Questions concerning this policy chapter should be directed to:

• Veterans Health Administration
• Veterans Benefits Administration
• National Cemetery Administration
• Debt Management Center
• Financial Services Center
• Construction and Facilities Management
• All others

0601 Overview

This chapter establishes the Department of Veterans Affairs’ (VA) financial policies for the use of the Cost of War Toxic Exposures Fund (TEF).

Key points covered in this chapter:

• Congress established the TEF under the “Sergeant First Class Heath Robinson Honoring our Promise to Address Comprehensive Toxics (PACT) Act of 2022” (PL 117‑168) to fund healthcare, benefits, and related activities for Veterans affected by exposure to environmental hazards such as burn pits and Agent Orange;
• VA will establish a methodology to estimate TEF-related healthcare costs, expenditures, research activities, and administrative expenses;
• VA will document TEF cost estimates used in budget formulation and maintain supporting data sources;
• VA will periodically compare and reconcile estimated TEF costs to actual obligations and expenditures, document reconciliation results, and use the results to refine future budget estimates;
• TEF funds will be used for the delivery of healthcare associated with exposures to environmental hazards, or expenses incident to the delivery of healthcare and benefits associated with exposure to environmental hazards, including administrative expenses, such as information technology and claims processing and appeals, and medical and other research relating to exposure to environmental hazards; and
• VA will comply with all statutory TEF reporting requirements, including reporting to Treasury, OMB, Congress, and other oversight entities, in accordance with federal financial reporting standards.

0602 Revisions

Section	Revision	Office	Reason for Change	Effective Date
0601	Updated Overview to incorporate statutory context, internal controls, reconciliation requirements, governance roles, and reporting responsibilities for improved TEF oversight	OFP	Improve clarity and align the Overview with updated statutory, oversight, and internal control requirements for TEF management	June 2026
0603	Updated definitions to include TEF terms and clarify existing terminology	OFP	To align definitions with updated TEF requirements.	June 2026
0604	Added roles and monitoring responsibilities to oversee TEF expenditure transfers, update cost-estimation methodology, and validate TEF-funded positions	OFP	Align policy with Office of Inspector General (OIG) recommendation	June 2026
Appendix B	Revision simplifies procedures, unifies guidance, and aligns the estimation process with current VHA practices.	VHA	Change ensures greater uniformity, removes redundant instructions, and aligns the appendix with current VHA practices.	June 2026
Appendix C	Revision simplifies procedures, unifies guidance, and aligns the estimation process with current VBA practices.	VBA	Change ensures greater uniformity, removes redundant instructions, and aligns the appendix with current VBA practices.	June 2026
Appendix D	Revision simplifies procedures, unifies guidance, and aligns the estimation process with current OIT practices.	OIT	Change ensures greater uniformity, removes redundant instructions, and aligns the appendix with current OIT practices.	June 2026
Appendix E	Revision simplifies procedures, unifies guidance, and aligns the estimation process with current OGC practices.	OGC	Change ensures greater uniformity, removes redundant instructions, and aligns the appendix with current OGC practices.	June 2026
Appendix F	Revision simplifies procedures, unifies guidance, and aligns the estimation process with current ORD practices.	ORD	Change ensures greater uniformity, removes redundant instructions, and aligns the appendix with current ORD practices.	June 2026
Appendix G	Revision simplifies procedures, unifies guidance, and aligns the estimation process with current HRA practices.	HRA	Change ensures greater uniformity, removes redundant instructions, and aligns the appendix with current HRA practices.	June 2026

For a complete list of previous policy revisions, see Appendix A: Previous Policy Revisions.

0603 Definitions

Appropriated Entitlements – An entitlement whose source of funding is in an annual appropriation act. However, because the entitlement is created by operation of law, if Congress does not appropriate the money necessary to fund the payments, eligible recipients may have legal recourse. Veterans’ compensation and Medicaid are examples of such appropriated entitlements.

Budget Execution – the process of implementing, expending, monitoring, adjusting, and reporting on the current year’s budget for which funds were appropriated.

Budget Scorekeeping – The process of developing and recording measures of the budgetary effects of proposed and enacted legislation, including changes in Federal spending, revenues, and deficits.

Environmental Health Hazard – As defined by the Centers for Disease Control, a substance that has the ability to cause an adverse health event. This includes physical, chemical, and biological factors that are external to a person. Hazards can be natural or human-made.

