[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]




 
              OVERSIGHT HEARING ON THE VETERANS BENEFITS
                  ADMINISTRATION'S FIDUCIARY PROGRAM,
                INCLUDING IMPLEMENTATION OF TITLE V OF
                         PUBLIC LAW 108-454

                                      Thursday, June 8, 2006

House of Representatives,
Subcommittee on Disability Assistance and Memorial Affairs,
Committee on Veterans' Affairs,
Washington, D.C.

The Subcommittee met, pursuant to call, at 10:00 a.m., in Room 340, 
Cannon House Office Building, Hon. Jeff Miller presiding.


Present: Representatives Miller, Berkley and Udall.


Staff Present: Paige E. McManus, Majority Counsel; Mary Ellen McCarthy, 
Minority Counsel.


Mr. Miller.  Good morning, the hearing will come to order.  We are 
meeting to receive testimony this morning on the Veterans Benefits 
Administration's implementation of Title V of Public Law 108-454, as 
well as VBA's Field Examination Activity.


As the veteran population ages, more Department of Veterans Affairs 
beneficiaries will require the appointment of a fiduciary to assist them 
in managing the monetary benefits provided by VBA.  The process of 
appointing a fiduciary is different than the legal process of appointing 
a guardian or an conservator.  However, the goal is the same, and that 
is to protect the interests of the beneficiary.  Once a fiduciary is 
recognized by the VBA, the  Department conducts periodic field 
examinations to ensure that the beneficiary's assets are being properly 
managed.  During 2005, the VBA completed over 77,000 field exams, annual 
accountings and other fiduciary-related actions for over 100,000 
beneficiaries.


Under Title V of Public Law 108-454, signed into law on the 10th of 
December of 2004, changes were made to VBA's Fiduciary Program to 
improve fiduciary accountability and strengthen protections for the 
beneficiary.  Among other things, the law requires VBA to conduct more 
thorough investigations of fiduciaries before being appointed, and 
requires VBA to reissue benefits that were misused if VBA was negligent 
in failing to investigate the fiduciary.


Today the Subcommittee would like a report on the implementation of 
these provisions.  So, without further ado, I yield to my Ranking 
Member.


[The statement of Hon. Jeff Miller appears on p.   ]





Ms. Berkley.  First, I would like to thank the Chairman for holding this 
hearing, and welcome our witnesses.  I appreciate the time you're taking 
to come here and help educate us.


Veterans and their survivors who are unable to handle their own 
financial affairs need appropriate assistance and oversight to obtain 
the benefits they deserve in a timely manner.  I'm pleased that the 
Department of Veterans Affairs has made progress in implementing the 
Veterans Benefits Act of 2004, but in my mind more needs to be done.


Last December, this Committee was contacted by a veteran who had been 
rated 100 percent disabled, and was determined to be incompetent by the 
VA to handle his financial affairs.  He wanted to move closer to his 
family, as his family wanted him to move closer to them, but he was 
unable to do so until a fiduciary was appointed, and he could receive 
the funds he needed to move.  Resolving his issue took the Committee's 
staff three months and repeated inquiries involving two Regional 
Offices.  Due to the work of the Committee staff, a fiduciary was 
eventually appointed.  However, the entire process was extremely 
stressful for the veteran, his family, and unfortunately, or 
fortunately, the Committee staff can't do this for every veteran that 
needs the help.


I'm also worried that the VA does not recognize durable powers of 
attorney.  A durable power of attorney executed under state laws becomes 
effective upon the person becoming incompetent or unable to manage his 
or her affairs.  Because the VA is not recognizing persons who hold a 
durable power of attorney for purposes of filing an application for 
benefits, I plan to introduce legislation which would require the VA to 
do so.


I'm also concerned that there may be inadequate coordination between the 
Veterans Benefits Administration and the Inspector General's Office to 
ensure that benefits are reissued when a fiduciary with ten or more 
beneficiaries misuses funds, which is shameful, and we shouldn't even 
have to be discussing this, but unfortunately we do.  It appears that 
this was not done in a recent case.


I hope that the witnesses will be able to address the issues that I have 
raised, and I thank you again for being here today.  I look forward to 
your testimony.


