[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]
EXAMINING THE U.S. DEPARTMENT OF
VETERANS AFFAIRS FIDUCIARY PROGRAM:
HOW CAN VA BETTER PROTECT VULNERABLE
VETERANS AND THEIR FAMILIES?
=======================================================================
HEARING
before the
SUBCOMMITTEE ON DISABILITY ASSISTANCE AND MEMORIAL AFFAIRS
of the
COMMITTEE ON VETERANS' AFFAIRS
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
SECOND SESSION
__________
APRIL 22, 2010
__________
Serial No. 111-72
__________
Printed for the use of the Committee on Veterans' Affairs
______
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COMMITTEE ON VETERANS' AFFAIRS
BOB FILNER, California, Chairman
CORRINE BROWN, Florida STEVE BUYER, Indiana, Ranking
VIC SNYDER, Arkansas CLIFF STEARNS, Florida
MICHAEL H. MICHAUD, Maine JERRY MORAN, Kansas
STEPHANIE HERSETH SANDLIN, South HENRY E. BROWN, Jr., South
Dakota Carolina
HARRY E. MITCHELL, Arizona JEFF MILLER, Florida
JOHN J. HALL, New York JOHN BOOZMAN, Arkansas
DEBORAH L. HALVORSON, Illinois BRIAN P. BILBRAY, California
THOMAS S.P. PERRIELLO, Virginia DOUG LAMBORN, Colorado
HARRY TEAGUE, New Mexico GUS M. BILIRAKIS, Florida
CIRO D. RODRIGUEZ, Texas VERN BUCHANAN, Florida
JOE DONNELLY, Indiana DAVID P. ROE, Tennessee
JERRY McNERNEY, California
ZACHARY T. SPACE, Ohio
TIMOTHY J. WALZ, Minnesota
JOHN H. ADLER, New Jersey
ANN KIRKPATRICK, Arizona
GLENN C. NYE, Virginia
Malcom A. Shorter, Staff Director
SUBCOMMITTEE ON DISABILITY ASSISTANCE AND MEMORIAL AFFAIRS
JOHN J. HALL, New York, Chairman
DEBORAH L. HALVORSON, Illinois DOUG LAMBORN, Colorado, Ranking
JOE DONNELLY, Indiana JEFF MILLER, Florida
CIRO D. RODRIGUEZ, Texas BRIAN P. BILBRAY, California
ANN KIRKPATRICK, Arizona
Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public
hearing records of the Committee on Veterans' Affairs are also
published in electronic form. The printed hearing record remains the
official version. Because electronic submissions are used to prepare
both printed and electronic versions of the hearing record, the process
of converting between various electronic formats may introduce
unintentional errors or omissions. Such occurrences are inherent in the
current publication process and should diminish as the process is
further refined.
C O N T E N T S
__________
April 22, 2010
Page
Examining the U.S. Department of Veterans Affairs Fiduciary
Program: How Can VA Better Protect Vulnerable Veterans and
Their Families?................................................ 1
OPENING STATEMENTS
Chairman John J. Hall............................................ 1
Prepared statement of Chairman Hall.......................... 42
The Honorable Doug Lamborn, Ranking Republican Member............ 3
Prepared statement of Congressman Lamborn.................... 43
WITNESSES
U.S. Department of Veterans Affairs:
Belinda J. Finn, Assistant Inspector General for Audits and
Evaluations, Office of Inspector General..................... 4
Prepared statement of Ms. Finn............................. 43
Bradley G. Mayes, Director, Compensation and Pension Service,
Veterans Benefits Administration............................. 31
Prepared statement of Mr. Mayes............................ 68
U.S. Government Accountability Office, Daniel Bertoni, Director,
Education, Workforce, and Income Security...................... 6
Prepared statement of Mr. Bertoni............................ 48
______
American Federation of Government Employees, AFL-CIO, and AFGE
National Veterans Affairs Council, Katherine R. Pflanz, Field
Examiner, Winston-Salem Veterans Affairs Regional Office....... 22
Prepared statement of Ms. Pflanz............................. 64
American Legion, Jacob B. Gadd, Assistant Director for Program
Management, Veterans Affairs and Rehabilitation Commission..... 18
Prepared statement of Mr. Gadd............................... 59
Gold Star Wives of America, Inc., Vivianne Cisneros Wersel,
Au.D., Chair, Government Relations Committee................... 20
Prepared statement of Dr. Wersel............................. 62
Vietnam Veterans of America, Richard F. Weidman, Executive
Director for Policy and Government Affairs..................... 15
Prepared statement of Mr. Weidman............................ 56
Wounded Warrior Project, Sarah Wade, Coordinator, Family Issues
and Traumatic Brain Injury..................................... 16
Prepared statement of Ms. Wade............................... 57
MATERIAL SUBMITTED FOR THE RECORD
Post-Hearing Follow-up Letter and Response:
Hon. John J. Hall, Chairman, Subcommittee on Disability
Assistance and Memorial Affairs, Committee on Veterans'
Affairs, to Hon. Eric K. Shinseki, Secretary, U.S.
Department of Veterans Affairs, letter and attachment,
dated May 13, 2010, and response letter, dated July 23,
2010....................................................... 70
EXAMINING THE U.S. DEPARTMENT OF
VETERANS AFFAIRS FIDUCIARY PROGRAM:
HOW CAN VA BETTER PROTECT VULNERABLE
VETERANS AND THEIR FAMILIES?
----------
THURSDAY, APRIL 22, 2010
U.S. House of Representatives,
Committee on Veterans' Affairs,
Subcommittee on Disability Assistance
and Memorial Affairs,
Washington, DC.
The Subcommittee met, pursuant to notice, at 2:05 p.m., in
Room 334, Cannon House Office Building, Hon. John J. Hall
[Chairman of the Subcommittee] presiding.
Present: Representatives Hall, Donnelly, Kirkpatrick, and
Lamborn.
OPENING STATEMENT OF CHAIRMAN HALL
Mr. Hall. Good afternoon and welcome to the House Committee
on Veterans' Affairs, Subcommittee on Disability Assistance and
Memorial Affairs, hearing on Examining the U.S. Department of
Veterans Affairs (VA) Fiduciary Program, How Can VA Better
Protect Vulnerable Veterans and Their Families?
Please rise for the Pledge of Allegiance.
[Pledge of Allegiance.]
Thank you. My apologies for being late. I was on the phone
trying to straighten out a problem for an individual in Darrell
Issa's district. A friend of mine called across country to
help, and fortunately, Congressman Issa has staff who are
capably taking care of the issue at this moment.
We are here today just a day after we passed another
comprehensive veterans' health bill that supports veterans'
caregivers and enhances the veterans' physical and mental well-
being of America's veterans.
I was happy to support Chairman Filner in winning unanimous
passage of this bipartisan legislation, S. 1963, the
``Caregivers and Veterans Omnibus Health Services Act of
2009.'' This bill incorporates the recommendations of nearly 20
Members of Congress, Democrats and Republicans alike.
Provisions in S. 1963 will provide training, education and
counseling for caregivers of veterans of any era. In addition,
the bill allows VA to recruit and retain nurses, home health
aides and specialty care providers. It will help VA to better
diagnose and treat those who suffer from the invisible wounds
of war, the stigma associated with them, and many other factors
that make effective treatment difficult.
Specifically, the bill expands authority to fund services
to treat wounded warriors suffering from post-traumatic stress
disorder (PTSD), traumatic brain injury (TBI), and other
combat-related disorders which lead to homelessness and in some
cases, suicide and criminal acts in some unfortunate instances
by veterans who are suffering from these disorders.
Our hearing today is entitled, ``Examining the VA Fiduciary
Program: How Can VA Better Protect Vulnerable Veterans and
Their Families?'' This hearing is intended to examine VA's
Fiduciary Program and assess how Congress and VA can work
together to better protect veterans and dependents who are in
need of fiduciary services.
Since 1926 when Congress passed the World War Veterans Act,
VA has been providing oversight of its benefits paid to those
beneficiaries who are incapable of handling their own affairs
due to injury, disease, or infirmities of age.
Today, the Fiduciary Program that VA runs with authority
contained in 38 U.S.C. 5502 is administered by VA regional
offices (ROs) and their respective offices of regional counsel
which interface directly with VA beneficiaries and State courts
on guardianship and commitment matters.
On average, impaired beneficiaries received approximately
$14,400 in fiscal year 2008, about $4,200 more per year than
the average for all VA compensation and pension beneficiaries.
In fiscal year 2008, fiduciaries managed approximately $1.5
billion in VA benefits for more than 103,000 beneficiaries.
Thus far, for fiscal year 2010, VA reports $396 million in
benefits have been paid to more than 102,000 beneficiaries with
a cumulative estate value of $3.1 billion.
Recently, both the VA's Office of Inspector General (OIG)
and the U.S. Government Accountability Office (GAO) issued
reports on VA's Fiduciary Program. These reports underscored
the benefits of the program, and there are many; but it also
pointed to insufficient staffing, training, and other resources
that hampered effective oversight of the Fiduciary Program.
In the absence of adequate oversight and accountability,
some fiduciaries have misused millions of dollars belonging to
our veterans and their dependents.
Let me take a moment to highlight some of the concerns
about the Fiduciary Program that were raised by the OIG and GAO
reports. From October 1998 to March 2010, the VA OIG's Office
of Investigations reports that it conducted 315 fiduciary fraud
investigations resulting in 132 arrests and monetary recoveries
of $7.2 million in restitution, fines, penalties and
administrative judgments. One of these cases involved the
submission of false financial reports by a fiduciary who
attempted to conceal her embezzlement of nearly $1 million from
33 disabled veterans whose accounts she managed. The funds
embezzled by the fiduciary were reportedly used to support her
gambling habit.
It should be noted that these problems are not
representative of all fiduciaries. The vast majority are doing
an honorable and honest job of taking care of our veterans, who
cannot handle their own affairs, many of whom are family
members. However, the program is susceptible to abuse as a
result of deficiencies noted by both OIG and GAO reports.
Specifically, they found that first, the Veterans Benefits
Administration (VBA) was not taking effective action to obtain
seriously delinquent accountings. Second, VBA was not
consistently verifying questionable expenses reported by
fiduciaries. And, third, VBA was not adequately following up
and reporting on allegations of misuse of beneficiary funds and
estates.
The VA OIG pointed out that VBA has also not been diligent
in replacing problematic fiduciaries. In one case, a fiduciary
was seriously delinquent in submitting multiple reports ranging
from 134 days to 215 days late. In addition, during that
period, VBA received numerous complaints concerning that
particular fiduciary's performance. However, the VBA took no
action to replace this particular fiduciary.
On the other end of the spectrum, we will hear from
veterans service organizations (VSOs) who complain that family
members who serve as fiduciaries are neither supported
financially nor through training by VBA to discharge their
duties. Moreover, the VSOs suggest that while some professional
fiduciaries are not subjected to enough oversight by the VBA,
family member fiduciaries often feel they are viewed with
suspicion and mistrust by the VBA, despite the sacrifices they
make to care for relatives who are incapacitated veterans and/
or beneficiaries.
For example, the Wounded Warrior Project reports that VBA
required a mother who served as a fiduciary for her mentally
disabled veteran son to reimburse funds spent on toilet paper
for their home.
This hearing provides a forum to explore concerns across
the spectrum regarding the Fiduciary Program, and I look
forward to the testimony of our witnesses and insightful
comments or questions from my colleagues on the Subcommittee.
I would now like to recognize Ranking Member Lamborn for
his opening statement.
[The prepared statement of Chairman Hall appears on p. 42.]
OPENING STATEMENT OF HON. DOUG LAMBORN
Mr. Lamborn. Thank you, Mr. Chairman, and welcome everyone
to this hearing on the Department of Veterans Affairs Fiduciary
Program. The Fiduciary Program provides oversight of VA
benefits to beneficiaries who are incapable of managing their
funds as a result of injury or disease. When the VA or a court
determines that a veteran is incompetent to handle his or her
finances, the Fiduciary Program establishes an appropriate
benefits payment method, appoints a fiduciary to oversee his or
her finances, and provides continued oversight services.
Through periodic personal visits to the beneficiary's
residence, VA field examiners monitor the welfare and needs of
the veteran.
My Subcommittee colleagues and I want to ensure that VA's
Fiduciary Program is taking every measure and has the support
necessary to fully safeguard beneficiaries' assets. During the
108th Congress, Congress passed legislation that President Bush
signed into law on December 10, 2004 (P.L. 108-454). The law
included provisions to make improvements to increase fiduciary
accountability and strengthen protections for the beneficiary.
This included more thorough investigation of fiduciaries prior
to them being appointed, and required VA to reissue benefits
that were misused in cases where negligence was found.
Today the Subcommittee would like to hear about the
effectiveness of these provisions and whether further
Congressional action is needed to ensure that our most
vulnerable veterans are afforded the highest level of
protection possible. I look forward to hearing from our
witnesses today, and I want to thank you all for your
participation.
