  to  change  his  VEAP  account,  the  Board  lacks 
authority  to  allow  Applicant  to  participate  in  a  program  which  has  statutorily 
expired, and is administered by the DVA.” 
 
 
The Chief Counsel  stated that other Coast Guard members in the appli-
cant’s position had been granted relief by the DVA.  Therefore, he recommended 
that the Board include the following finding in its Final Decision in this case: 
 

The  Coast  Guard  failed  to  timely  process  the  Applicant’s  initial  pay 
deduction  into  the  Department  of  Veterans  Affairs  VEAP  account  fund 
prior to October 9, 1996.  This error was solely the result of an adminis-
trative error on the part of the Coast Guard and was not due to any error 
on the part of the Applicant.  The Applicant should be directed to apply 
to the DVA for MGIB education benefits and if denied, Applicant should 
petition the Secretary of the Department of Veterans Affairs (DVA Office 
of  General  Counsel,  202-273-6438)  for  equitable relief  under  38 U.S.C.  § 
503(a) and should present this decision, in part, as evidence of adminis-
trative error on the part of the Coast Guard. 

 
 
The Chief Counsel also appended to his advisory opinion a letter, dated 
February 18, 1998, from the Acting General Counsel of the DVA answering the 
inquiry by the Chief of the Coast Guard’s Office of General Law.  The letter states 
the following: 
 

Although the individuals [whose allotments were not timely processed] 
do not appear to meet the requirements of [38 U.S.C. § 3018C], based on 
your description, they, nevertheless, may be able to obtain relief as fur-
ther explained below. …  At issue here is the meaning of the term “par-

 
 
The  Chief  Counsel  appended  to  his  advisory  opinion  a  memorandum 
dated January 8, 1998, from the Chief of the Coast Guard Office of General Law 
to the Master Chief Petty Officer of the Coast Guard.  The memorandum includes 
the following statements: 
 

[The DVA] General Counsel has determined that service members who 
have  had  a  VEAP  account, but have  withdrawn  all  their funds,  are not 
participants in the VEAP. …  The Coast Guard determined that members 
who did not have a valid allotment in effect on 9 October 1996, providing 
for the deposit of money to their VEAP accounts, did not have money in 
their  VEAP  accounts  on  9  October  1996,  and  therefore,  were  not  VEAP 
participants  on  that  date.  …    [T]his  Office  has  asked  the  VA  General 
Counsel for a ruling on whether allotments that were initiated prior to 9 
October 1996 to deposit money in VEAP accounts, but due to administra-
tive  error  were  not  processed  and  made  effective  until  after  9  October 
1996, constitute participation in the VEAP. … 

ticipant.” … In other words, participation is linked to and manifested by 
contribution to the fund.  A service member does not become a partici-
pant  merely  by  electing  to  participate,  but  only  by  actually  making  a 
monthly  contribution  from  military  pay  …  .    [O]nly  those  who,  at  any 
give point in time, have money on account in the fund are considered by 
VA to be VEAP participants. … 
 
However,  having  reached  that  conclusion,  we  note  that  if  the  affected 
members had made an election to participate under VEAP prior to Octo-
ber 9, 1996, and the Coast Guard failed to timely process the initial pay 
deduction to the VEAP fund, such members may be entitled to equitable 
relief under 38 U.S.C. § 503(a).  That section grants VA’s Secretary discre-
tionary  authority  to  provide  appropriate  relief,  including  granting  the 
benefits sought, if those benefits were not provided because of adminis-
trative  error  on  the  part  of  the  Government  (or  any  employee  thereof).  
Thus,  if  your  members  had  agreed  to  the  requisite  pay  deduction  (in 
accordance with 38 U.S.C. § 3222) within sufficient time for Coast Guard 
staff to have effectuated it prior to October 9, 1996, but the Coast Guard 
failed to act timely, the individual may request that VA consider provid-
ing equitable relief. 

 

APPLICANT’S RESPONSE TO THE VIEWS OF THE COAST GUARD 

 
 
On  July  23,  1999,  the  Chairman  sent  the  applicant  a  copy  of  the  Chief 
Counsel’s  advisory  opinion  and  invited  him  to  respond  within  15  days.    The 
applicant did not respond. 

 
 
On October 9, 1996, the President signed the VBI Act, Public Law 104-275.  
Section 106 of the Act (38 U.S.C. § 3018C) includes the following under the sub-
heading “Opportunity for certain VEAP participants to enroll [in MGIB]”: 
 

 

APPLICABLE LAW 

(a) Notwithstanding any other provision of law, an individual who— 
 

(1) is a participant on the date of the enactment of the [VBI Act] in 
the  educational  benefits  program  provided  by  chapter  32  of  this  title 
[VEAP];  

(2) is serving on active duty … ; … and 
(5)  during  the  one-year  period  beginning  on  the  date  of  the 
enactment of the [VBI Act], makes an irrevocable election to receive bene-
fits under this [MGIB] section in lieu of benefits under chapter 32 of this 
title,  pursuant  to  procedures  which  …  the  Secretary  of  Transportation 
shall provide for such purpose with respect to the Coast Guard … ;  
 
may  elect  to  become  entitled  to  basic  educational  assistance  under  this 
chapter. 