[The statement of Hon. Shelley Berkley appears on p.   ]




Mr. Miller.  Thank you very much.  We have one panel this morning.  They 
are seated at the table, and testifying for VBA is Ms. Renee Szybala, 
Director of VBA's Compensation and Pension Service.  Ms. Szybala is 
accompanied by Ms. Patricia Knapp, Fiduciary Chief of the Compensation 
and Pension Service.  I welcome both of you here this morning, and 
before you begin your testimony, I'd like to recognize Ms. Knapp for her 
years of dedicated service at VA.  She's retiring in July.  She began 
her career in the Regional Office in Cleveland as a Benefits Counselor, 
and after 25 years at the Regional Office she was promoted to the VA 
Central Office where she was a Program Analyst at the Fiduciary Program.  
She was appointed Chief of the program in 2002.  Ms. Knapp, we all thank 
you for service and we wish you the best of luck in your retirement.


Ms. Knapp.  Thank you.


Mr. Miller.  Ms. Szybala, you may proceed.


STATEMENT OF RENEE L. SZYBALA, DIRECTOR, COMPENSATION AND PENSION 
SERVICE, VETERANS BENEFITS ADMINISTRATION; ACCOMPANIED BY PATRICIA K. 
KNAPP, FIDUCIARY CHIEF, COMPENSATION AND PENSION SERVICE, VETERANS 
BENEFITS ADMINISTRATION

STATEMENT OF RENEE L. SZYBALA



Ms. Szybala.  Mr. Chairman, and Ms. Berkley, I'm happy to appear before 
you today to report on the activities and accomplishments of the 
Fiduciary Program, and our implementation of the law that was passed in 
December, 2004.  I'm really happy to be accompanied by Pat Knapp, who 
has 23 years of experience which will get you the best answers to the 
questions you may have.


As you know, the Fiduciary Program oversees VA benefits paid to others 
on behalf of beneficiaries who have been found incompetent, incapable of 
handling their VA funds due to their minor status, injury, disease, or 
the infirmities of age.  We currently provide supervision to just over 
100,000 VA beneficiaries.  These beneficiaries are among the most 
vulnerable, and they receive more than $114 million monthly in VA 
benefits.  They have estates exceeding $2.8 billion.   

 The program is administered by the Fiduciary Field Examination 
activities in VA's 57 Regional Offices throughout the country.  
Monitoring the needs of beneficiaries of the program and the protection 
of their funds is the shared responsibility of the field examiners and 
the legal instrument examiners within those Regional Offices.  There are 
currently 241 field examiners, and 110 legal instrument examiners at the 
VA Regional Offices.


Field examiners make determinations concerning the type of fiduciary 
best suited to the situation, and monitor the welfare of the beneficiary 
through personal contacts and visits.  They observe living conditions, 
financial requirements, and capacity of the beneficiary to handle their 
own affairs, recommending action in state court when necessary.


In fiscal year 2005, VA field offices conducted more than 55,000 field 
examinations, in which they had personal contact with incompetent 
beneficiaries and their fiduciaries.  Many federal fiduciaries and all 
state court appointed fiduciaries are required to submit accountings at 
regular intervals, which are established by VA policy or state law.  
Monitoring the filings of such accountings, and reviewing them, is the 
responsibility of VA's legal instrument examiners.  The LIE's review the 
information submitted by the fiduciary, following up as necessary when 
the need arises.


Oversight of the field's efforts in this program is the responsibility 
of my office under Pat Knapp's direction, our Fiduciary staff at C & P 
Service.  That staff conducts site visits to each Regional Office on a 
three year schedule.  It conducts 242 quality reviews of field station 
work monthly as part of our quality assurance program.  The Fiduciary 
staff has organized three national conferences in the past five years, 
including one last month in Baltimore for legal instrument examiners.