Unfortunately, I have to leave soon for the airport, but
you will all be in good hands with our Chairman.
[The prepared statement of Congressman Lamborn appears on
p. 43.]
Mr. Hall. Thank you, Mr. Lamborn.
Votes are done. The good news is we will not be interrupted
by votes as we sometimes are. Unfortunately, the Ranking Member
and other Subcommittee Members may need to leave early.
There are no other opening statements, so we will move
right along to our first panel. I would like to welcome Belinda
J. Finn, Assistant Inspector General For Audits and
Evaluations, Office of Inspector General, U.S. Department of
Veterans Affairs, and Daniel Bertoni, Director, Education
Workforce and Income Security with the Government
Accountability Office. They are accompanied by Timothy Crowe,
also with the VA Office of Inspector General. Welcome and thank
you for being here today and for the work you do.
Ms. Finn, and all of the witnesses, your statements,
written statements are entered into the record. I would like to
ask you to present a 5-minute version if you can. You are now
recognized, Ms. Finn.
STATEMENTS OF BELINDA J. FINN, ASSISTANT INSPECTOR GENERAL FOR
AUDITS AND EVALUATIONS, OFFICE OF INSPECTOR GENERAL, U.S.
DEPARTMENT OF VETERANS AFFAIRS; ACCOMPANIED BY TIMOTHY CROWE,
DIRECTOR, AUDIT OPERATIONS DIVISION, ST. PETERSBURG, FL, OFFICE
OF INSPECTOR GENERAL, U.S. DEPARTMENT OF VETERANS AFFAIRS; AND
DANIEL BERTONI, DIRECTOR, EDUCATION, WORKFORCE, AND INCOME
SECURITY, U.S. GOVERNMENT ACCOUNTABILITY OFFICE
STATEMENT OF BELINDA J. FINN
Ms. Finn. Thank you, Chairman Hall and Members of the
Subcommittee. Thank you for the opportunity to talk today about
how the Department of Veterans Affairs can better protect
vulnerable veterans and their families.
With me today is Mr. Tim Crowe, Director of the Audit
Operations Division in Bay Pines, Florida.
VA annually provides benefits totaling more than $40
billion to over 3 million veterans and dependents. When a VA
beneficiary cannot handle their own finances because of injury,
disease or the infirmities of age, VBA or the courts appoint a
fiduciary to receive monies and make necessary payments for the
beneficiary's living expenses. VBA reports that fiduciaries
managed the finances of over 100,000 beneficiaries with
cumulative estate values of over $3 billion and those
beneficiaries receive annual benefit payments of around $700
million.
VBA employees at regional offices are responsible for
overseeing the fiduciaries to ensure that the VA-derived income
and estates are used solely for the care, support, welfare, and
other needs of VA beneficiaries.
From the OIG's perspective as an oversight agency, we know
firsthand that a dishonest fiduciary can misuse funds and how
they might hide that misuse. We recently completed a review of
the Fiduciary Program's effectiveness in addressing potential
misuse. We concluded that VBA lacks the elements of an
effective management infrastructure to support the program. A
previous audit in 2006 had identified some of the same
weaknesses.
VBA's case management system, the Fiduciary Beneficiary
System, or FBS, has functional and data limitations that
severely limit its usefulness as a tool to support program
operations. For example, FBS stores only 2 months' worth of
data at any time and does not interface with other critical VBA
systems. Further, the system cannot receive financial
information electronically, and this means that program
personnel must deal with manual reports and statements from
fiduciaries and financial institutions. Late last year,
however, VBA did start work to compare the current capabilities
of the FBS system with their program needs.
VBA also needs a staffing and workload model to guide
resource allocations across the program. For example, we found
that the number of beneficiaries managed by individual VBA
staff ranged from under 200 to over 1,500.
Finally, VBA needs to consistently assess the quality of
operations at regional offices, provide more guidance to
fiduciaries, and analyze the findings from program evaluations.
The program management issues lead to oversight lapses that
can affect the safety of beneficiary funds. We found that VBA
is not always taking effective action to obtain delinquent
reports that detail beneficiary assets, income, and expenses.
It also does not always verify the questionable expenditures
that are reported by fiduciaries.
Veterans and dependents that need the services of a
fiduciary depend on VA to oversee their financial well-being.
We believe that the Fiduciary Program can better monitor the
performance of fiduciaries with improved systems, staffing, and
information on program operations. As an OIG, we will continue
to work with VBA to improve the oversight of fiduciaries and
ensure that vulnerable veterans and their families are
protected.
Mr. Chairman, thank you for the opportunity to be here
today and discuss these important issues. Mr. Crowe and I will
be happy to answer any questions that you or the other
Subcommittee Members may have.
[The prepared statement of Ms. Finn appears on p. 43.]
Mr. Hall. Thank you, Ms. Finn.
Mr. Bertoni.
STATEMENT OF DANIEL BERTONI
Mr. Bertoni. Mr. Chairman, Members of the Subcommittee,
good afternoon. I am pleased to discuss the Department of
Veterans Affairs Fiduciary Program and how it can be improved
to better serve veterans and their families.
As you know, VA appoints fiduciaries to protect the funds
of veterans who are unable to manage their own affairs. The
fiduciary may be a spouse, other family member, or a private
party that provide such services for a fee. Last year,
fiduciaries served more than 100,000 beneficiaries and managed
over 4 percent of all benefits paid by VA.
For years GAO, VA's inspector general and others have
expressed concern that the program is not fully safeguarding
beneficiary assets. You asked us to discuss areas of continuing
vulnerability and possible ways the program can be improved. My
statement draws on a recent report assessing VA's policies for
safeguarding beneficiary assets, as well as challenges to
program oversight and performance.
In summary, we found that VA did not always take required
actions or sufficiently document the records to protect
beneficiaries. First, our analysis of case file data showed
that VA did not always conduct initial visits within required
time frames to assess a fiduciary's suitability to manage VA
benefits.
Beyond their value as a key screening tool, timely initial
visits are important because individuals often cannot begin
receiving benefits until they are completed. Moreover, in 18
percent of the cases we reviewed, the VA was also late in
completing required follow-up visits to monitor beneficiaries
and fiduciaries, or lacked sufficient documentation for us to
determine whether any action occurred at all. Similarly, while
we estimated that about 39 percent of fiduciaries were late in
submitting financial reports, program staff did not
consistently follow-up to obtain required information or failed
to document their actions. Many cases involved reports that
were more than 120 days late and considered seriously
delinquent under program rules. In the most egregious case, we
found a fiduciary submitted financial reports almost 2 years
late and only after VA initiated action to suspend payment.
We also identified weaknesses and staff confusion around
VA's processes for ensuring that fiduciaries who oversee high-
dollar-value estates are properly bonded. Of the cases we
reviewed that required a bond, 13 percent lacked documentation
that one was purchased or that the requirement was
appropriately waived. Some cases have estate values approaching
$100,000 leaving beneficiaries exposed to substantial loss if
funds were misused. We have recommended that VA take additional
steps to ensure that staff better understand and execute
program policies for file documentation, initial and follow-up
visits, and bond acquisition. The agency concurred with our
recommendations and is moving to revise key policies and
enhance its oversight role.
In addition to program compliance issues, we identified
weaknesses in VA's ability to monitor professional fiduciaries
who manage substantial funds for multiple beneficiaries.
Although VA is required to conduct on-site financial reviews of
these fiduciaries, the agency did not use a unique identifier
such as a Social Security number (SSN) or taxpayer
identification number to identify and match them to all
beneficiaries they may serve. Thus, the VA cannot be ensured
that all required reviews are being conducted and beneficiary
funds appropriately spent. However, per our recommendation, the
VA recently noted that it plans to require staff to begin
obtaining SSN or tax ID numbers for all professional
fiduciaries.
Finally, our report identified limitations in VA's
electronic fiduciary case management system and the training
provided to fiduciary staff as two key challenges to improving
program performance going forward. Specifically, we found that
restricted data fields in the current system prohibit staff
from systematically recording important case management
information such as when multiple financial reports are due or
tracking historical information on prior performance problems
with fiduciaries. In so many other areas, this system falls
short in terms of helping staff monitor their very complex
workloads.
In regard to training management and staff in the offices
we visited, we observed that available training was
insufficient to ensure that they had the necessary expertise to
carry out their responsibilities.
In two of the three locations we visited, most fiduciary
staff and managers had less than 2 years of programmatic
experience. Managers at these locations told us that staff
inexperience and limited training has likely contributed to the
problems we identified, including failure to properly monitor
fiduciaries or document certain actions in beneficiary case
files.
We have issued recommendations in both of these areas, and
VA is moving to address them.
Mr. Chairman, this concludes my statement. I am happy to
answer any questions that you or other Members of the
Subcommittee may have. Thank you very much.
[The prepared statement of Mr. Bertoni appears on p. 48.]
Mr. Hall. Thank you, Mr. Bertoni.
I will have one question of both of you, and then I will
ask Mrs. Kirkpatrick if she would like to go first, and then
Mr. Lamborn because they may have travel plans sooner than
mine. Mr. Mayes' prepared testimony on our third panel states
that the GAO and OIG reports ``confirm the validity of the VA's
current efforts.''
Do you believe that VA is complying with the OIG and GAO's
recommendations?
Ms. Finn. Our current effort found problems with how the
Department had implemented our recommendations from 2006.
Several of our recommendations were similar to what we had
issued in 2006, and the Department's efforts had not quite
fixed the problem.
For the current audit, though, of course they certainly
took action during our audit on issues that we brought up. They
have concurred with all of our recommendations, and the actions
we see seem to indicate that they are moving forward on those
recommendations.
Mr. Bertoni. In the case of our report that we just issued
at the end of February, and what we have is essentially
concurrence with our recommendations and a litany of things
that they have either planned or are underway.
In some areas, I believe they have already taken action. I
believe they are now requiring that professional fiduciaries
are tracked via their Social Security number or tax
identification number. I think that is very important.
If you have a fiduciary who is perhaps less than honest and
wants to game the system, under the old way they could list
their name as John Smith. In another case, John Q. Smith and
Johnny Smith. In that kind of situation they could have
multiple beneficiaries and you wouldn't know it. With a unique
identifier like a Social Security number or tax number, you
will be able to tie them all together and follow a financial
trail.
In other areas in the on-site reviews, we were concerned
that there was no national quality assurance process. My
understanding is that there is one now in place, or at least
beginning.
In several areas it looks like they have already begun to
initiate action per our recommendations. In others, what they
plan to do sounds like sound practice.
Mr. Hall. Thank you. I am sure when Mr. Mayes speaks, he
will elaborate.
Current efforts to move in the direction your reports have
suggested is progress, and we like progress. We are not
expecting perfection, but we are after progress here.
Mrs. Kirkpatrick.
Mrs. Kirkpatrick. Thank you, Mr. Chairman, for letting me
go first. I do have to leave for a flight.
I am very concerned about this program. Before I was
elected to office, I did a lot of guardianships and
conservatorships in my law practice, and then served for a
period as a judge pro tem just reviewing guardianship and
conservatorship accountings. As a judge, we have the power of
the court to crack down and apply fairly swift sanctions. But I
will tell you just the mere nature that you are combining
resources that aren't really having to be accounted for to me
just raises a huge red flag. So I have a couple of questions
for both of you.
Ms. Finn, first of all, is there training for the
fiduciaries? Are there specific rules and regulations within
the VA as to what the money can be spent for and are the
fiduciaries trained?
Ms. Finn. Mr. Crowe will answer that.
Mr. Crowe. I would characterize the training that is given
when they are appointed as being limited to a listing of their
responsibilities. One of the things we brought up in our report
was that a Web portal that lists responsibilities, training
aids, frequently asked questions and answers, might be helpful
in this regard.
Mrs. Kirkpatrick. That concerns me. I hope to see some
improvement in the training.
My personal experience in the area led me to believe that a
lot of people don't understand the nature of a fiduciary
relationship. They think that money is their money and they can
spend it any way they wish, and there really has to be tight
control on that.
Mr. Bertoni, I wanted to ask you, are there limitations on
fiduciary fees? I want to tell you, there is a high-profile
case in Arizona right now where a million dollars went to the
fiduciaries and their attorneys leaving the ward almost
bankrupt. Can you tell me, are there limitations on what the
fiduciaries can charge themselves?
Mr. Bertoni. Yes. Generally the fee is 4 percent of the
annual benefit amount. There are exceptions to that, as well as
exceptions when it is related to the courts. The courts often
mandate higher fees. I believe VA is required to comply with
the court's dictates. So yes, they can go higher, and
oftentimes it is due to a court-ordered fee.
Mrs. Kirkpatrick. I noticed in some of the statements that
were submitted that it appears in the Department of Veterans
Affairs, someone can be appointed a fiduciary. In my county, we
have public fiduciaries. That is one person with a staff, but
that person can be appointed the fiduciary. Do we have
something similar in the VA system?
