The amount of misreporting of Veterans Administration (VA) benefits was assessed, along with the impact of misreporting on the Basic Educational Opportunity Grant (BEOG) program. Accurate financial information is need to determine appropriate awards. The analysis revealed: over 97% of VA beneficiaries misreported benefits; the total net loss to the BEOG program due to misreporting of VA benefits was less than $2 million in 1979-1980; the overreporting of VA benefits was the most common problem; no systematic variation in the likelihood of misreporting of VA benefits was found for the different times of year the BEOG application is filed or when comparing the dependent/independent status of applicants; the majority of misreporting applicants actually overreported the level of benefits they received from the VA program, which caused applicants to qualify for lower levels of BEOG benefits; validation affected misreporting of VA benefits by shifting the type of error from overreporting to underreporting and increasing the loss to the BEOG program due to overpayments to more students; current computer system edits applicable to the VA benefits issue appeared to cause at least a proportion of applicants to shift to overreporting from underreporting VA benefits; and the monthly benefit amount changed at least once annually for 80% of VA recipients. Ten data tables are provided. (SW)