The responsibility for implementing Title V of Public Law 108-454 also 
fell to Pat Knapp's staff.  I'm very proud of the manner in which this 
responsibility has been implemented.  VA welcomed the legislation, which 
gave it additional fiduciary qualification and oversight 
responsibilities, and we went at it with no time wasted.  Within one 
month of the passage of the law, we hit the ground running, convening a 
working group to develop basic procedures and a plan of action.  A 
nationwide teleconference was held with all 57 Regional Office Fiduciary 
Activities, to make them aware of the Title V provision, and outline the 
preliminary plans for implementation.  As procedures developed during 
the first quarter of 2005 and beyond, a series of three instructional 
letters was issued to the field, covering a wide range of topics that 
were included in the legislation.  Two additional nationwide 
teleconferences assisted us in communicating later instructions to the 
field.   

All of these procedural letters, and all of the teleconferences occurred 
prior to July 1, 2005, when most of the requirements of Title V became 
effective.  We accomplished all of the subsidiary tasks, most of them, 
that need to be accomplished as well, including changing our procedural 
manual.  We sent changes to the field in late October, 2005.  We 
modified the Fiduciary Program database to gather the data needed by the 
law.  To help us review the qualifications of proposed fiduciaries, we 
developed a new VA form, the Fiduciary Statement in Support of 
Appointment that is now required for every fiduciary who wants to work 
in VA.  We posted training materials on the Fiduciary Website.  And 
finally, we have gathered the statistical information required for the 
next annual report.


I'm confident that we've responded promptly and diligently in 
implementing the provisions of Title V.  We'll continue to fine tune our 
operational processes as necessary, as we learn through real life 
situations.  And I welcome any questions that the Committee may have.


[The statement of Ms. Renee L. Szybala appears on p.   ]






Mr. Miller.  Thank you very much.  Mr. Udall, do you have a statement 
you want to make, or enter into the record?


Mr. Udall.  I do have an opening statement.  I'll just pass it to be put 
in the record.


Mr. Miller.  That will be very good.


Mr. Udall.  So we can move on.


[The statement of Hon. Tom Udall appears on p.   ]






Mr. Miller.  Let me ask you one question, and we'll rotate through the 
members here.  And this pertains to someone from my district.  I had a 
conversation with the family of a veteran in my district, and it's my 
understanding through conversations with them that the St. Petersburg 
Regional Office has not been accepting Durable Powers of Attorney under 
the Fiduciary Program.  My statement is, that it is about an $80,000 
cost to the family because of the delay.  It appears that every other 
organization accepts Durable Powers of Attorney.  And I want to know, is 
there a specific mandate that precludes you from recognizing it?


Ms. Szybala.  The durable power of attorney is not the same thing as 
being appointed as a fiduciary under VA's regulations.  This law 
requires us to do certain steps to qualify fiduciaries.  Those are not 
necessarily covered by a durable power of attorney.  In truth, durable 
power of attorney wasn't mentioned to me until two days ago.  It's the 
first time I've heard the word in this context.  And it's certainly 
something we can look at.  I'm not sure, Ms. Berkley described what a 
durable power of attorney is, I really don't know what it is.  I always 
thought it was like a healthcare proxy.  But it's something we will look 
at.  Anything that can help us do this better and faster is something we 
want to do.  Right now, though, in the Fiduciary Program, we need to do 
certain things accepting someone as a fiduciary, including meet with 
them, including look into their background.  And we take these 
responsibilities seriously.  We think it helps protect the beneficiary.


Mr. Miller.  And of course the question, I guess, would be, do you 
anticipate that this is something that can be resolved by rule?  Or does 
it need a legislative change?


Ms. Szybala.  It doesn't need a legislative change.  Should we look at 
it, and should it be the right thing to do, we can do it.


Mr. Miller.  How long do you think it will take you to look at it?


Mr. Szybala.  I'll say, we'll do it quickly.  Give me quarter.  We'll do 
it very quickly.


Mr. Miller.  Thank you.  Ms. Berkley?


Ms. Berkley.  Actually, the Chairman has asked the question that I was 
going to ask you about.  If you guys can resolve this without 
legislation, that would be fine with me.  If you need the legislation, I 
would be delighted to introduce it because I think there's a need and an 
issue here.  But, we will wait as long as you will do this shortly.


Ms. Szybala.  We will absolutely do it shortly.  And we want to do it 
smarter and better, and if we're missing what can help, we will grab it.