Healthcare associated with exposure to environmental hazards – VA and/or Community Care provided for a disability or disease that, in accordance with guidelines issued by the Under Secretary for Health, is determined to have resulted from exposure to environmental hazards (38 U.S.C. § 1710(e)(2)) and is eligible for funding through the Toxic Exposures Fund.

Incidental costs – Expenses incurred as a result of delivering healthcare and benefits that are “secondary to” or “occurring in conjunction with” the delivery of toxic exposure-related healthcare and benefits.

Presumptive List – The list of substances, chemicals, and airborne hazards established and maintained by the Secretary of VA, in collaboration with the Secretary of Defense, that identifies specific toxic exposure conditions presumed for any covered veteran.

Priority Group – VA assignment upon Veterans’ enrollment for VA healthcare in general. Veterans meeting the requirement for more than one priority group will be placed in the highest priority group for which eligible. Veterans placed in priority group 6 are also placed in priority group 7 or priority group 8, as applicable, if the Veteran has previously agreed to pay the applicable copayment for all matters not covered by priority group 6. The enrollment priority group assigned will determine the Veterans’ responsibility for copayments and could determine access to care.

Service Connection – Established when a Veteran’s disability or death was incurred during or aggravated by his or her military service. 38 U.S.C. § 101(16).

Toxic Exposure – Includes the following:

• A toxic exposure risk activity; or
• An exposure to a substance, chemical, or airborne hazard identified in the list under 38 U.S.C. § 1119(b)(2).

Toxic Exposure Risk Activity – Any activity that:

• Requires a corresponding entry in an exposure tracking record system (as defined in 38 U.S.C. § 1119(c)) for the Veteran who carried out the activity; or
• The Secretary of VA determines qualifies when taking into account what is reasonably prudent to protect the health of Veterans (38 U.S.C. § 1710 (e)(4)(C).

Veterans Health Administration (VHA) Priority Group 6 – The Priority Group (at a minimum) in which toxic-exposed Veterans are placed within VHA (38 U.S.C. § 1705(a)(6); 38 U.S.C. § 1710(a)(2)(F); (38 C.F.R. § 17.36). See VA Priority Groups for factors used to assign a Priority Group 6 designation.

0604 Roles and Responsibilities

Secretary of Veterans Affairs (SECVA) is responsible for

• The content of all budget requests made by VA;
• Establishing, maintaining, and communicating to congress a list of presumptive toxic exposures (substance, chemical, or airborne hazard) as required by 38 U.S.C. § 1119(b)(2) in collaboration with the Secretary of Defense; and
• Determining whether to establish an end date for a covered veteran to qualify for presumptions of exposure.

Administration/Staff Office CFOs, and Fiscal Officers are responsible for compiling annual TEF spend data and collaborating with the Office of Budget to develop each year’s budget estimate, monitoring and approving all TEF expenditure transfers to ensure compliance with applicable statutes and internal VA policies and partnering with the Office of Human Capital Services to verify and accurately code the number of TEF supported personnel in HRSmart.

Human Resources and Administrations (HRA) areresponsible for tracking positions that are established in support of the PACT Act. HRA is responsible for ensuring that HRSmart has the correct cost centers and organization structure at the time of hiring. This information may be obtained and verified by the staff office and Office of Budget prior to hiring or transferring Full-time Employee Equivalent (FTEE).

Office of Management (OM) is responsible for the overall VA spend governance process. OM is responsible for hosting the monthly budget reviews for spend plan oversight and fund execution.

Investment Review Council is responsible for the monthly budget review of the spend plan and fund execution.

Office of Budget (OB) is responsible for:

• Providing guidance and coordinating with the Administrations and Staff Offices on matters relating to the formulation and execution of the Department’s TEF Budget;
• Coordinating and consolidating TEF spend data with the Administrations and Staff Offices; and
• Enforcing VA’s TEF Funds Control policy by confirming the entries made by the FSC align with the ACS and authorizing documents.

Office of General Counsel (OGC) is responsible for providing legal advice and opinions on the PACT Act.