Ms. Finn. The VA appoints the fiduciary and many, many
times it is a family member, in a lot of cases, not necessarily
a professional fiduciary.
Mrs. Kirkpatrick. Are there professional fiduciaries within
the VA who can serve in that capacity if the person doesn't
have a family member who can serve?
Ms. Finn. They are not employed by the VA. They register
with VA but are not part of VA.
Mrs. Kirkpatrick. My last question is I am very concerned
about the lack of timely reporting and accounting and lack of
documentation to support that. What kind of sanctions are there
in the system if someone delays in reporting?
Mr. Bertoni. In the financial area?
Mrs. Kirkpatrick. Any kind of sanction. For instance, I
would oftentimes remove a fiduciary who wasn't compliant. I
always took a pretty strict approach because they are really
dealing with someone else's money. So is there a process for
removing them or fining them or some kind of sanction?
Mr. Bertoni. Sure. In terms of the annual financial
reports, I believe it is sort of a sequential process. If
someone is late in filing, in the first 35 to 65 days, the VBA
is required to reach out and remind them in various ways to
submit reports. Once that gets up to be 90-plus days, then the
VBA is required to reach out again and can in fact suspend
benefits at that point. After 120 days, it becomes what is
known ``seriously delinquent'' and then again the VBA can take
more rigorous actions, which could be suspending the benefits
and pursuing the funds.
Mrs. Kirkpatrick. I hope we can do some more work on this.
I do appreciate you appearing here today. The Chairman and I
talked about wanting to do some additional oversight. I have a
concern about the sanction of removing benefits hurts the
veteran who needs the care. But we can keep talking.
Mr. Chairman, thank you very much.
Mr. Hall. Thank you, Congresswoman Kirkpatrick. I hate to
say it because it sounds like a joke, but we may have stumbled
upon a fiduciary backlog.
Mr. Lamborn.
Mr. Lamborn. Thank you, Mr. Chairman. I have a couple of
questions to build on the questions that Representative
Kirkpatrick already asked.
As she noted, there is a State process. In Colorado, it is
through the probate courts and the judge will grant someone's
application normally, sometimes appoint a guardian ad litem.
Does the VA just accept what the State courts, whoever has been
appointed by the State courts, or is there a parallel process?
Just so I understand better.
Ms. Finn. I can't give you a specific answer on that right
now mainly because our report didn't focus on the appointment
process. At this point in time, we focused more on the misuse
of funds.
Mr. Bertoni. We have done some work in guardianship in the
court systems. Generally I believe they defer to the court in
terms of the arrangement that was made, the fee collection
agreement, and the entity that is going to be the guardian and/
or the fiduciary.
I believe their controls allow them to screen at a later
point to determine whether that person still meets the bar in
terms of being suitable for being a fiduciary. But I would
defer the specifics to VA on that.
Mr. Lamborn. If I am not here to ask questions of the VA
panelists, I will possibly use the option of submitting
questions in writing.
Along that line, and I know you may not know the answer to
this, if there is a contest as happens occasionally with heirs
or other interested parties, does the VA ever take sides and
determine between contesting applicants? Do you ever get into
disputes over who is the guardian?
Mr. Bertoni. We have not done that level of work to answer
that question.
Ms. Finn. I think that is a VA question.
Mr. Lamborn. So that is not so much GAO matter of review.
Okay, then I have some other technical questions. I will defer
them to the VA. Thank you for being here and for the
information you provided.
I yield back.
Mr. Hall. Thank you, Mr. Lamborn.
Ms. Finn, your OIG report indicates that the program is
plagued by VBA's inability to detect the misuse of incompetent
beneficiary estates, insufficient staff follow-up on
questionable or incomplete data in fiduciary annual accounting
statements, and the failure of VBA to require documentation
from fiduciaries to support expenses that are claimed. These
challenges were identified in your 2006 audit, and in your
2010, which audit show that these weaknesses still exist. What
steps does the OIG plan to take to ensure that VA resolves
these issues to protect the beneficiaries who are unable to
protect themselves?
Ms. Finn. We have a multifaceted approach right now. We are
currently conducting a new audit where we are looking at the
large, retroactive payments that are made to beneficiaries
through a fiduciary. We are concentrating on those large
payments over $10,000.
We also work with our Office of Investigations on
investigations as they take on fiduciary fraud. We are doing
some work in our benefit inspections as we go into each
regional office and we look at the Fiduciary Program across the
board, not just misuse but we look at issues related to
appointments and accountings and anything that comes to our
attention in those regional offices.
Finally, we will continue to follow-up on our
recommendations and conduct future work in the program to look
at other aspects that we may not have been able to address at
this point. It is a pretty large program and we focused really
on one aspect for this period of time.
Mr. Hall. Thank you. From a statistical sample of Fiduciary
Program reports, the OIG anticipates that legal instruments
examiners may not have adequately verified approximately $2.9
million in expenditures for 551 of 1,906 accountings. That is
29 percent of the accountings completed between April 1, 2009,
and May 22, 2009. Based on this 29 percent error rate, how many
of the Nation's 104,000 incompetent beneficiaries do you
predict or estimate are at risk of fiduciary misuse?
Ms. Finn. Our statistical sample was somewhat constrained
by the fact that the system included only 2 month's worth of
data on accountings that were due and that is what we pulled
our sample from. So we didn't have a whole year's worth of
accountings, we just had 2 months of data. In the absence of
data, we cannot do an estimate of possible impact to the
program.
Mr. Hall. Thank you. That would be welcomed.
OIG contends in the 2010 report that VBA was not taking
effective action to obtain the delinquent financial accountings
from fiduciaries. Your report was based upon visits to a number
of regional offices. What in your observation distinguishes a
regional office that is properly overseeing a Fiduciary Program
from one that is having problems?
Mr. Crowe. I think the lack of a strong national management
oversight infrastructure of the program, which meant that there
were great performance variances from regional office to
regional office. The effectiveness of the program largely fell
to the abilities of local staff and management. We saw great
differences.
Mr. Hall. That is good for us to know since having
consistency, training, and standards that everyone is expected
to meet and taught to meet, are goals I am sure we would all
support.
The OIG's recent report notes that from fiscal year 2005
through 2008, VBA has failed to include statistical information
pertaining to misuse of funds by fiduciaries in the annual
benefits report to Congress as required by title 38 U.S. Code
section 5510. We know that the failure to provide this report
to Congress impairs our ability to effectively provide
oversight of the Fiduciary Program. How has this reporting
failure in your opinion harmed veterans and other
beneficiaries? And if so, what can we do to address this issue?
Mr. Crowe. I think investigating allegations of misuse go
to the heart of the mission of this program. I think we were
surprised to find that their policies were not being followed
largely because it appears that their performance in this area
was not being measured by performance standards or any other
measurements. And certainly some staff, I wouldn't characterize
everybody, but some staff talked about this as being a lower
priority, and we considered it to be a very high priority. And
some of the misuse actions that they had taken in investigating
these allegations were either untimely or not documented.
Therefore, if they weren't reported in their system, what was
being reported to Congress would be understated by definition.
When you get allegations of misuse from a beneficiary, from
a family member or from a friend, I think these are very
important leads that something is going wrong and a great way
for them to find out. We were trying to emphasize to the VBA
the importance of making sure that this becomes a higher
priority among their staff.
Mr. Hall. Mr. Bertoni, in the GAO report to the
Subcommittee, you observed that the Fiduciary Program is
hindered by its electronic fiduciary case management system or
FBS which some VA staff have called antiquated and cumbersome.
I understand that this system prevents VBA from identifying all
fiduciaries in the program since it may not be able to connect
a Social Security number with a name, or it may have the same
person's name entered in different ways and perhaps the VA
cannot tell the difference or identify the sameness of John
Hall, John J. Hall, John Joseph Hall, et cetera. Are there
better systems that could be used by VA that are being used by
other agencies that you oversee that could replace FBS and what
recommendations do you have regarding the FBS system?
Mr. Bertoni. I can't speak to specific systems, but I can
speak to other Federal benefit programs, and to my knowledge,
as I said, I have disability portfolios that entail the U.S.
Department of Defense (DoD), VA, and the Social Security
Administration (SSA), 20 other agencies, and within those 20
agencies, 200 Federal programs, and it is a rarity not to
capture the full Social Security number as the control number.
In this situation, you can have a fiduciary in California
who runs a afoul of the rules and regulations and pulls up
stakes and ends up in Oregon and changes his name slightly and
you would never know that. If you had a unique identifier, you
could catch that kind of activity. That is just one example.
I don't know what the system is. I do know that they are
not capturing it now. I don't think it is a matter of
capability. I think we were told that they could capture the
Social Security number under the existing system. But I would
say that FBS is problematic.
In our case, you asked why the Legal Instruments Examiners
(LIEs) were missing so many of their accountings. Well, if the
system only holds the most recent account due, then the four
prior that the fiduciary didn't submit drop off the radar
screen. When we went out into the field, we found field
examiners who had sticky notes on the wall to sort of remind
them that this particular fiduciary was late in four
accountings. The system wasn't doing that. These folks were
working in their own paper system outside the electronic
system.
So as far as the apparent lack of attention on the LIE's
part, I think much of that can be attributed to, number one,
the system is not helping them. Second, the ratio of wards to
staff. What I heard just a moment ago in terms of how many
folks that these LIEs and field examiners are managing, that is
alarming. At some point folks and tasks are going to fall
through the cracks. If you look at the consolidated hub, I
think the ratio is 800 wards per LIE and 400 wards per field
examiner. I don't know if that is appropriate, but at least
they know what they want to achieve.
Mr. Hall. Thank you for that information. Regarding the
site visits that GAO conducted to three of the 43 program
units, St. Petersburg, Cleveland and Salt Lake City, which is
the location of the western hub, I understand that the western
hub is a new initiative and your examination did not yield
conclusive findings, but you predicted this consolidation
effort has promised to standardize training procedures and
implementation. How long do you think it will take before the
western hub shows those results?
Mr. Bertoni. GAO, in general, is on record for much of the
consolidation of workloads and activities that are happening at
VA. They are consolidating a lot of workloads across a lot of
different activities, and conceptually that makes sense to us.
When you can pull together that many States and that many field
examiners, give them consistent training, give them an
opportunity to specialize in what they do instead of being the
generalist, jack of all trades, I think there are real
opportunities to increase timeliness and accuracy and
consistency of the workload.
Our concern is that we heard some noise out there in terms
of how the hub came about, perhaps it was rolled out when there
weren't enough support systems in place. How some of the cases
that came in were not what I would say appropriately worked and
they had to be reworked to make sure that the accountings were
up to date. So I think there were some speed bumps in terms of
implementation. We have asked that they do an evaluation to see
lessons learned and what they could do different going forward.
I believe that is underway or will be soon.
As far as when it will be up to maximum productivity, I
don't know. But I am starting to see some data that they are
starting to exceed national targets in terms of submissions of
the reviews of the financial accountings.
Mr. Hall. Thank you. I have a couple of more questions for
you and then we will give you some more in writing next week. I
am going to try to get to our other panels here while we are
all still awake and on solid food. But in your estimation, Ms.
Finn or Mr. Bertoni, what misuse of beneficiary funds occurs
more, that by fiduciaries who are related to beneficiaries or
by professional, nonfamilial fiduciaries?
Ms. Finn. It is hard to say what we don't know, but I can
tell you that our Office of Investigations has told me that
more than half of their investigations are related to a family
member. I find that very sad to speak of, especially on Bring
Your Child to Work Day, but that is the case.
Mr. Hall. Well, we are talking about a lot of money and
human beings here, so I guess we shouldn't be surprised that
the temptation certainly exists.
Mr. Bertoni. We couldn't answer that specifically either.
We haven't done that work. But I do believe that when you have
this level to date of management inattention, that that invites
and can open the door to misuse.
If you have structured oversight of the program, strong
program integrity tools in place, I think that clamps down the
temptation for abuse.
I did get a call this week from a citizen, I get these
quite frequently, who was having trouble contacting VA in terms
of getting a fiduciary. I tried to work through various
scenarios for that person, and I kept going back to: Do you
have a family member that could take this on? And that person
had family members but did not feel that they could trust their
funds with a family member. But that is all I know.
Mr. Hall. Just a couple of more things. We have some
reports from family members who are acting as fiduciaries who
have been barred from using VA funds for living expenses. One
question is have you an opinion about that and also do you
think that VA should consider paying familial fiduciaries?
Ms. Finn. I would hesitate to voice an opinion on that. I
guess if I were in that situation, I would hope my child would
do that without a salary. But I can see where the occasion
could arise where it is a large undertaking to take care of
someone who needs that level of attention.
Mr. Bertoni. Again, I don't have any work to bear any of
this out, but I would say expenses should be associated with
the care and well-being of the beneficiary. There are other
programs, aide and attendants that can be sort of rolled into
the equation to meet the supplementary needs of the
beneficiary. But I have no opinion on whether living expenses
should be part of it.