 
 
On  January  3,  1997,  the  Commandant  issued  ALDIST  001/97,  which 
announced the MGIB conversion program and stated that “active duty members 
who signed an Allotment Worksheet … prior to 9 Oct 96, to restart their VEAP 
contribution, will be eligible for this offering.” 
 
 
Title 38 U.S.C. § 501(a) states that “[t]he Secretary [of DVA] has authority 
to prescribe all rules and regulations which are necessary or appropriate to carry 
out the laws administered by the Department and are consistent with those laws, 
including—(1)  regulations  with  respect  to  the  nature  and  extent  of  proof  and 
evidence and the method of taking and furnishing them in order to establish the 
right to benefits under such laws …” 
 
 
Title 38 C.F.R. § 21.5001(a), entitled “Administration of benefits:  38 U.S.C. 
Chapter 32,” states that “Except as otherwise provided, authority is delegated to 
the Under Secretary for Benefits [of DVA] and to supervisory or administrative 
personnel  within  the  jurisdiction  of  the  Education  Service,  Veterans  Benefits 
Administration, designated by him or her to make findings and decisions under 

38 U.S.C. Chapter 32 and applicable regulations, precedents, and instructions, as 
to the program authorized by subpart G of this part.” 
 
Title 38 U.S.C. § 503(a) states, “If the Secretary [of DVA] determines that 
 
benefits administered by the Department have not been provided by reason of 
administrative error on the part of the Federal Government or any of its employ-
ees, the Secretary may provide such relief on account of such error as the Secre-
tary  determines  equitable,  including  the  payment  of  moneys  to  any  person 
whom the Secretary determines is equitably entitled to such moneys.” 
 

FINDINGS AND CONCLUSIONS 

1. 

 
 
The Board makes the following findings and conclusions on the basis of 
the applicant's military record and submissions, the Coast Guard's submissions, 
and applicable law: 
 

The Chief Counsel alleged that the Board has no jurisdiction over 
this case and cannot grant the relief requested by the applicant because the MGIB 
program  is  administered  by  the  DVA.    However,  the  Coast  Guard  clearly  has 
duties with respect to VEAP and MGIB and retains records concerning its mem-
bers’ allotments and participation in those programs.  Under 10 U.S.C. § 1552, the 
Board  is  authorized  to  correct  errors  and  remove  injustices  in  Coast  Guard 
records.    Therefore,  the  Board  has  jurisdiction  over  the  Coast  Guard’s  records 
concerning the applicant’s allotments and participation in VEAP and MGIB.  The 
application was timely. 
 

The applicant timely completed an Allotment Worksheet to reopen 
his VEAP account on September 10, 1996.  The Coast Guard failed to reopen and 
fund his VEAP account in a timely manner.  The applicant completed an Allot-
ment Worksheet to convert his VEAP account to an MGIB account on October 30, 
1996, within the proper statutory period.  The Coast Guard failed to act on this 
request  as  well.    These  administrative  errors  were  caused  solely  by  the  Coast 
Guard and were not due to any mistake or omission on the part of the applicant. 

Had  the  Coast  Guard  processed  the  applicant’s  Allotment  Work-
sheets in a timely manner, he would have been eligible to participate in MGIB, 
pursuant  to  the  Veterans’  Benefits  Improvement  Act  of  1996.    Because  of  the 
Coast  Guard’s  errors, the  applicant  was  unjustly  denied  participation  in  MGIB 
when he applied on October 7, 1997. 

2. 

 
3. 

 
4. 

Therefore,  the  Coast  Guard’s  records  concerning  the  applicant’s 
participation in VEAP and conversion to MGIB should be corrected to reflect his 

 
5. 

timely allotments and participation in these programs.  The Coast Guard should 
inform the DVA of these corrections to the applicant’s records. 

Because the MGIB program is administered by the DVA, the appli-
cant  is  advised  to  petition  the  Secretary of  the  Department  of  Veterans  Affairs 
(DVA  Office  of  General  Counsel,  202-273-6438)  for  equitable  relief  under  38 
U.S.C. § 503(a) with respect to his eligibility for the MGIB program based on a 
corrected record.   
 

6. 

Accordingly, the applicant’s request should be granted.  

 

The  application  for  correction  of  the  military  record  of  XXXXXXXXX, 

ORDER 

 

USCG, is hereby granted. 
 

The  Coast  Guard  shall  correct  its  records  to  reflect  that  the  applicant’s 
Worksheet Allotment dated September 10, 1996, was timely processed and that 
his VEAP account was reopened and funded by his allotment with the minimum 
qualifying sum on September 30, 1996.   

 
The  Coast  Guard  shall  correct  its  records  to  reflect  that  the  applicant’s 
Worksheet Allotment dated October 30, 1996, was processed and that his VEAP 
account  was  thereby  converted  to  an  MGIB  account,  funded  by  his  allotment 
with the minimum qualifying sum, prior to October 9, 1997. 
 
 
The Coast Guard shall advise the DVA that it has corrected the applicant’s 
record in accordance with this order and forward a copy of this final decision to 
the appropriate office at the DVA. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
James K. Augustine 

 
Michael K. Nolan 

 

 
Robert C. Ashby