0605 Policies

060501 TEF Establishment

1. VA will request Toxic Exposure Fund (TEF) appropriations to pay for costs associated with providing healthcare and benefits to Veterans exposed to environmental hazards as required by the PACT Act.
2. VA will only use TEF funds for the delivery of healthcare and benefits that are associated with exposure to environmental hazards. Using TEF funds for any other purpose would violate the Purpose Statute (31 U.S.C. § 1301(a)) and could result in an Antideficiency Act (ADA) violation (31 U.S.C. §§1341(a),1342, or 1517(a)).
3. In accordance with 38 U.S.C. § 1710(e)(2)(B), Medical care provided to a veteran may be subject to a copayment if medical evidence demonstrates that the condition resulted from a cause completely unrelated to their qualifying exposure.

060502 Budget Authority

1. In accordance with 38 U.S.C. § 324(e), the Secretary will provide detailed estimates of the funding required for TEF as part of the President’s budget request submitted under 31 U.S.C. § 1105.
2. No amount appropriated to TEF in FY 2023 or any subsequent fiscal year shall be counted as discretionary budget authority, discretionary outlays, or direct spending for purposes of any estimate under the Congressional Budget and Impoundment Control Act of 1974 (2 U.S.C. § 621 et seq.) or any other Act.
3. Notwithstanding the Budget Scorekeeping Guidelines and the program list in the Joint Explanatory Statement accompanying Conference Report 105–217, TEF shall be treated, for purposes of the Balanced Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. § 900 et seq.) and the Congressional Budget Act of 1974 (2 U.S.C. § 621 et seq.), as an account designated  ‘Appropriated Entitlements and Mandatories for Fiscal Year 1997’ in that same Joint Explanatory Statement.  
4. TEF funds obligated under interagency agreements (e.g., the interagency toxic exposure research workgroup) must comply with the requirements in Volume IX Chapter 7- Buy/Sell Transactions (G-Invoicing)

060503 Estimates for Congressional Consideration

1. In accordance with 38 U.S.C. § 324(f), VA will establish policies and procedures for developing annual TEF estimates. Because TEF activities vary across VA, each Administration and Staff Office will develop procedures specific to their cost estimation processes. Estimation methodologies are detailed in:
   • Appendix B – VHA’s TEF estimation methodology;
   • Appendix C – VBA’s TEF estimation methodology;
   • Appendix D – OIT’s TEF estimation methodology;
   • Appendix E – OGC’s TEF estimation methodology;
   • Appendix F – ORD’s TEF estimation methodology; and
   • Appendix G – HRA’s TEF estimation methodology.
2. VA may use TEF funds for anticipated expenses when an Administration or Staff Office demonstrates that the expenses are necessary to deliver healthcare and/or benefits associated with exposure to environmental hazards. TEF funds may not be used for any activities that do not fall within one of the three statutory categories in 38 U.S.C. § 324(c): delivery of toxic‑exposure‑related healthcare, expenses incident to delivering such care and benefits (including administrative support), or medical and other research related to environmental hazards.
3. In accordance with 38 U.S.C. § 324(c), TEF funds may be used for incidental costs that support VA’s delivery of healthcare and benefits associated with in-service environmental exposures when the costs are demonstrably estimable and reconcilable. Specifically, TEF funds may be used to fund a pro rata share of an expense if an Administration or Staff Office is able to:
   • Reasonably estimate the portion attributable to environmental hazards exposure work;
   • Track the actual environmental hazards exposure related workload; and
   • Reconcile estimated and actual workload and adjust accounts accordingly using  an “estimate, track, and reconcile” process.

060504 Budget Execution Implementing/Allocating Costs

1. VA’s budget execution will align with all relevant laws, regulations, and policies governing fund management, procurement, and Federal accounting.
2. Oversight and control of appropriations will be executed in accordance with Volume II, Chapter 1 – Appropriations Law.
3. Administrations and Staff Offices will review TEF obligations in accordance with Volume III, Chapter 2 – Obligations, to ensure that recorded amounts are accurate, valid, and properly supported.
4. Administrations and Staff Offices will use a similar methodology to the one they used for estimating the budget when determining total allowable costs chargeable to TEF during the budget execution process. When allocating allowable costs, the Administrations and Staff Offices will apply actual amounts incurred for obligations, workload, patients, contracts, etc. in place of the estimates. 
5. In accordance with 31 U.S.C. § 1341, VA will not obligate or expend TEF funds before an appropriation is available.
6. VA will establish and maintain controls within VA’s accounting system to limit the ability to obligate or expend funds in excess of available amounts or statutory limitations. Refer to Volume II, Chapter 3 – VA Funds Control.
7. Administration and Staff Office CFOs or CFO equivalents will monitor TEF execution to ensure spending is on track with estimated amounts. Administration and Staff Office CFOs or CFO equivalents will make adjustments if spending is significantly higher or lower than expected. OM will monitor spending as part of the monthly budget execution reviews.
8. Administrations and Staff Offices will analyze execution data to determine the need for transfers of resources to properly align program requirements and resources in accordance with changes in timing, program emphasis, pricing, or other determinants.