Mr. Hall. My last question is do you have an opinion as to
whether we should put a cap on the number of beneficiaries that
one fiduciary may handle or whose affairs they may handle?
Ms. Finn. It would seem to me to be a prudent undertaking
to do because a professional fiduciary who is managing the
funds of many beneficiaries has the greatest ability to move
funds between fiduciaries and the most funds that are at risk.
Certainly that is where we really need the controls to ensure
that all of the funds for the many beneficiaries that may be
under a fiduciary's management are well accounted for. I don't
have a specific number that I would recommend, however.
Mr. Bertoni. Is your question should we place a cap on the
number of beneficiaries that professional fiduciaries can
serve?
Mr. Hall. Right.
Mr. Bertoni. I would say, just as the point I made a few
moments ago regarding the ratio of LIE to wards and field
examiners to wards, I think at a certain point it becomes very
difficult to manage the finances of folks when you have many,
many beneficiaries to worry about. I don't know what that is,
but I think at some point you have to look at does this person
have the capacity or entity have the capacity to serve the
needs of the beneficiaries.
Mr. Hall. Thank you, sir. I would assume it would possibly
vary depending on the degree of disability and impairment of
the veteran beneficiary, but there is probably a limit to what
any one person can do competently, even assuming total
honestly.
Mr. Bertoni. And it also depends on the capacity of the
professional fiduciary. There are probably organizations and
entities out there that have support staff in place that can
sort of help with that. You really need to look at it on a
case-by-case basis as to which entities might be able to handle
more.
Mr. Hall. Thank you very much, Mr. Bertoni, Ms. Finn, and
Mr. Crowe. Your testimony has been very helpful. We will submit
some more questions to you most likely. We thank you. You are
excused, and now we welcome the second panel.
Our witnesses are Richard Weidman, Executive Director for
Policy and Government Affairs, Vietnam Veterans of America
(VVA); Sarah Wade, Coordinator, Family Issues and Traumatic
Brain Injury, Wounded Warrior Project (WWP); Jacob Gadd,
Assistant Director for Program Management of the American
Legion; Vivianne Cisneros Wersel, Gold Star Wives of America;
and Katherine Pflanz, Field Examiner from the Winston-Salem VA
Regional Office and American Federal of Government Employees
(AFGE) representative. Welcome. Thank you for your patience.
Again, it is good to see those of you who we have seen many
times before. Your written statements are in the record. You
are recognized for 5 minutes each, and then we will have some
questions.
We will start with Mr. Weidman.
STATEMENTS OF RICHARD F. WEIDMAN, EXECUTIVE DIRECTOR FOR POLICY
AND GOVERNMENT AFFAIRS, VIETNAM VETERANS OF AMERICA; SARAH
WADE, COORDINATOR, FAMILY ISSUES AND TRAUMATIC BRAIN INJURY,
WOUNDED WARRIOR PROJECT; JACOB B. GADD, ASSISTANT DIRECTOR FOR
PROGRAM MANAGEMENT, VETERANS AFFAIRS AND REHABILITATION
COMMISSION, AMERICAN LEGION; VIVIANNE CISNEROS WERSEL, AU.D.,
CHAIR, GOVERNMENT RELATIONS COMMITTEE, GOLD STAR WIVES OF
AMERICA, INC.; AND KATHERINE R. PFLANZ, FIELD EXAMINER,
WINSTON-SALEM VETERANS AFFAIRS REGIONAL OFFICE, ON BEHALF OF
AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, AFL-CIO, AND AFGE
NATIONAL VETERANS AFFAIRS COUNCIL
STATEMENT OF RICHARD F. WEIDMAN
Mr. Weidman. Mr. Chairman, thank you for the opportunity
for Vietnam Veterans of America to present some thoughts about
the fiduciary reports that you all are considering today, one
by the OIG and one by GAO and looking at the overall problem.
One thing is clear from both anecdotal experience that we
have as an organization both directly and through our local
leadership around the company as well as our service
representatives in that things in this program have been not
good for a very long period of time, mostly because it hasn't
been paid attention to.
So first and foremost, after reading both of these reports,
there is not a good solid program. The axiom that is always
useful to remember is that a unit does well is that which a
commander checks well. And because this thing is not set up
well, you can't even check well what is happening with each and
every veteran.
My second concern has to do with standards for the
fiduciaries as well as training, and this is something that
needs to be done.
Three, we are very troubled that most of the 2006
recommendations were not followed and implemented or at least a
number of them were not.
And the next observation that we have really has to do with
care. Both of these reports focused on the fiduciary and the
financial obligation that VA has to make sure that taxpayer
dollars go to the intended recipient for his or her benefit and
don't end up elsewhere. And that is an important function. But
equally important is that these are folks in pretty rough
shape, these 103,000 folks. They need medical care on an
ongoing basis. They need lots of things on an ongoing basis,
not the least of which is to make sure that they eat right.
We, frankly, are not all that concerned where it is a
spouse, which is true in a number of cases. We are concerned
with those who have many, or perhaps even hundreds, in their
caseload because that element of making sure that people get
the medical care that they need when they need it, we believe,
is a key part of this program. And of course, we have the
exposure of billions of dollars potentially.
It is almost akin when you don't have a system to check and
follow-up to the genius idea of sending $10 billion in cash
into the war zone into Iraq and then being surprised that more
than 70 percent of it couldn't be accounted for. It is almost
that foolhardy that you don't have checks and balances in this
system that really make a great deal of sense. But it is easily
done and we would urge Mr. Mayes and his folks that produce
information technology (IT) that can give you that capability
and start constructing a parallel system virtually immediately.
We believe that some of the progress that has been made
recently on the compensation and pension (C&P) system and a
change in attitude on the part of VBA leadership towards those
of us who are partners with them, and major stakeholders, is
something that means that we can move towards solving the C&P
problems within the next year and a half or 2 years. We need
the same sort of attention and the same collegiality, if you
will, and the same openness of attitude toward new solutions
and working with stakeholders at the State, national as well as
at the local level in order to solve the problems of the
fiduciaries.
With that, I will conclude my statement. I look forward to
any questions you may have, sir.
[The prepared statement of Mr. Weidman appears on p. 56.]
Mr. Hall. Thank you, Mr. Weidman. Ms. Wade.
STATEMENT OF SARAH WADE
Ms. Wade. Chairman Hall, Ranking Member Lamborn and Members
of the Subcommittee, thank you for inviting Wounded Warrior
Project to testify on VA's Fiduciary Program. Through our work
with severely wounded veterans and their family caregivers,
many of whom are fiduciaries, Wounded Warrior Project has a
unique perspective on this program. As a caregiver myself of a
severely wounded veteran of both Operation Enduring Freedom
(OEF) and Operation Iraqi Freedom (OIF) who sustained a severe
traumatic brain injury, and as someone who has worked with many
caregivers of severely wounded warriors, I believe I can
provide helpful insight.
WWP appreciates the critical mission and vital work
performed by the VA's Fiduciary Program, but we are gravely
concerned that in managing the program, VA fails to take
account of the unique circumstances of family members who are
devoting themselves to the full-time care of severely wounded
warriors and who also serve as their fiduciaries. Many have
given up careers and depleted their own savings to care for
these wounded warriors. Family members who have made these
kinds of sacrifices hardly pose a risk of misusing the
veterans' benefits.
WWP recognizes the need for the VA Fiduciary Program and
for appropriate oversight, and we appreciate the Government
Accountability Office's helpful report on the need to
strengthen the program and improve compliance with fiduciary
policies. Importantly, those policies recognize that all
fiduciary cases do not require the same degree of attention and
supervision and that field examiners should consider the unique
circumstances of each individual case. Unfortunately, we see
wide variability in how the judgment is exercised.
The many caregivers of wounded warriors, who are my friends
and with whom I have worked over the years, have put their own
lives on hold to be caregivers. Typically they have chosen to
give up or independently suspend their own career plans and
made other financial sacrifices. I can assure you of one thing
regarding those who have been appointed fiduciaries: their
dedication to their wounded spouses or children did not change
by virtue of taking on responsibilities of a fiduciary, yet
VBA's fiduciary oversight seldom recognizes the sacrifice of
those who are also caregivers. Too often these family members
encounter a VBA oversight system marked by rigidity,
intrusiveness and unreasonable decision-making.
Let me illustrate by way of a few examples. A VBA field
examiner imposing a summer vacation expenditure limit for a
profoundly wounded warrior, his wife and two children; a mother
caregiver having to explain to a VBA examiner why she allowed
her wounded warrior son to spend ``too much money'' on
Christmas gifts; the spouse caregiver of a traumatically brain
injured veteran having to get permission from their VBA field
officer to purchase a couch for their home.
As Chairman Hall mentioned in opening remarks, a devoted
mother caregiver was required to pay back money for toilet
paper purchased for the home. A family being questioned about
expenditures for gasoline that was used in transportation of
the wounded veteran; several instances of mothers who are full-
time caregivers being required to pay rent to the wounded
veteran rather than residing in their home for ``free.'' A
field examiner denying a mother caregiver's request to place
the now-wheelchair bound veteran's 8-year-old high mileage
truck that she uses to transport him in a rural, snowy area; a
mother caregiver having to relinquish her role as a fiduciary
because she had had to declare bankruptcy after leaving the
workforce to care for her wounded warrior son.
Let me assure you from personal knowledge that these
families do not deserve to be treated this way. Not every case
is mishandled, but these aren't isolated problems. Moreover,
caregivers experience stark variability in VA's oversight
across the country. The impression frankly is of a program
marked by arbitrary and capricious decision-making. It should
be recognized that family caregivers typically reside with the
veteran and may no longer have their own income. We see no
reason to preclude such families from applying part of their
loved's one benefits to help maintain a household that they
share. VA Fiduciary Program policies should make that
abundantly clear.
But even more fundamentally, a devoted family member who
provides daily care for a severely wounded veteran should not
be treated as the object of suspicion, either in terms of rigid
management of the budget or intrusive home visits simply
because the individual serves as the veteran's fiduciaries. We
believe these families are owed a presumption of honesty and
should be treated with dignity.
Over the past year, WWP has discussed these concerns with
VBA officials and offered to work with them, even arranging for
them to meet a family caregiver fiduciary to appreciate better
this family's experience, but we have yet to see any change in
policy or practice. Clearly both are needed.
In addition, VA must provide more training. Its own staff
needs training, but VA should also better clarify to family
members their responsibilities when they agree to serve as a
fiduciary.
Finally, it is noteworthy that caregivers of wounded
warriors are well known to VA. Each has worked closely with a
Federal Recovery Coordinator and/or other case manages in
connection with the veteran's care. In the isolated instance in
which there is some indication of a problem concerning a
caregiver, case workers in the Veterans Health Administration
become aware of it. From the caregiver's perspective, VA is a
single entity and they have every reason to believe VA knows
they are reliable and have integrity, so imagine how confusing
it is for a caregiver who has worked closely and developed
relationships of trust with other VA staff to encounter VBA
personnel whose fiduciary requirements convey fundamental
mistrust. It doesn't seem too much to expect that VBA and other
arms of the Department work more closely to share information
relating to caregiver fiduciaries rather than requiring these
dedicated individuals to prove themselves yet again.
Mr. Chairman, we look forward to working with the
Subcommittee to address these concerns regarding the VA's
Fiduciary Program.
This concludes our testimony. I would be pleased to address
any questions you may have.
[The prepared statement of Ms. Wade appears on p. 57.]
Mr. Hall. Thank you very much.
Mr. Gadd.
STATEMENT OF JACOB B. GADD
Mr. Gadd. Mr. Chairman and Members of the Subcommittee,
thank you for the opportunity to provide the American Legion's
views on the Department of Veterans Affairs' Fiduciary Program.
Without effective oversight, coordination, and management,
our Nation's veterans with mental health illnesses or diseases
will continue to experience delays and financial hardships in
accessing their earned benefits.
Title 38, Code of Federal Regulations, section 13, provides
the guidance for VA to manage the Fiduciary Program. VA is
charged with the point of fiduciary to manage and handle the
veterans compensation and pension benefits if a veteran is
deemed mentally incompetent.
A recent OIG report found that Veterans Benefits
Administration lacks elements of an effective management
infrastructure to monitor program performance, utilize staff,
and oversee fiduciary activities. Furthermore, the Government
Accountability Office recommended VA strengthen the Fiduciary
Program monitoring policies, improve staff compliance, and
consolidate the 14 western Fiduciary Program units.
While VA is, indeed, moving forward with the fiduciary hub
in Salt Lake City and taking actions to rectify the problems as
noted by OIG and GAO in their reports and through testimony
today, the American Legion still continues to have several
concerns. These concerns include the difficulty and delay in
processing the appointed fiduciary, the VA's centralization
model, and then, three, feedback from American Legion State
service officers and the Pension Management Center (PMC) staff.
First, in researching the number of forms, accompanying
delay in processing, and the stress that it places on veterans
and their beneficiaries, that is monumental. In fact, as noted
in my written testimony, there are 21 different VA forms
required to appoint a fiduciary.