Ms. Berkley.  Well, it's very apparent to me just listening to your 
testimony and observing your demeanor that you have the best interests 
of the veterans in your heart and mind and will do whatever it takes to 
make this work.  And I appreciate that very much.


Let me ask you a question.  The Committee is aware of a number of cases 
in which erroneous information has been provided to the VA by 
incompetent veterans who have been directed to sign a document by an 
``X'' or a thumbprint, with no indication that the veteran understood 
the document which was being signed.  Thousands of dollars of 
overpayments, I understand, have resulted when the VA did not 
communicate with the spouse or the person handling the veteran's 
finances.  Should VBA letters which request that an application or other 
form be signed by a veteran with an ``X'' or a thumbprint also indicate 
that if the veteran is not able to understand the document that he or 
she is signing, the Regional Office should be notified?  And should the 
applications for aid and attendance, or other disability information, 
indicate that the veteran or other claimant has dementia, or 
Alzheimer's, trigger inquiry into a claimant's competency?  I mean, just 
the reality that they are suffering from dementia or Alzheimer's, should 
that be a pretty good indication that they're not fully competent?


Ms. Szybala.  There is.  There's a couple of questions in there.  I'll 
take the last one first.


Things coming from the doctor, or applications for A & A, or housebound, 
that show that the veteran is mentally disabled, 100 percent mentally 
disabled, or needs A & A because of mental disability, do trigger 
immediate fiduciary investigations.  That is, we start a competency 
rating, and then a fiduciary gets appointed.  They are linked.  So, if 
we get a medical from VHA that says, ``Housebound is needed because of 
the veteran's condition,'' we immediately start a competency rating.  
That much is easy.


The ``X'' is a little more difficult.  The ``X'', which I'm not sure we 
all understand is the same thing.  The ``X'' is our proof that the 
veteran is there, that the veteran is in the room.  But the ``X'' is 
supposed to be witnessed by either two strangers, or people who are 
close, family members, or the POA, or the veteran's rep, who would be 
then, I would hope, making sure that information being submitted is the 
correct information.


Ms. Berkley.  If they are strangers, how do they know that?


Ms. Szybala.  Well, by stranger, I mean, the person in the hospital.  If 
the veteran is hospitalized, and they are putting an ``X'' on a desire 
for an increased rating, say, the nurse can say, ``This is the veteran 
who put this 'X' here.''  Without real situations, I'm having trouble 
thinking of hypotheticals.  But the ``X'' is not meant to slow things 
down, it's meant to speed things up.  And to accept an initial claim 
without any signature or mark from the veteran would be a very big 
change in VA processes.  In one formal claim, the veteran has to have 
signed.  That's really the only requirement for the veteran's signature 
in the whole thing.   

To the extent we get hung up, and RO's are waiting for signatures, 
sometimes we're just wrong.  There are just many situations after the 
formal claim has been done where the POA, doesn't even have to be a 
durable power of attorney, the POA can sign for the veteran, do lots of 
activities within the claim.  And in those that he can't, where the 
veteran is incapable of signing, the ``X'', the thumbprint witnessed 
does the trick.  Before, and without needing, a fiduciary to be 
appointed.


Ms. Berkley.  Let me see if I've got this.  All right, so a veteran puts 
their ``X'' and that triggers the beginning of the claim process?


Ms. Szybala.  Yes.  An original claim can be filed, the formal 556, can 
be filed with a thumbprint, witnessed by two people, starts the duty to 
assist, which might lead to an incompetency rating.


Ms. Berkley.  And, I know you're going to look into this, but the 
durable power of attorney, would that trigger the need for the durable 
power for attorney?  How would that work in your mind?  What's the 
sequence here?


Ms. Szybala.  I'm not sure.  I don't think I can answer that.  I'm not 
sure where the durable power of attorney comes in.  But the sense I'm 
getting is that the durable power of attorney would tell us who the 
fiduciary is, and would maybe, and you guys are thinking, that it would 
tell us that we need a fiduciary, it would stand in for the rating of 
the competency.  That's where I have more of a problem, because we can't 
take someone else's paper and have that be our rating.  And so we'll 
have to look at that closely.  We'll do it quickly, but we will look at 
it.