060505 Tracking/Monitoring/Reconciling Toxic Exposures Fund

1. Administrations and Staff Offices will track all TEF obligations and expenses using the appropriate fund codes for both VA funded TEF costs and reimbursable activities.
2. Administrations and Staff Offices will periodically (e.g., monthly or quarterly) perform a reconciliation to confirm that TEF expenses are allowable per PACT Act restrictions. If transactions are not allowable or allocations were not accurate, Administrations and Staff Offices will perform cost transfers to move expenses to the appropriate funding source.

060506 Reporting

1. Administrations and Staff Offices will report any findings or concerns (i.e., violations of policy, lack of internal control, budget plan, or execution issues) as a result of their internal reviews to their Administration or Staff Office CFO’s or CFO equivalents. Administration and Staff Office CFOs will notify the VA CFO of any significant findings or concerns, as well as the corrective actions being taken to resolve the issue.
2. Findings will be incorporated into subsequent estimation cycles to ensure continuous improvement.
3. Administrations and Staff Offices CFOs will report financial or operational risks identified with TEF funded activities to the VA CFO.

0606 Authorities and References

• Consolidated Appropriations Act of 2023
• Consolidated Appropriations Act of 2024
• Full-Year Continuing Appropriations and Extensions Act, 2025
• Sergeant First Class Heath Robinson Honoring our Promise to Address Comprehensive Toxics Act of 2022, PL 117-168, PACT Act
• United States Code (U.S.C.)
  • 2 U.S.C. § 621, Congressional Declaration of Purpose
  • 2 U.S.C. § 639, Reports, Summaries, and Projections of Congressional Budget Actions
  • 2 U.S.C. § 900, Statement of Budget Enforcement Through Sequestration; Definitions
  • 2 U.S.C. § 907, The Baseline
  • 2 U.S.C. § 931, Purpose
  • 31 U.S.C. Chapter 13 Appropriations
  • 31 U.S.C. § 1105, Budget Contents and Submission to Congress
  • 31 U.S.C. § 1301, Appropriations, Application
  • 31 U.S.C. § 1341, Limitations on Expending and Obligating Amounts
  • 31 U.S.C. § 1342, Limitations on Voluntary Services
  • 31 U.S.C. § 1517(a), Prohibited Obligations and Expenditures
  • 38 U.S.C. §§ 1171-1176, Determinations Relating to Presumptions of Service Connection Based on Toxic Exposure
  • 38 U.S.C. § 324 Cost of War Toxic Exposures Fund
  • 38 U.S.C. § 1119, Presumptions of toxic exposure
  • 38 U.S.C. § 1705, Management of Healthcare: Patient Enrollment System
  • 38 U.S.C. § 1710, Eligibility for Hospital, Nursing Home, and Domiciliary Care
• Code of Federal Regulations (C.F.R.)
  • 38 C.F.R. § 17.36, Enrollment – Provision of Hospital and Outpatient Care to Veterans
  • 38 C.F.R. § 17.400, Hospital Care and Medical Services for Camp Lejeune Veterans
• OMB Circular A-11, Preparation, Submission and Execution of the Budget 
• GAO Cost Estimating and Assessment Guide
• VA Priority Groups
• VA Financial Policy Publications
  • Volume II, Chapter 1 – Appropriations Law
  • Volume II, Chapter 3 – VA Funds Control
  • Volume III, Chapter 2 – Obligations
  • Volume IX, Chapter 3 – Reclassifications
  • Volume IX, Chapter 7 – Buy/Sell Transactions (G-Invoicing)