Second, the American Legion has been concerned about VA's
centralization policies and that VSOs are not being included in
these processes. The American Legion continues to urge VA to
provide internal access phone numbers for accredited VSO
representatives. VA commented on this recommendation, stating
that, ``Providing direct internal telephone access would
require the redirection of resources currently dedicated to
disability claims processing.'' This is the same communication
problem that VA and VSOs are experiencing with the Fiduciary
Program.
At the Pension Management Centers, the American Legion has
three national staff in Minneapolis, Philadelphia, and
Milwaukee that have all shared the same concern, and that is
improving the coordination between the regional offices, the
pension centers, and the fiduciary hubs.
For example, a service officer files for benefits for a
veteran in August of 2009. The rating decision is then
completed in February 2010, proposing incompetency. In March,
the letter is sent to the veteran in regards to this
incompetency and the veteran waives the due process, which
enables VA to act on the claim prior to waiting the 65 days.
The award letter then goes back to the veteran, the first
payment, in May, but those retroactive benefits are withheld
until the guardianship unit can make their visit.
So, after all this process is complete, the Pension
Management Center then sends VA the form to the hub back in
Salt Lake City. The hub then would notify the guardianship
unit. And, once the field exam was completed, it was sent back
to the Pension Management Center.
So, as you can tell from all of this explanation, it is a
very cumbersome and lengthy process, and the coordination
between these offices can definitely be improved.
In addition, our service officer in one of the Pension
Management Centers helped schedule a fiduciary field exam
because the veteran had been waiting for 4 years to access his
benefits. And that field exam agent went out to his home on a
Sunday for that particular exam. And I just want to note that
this is unconscionable, that a veteran's claim can be delayed
for this period of time, and that our Nation's veterans and
their beneficiaries deserve better.
And the American Legion's focus with our testimony was on
the front end of this process and how we need to improve, as we
heard today, on the centralization, working with the IT
component. And, in that regard, the American Legion has several
recommendations:
First, that a full-time employee be funded and authorized
within each RO and PMC. Second, that Congress authorize and
fund VBA's IT budget to develop that integrated IT software
package that we have heard today.
Third, the Legion recommends that Congress ensure VSO
representatives are given an internal access phone number so we
can improve the communication between VSO and VA. Fourth, that
Congress direct VA to create a national fiduciary toll-free
number for their family members and the general public so that
they can get that information for that fiduciary.
Fifth, that Congress direct VA to allow fiduciaries to sign
the paperwork in advance so that a temporary fiduciary can be
appointed, and it might shorten that delay that they are
currently experiencing. And, lastly, that VA establish a VA
voluntary service pilot program which may be able to train
volunteers on how to become VA fiduciary volunteers.
So, Mr. Chairman and Members of the Subcommittee, the
American Legion sincerely appreciates the opportunity to submit
testimony today. Thank you.
[The prepared statement of Mr. Gadd appears on p. 59.]
Mr. Hall. Thank you, Mr. Gadd.
Dr. Wersel.
STATEMENT OF VIVIANNE CISNEROS WERSEL, AU.D.
Dr. Wersel. Mr. Chairman and Members of the Subcommittee, I
am pleased to be here today and to testify on behalf of Gold
Star Wives.
My name is Vivianne Wersel, Chair of the Government
Relations Committee. I am the widow of Lieutenant Colonel Rich
Wersel, Jr., United States Marine Corps, who died suddenly on
February 4, 2005, a week after returning from his second tour
of duty in Iraq.
We begin by thanking this Subcommittee and our Government
for providing essential services necessary to help us through
our loss and grief. Many services are being done well and in a
caring and helpful way. We must stress the importance of
staying vigilant so no one grieving the loss of a loved one
will endure any indignities or forfeit benefits due to the lack
of knowledge. Therefore, we need consistent and relevant
assistance at the time of death and for some period of time
thereafter.
Gold Star Wives was unaware of the VA Fiduciary Program
until requested to testify at this hearing. Even one of our
most seasoned Government relations members, Mrs. Edith Smith,
stated she was unaware of the Fiduciary Program. And this, in
itself, posed a concern about the lack of information for
eligible beneficiaries. ``Fiduciaries'' is not a word in our
vocabulary; yet, it should be.
We are concerned with the lack of publicity about the
program and the information available to eligible
beneficiaries. There is no mention of the Fiduciary Program in
the VA Handbook for Veterans, Dependents, and Survivors. We
need prior knowledge in order to obtain specific information on
the VA Web site.
Furthermore, this subject has neither been discussed in
prior testimonies that included Gold Star Wives, nor has it
been a topic of discussion with the VA/DoD Survivor Forum
quarterly meetings. Lack of information and participation does
not promote optimal care for surviving families.
In preparation for this hearing, we discovered some Gold
Star Wives were their spouses' fiduciary before their military
spouses died. Some required an annual bonding fee as the
designated fiduciaries. Why do spouses have to pay significant
fees to be bonded?
In 2002, Petty Officer Second Class Anthony Palmer
collapsed while playing basketball. He was kept alive via
medical devices. When the respirator was removed, he
unexpectedly continued living; however, he was totally
incapacitated. He was then medically retired, but when he died
2 years later, his VA disability compensation suddenly stopped.
His wife and two children were suddenly left without support.
What role did the VA Fiduciary Program play for his family?
When the Servicemembers' Group Life Insurance (SGLI) was
assigned by name to Mrs. Palmer's two small children, she had
to pay several thousand dollars for civilian court
guardianship. Why is this required when she is the biological
parent of two small children? She is one of the many young
widows with children who are experiencing this problem. Why is
the Fiduciary Program not used for SGLI, which is administered
by the VA?
Mrs. Dora Aja married her college sweetheart in 1953. His
heart attack in 1976 eventually left him totally incapacitated.
She had to be bonded to be a fiduciary, at the cost of $250
annually. When she relocated to be closer to her family, she
had to receive permission from the VA and Defense Finance and
Accounting Service to purchase a home. In addition, she must
submit, yearly, a spreadsheet of all her expenses.
Are spouses provided with the tools they need to monitor
the administration required of them annually? Mrs. Aja stated,
``I have cared for him and loved him for over 50 years, and the
Government treats me like a juvenile. It is a good thing that
my husband is not aware of what is happening because he would
be angry.'' She is neither a widow nor a veteran, nor is she
treated as the dedicated military spouse that she is, even
though she is soon to be a Gold Star Wife.
On another note, there are approximately 35,000 surviving
spouses and adults who are incapacitated and have fiduciaries.
Who takes the lead when the surviving spouse becomes
incapacitated? If the surviving spouse was not a fiduciary for
the veteran spouse, they may not know anything about the
program and, by extension, neither would their children.
Our main concerns with this program is the lack of
publicity and available information for our surviving spouses.
It is imperative that pertinent information about the Fiduciary
Program be made available to eligible beneficiaries to provide
meaningful support for present and future surviving spouses.
Please refer to our questions and concerns in our written
testimony. We thank you all for all your past support and look
forward to working with you to help improve this program. I
will be happy to answer any questions you may have, and I thank
you very much.
[The prepared statement of Dr. Wersel appears on p. 62.]
Mr. Hall. Thank you very much, Doctor.
Ms. Pflanz.
STATEMENT OF KATHERINE R. PFLANZ
Ms. Pflanz. Chairman Hall and Members of the Subcommittee,
thank you for the opportunity to testify on behalf of AFGE and
the National Council in order to share the perspective of the
field examiner and other employees of the fiduciary unit.
The fiduciary unit may be a very small part of the VA, but
it involves tremendous responsibilities. We are the unseen
workers who are tasked with ensuring that VA benefits are
protected. Field examiners are in the field 100 percent of the
time. I, for example, live 220 miles from my regional office
and over 100 miles from any other field examiners. We count on
the legal instrument examiners for assistance and guidance.
They are our eyes and ears for the protection of beneficiaries
but also for our personal safety.
Field examiners meet the fiduciary, who has been rated
incompetent by VA or adjudicated incompetent by the court, face
to face. We often live in the same community. We see them in
the grocery stores. We meet their families, sit in their homes,
and are provided a unique insight into their lives. We see them
at their best, worst, on and off medications, mad at the VA,
happy to have a visitor, and usually armed with many questions.
We are tasked with gathering personal information, from
finances to incontinence.
Field examiners are investigators, social workers,
auditors, medical personnel, financial advisers, information
resource specialists for local, State, and Federal benefits. We
work under very demanding production standards while striving
for high quality.
With a growing number of beneficiaries needing the service
and oversight of the fiduciary activity, lack of experience,
training, and guidance makes this task difficult to accomplish.
When I was a VSR, veterans service representative, I got
formal training by subject-matter experts as instructors. This
training gave me the opportunity to ask questions, meet
coworkers from other regional offices, work on mock cases,
learn to conduct interviews, and work in live cases.
In the fiduciary unit, formal training is not available.
The only hands-on training provided is by observing other field
examiners for a short time. Although useful, it does not
provide enough exposure to the wide variety of cases and
situations. We really need a comparable challenge course for
the field examiners.
Frontline supervisors, known as coaches, also need more
training. Supervisors throughout the regional office rotate
between stations or teams, but the fiduciary station requires a
very different skill and knowledge other than these different
teams. Too often, supervisors who do gain experience in the
fiduciary unit are rotated.
We also really need more field examiners. The workload
keeps increasing, and we cannot meet timeliness, and our
quality also suffers.
We also need better tools to do our job. Often, we have to
share cars, which hurts timeliness. The report generator, which
is what we use to write our report, is only for one of the many
types of reports that we have to prepare. The current
production expectations are unrealistic.
The standards make an assumption that every case is alike,
even though it varies so much from case to case on how long it
takes to gather the data required to properly assess the
beneficiary's need, protect funds, assess possible benefits,
and answer any questions the family may have. We are sometimes
forced to choose to either not make our production goal or make
errors or secretly work longer hours and risk facing the
consequences.
Giving the frontline employees a voice in the design and
testing of fiduciary tools would both save time and improve
quality. Me and my colleagues who work in the hub pilot in the
West are also very frustrated because they had no say in the
design of the pilot project. This model does not work, and AFGE
and VA Council urge you to discontinue it. The pilot deprives
veterans of the personal touch they need. It is depriving
employees out on the road, who are trying to protect the
veterans, from full support they need to do their jobs.
The Salt Lake City hub covers 13 States with 13 different
sets of State laws. There are a lot of morale problems. Field
examiners are not getting the backup they need. I have been
told that the San Diego hub also has big problems. Again, we
urge you to listen to the fiduciary unit employees who do the
job on the front lines.
I want to close by saying: A bad day as a field examiner
still beats a good day in the office any day. I feel this
position is the most rewarding, emotionally and physically
challenging, humbling, and enlightening position in the VA.
Thank you.
[The prepared statement of Ms. Pflanz appears on p. 64.]
Mr. Hall. Thank you very much for your testimony, Ms.
Pflanz.
And thank you all. I am sorry I had to leave the room for a
minute there, but I do have written statements from everyone.
I wanted to start with Ms. Wade and ask you: In your
testimony, you suggest that VBA staff does not recognize the
unique circumstances of family members who are fiduciaries and
who have devoted themselves to the care, sometimes full-time
care, of severely wounded veterans, nor does it provide the
support needed for these caregivers.
What specific steps would you recommend that VBA take to
better recognize the sacrifices of family members who oversee
the financial affairs of our veteran beneficiaries?
Ms. Wade. I think, first, it is important to distinguish
between what kind of family members we are discussing here. I
know in your previous question you asked about the number of
family members that were investigated. And we are not talking
about just any family member that suddenly came out of the
woodwork after this veteran started receiving their benefits
from the VA. The people I am talking about are ones that
oftentimes handled that individual's money through multiple
deployments when they were still on active duty and that is who
they entrusted with their money. A lot of these people were
asked to be the power of attorney of that servicemember before
they were injured.
Also, these are family members that have likely been at the
bedside since day one of that veterans injury and done this at
their own financial sacrifice. I know, in my own situation,
when my husband was injured, I quit school and left my job to
do it. I think these are people that have sorted themselves
out, have proven themselves. Many are also court-appointed
guardians, fiduciaries recognized by Social Security or just a
power of attorney.
But I think what we are talking about here is trusting
these people by virtue of the fact that they have already
proven themselves. And sometimes what that means is that--for
instance, in the example I used of several moms that live with
their veteran and take care of them, I don't think they are
living there for free; I think they are earning their living. I
don't think that it is that uncommon for family members to
house another family member in a time of need. I know my own
family has done it under numerous circumstances.
So I think recognizing that these funds that are being used
to take care of the household are for the veteran's well-being,
that it allows that person to be there to care for them, it
allows that veteran to stay out of institutional care and to
have quality of life.
I also think that it is very intrusive to have a complete
stranger who is a Government employee decide how that person's
budget gets spent when they didn't know that person before they
were injured. I think a good example would be one of the ones I
stated, of a family--a wife and her husband and two children,
who were given a spending limit for what they could use for a
vacation.