The durable power of attorney I would think would come in at the point 
of which we find somebody incompetent, this is where I can see it 
working well, and they have a durable power of attorney, that person 
might with no further ado be the fiduciary.


Ms. Berkley.  So if the ``X'' is not an indication, in your mind, of 
incompetence.  What is it an indication of?


Ms. Szybala.  The fact that they can't sign.  Whether it's physical 
infirmity, whether it's a moment, they're unconscious.  They cannot at 
the moment sign.  It doesn't trigger an automatic competency review.


I have to say that we did a survey, very informal survey, of the service 
centers, asking how many times they take an ``X'' or a thumbprint.  We 
could only get three to tell us that they knew of one.  It's a very, 
very rare thing.  It's a safeguard.  It's not something that's done 
often.  But it helps you if you have a veteran who is right now totally 
unconscious, there is a way to get his claim started.


Ms. Berkley.  Okay, thanks a lot.


Mr. Miller.  Thank you very much.  Mr. Udall?


Mr. Udall.  Thank you, Mr. Chairman.  And thank you to the witnesses.  
We very much appreciate you being here today, and obviously these are 
very difficult situations, I think, for veterans and their families in 
terms of having somebody have to have a fiduciary.  I've run into this 
situation several times as a state attorney general, where we were 
giving advice to the veteran's agents in the State of New Mexico, where 
they were dealing with these kinds of situations.


Now, could you please describe the circumstances under which the VA 
appoints a fiduciary for a veteran without first proposing a finding of 
incompetency?


Ms. Szybala.  We do not do that.  Right now, under the new law, under 
Title V, we can appoint a temporary fiduciary for a competent veteran, 
while we look at a rating of incompetency.  While the competency rating 
is ongoing we can appoint a temporary fiduciary, which is a very helpful 
provision in this law.  Otherwise, I'll bounce to Pat whether we can do 
that at any other time, appoint a fiduciary before a rating of 
incompetency.


Ms. Knapp.  No.  But we did welcome the temporary fiduciary measure, 
although we did implement that to be used in only extreme situations.  
Because what you're doing is taking a competent individual and putting a 
fiduciary over them without the regular due process period.  So when we 
receive an indication that a beneficiary may be incompetent, and it's an 
emergency type situation, perhaps such as the one you spoke about, sir, 
we do immediately go out and do a field examination to actually find out 
what the facts and circumstances are before that appointment of a 
temporary fiduciary.  Which, again, as Renee indicated is only for 120 
day period while we develop to get the actual medical information or 
court information that we need.


Mr. Udall.  I'm curious to your opinion on this part of the statute.  I 
guess this is Title 5502, Payments to and Supervision of Fiduciaries, 
where it says, ``The Secretary may be made directly to the beneficiary, 
or to a relative or some other fiduciary for the use and benefit of the 
beneficiary, regardless of any legal disability on the part of the 
beneficiary.''  And your opinion is you can't move forward under that 
statute?


Ms. Knapp.  Our interpretation of that portion of the statute was to 
allow VA to select a fiduciary other than a court appointed fiduciary, 
if it would be in the best interest of the beneficiary.  That language 
was added to allow us to bypass a court appointed fiduciary.  For 
example, if it would be better to pay benefits directly to a nursing 
home as fiduciary for an incompetent beneficiary rather than a court 
appointed fiduciary, which would incur additional legal costs, 
accountings, etc.  That was our take on that.  Other than the temporary 
fiduciary that I just described, we do not automatically appoint a 
fiduciary without either the rating of incompetency, or evidence of a 
legal disability.


Mr. Udall.  Has the VA issued any guidelines to staff as to the 
circumstances under which a fiduciary can be appointed regardless of any 
legal disability?


Ms. Szybala.  Legal disability of the fiduciary?


Mr. Udall.  Of the beneficiary.


Ms. Szybala.  Of the beneficiary.  We've disseminated guidelines on 
temporary fiduciaries, and the kinds of circumstances in which we should 
appoint one.  And those are, you know, as Pat described, cases in which 
we are looking, we think that the beneficiary's incompetent, but the 
beneficiary has not yet been rated incompetent.  I don't think we have 
any circumstances in which we have suggested the appointment of a 
fiduciary for someone who is otherwise believed to be competent.