0607 Rescissions

Volume XI, Chapter 6 – Toxic Exposures Fund, January 2026

Appendix A: Previous Policy Revisions

Section	Revision	Office	Reason for Change	Effective Date
Appendix D	Veterans Benefits Administration (VBA) Budget Execution standard operating procedures (SOPs) documented in policy appendix	VBA	Office of Inspector General (OIG) audit finding	January 2026
Appendix F	Removed Appendix F: GenAd TEF Estimation Methodology	OFP	GenAd does not use indirect costing for any TEF purposes	January 2026
Appendix G	Office of General Council (OGC) Budget Execution SOPs documented in policy appendix	OGC	Office of Inspector General (OIG) audit finding	January 2026
Appendix I	Office of Research and Development (ORD) Budget Execution SOPs documented in policy appendix	ORD	Office of Inspector General (OIG) audit finding	January 2026
Appendix K	Human Resources and Administration (HRA) Budget Execution SOPs documented in policy appendix	HRA	Office of Inspector General (OIG) audit finding	January 2026
Various	Removed combined office designation HRA/OSP to HRA only	OFP	SECVA Memo of 9/16/25 partitioning OSP to a standalone entity	January 2026
0603	Update to Definitions to include Budget Execution	OFP	Policy updated to include overarching budget execution expectations	November 2025
0605	Removed previous 060504 Tracking Pact Act Toxic Exposures Fund to expand to Budget Execution tasks including Implementing, Allocating, Tracking, Monitoring, Reconciling, and Reporting of Toxic Exposures funds	OFP	Ensure accountability, consistency, compliance, and transparency of TEF Funds	November 2025
Appendix P	Human Resources Administration/Office of Operations, Security and Preparedness (HRA/OSP) TEF Methodology	OFP	HRA/OSP methodology for estimating TEF application	April 2025
Appendix N	Office of Research and Development (ORD) TEF Methodology	OFP	ORD methodology for estimating TEF application	June 2024
Appendix A	Moved all previous revisions to Appendix A	OFP	Standard policy formatting	May 2024
Appendix L	Office of General Counsel (OGC) TEF Methodology	OFP	OGC methodology for estimating TEF application	May 2024
Appendix I	GenAd Funded Staff Offices Methodology for Administrative Costs for Use of the Toxic Exposures Fund	OFP	GenAd methodology for estimating TEF application	April 2024
Appendix G	Office of Enterprise Integration (OEI) TEF Methodology	OFP	OEI methodology for estimating TEF application	March 2024
Appendix E	Office of Information and Technology (OIT) TEF Methodology	OFP	OIT methodology for estimating TEF application	February 2024
1203	Updated definitions	OFP	OGC clarification of expenses ‘incidental to’ for allowable use of TEF funds	December 2023
1205	Detailed allowable use of TEF funds	OFP	Detailed use of funds for OI&T expenses	December 2023
1205	Detailed allowable use of incidental TEF funds	OFP	OGC determination for incidental expenses incurred as part of Toxic Exposure care	December 2023
Appendix C	VBA TEF Methodology	OFP	VBA methodology for estimating TEF application	December 2023
Appendix E	Added Memo for Initial House and Senate Approved TEF Spend Plan	OFP	Leaderships expectations for Estimating, Tracking, and Reconciling TEF funds	December 2023
New Policy	Establish policy for TEF appropriation, estimation procedures, and authorized use of funds	OFP	PACT Act of 2022	July 2023

Appendix B: VHA TEF Estimation Methodology

Estimation Overview

VHA estimates TEF‑eligible healthcare costs using a methodology that defines (1) what is being estimated, (2) why this approach is appropriate for TEF purposes, (3) how the estimate is calculated, and (4) what data sources and assumptions inform the estimate.

What Is Being Estimated

VHA estimates the total cost of healthcare associated with exposure to environmental hazards.

Why This Approach Is Appropriate

This method aligns with 38 U.S.C. § 324(c)(1) and uses an empirical proxy (care without copayment) that reflects environmental hazard–related care delivered to Veterans.