I think it is important to include that I went on an
alternative ski trip with that very family this winter, and the
mother-in-law had to come, too, because there was no way the
mom could take care of both her husband and the two children.
And, heaven forbid she had gotten injured skiing or something,
someone would have to take her place. So we are talking about
quite a few people traveling.
But my husband loved to travel before he was injured. And I
think that how someone spends their money and chooses their
financial priorities are oftentimes based on quality of life.
We have made some financial adjustments in our lives. We went
from a three-bedroom house to a two-bedroom house. We have one
car. We sold the car that I dearly loved before he was injured
to get something less expensive with better gas mileage that
would require less expensive maintenance. We don't eat out as
much. But we do still have a special account, actually, that we
contribute to monthly to pay for recreation and trips.
So I think that some leniency needs to be afforded to these
families. But, also, I really think that if these family
members are able to pay the bills and they are not putting this
veteran into debt, then I think how they spend their money for
fun and quality of life shouldn't be a stranger's business.
Mr. Hall. Thank you, Ms. Wade.
I would just like to say--and I am sure the rest of the
Subcommittee and full Committee Members would concur--that we
thank you and admire you and the other caregivers, fiduciaries
or not, who take care of their husbands or wives or sons or
daughters who have been injured serving this country and made a
sacrifice that affects the entire family so gravely and
seriously and requires the changes and the sacrifices that you
described.
Ms. Wade. We appreciate your support of the bill yesterday,
sir.
Mr. Hall. I thank you for coming here and giving us such
moving examples of what I would assume are isolated and
misguided actions that can be corrected. I don't believe that
the VA staff are intentionally trying to make life harder for
you, when it is already difficult.
The job of this Subcommittee and that of the Congress in
general is to perform oversight. And we are going to do that
with this program, to try to improve it in ways that you and
others are suggesting.
Mr. Gadd, in your statement you indicate that the process
for approving a fiduciary is long and tedious. Could you
suggest some ways that that process could be improved, please?
Mr. Gadd. Sure. And thank you, Mr. Chairman.
The American Legion's primary concern was the delay in
processing the fiduciaries. We indicate in our written
testimony several different reasons why, whether it be the
number of forms or the lack of communication between the RO,
the Pension Management Center, and the guardianship unit that
are actually scheduling these visits.
And some of the ways that we suggested improving this was a
comprehensive approach, such as training, IT software package,
and having there be alerts or reminders to make sure that that
process keeps continuing, and just more communication with the
veterans service organizations. We walk together with the VA to
try to help veterans and their beneficiaries.
And so, again, we just focus, really, on the delay and on
the front end. And we felt that if we addressed those problems
and the length in time that these veterans and their
beneficiaries are having to wait, that the program could be
improved.
And we also indicated, that a VA volunteer program--VA has
the Department of Veterans Affairs Voluntary Service Program--
that they could train and do a better job of standardizing the
training for this program.
Mr. Hall. Mr. Gadd, you suggest that there is a disconnect
between the public and the Fiduciary Program. If a public
contact number was provided and widely publicized, do you think
this would help to alleviate some of the commonly asked
questions that both veterans and their families need answered?
Mr. Gadd. Yes, sir, the American Legion feels that way.
Part of our testimony today was a recommendation to have a 1-
800 national call number for this. As many of the panelists
today have indicated, the public doesn't know enough about this
program. Some may have questions on what the program actually
does or how to get in touch with someone if you have a
question. So that 1-800 number, maybe if it was run out of the
Salt Lake City hub, will go a long way in improving that
communication.
Mr. Hall. Mr. Gadd, in your testimony you mentioned that
one or more full-time employees should be dedicated exclusively
to this program in each designated regional office. How many
full-time employees do you think would be necessary to fully
staff the Fiduciary Program in each RO?
Mr. Gadd. Well, the American Legion would contend that we
would need one additional full-time equivalent (FTE) in each
regional office to improve the Fiduciary Program. But, as we
have heard from the panelists today and from OIG and GAO, we
might also need an additional FTE looking at the compliance
side, to manage and make sure that those funds are being
allocated and used to the intention that they were supposed to
be.
So a number of 200 comes to mind with the regional offices,
and then the hub out in Salt Lake City.
Mr. Hall. Thank you.
Mr. Weidman, thank you again for coming before this
Subcommittee. I was wondering what your organization's
experience has been in interfacing with the Fiduciary Program
field examiners or legal instrument examiners. Do these VBA
staffers demonstrate the level of professionalism and diligence
that you believe is necessary for adequate oversight of the
program?
Mr. Weidman. When I talked earlier about complaints from
the field, almost every one of them has to do with the
multiples, if you will, those who have many. And it is usually
an attorney in a firm that is ostensibly a law firm but is much
more like law firms that are really bill collectors, if you
will.
So that has been our major concern. And trying to get
something done about those, we have not been particularly
successful anywhere. The majority of those have been in the
western States, as I think of it now. But also, here in this
area, we have had problems also.
And the question is, lack of a clear chain of command and
who does what. You can always call the OIG if you know to call
the OIG. The lack of information, which was talked about very
eloquently by the Gold Star Wives here today. People don't know
about the Fiduciary Program, but they don't know about any VA
program. VA's outreach is something that this Committee has
again and again and again discussed. The VA lacks public
education and public outreach to let veterans and their
families know what they have earned by virtue of military
service. And the Fiduciary Program is just another example of
that.
Mr. Hall. Would you suggest that greater training for
fiduciaries would help to curb the cases of misuse of funds
that we have heard about today?
Mr. Weidman. Well, it is partly that, and it is also the
selection of the fiduciaries themselves.
I mentioned earlier that we are not particularly concerned,
because we had never had complaints, that I can recall, about a
spouse misusing the moneys and not taking care of the vet. And
all of our complaints have been about the multiples.
But there clearly has to be some kind of differentiation
between the spouse where the marriage was intact prior to the
individual becoming disabled and those multiples. You shouldn't
be treating them the same.
I would say, when people asked about a living allowance
separate and above the 4 percent, hopefully a lot of that will
be taken care of with the caregivers bill, which passed the
House yesterday--and I think almost unanimously on the part of
the veterans organizations, will, knock on wood, pass the
Senate easily--and that and a much better coordination with the
VA chain when it comes to making sure people get their care.
Mr. Hall. Thank you, Mr. Weidman. And may your words go
straight to the Senate's ears. We have 290 bills that we have
passed in the House waiting for Senate action. This one might
jump to the head of the line and hopefully pass before Memorial
Day.
Dr. Wersel, in your testimony, you note the lack of
information published by the VA about the Fiduciary Program and
the fact that your organization was unfamiliar with the Program
due in part that the omission of any mention of it in the VA
Handbook for Veterans, Dependents, and Survivors.
How are spouses caring for VA beneficiaries harmed by this
scarcity of information? How much of an impact is that having
on the families, that they don't know about the Fiduciary
Program?
Dr. Wersel. When you don't have the information--and we are
looking at the--say, for instance, I am the surviving spouse. I
have funds coming in to my account automatically. In the event
something should happen to me catastrophically, am I prepared
to know what will happen? I have children that are young, and
one is over 18. It is just protecting--being able--that the
funds are going to be protected to care for my family still.
My children are not--I still have to have them go through
college. If I was alive and if I was not incapacitated, as a
mother I still would be providing a lot of support for my
children. I would hate the fact that my children, who would be
my fiduciary, would have to be limited in what they could spend
and what they could not spend. On the other hand,
accountability is important.
But, still, I think the lack of knowledge to any program is
compromising to our optimal well-being, just knowing, in the
event something should catastrophically happen to us.
Mr. Hall. Dr. Wersel, you also note that one spouse was
required to seek permission from the VBA to purchase a home to
be closer to family, that she was also required to be bonded.
Dr. Wersel. Yes. She is in California. And they were living
in northern California, and her family was in southern
California. And it was really challenging for her to be up at
the VA where he was, or at the care facility where he was, and
she wanted to be closer to family. And when she said, okay, to
get to California, they had to approve. She had to ask for
permission to move to San Diego.
I don't know if it is the State requirement that is asking
her to be bonded, but we were told that she is required to pay
$250 a year to be bonded. Because, at the time, it was decided
that she did not have the correct criteria to not be bonded.
But she does pay $250 a year to be bonded as fiduciary of her
husband. And part of the insult is that, you know, they went
through college together; she has been with him all these
years, and now she is being monitored carefully.
Mr. Hall. I understand that and I sympathize with it. I
think all of us do. And I think most Americans would feel that
this is, on the face of it, illogical, onerous and insulting,
particularly for a family member who goes back many years and
went to school with a veteran who is now incapacitated, like
cases that Ms. Wade mentioned, had a power of attorney, was
handling the finances while the spouse was serving overseas
before the injury occurred and so on.
But the question is, do you recommend any level of scrutiny
and accountability that would be acceptable to family members
to prevent misuse of funds.
Dr. Wersel. At what level.
Mr. Hall. Yes, the question is, what level?
Dr. Wersel. At what level. I think Ms. Wade said it well.
It is the fact that someone who has a vested relationship with
that servicemember or with that survivor is that spouse,
someone who has cared for that person unconditionally, that
should not be scrutinized in that level. That is where we have
issues with the wife who is still caring for the person who
said, ``Here is your power of attorney, and I am naming you as
the person in my power of attorney.'' The servicemember chose,
and legally chose, to have this person care for them in the
event that there was a traumatic event or a catastrophic event.
So that was chosen.
To have the Government come in and say, we want to monitor
where you live, how you live, how you spend--and in our
relationship, very much like her husband, we did a vacation
every year, every single year. Now, unfortunately, my husband
is not alive, but I would be insulted if someone wanted to know
why we chose the vacation we chose this year. And it is
something we tried to keep the tradition going. If it was
something we did in the past, you continue. It never should be
questioned. It is that close family member that has invested
the time with that servicemember.
So if you are thinking about levels, I think that the next
of kin should probably not be scrutinized as much as someone
who doesn't have that connection or perhaps wasn't named
legally before there was a death--I mean, a catastrophic event
that left them incapacitated.
Am I getting there?
Mr. Hall. Oh, you are, yes.
Dr. Wersel. Okay. Good.
Mr. Hall. I appreciate your suggestion. And I want to thank
you also.
Dr. Wersel. There is one thing that we talked about, that
first question, and I think I didn't touch upon it correctly.
You know, in the event of one of our children, if they became
incapacitated and there were special needs, can you all come in
and say, we don't want the mother to be the fiduciary? Can VA
pick and choose who they will choose to be the--do we have any
control of that?
Mr. Hall. I am sure Mr. Mayes can answer that in the next
panel when the time comes.
Dr. Wersel. Okay. That is a concern.
And those are the questions we have. The main concern is,
when you are a surviving spouse or a survivor, sometimes what
you don't know is okay, but then when you discover there are
programs out there, you want to be prepared, you want your
ducks in a row. We need to know what would happen in the event
of a catastrophic event that would happen to me tomorrow.
Mr. Weidman. Mr. Chairman, may I just offer one comment?
Mr. Hall. Yes, Mr. Weidman.
Mr. Weidman. That comment is, one size clearly does not fit
all. And Brad Mayes and his competent pension staff are bound
to act according to the law as interpreted by the General
Counsel. This is the place in statute--and I would encourage
and suggest that we encourage the administration to work with
this Committee to fashion language so that they have the
latitude to treat situations differently--to a distant nephew,
who the individual was not close to who may end up being the
guardian of an elderly vet, is not the same as a spouse of 50
years. And right now the law doesn't provide for Brad's people
being able to use their discretion to what makes sense. And
that is why it would be my suggestion that you look at, how do
you still have accountability yet have the latitude not to
insult the people who have become fiduciary who have that kind
of relationship?
Mr. Hall. Right. Thank you, Mr. Weidman. Or a parent would
probably fall in the same category of closeness to the
individual, in my opinion. But we will follow up with our next
panel with that.
Ms. Pflanz, in your testimony you stated that field
examiners often lack adequate training. What training would you
recommend? And how often should field examiners receive updated
training or refresher training to ensure that they remain
current with all Federal Fiduciary Program policy and
procedures?
Ms. Pflanz. I think that field examiners, before they go
out, should get the same kind of training as the veterans
service representatives do in the challenge program that they
have. And I also think that they should--as field examiners, we
should be retrained every 2 years, you know, enhance our
training. We deal with so many different levels, different
regulations, State laws, Federal laws, and things change. So I
think every 2 years would keep us at the best we can be to
provide a service to those who need us the most.
Mr. Hall. That is similar to lawyers doing continuing legal
education or other professions where there have to be yearly or
biyearly updates and education.
And in your statement, also, you recommend getting rid of
the western fiduciary hub, contending that it has adversely
affected training, case management, and tracking. Could you
give us any more details on the problems of the hub in your
opinion, and indicate any specific examples of how a case was
mishandled by staff in the western hub or how the case could
have been better handled if it was located in another office?