Mr. Udall.  Thank you very much.


Mr. Miller.  Can I ask you, off Ms. Berkley's question regarding the 
thumbprint.  Who takes the thumbprint?  How does that usually work?


Ms. Szybala.  I would assume, and I'm going to bounce it to Pat in a 
minute, but I assume it's something that is done the same way someone 
signs a will.  I mean, somebody just goes to the person who's in bed at 
home, takes a thumbprint, and signs as witness.


Mr. Miller.  And how often, you said it's very rare?


Ms. Szybala.  Very, very rare.


Mr. Miller.  All right, and once that's done, then what happens?  I 
mean, all right, they do that, then what's the next step in the process?


Ms. Szybala.  Then whatever that paper was is signed and accepted by VA.  
Whatever the people who are trying to help the person who is in bed get 
done VA will process.  Whether it's a claim, or a bank transfer.


Mr. Miller.  Is there a chance that somebody could take a fingerprint 
from somebody who's not living?


Ms. Szybala.  Absolutely.  But that's why there are two witnesses 
required.  And those witnesses are signing notarized, and, you know, I 
assume there's penalties for them if this is a fraud.


Mr. Miller.  I just wanted to know, under those very special 
circumstances, does VA take any additional actions to verify the 
legality of the document?


Ms. Szybala.  I think this is seen as the protection against fraud.  I 
think this is seen as better protection against fraud than would be just 
acceptance of someone else's signature in lieu of the veteran's.  
Because you have two people who have signed, and attested to the fact 
that this is the veteran's thumbprint.  It's actually a very, very old, 
longstanding section of VA regs.  It probably should be looked at again 
to see if it makes any sense, but in advance of this hearing I had 
numerous discussions with my staff about it.  They all believe it's 
still good procedure.


Mr. Miller.  I know people in my district that would sign with an ``X'', 
so I'm not saying that they're incompetent people today, but my question 
is, if someone wants to commit fraud they can still commit it.  I would 
think that in these special circumstances that there might be a little 
additional follow-up.


On the 20th of this month, we're going to have a joint hearing with the 
Economic Opportunity Subcommittee on the recent data theft and current 
cyber-security procedures at VBA.  While we'll delve further into the 
security measures for fiduciaries in the next two weeks, I want to know 
today what your oversight procedures are of fiduciaries after they've 
been appointed.


Ms. Szybala.  Beyond the accountings and the visits?  I mean, we do 
visit fiduciaries.  Under the law, we visit those who have more than ten 
beneficiaries on a regular schedule.  Twenty, excuse me.  And we review 
their accounting.  In terms of their use of data, I don't know of any 
oversight that we do of their use of our data.


Mr. Miller.  Can you tell me what the regular schedule would be?


Ms. Knapp.  For the field examination?  After the initial appointment of 
a fiduciary, we routinely do a one year follow-up of that fiduciary, and 
then subsequent visits are as the individual circumstances dictate.  A 
beneficiary that receives minimal benefits, or is in a nursing home, say 
on Medicaid, may only be seen every five years.  A case of 100 percent 
service connected veteran, who's living in a very unstable situation, 
would obviously receive more frequent visits.


Ms. Szybala.  Many fiduciaries are the parents of the child, or the 
spouse of the veteran.  And they are visited less frequently.  I mean, 
fiduciaries where the situation is very good, and where there's no 
questions that any thing is going wrong, the schedule gets further and 
further pushed out.  And so, it's really as needed.  We go to those we 
need to go to.


Mr. Miller.  Ms. Berkley?


Ms. Berkley.  According to the Inspector General, an individual who was 
fiduciary for 11 beneficiaries misused funds and was charged in federal 
court in Texas in August of 2005.  It doesn't appear that the procedures 
to reissue checks was followed in that particular case.  Are you aware 
of this?  How does the VA determine the date of the termination for 
purposes of the reissue provision?  And how does the information 
concerning the misuse by a fiduciary for ten or more persons get 
communicated to the Veterans Benefits Administration in cases where the 
Inspector General is involved, so that the checks can be reissued?