How the Estimate Is Calculated

1. Annually, VHA will estimate the portion of healthcare costs attributable to care associated with exposure to environmental hazards.
2. VHA reviewed a sample of Priority Group (PG) 6 Veterans receiving care in FY 2021 to determine the proportion of total healthcare costs that were not subject to VA copayment liability. The proportion of care provided to PG 6 Veterans without copayment liability serves as the proxy for exposure‑related care because most PG 6 Veterans qualify due to environmental exposure.
3. This approach aligns with VA’s interpretation that “healthcare associated with exposure to environmental hazards” refers to care that VA cannot determine, under guidelines issued by the Under Secretary for Health, to have resulted from a cause other than the service, testing, or activity that resulted in the exposure to environmental hazards.
4. Based on the FY 2021 PG 6 sample, VHA determined that 84 percent of healthcare costs were provided without copayment liability. This percentage (hereafter referred to as the Care without Copayment proxy) provides a reasonable estimation for the proportion of care associated with environmental hazards.
5. To project healthcare costs in future years for healthcare associated with exposure to environmental hazards, VHA will take the following steps.
   1. VHA will use projections from the most recent Enrollee Healthcare Projection Model (EHCPM) scenario for three Veteran cohorts: Post‑9/11, Gulf War, and Vietnam-era Veterans. These cohorts represent the maximum population potentially exposed to environmental hazards during military service.
   2. VHA will apply the proportion of Care without Copayment (84%) to the projected healthcare costs for these cohorts.
   3. VHA will apply a lease cost reduction factor to remove non‑TEF‑fundable facility lease costs included in the EHCPM projections. This discount factor will be based on the most recent year of actual lease execution.
   4. The result of this calculation is the maximum estimated obligations level for healthcare associated with exposure to environmental hazards.
6. Using these steps and the EHCPM scenario BAB1 (base year FY 2021), VHA calculated the FY 2021 baseline obligations for exposure‑associated healthcare at $41.068 billion.
7. VHA will subtract the FY 2021 baseline from future year projections to determine the increase over the FY 2021 level for the obligations associated with exposure-related healthcare. However, the upper limit of TEF-allowable obligations for each fiscal year is established as described in E.4.
8. The Care without Copayment proxy cannot be recalculated after FY 2021 due to PACT Act implementation, which moved many Veterans out of PG 6. As a result, FY 2021 remains the only year for which the proxy can be derived using PG 6 data.

Data Sources and Assumptions
• FY 2021 Priority Group 6 sample
• EHCPM BAB1 scenario
• Care without Copayment proxy (84%)
• Annual lease‑discount factor

The first three items represent fixed data sources as they reflect information captured at a defined point in time. The annual lease discount factor will be reviewed each year to ensure it remains accurate, supportable, and fully auditable.

Appendix C: VBA TEF Estimation Methodology

Estimation Overview

VBA estimates TEF‑eligible workload and associated cost attribution using a methodology that defines (1) what is being estimated, (2) why this approach is appropriate, (3) how the estimate is calculated, and (4) what data sources and assumptions inform the estimate.

What Is Being Estimated

VBA estimates the TEF share of workload and staffing aligned with toxic‑exposure‑related benefits activity.

Why This Approach Is Appropriate

TEF eligibility for VBA is workload‑based under 38 U.S.C. § 324(c)(2), making a Veteran‑population share method appropriate for allocating costs.

How the Estimate Is Calculated

1. VBA will identify the number of Veterans receiving disability compensation with at least one toxic exposure rated issue and compare that to the total number of Veterans receiving compensation to derive a percentage of Veterans that are toxically exposed (herein referred to as TEF Veteran population share).
2. VBA Staff
   1. The number of Direct Service FTE attributable to TEF will be calculated using the TEF Veteran population share, defined as the percentage of the disability compensation population with at least one TEF‑rated condition. In FY2026, the TEF workload share is 35%.
   2. This methodology ensures that TEF funds only the proportion of VBA staffing that is aligned with TEF‑related Direct Service workload, preventing over‑ or under‑allocation and ensuring consistency across business lines.
   3. The VBA staff proxy ratio and the TEF Veteran population share will be evaluated annually to confirm that they remain accurate and reflective of operational conditions. Any material adjustments will be documented, including data sources and justification.
3. Cost Allocation
   VBA will apply a proportion up to the percentage that reflects VBA’s applicable TEF Veteran population share to salary, benefits, and non-pay expenses, which include the following:
   1. Training Costs for VBA Claims Processors and National Call Center (NCC) Personnel, including salary, benefits, and non-pay expenses associated with onboarding and training claims processors.
   2. VBA Claims Processing and National Contact Center Staff.
   3. Non-pay Toxic Exposure-Related Costs, including contracts, travel, scanning, automation, and training.
   4. Outreach Toxic Exposure-Related Costs, including contracts, travel, and any other specific costs explicitly attributable to implementing and managing toxic exposure-related benefits efforts.