Ms. Pflanz. Personally, I am a field examiner out of the
Winston-Salem office, and we have--you know, ours are in-house.
But I know that my coworkers in-field are having a hard time
getting service from a different regional office. It is totally
in a different State. They don't know the local in-State
benefits that we, as field examiners, are required to also
speak about.
And we have a timeliness issue, which affects our
production, on being able to get it to a totally different
State, our reports, so that if any actions need to be done, you
know, it can be done in a timely manner. We count on the mail
system, and it is just not working.
With better training and then more tools, be automated, and
vehicles--our regional offices, we are there. Our frontline
supervisors are in the State. With better training, we would be
able to provide a much better service, you know. Just as this
lady had said, you know, to get the word out there. We also
talk about State benefits, local benefits. And one hub handling
13 different States with 13 different rules or different
benefits is cumbersome.
Mr. Hall. I understand that and appreciate that comment.
You also have mentioned that you would like Congress to
improve the lines of communication between the VA Fiduciary
Program and other Federal agencies, and you note in your
testimony a joint program between VBA and Social Security
Administration.
Could you elaborate on this program? And what are the pros
and cons of establishing similar joint programs between VBA and
other Federal and State agencies?
Ms. Pflanz. As a field examiner, when I go out, there is--
and we see misuse. It is not always just on the VA benefits.
Normally, that person also has control of our beneficiary's
Social Security, military retirement, personal retirement. As
field examiners, we can only take so much action. There is no
follow-up. We don't send our reports to Social Security, you
know, saying, ``Hey, there is a problem.'' Social Security, if
they have somebody that is rated, you know, as incompetent or a
fiduciary that is not doing what they are supposed to do, there
is no feedback, no warning to me on the road, you know, out
there working. You know, it is trial and error on both parts of
a system that could work.
Mr. Hall. So interagency communication would help both?
Ms. Pflanz. Tremendously for everybody, especially our
beneficiaries.
Mr. Hall. From the AFGE point of view, I gather you would
like to see a total revamp of the program that would allow
field examiners to have more input, better training, better
equipment, cell phones, et cetera, improved policies and
procedures.
Which is the most urgent of these changes? Or how would you
have prioritized them? And what other changes might you
recommend based on what you have heard today?
Ms. Pflanz. Our senior field examiners, they have been on
the road, they have dealt with several situations, and they
should be the voice to writing policies and procedures. That
would be my number-one thing, would be to get them, who have
the experience to change because they have been there, they
have gone through it. And they have met people who don't
understand the programs. And they are more experienced than I
on how to make it work, what we can do to make us more
productive.
We need tools. We need--like, they were talking about with
the report generator, it is a great start, but it only provides
one report that I as a field examiner am required to write. Our
FBS program only gives our coaches a very limited scope or
reports because it is for only 60 days. That also needs to be
addressed. We need vehicles. We are where the rubber meets the
road.
Mr. Hall. Well, I want to thank you, Ms. Pflanz, Dr.
Wersel, Mr. Gadd, Ms. Wade, Mr. Weidman. Thank you all for your
testimony. Thank you for the perspective and the dedication and
insight that you have brought us today, and for your patience.
As usual, these hearings can take a long time, and we want to
thank you.
We may have some follow-up questions for you in writing,
which we will send to you. But, for now, I just want to say
thanks, and you are now excused. And have a great rest of your
day. We will try to do our best to solve some of these
problems.
We will ask panel three to join us: Gary Chesterton, Chief
of VBA's Fiduciary Program staff; Bradley G. Mayes, Director of
Compensation and Pension Service for the Veterans Benefits
Administration, U.S. Department of Veterans Affairs; with Diana
Rubens, Associate Under Secretary for Field Operations of VBA,
U.S. Department of Veterans Affairs.
Mr. Mayes, the floor is yours, sir.
STATEMENTS OF BRADLEY G. MAYES, DIRECTOR, COMPENSATION AND
PENSION SERVICE, VETERANS BENEFITS ADMINISTRATION, U.S.
DEPARTMENT OF VETERANS AFFAIRS; ACCOMPANIED BY DIANA M. RUBENS,
ASSOCIATE DEPUTY UNDER SECRETARY FOR FIELD OPERATIONS, VETERANS
BENEFITS ADMINISTRATION, U.S. DEPARTMENT OF VETERANS AFFAIRS;
AND GARY CHESTERTON, CHIEF, FIDUCIARY STAFF, COMPENSATION AND
PENSION SERVICE, VETERANS BENEFITS ADMINISTRATION, U.S.
DEPARTMENT OF VETERANS AFFAIRS
Mr. Mayes. Thank you, Mr. Chairman. I am pleased to appear
before you today to speak of the initiatives under way to
enhance the Department of Veterans Affairs' Fiduciary Program.
I am accompanied by Ms. Diana Rubens, as you mentioned,
Associate Deputy Under Secretary for Field Operations, and Mr.
Gary Chesterton, Chief Fiduciary Staff for Compensation and
Pension Service. I don't know if I could handle two of him, but
he is doing a lot of great stuff for us.
The Fiduciary Program oversees VA benefits paid to those
veterans and beneficiaries who, because of injury, disease, or
the infirmities of age, are unable to manage their financial
affairs. VA currently supervises more than 108,000 VA
beneficiaries, with cumulative estates exceeding $3 billion.
These veterans and their widows and children are among our most
vulnerable clients.
First, let me say that VA takes very seriously the
recommendations made by the Government Accountability Office
and VA's Office of Inspector General and is working to
implement recommendations made in their recent reports as well
as other important measures that we believe will further
strengthen our program.
I would like to briefly highlight some of the strides VA
has made within the last 18 months which are contributing to
improved service delivery and oversight of benefits to this
group of veterans and beneficiaries.
In September 2008, a new Chief of the Fiduciary Staff,
Gary, who is sitting to my left, was recruited to spearhead our
reform efforts in this program. Shortly thereafter, we selected
a new Assistant Director for Veterans Services, who has overall
responsibility in this program area. And these individuals
bring many years of technical and management experience to bear
on our efforts to strengthen the program and the service
delivery for these veterans and beneficiaries.
In addition to these leadership changes, we have doubled
the size of the staff responsible for fiduciary policies and
procedures and we have reassigned quality assurance case
reviews to our national quality assurance staff, located in
Nashville, Tennessee.
We are taking steps to clarify existing procedural
guidance. The operations manual for fiduciary activities is
undergoing a complete revision. Several policy changes are
already in place to increase protections, to include changes in
bonding requirements and documentation requirements for certain
categories of both budgeted and unbudgeted expenses. And this
guidance was contained in Compensation and Pension Service Fast
Letters that have been issued to the field within the last
year.
VA has deployed several measures to improve oversight of
investigations into allegations of misuse of beneficiary funds.
In cases where a misuse allegation has occurred, policy is now
in place that requires regional office fiduciary activities to
provide VA's Central Office all documentation pertaining to the
investigation of these allegations.
To improve operational efficiencies, VA consolidated the
management of 14 fiduciary activities within the western area
under the fiduciary hub pilot program located at the regional
office in Salt Lake City, Utah. Analysis of the pilot, along
with recommendations, will be completed by September 30th of
this year and will address program strengths, weaknesses, and
lessons learned, and make recommendations on the feasibility of
expansion of the hub concept.
The hub is the only fiduciary activity operating in a
paperless environment, which has served its unique
configuration well. The hub also created a misuse team which
specializes in these types of investigations.
The hub is unique in that it has integrated Microsoft
MapPoint software in the scheduling of field exams within the
hub's jurisdiction. Utilizing this technology has reduced
overall travel times and increased the effectiveness of our
field examiners.
These are examples of improvements that have been realized
with this consolidation.
We also recognize the need to improve the information
technology systems available to our field fiduciary personnel
in the administration of this program. The current electronic
case management system, the Fiduciary Beneficiary System, poses
some limitations with historical data, as you heard,
interfacing with other systems currently employed by VA, and
workload management and fiduciary oversight. We have initiated
steps to replace the system. We are developing a request for
information to solicit interest from the private sector in an
alternative electronic case management system.
In conclusion, I want to affirm the commitment of VA to
serve and protect our most vulnerable population of veterans
and beneficiaries. The interest expressed in our program by the
Office of Inspector General, the GAO, and this Committee is a
testament to the very important task we have at hand. VA is
committed to take every step necessary to ensure that we
fulfill our obligations to protect this special segment of
veterans and beneficiaries whom we serve.
Mr. Chairman, this concludes my prepared remarks. And I
would be glad to address any questions or comments regarding my
testimony here today.
[The prepared statement of Mr. Mayes appears on p. 68.]
Mr. Hall. Thank you, Mr. Mayes.
I know the report isn't due until September on the pilot
western hub. But have you heard anything? Do you have any
response to the earlier critique about 13 different States'
differing regulations causing a problem for work being done
from that hub?
Mr. Mayes. I am going to defer that question to Ms. Rubens,
who has management responsibility for the hub.
[The following was subsequently received from the VA:]
The analysis of the Western Area Fiduciary Hub has been
completed, and the draft report is expected to be finalized by
the end of the calendar year. VA will share the report with the
Subcommittee at that time.
Ms. Rubens. Thank you, Mr. Chairman.
I will tell you that I was the western area director when
we decided we needed to look at how we do this better within
the constraints that we live with today.
One of the things we recognized right off was we would be
bringing together an amalgam of different States, different
court systems, different rules. We work closely with the folks
from General Counsel and the local regional counsels in an
effort to develop the training program that we would need to
incorporate for the legal instruments examiners that would be
living in Salt Lake. We continue to review that in an effort to
ensure we have made that connection the way we need to.
At the same time, I would say to you that the field
examiners all remained out based. They need to be in the
communities where the veterans are. And so we continue to have
that local relationship then with our regional council and the
local courts in an effort to ensure we are aware of changes
that might come about in individual States and can inform the
folks in the hub of any of those changes.
Mr. Hall. Thank you, Ms. Rubens.
Mr. Mayes, given the persistence of the problems OIG
identified in the 2006 study and again in the 2010 report,
could you elaborate on the steps VBA intends to take to address
these issues that have lingered in the Fiduciary Program?
Mr. Mayes. Yes, Mr. Chairman. I will break this along two
lines of discussion.
One has to do with ensuring that funds are appropriately
utilized on behalf of a beneficiary who we have determined
can't manage their affairs for whatever reason. We have
instituted new bonding requirements. We are checking to make
sure that bonds are in place every time we do an accounting and
that they are current.
We are insisting on pre-approval for any unbudgeted
expenses in excess of $1,000. We have set a national standard
on that. We have a requirement that budget expenses that exceed
15 percent more than what we have in the fund usage agreement,
require receipts, if we can't determine at the time of the
annual accounting what those monies were spent on.
Another thing that we are doing is, during our annual
accountings, we are requiring bank statements that show all
transactions during the accounting period. Previously, the
requirement simply required evidence that funds were in the
account. And we were concerned that, in particular, fiduciaries
who were managing multiple beneficiaries might have been moving
monies around, and then they were appearing at the time of the
accounting and there was no evidence, from our point of view,
that those monies weren't in that particular fiduciary's
account for the entire period.
So we have done a lot of things along those lines. Any time
there is an allegation of misuse, we are going to review the
documentation that either led to a formal misuse
determination--in other words, there was some merit to the
misuse allegation, we investigated it, and we did a formal
determination. We are going to review that. But even in cases
where we determined that there isn't merit to the allegation,
we want to see those. So there is much more oversight that we
are putting in place.
And the second thing that we are doing is we are focusing
on the training. The previous panels hit this pretty hard, and
we agree. That is one of the things that the Government
Accountability Office said, was we really need to focus on the
training.
Gary and his staff have been out to nine stations. We are
scheduled to visit 20 more stations. They have developed a
training program to deliver in person to the field examiners
and the legal instruments examiners in these regional offices.
So we are hitting the road, basically. I have given him more
staff, and we are going to hit the road and make sure that
everybody is up to speed.
Mr. Hall. Well, that is good to hear.
I am happy to hear you say that FBS is going to be
replaced. Do you have a timeline in mind for that, in terms of
the proposals coming back and one being chosen?
Mr. Mayes. We have been working with subject-matter experts
to help us identify the requirements, and we are working
closely with field representatives, with folks in Ms. Ruben's
chain of command, to come in.
Mr. Mayes. We need, as I think someone on an earlier panel
said, we need those subject matter experts to help us identify
the requirements.
We intend to put a request for information (RFI) out on the
street to solicit interest from the private sector. This is a
workload management tool that we need to build, to replace. So
we would like to engage the private sector community to see if
maybe there is something that we can use off the shelf and not
rely on in-house development. I believe that we can have that
RFI on the street within a matter of weeks.