Ms. Szybala.  We work very closely with the Inspector General.  That is, 
as soon as we have doubts we ask them to investigate, because they are 
better at investigating that kind of thing than we are.  I'm surprised 
because I don't know of the case that you have mentioned, the case where 
11 beneficiaries had their funds reissued.


Ms. Berkley.  You know, I'm going to provide you, we received a copy 
from the office of the Inspector General, Department of VA, semi-annual 
report to Congress.  So let me provide this to you so you can see it.


Ms. Szybala.  Thank you.


Ms. Berkley.  You're welcome.


Ms. Szybala.  That would be failing in whatever our procedures are.  We 
get to them locally, at the RO, where the problem is.  They would 
contact their local, whatever the local office of the IG is, and ask 
them to investigate.  The IG would assess and would determine whether 
they're going to go or not.  I mean, I'm aware of one case in which we 
went to the IG quickly.  They assessed, and they said, ``No, we're not 
going to get involved.''  And we continued on.  Ultimately, the IG was 
interested, and now that fiduciary has been charged in court.  It took a 
while to get the IG interested.  Everybody's got their own judgements on 
these things.  But working with the IG is very important.  They have the 
forensic accounting expertise to get to the bottom of what was misused 
and that's what we need.


Ms. Knapp.  I just wanted to add that I also am not familiar with this 
particular case.  But the reissuance provisions of the law were 
effective on the date of passage, December 10, 2004, and applied to any 
misuse determinations made after that date, regardless of when the 
misuse occurred.  Now, this particular case could have been in the 
pipeline prior to the law.  It may have been a case that we actually 
referred to the IG prior to the implementation of the law.  So, this 
would have been the procedure in effect at that time, is to refer the 
case to the IG, and then the IG would go about its business and its 
investigative technique.  So it may not have fallen under that criteria, 
but we will look into it.


Ms. Szybala.  Yes, we will follow up.


Ms. Berkley.  Can I just do a quick follow-up?  And how does the VA 
determine the date of determination for the purposes of the reissuance 
provision?


Ms. Knapp.  Any misuse determinations that have been made after December 
10, 2004, again, even if they refer to prior periods of misuse, and if 
it meets one of the reissuance categories, i.e. a multiple fiduciary 
serving more than ten, as you mentioned, or an individual fiduciary 
where VA has been negligent in the oversight, that would also trigger 
reissuance.  So far, and all those negligence determinations on 
individual fiduciaries are done in the VA Central Office, and we have 
made no findings of negligence to date, nor have there been any multiple 
fiduciaries to date where there has been reissuance.  That may change.


Ms. Szybala.  But, what would be reissued is all the funds found to be 
misused.  And so, it depends on the accounting.  The date from which the 
misuse starts is the date from which we would reissue the funds.


Ms. Knapp.  Based on factual evidence, a field exam has to be done, 
etc., etc.  we don't want to reissue more than was misused, obviously.  
We have to guard the taxpayers' money also.


Mr. Miller.  Very good.  Mr. Udall, any more questions?


Mr. Udall.  I don't have any other questions.  So, Ms. Berkley, you can 
continue if you wish?


Ms. Berkley.  When you review that case, could you get back to us so 
that we can actually discuss the real case?


Ms. Szybala.  Absolutely.


Ms. Berkley.  All right, thanks.


Mr. Miller.  Any other questions?  If not, thank you very much for being 
with us this morning.  We all agree it's vitally important that VBA 
ensure the beneficiaries who are no longer competent to handle their 
compensation have access to trained staff as well as honest and 
trustworthy fiduciaries.  And if they don't receive their benefits, 
neither the veterans' nor VA's interests are served.  Without objection, 
the statement from Mr. William Burns will be entered into the record.  
Ms. Szybala, I'd ask that you review Mr. Burns' statement and provide a 
written response to me by the 22nd of this month addressing his 
concerns.


[The statement of Mr. William D. Burns appears on p.   ]




Mr. Miller.  All members will have five legislative days to submit a 
statement for the record, as well as pose post-hearing questions to the 
witnesses.  And with nothing further, the hearing is adjourned and we'll 
move into Executive Session, marking up several bills pending before the 
Subcommittee.  Thank you.


[Whereupon, at 10:40 a.m., the Subcommittee proceeded to other 
business.]
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