Data Sources and Assumptions

• VBA compensation rolls
• Toxic‑exposure‑rated disability data
• Annual FTE and staffing baselines
• TEF Veteran population share (updated annually)

Data sources and assumptions will be reviewed annually for accuracy and auditability.

Appendix D: OIT TEF Estimation Methodology

Estimation Overview

OIT estimates TEF‑eligible IT costs using a methodology that defines (1) what is being estimated, (2) why this approach is appropriate, (3) how the estimate is calculated, and (4) what data sources and assumptions are used.

What Is Being Estimated

OIT estimates TEF‑eligible IT solutions and allocable shared IT costs.

Why This Approach Is Appropriate

38 U.S.C. § 324(c)(2) allows TEF to pay for administrative expenses (including IT) that directly support toxic‑exposure‑related healthcare or benefits.

How the Estimate Is Calculated

1. Annually, the Office of Information and Technology (OIT) will estimate TEF‑eligible information technology (IT) costs that support the delivery of healthcare and benefits to Veterans exposed to environmental hazards.
2. OIT maintains the OIT TEF Solution List, approved annually by the OIT Chief Financial Officer (CFO). This list identifies IT solutions with documented TEF nexus and includes a nexus statement for each solution that explains the IT function supporting toxic exposure healthcare or benefits.
3. New TEF‑eligible solutions may be identified at any point in the fiscal year.
   1. A solution becomes eligible for TEF obligations once it is added to the OIT TEF Solution List and incorporated into the fiscal year Operating Plan.
   2. The OIT TEF Solution List is available for audit upon request. All solutions on the list are fully funded from TEF.
4. In addition to the TEF-eligible solutions identified above, OIT will fund an allocable percentage of certain shared enterprise IT costs that support TEF-funded work across VA. The principal allocable cost categories include:
   1. Enterprise licenses;
   2. End-user devices;
   3. Technology Acquisition Center (TAC) fees; and
   4. Other allocable cost types may be added when they meet the three-condition test in Section 060503.C of this chapter.
5. Allocable percentages are determined as follows:
   1. For enterprise licenses and end-user devices, OIT will apply the percentage of TEF-funded VA users served using the TEF workload percentages published in Administration and Staff Office methodologies (e.g., Appendix B for VHA, Appendix C for VBA).
   2. For TAC fees, OIT will apply the percentage of total OIT acquisition workload attributable to TEF‑funded contracting actions.
6. OIT will reconfirm and validate the TEF nexus for each solution on the OIT TEF Solution List annually as part of the budget formulation process.

Data Sources and Assumptions

• OIT TEF Solution List
• VA user counts and system access data
• TAC acquisition workload data
• Administration‑provided TEF workload percentages

All data sources and assumptions are updated annually and subject to audit.

Appendix E:  OGC TEF Estimation Methodology

Estimation Overview

OGC estimates TEF‑eligible legal workload using a methodology that defines (1) what is being estimated, (2) why the approach is appropriate, (3) how the estimate is calculated, and (4) what data sources and assumptions inform the estimate.

What Is Being Estimated

OGC estimates FTE requirements and workload attributable to toxic‑exposure‑related legal activities.

Why This Approach Is Appropriate

OGC’s statutory authority under 38 U.S.C. § 324(c)(2) includes administrative expenses incidental to delivering toxic‑exposure benefits and healthcare.

How the Estimate Is Calculated

1. Workload Estimation and FTE Projections
   OGC estimates TEF‑funded staffing needs across its offices based on projected toxic‑exposure‑related legal workload, including benefits, litigation, regulatory implementation, and interagency coordination. FY 2025 projections include 158 FTE supported by TEF, with estimated payroll and non‑pay requirements allocated by office.
2. Case and Workload Tracking Methodology
   OGC utilizes GCLaws, a mandatory enterprise case and time-tracking system to identify and record TEF-related work.
   1. Attorneys and staff record TEF‑related case hours directly in GCLaws.
   2. Management reports identify TEF hours per employee for reconciliation.
   3. TEF costs are estimated based on the proportion of actual time spent on TEF workload relative to total workload, adjusted for ramp‑up periods.
3. TEF‑funded OGC work must directly support or be incidental to VA’s delivery of healthcare and benefits associated with in‑service toxic exposures. This includes legal support for regulatory, legislative, litigation, operational, and oversight activities necessary to implement the PACT Act.
4. Charging TEF costs for FTE:
   1. During an attorney’s first year, 100% of the salaries and benefits may be charged to the TEF as they become proficient in TEF-related subject matter (per training plans in  Appendices 1 and 2).
   2. After one year, TEF salary and benefits charges are allocated based on validated workload via GCLaws.
5. Charging TEF costs for non-TEF FTE Performing Partial Work
   If a non‑TEF employee performs toxic‑exposure‑related work:
   1. The employee’s actual hours are identified through GCLaws reporting.
   2. OGC will calculate the cost as (hourly salary + 37 percent benefits) multiplied by TEF hours.
   3. Costs are transferred from OGC’s BA fund to the TEF during quarterly or year-end reconciliation (no later than October 10).
6. Non-Pay Costs (Training and Travel)
   TEF may fund training and travel when directly related to toxic‑exposure legal work. Each expense must be certified for TEF applicability in the quarterly reconciliation report.

Data Sources and Assumptions

• GCLaws case and time data
• Annual attorney performance standards (hours/cases)
• OGC workforce modeling data

Data sources and assumptions are reviewed annually to ensure accuracy.

Appendix F: ORD TEF Estimation Methodology

Estimation Overview
ORD estimates TEF‑eligible research activities using a methodology that defines (1) what is being estimated, (2) why this approach is appropriate, (3) how estimates are determined, and (4) what data sources and assumptions apply.

What Is Being Estimated
ORD identifies the scope and cost of research activities that qualify as medical and other research relating to exposure to environmental hazards.

Why This Approach Is Appropriate
38 U.S.C. § 324(c)(3) explicitly authorizes TEF to fund medical and other research related to environmental hazard exposures.

How the Estimate Is Calculated

1. ORD will annually determine TEF‑eligible research activities consistent with the statutory authority for “medical and other research relating to exposure to environmental hazards.”
2. ORD applies criteria to identify research programs, activities, and infrastructure that directly support toxic‑exposure‑related scientific inquiry, including Merit studies, program‑directed research, research workforce development, biorepository infrastructure, and specific scientific efforts supporting PACT Act implementation.

Data Sources and Assumptions

• DRAs (Designated Research Areas)
• MERP portfolio and staffing data
• RFA and award program data
• ORD infrastructure and capacity requirements

All sources and assumptions undergo annual review.

Appendix G: HRA TEF Estimation Methodology

Estimation Overview
HRA estimates TEF‑eligible staffing and contract support using a methodology that defines (1) what is being estimated, (2) why the approach is appropriate, (3) how estimates are calculated, and (4) what data sources and assumptions inform the estimate.

What Is Being Estimated
HRA estimates FTE effort and contract resource needs required to complete Section 104 personnel assessments and related reporting.

Why This Approach Is Appropriate
Section 104 requires VA to determine whether it has the personnel resources to implement Section 103; TEF supports the incremental resource requirements.

How the Estimate Is Calculated

1. VA’s Human Resources Administration (HRA) is responsible for conducting the Section 104 assessment and related ongoing reporting. HRA’s execution of these requirements includes personnel from the Manpower Management Service (MMS) and contractor support from VHA’s Partnered Evidence‑based Policy Resource Center (PEPReC).
2. HRA will restrict TEF funding exclusively to activities directly supporting the requirements under Section 104 of P.L. 117‑168. These activities ensure VA can assess whether it has sufficient personnel resources to meet Section 103 staffing requirements associated with increased demand for toxic‑exposure‑related healthcare.
3. MMS and PEPReC will collaborate with VHA to gather, analyze, and interpret data needed to assess personnel impact associated with PACT Act expansion and to support VHA workforce planning.
4. HRA requires TEF direct funding for both full-time equivalents (FTE) and non-FTE contract support used to develop and maintain staffing models, conduct the required analyses, and fulfill Section 104 reporting.
5. FTE Estimation Methodology:
   1. MMS supervisors will use an internal tracking system (similar to a timecard) to estimate quarterly FTE levels of effort for TEF-allowable work.
   2. Estimated TEF‑eligible FTE levels of effort will be established at the beginning of each quarter.
6. Non-FTE Estimation Methodology:
   1. Contract support provided through the PEPReC SLA is considered 100 percent TEF‑allowable.

Data Sources and Assumptions

• MMS time‑tracking logs
• PEPReC SLA deliverables and schedules
• EHCPM population projections for staffing models

All assumptions and data sources are reviewed annually.