Mr. Hall. There might be reason to make sure that it is
compatible with VA's new electronic system that will be
handling claim, in general, which also is supposed to be
compatible with DoD so that there will be a continuous stream
of compatibility. There will be, of course, veterans who move
from being self-sufficient to being incapacitated and perhaps
being in the Fiduciary Program, and it might be helpful to have
all three of these systems talk to each other.
I also wanted to you ask regarding FBS, during the interim
now while this search for the new system is going on, is it
possible to somehow tweak it so it can accept say the last four
numbers of the Social Security number? I just called one of the
unions that I belong to because they sent me a letter about
something, and they wanted to know which John Hall they were
talking to. It is a fairly common name. They are a national
organization, and the first person I got on the phone asked for
the last four digits of my Social, and I gave it and they
pulled up the right account. As the reports mentioned, that
would be a quick and easy fix. Hopefully that is an attainable
improvement.
Mr. Mayes. Mr. Chairman, we actually have the capability to
collect a tax ID number in our system. We have mandated that at
this point, that we collect a tax ID number.
The key, and Mr. Bertoni made reference to this, the key is
to make sure that we can associate every veteran or beneficiary
that is in this program with their fiduciary because there are
certain requirements that we have with respect to oversight,
especially in those cases where you have a fiduciary handling
multiple beneficiaries and certain liabilities that incur as a
result of legislation.
So now that is a requirement, whether it be an individual
Federal fiduciary or a professional fiduciary who is handling
multiple beneficiaries.
Mr. Hall. When did that requirement go into effect?
Mr. Mayes. That requirement just went into effect this past
week in a policy letter that went out.
Mr. Hall. That is good. OIG also noted deficiencies in
staffing and workload models for the program. For example,
decisions regarding staffing are left to the judgment of
individual RO directors. As a result, the OIG contends that a
wide variation exists in the number of beneficiaries managed by
different individual legal instrument examiners. It is a pretty
wide variation, from the hundreds to well over a thousand. What
steps are being taken to remedy this problem, and how long do
you think it will take to get to a more uniform level?
Mr. Mayes. Mr. Chairman, I would just like to make one
point because I heard that from members of the previous panel.
You know, when we are talking about field exams, the
circumstances with which we perform these field exams vary
across jurisdictions. If you are located, for example, in
Montana, you may have to drive literally hundreds of miles to
conduct a single field exam as opposed to maybe Chicago where
while you are not traveling so far, you are in rush hour
traffic as compared to Topeka, Kansas, where going 10 miles,
you are there in 10 minutes. So I don't think we can say that
the requirements in Montana would be exactly the same as they
would in Kansas vis-a-vis a metropolitan area in the east.
But we have some work to do here. When we set up the
western area, Ms. Rubens was very involved in helping us figure
out what is the proper allocation of resources.
Ms. Rubens. I can address that. One of the challenges, of
course, is as we look at the resources we have and how we
ensure that they are effectively and efficiently spread across
the organization, there is an overarching resource allocation
model for the service centers across the country that looks at
not only receipts in terms of work, but it looks at qualities
and production and timeliness and all of those things as we
look at how do we make sure that we distribute resources in a
way that allows them to be used effectively.
When we established the western area hub, one of the things
that we started out with was looking at how many incompetent
veterans and guardians that we had out there and appointees, as
well as each individual office, breaking that down, how many
legal instruments examiners did they have. Quite frankly, part
of my concern was I didn't think we were doing the job as well
as we needed to. My hope was to help build a cadre of legal
instruments examiners that would not be left behind. If there
were only two and one retired, we have some redundancy built in
so we can absorb any of those changes that might come
unexpectedly.
We have worked hard to ensure that initial staffing model
which aggregated those legal instruments examiners into Salt
Lake, as well as maintain those field examiners out there, to
ensure that we can still get out and do all those field exams.
It is part of an ongoing review that I regularly talk with
the now-western area director about in terms of how are we
doing in performance, are we meeting our obligation to appoint
those fiduciaries in a timely manner for those initial
appointments as well as getting those follow-ups done.
Currently we are going to work with the service to conduct
that overview of how is it going? Is the fiduciary hub a
concept that we are ready to advocate as an organization and
spread across the country? That is a key. At the moment I will
tell you we continue to evaluate the surges in field exams that
need to be accomplished when we lose field examiners.
We have worked with the service employees. AFGE was part of
a group last year that looked at what are the performance
standards for our field examiners, and redesigned those in an
effort to address the issues Brad raised when it comes to the
different locations that you have. I believe in Salt Lake we
have the right ratio. As I look at those numbers of 400 per
field examiner, and I think the 745 per LIE in Salt Lake are
manageable. We have made some tremendous strides in the
accountings and in the work we are doing. We have made some
tremendous strides in ensuring that seriously overdue
accountings are acted upon timely, that we are appointing
successor fiduciaries when that is required. But we will have
an overarching review to ensure that we have those ratios
proper, that we have the right training and the right standards
before we make any adjustments about how do we go forward, if
that is the decision.
Mr. Hall. Thank you.
We have all heard and know that, thanks to faster, better
medical care on the battlefield, that more of our servicemen
and women are surviving today in OIF, OEF than previously in
Vietnam, for instance. There is a much higher ratio of injured
that survive, but much more serious injuries for many of them,
debilitating injuries. Have you seen an increase percentage-
wise in terms of the recent veterans, post-2001 veterans
relative to the overall veterans' population who need the
services of a fiduciary? Or does it still track with the
veterans' populations based on the age groups and conflicts in
which veterans served?
Mr. Mayes. Mr. Chairman, I am going to ask Mr. Chesterton
to go ahead and take that question.
Mr. Chesterton. Yes, sir. We have actually recently looked
at that and we wanted to see if there was an increase
proportionally as to the total population. What we found is
proportionally it is growing exactly the same as the total
beneficiaries.
Mr. Hall. Thank you. That is interesting. I am sure that
age probably accounts.
Mr. Mayes. I was going to say, lots of time that is what
happens.
Mr. Hall. It is the great leveler. As a friend of mine
wrote, Time, the conqueror.
Can you tell us or if you don't have the information,
supply it to the Subcommittee later, which RO offices
experience the highest volume of cases involving the misuse of
beneficiary funds?
Mr. Mayes. We will have to take that one for the record,
Mr. Chairman.
[The VA subsequently provided the following information:]
Since FY 2005, when P.L. 108-454 put the requirements in for
misuse, the following States had the most misuse allegations/
determinations: Georgia (Atlanta RO), California (now being
processed by Salt Lake City RO), and Alabama (Montgomery RO).
Mr. Hall. How many cases has the VA discovered on the scale
of that one involving the fiduciary who embezzled nearly a
million dollars to support her gambling habit as we understand?
Is that an isolated incident or are there other cases of that
scale?
Mr. Mayes. Mr. Chairman, I would like to give you an
accurate answer on that because I think you are asking are
there other cases of fraud in excess of a million dollars?
Mr. Hall. Or in that ballpark?
Mr. Mayes. It is isolated, I will tell you that. It is
certainly isolated, but let me take that question for the
record and I will give you an accurate answer.
[The VA subsequently provided the following information:]
Since enactment of P.L. 108-454, three cases have involved
embezzlement of approximately $1.0 million. The three cases
were in California, Minnesota, and Texas.
Mr. Hall. When does the VA plan to launch the new Internet
portal for VA fiduciaries? What information is currently
available on the Web site for families and others who are
interested in securing the appointment of a fiduciary to care
for their beneficiaries, and what will be up on the new portal
when it goes up?
Mr. Mayes. Right now we have actually provided, I have seen
it, an E-benefits portal. The E-benefits portal is leveraging
the authentication that exists already within the Department of
Defense. So as an active duty service person separates, they
move into VA. They can be in the system and access information
that is up in this portal. In its infant stages, what we are
deploying up on the portal are parts of our applications that
might give an individual for example information on the status
of their claim. Did VA receive a piece of evidence, for
example, and that information will be available to an
accredited representative.
In the Fiduciary Program, I suppose that we would provide
access to a family member if they can represent the claimant
before the VA. So in that respect, they would be able to access
the information to see what is transpiring in the claims
process.
Beyond that, Mr. Chairman, I am not sure what we would put
out there. In other words, when we set up a fiduciary for a
veteran or a beneficiary, really the interaction is on a very
personal level because we are out there conducting a field
exam. We do follow-up beneficiary exams, and sometimes there is
interaction when we are doing the annual accountings. We did
take a note about a 1-800 number, I think was the suggestion,
some place for someone to go if they have questions about how
they can utilize those benefits and that is something that we
will also take back. Maybe we can put that information up and
have it be accessible through the Web as well, but I don't know
that it would be in that Web portal because that is designed
for the individual to access their report.
Mr. Hall. Thank you. Regarding the OIG report which noted
that from FY 2005 through 2008, VBA has not included
statistical information pertaining to misuse of funds as
required by title 38, U.S. Code, section 5510. When can we
expect VBA to provide this information?
Mr. Mayes. There is some information on misuse in the 2009
and 2010 annual benefits reports. I believe the piece we are
missing is what we saw in the OIG report. I believe that the
statute also requires that we report in the Annual Benefits
Report (ABR) the results of the cases that are referred to the
OIG. So now that we have that, we will include that in the ABR.
Mr. Hall. Thank you. Present company excepted, and not to
raise questions about the honesty of family members, but in
your experience and the statistics that you have, what is VBA's
opinion or view of professional versus familial fiduciaries and
the misuse of funds that occurs?
Mr. Mayes. For us, we want the most effective, least
restrictive fiduciary. That's what we care about. We care that
the fiduciary is willing to serve in that capacity. We care
that the fiduciary is willing to adhere to our legal
requirements. We care that they have the beneficiary's best
interests at heart, and we require that they meet certain
credit and criminal history requirements. That is what is
important to us.
Now, I would suggest that in most cases the most effective,
least restrictive avenue for achieving what is best for the
beneficiary is appointing a family member who is willing to act
in that capacity as a fiduciary. In fact, that is what we find
in most cases. In a majority of cases, we have family members
acting in that capacity.
Unfortunately, in some cases we have seen that family
members misuse those funds. So it is not about family member
versus professional fiduciary, it is about who is going to
discharge that responsibility most effectively. That is what
the VA cares about.
Mr. Hall. Regarding some of the testimony before that we
heard, what is your opinion about the possibility of providing
VA funds to pay for living expenses that are shared by the
beneficiary and the caregiver fiduciary and should we consider
providing compensation to familial fiduciaries?
Mr. Mayes. Well, Mr. Chairman, I am glad you asked that
question. When we pay fees, when we authorize fees to a
professional fiduciary, those fees come out of the benefits to
the beneficiary. So it is not like there is this extra fee that
is paid. We are authorizing an amount that has a cap on it by
law for a professional fiduciary to manage the Federal funds to
make sure that the beneficiary is taken care of. So when we
have a family member that is utilizing the veteran's monies,
funds, benefits, based on the disability or disabilities they
incurred in the service, it is perfectly reasonable for the
family fiduciary to use those funds for taking care of their
family member.
I think the question here is the level of oversight. I was
listening to the earlier panels. I know that sometimes it may
seem intrusive when we come in and we are trying to find out
who is going to be the most effective, least restrictive
fiduciary, and we ask to sit down with the family member and go
through a fund usage agreement.
But the reality is we don't require bonds for spouse. We
don't require an annual accounting requirement for a spouse.
That typically is a 3-year follow-up followed by another 3-year
follow-up. We do require pre-approval for certain expenses that
are expenses over a thousand dollars that aren't part of a fund
usage agreement, and we do require that those funds be utilized
to take care of the beneficiary.
So the requirements are a little less restrictive for the
spouse. And I understand how it might be perceived as being
onerous, but we have to balance that with the responsibility to
ensure that the beneficiary is being taken care of.
Mr. Hall. That is sensible. I am wondering if you think
that there is enough consistency from one RO to another in
terms of those thing you just talked about, the degree of
oversight and the degree of questions asked and standards met
and going through records. What we have heard is that there
seems to be some offices that are more zealous or cautious or
questioning or challenging, even, to family members in this
position than others. So how can we get everybody on the same
page and have the same level of scrutiny?
Mr. Mayes. I think we have some work to do here. No
question. I know Ms. Rubens, that is one thing that she presses
me on as program manager. We have to have clear guidance and
clear policy. I will tell you that we are in the process of
revising our procedures. And we are bringing in some very
experienced people from the field to do that. We are about 90
percent complete. So we have to have that clear policy out
there.
But I think even more importantly, we have to get out there
with these field examiners and these legal instruments
examiners, and that is why I brought Gary in and Christine
Alford, the Assistant Director over this shop, and added staff.
We have to get out there and train. We do have legal
instruments examiners and field examiners with a couple of
years' experience. We have gone to nine stations. We are on tap
to go to 20 more. We are going to hit every station.
So clarify the policies and procedures, streamline those
where we can, and then we have to train. I agree that we have
some work to do.
Ms. Rubens, did you want to add anything to that?
Ms. Rubens. Yes, I do want to add one thing, Brad. The
other thing we are going to do, while you all are going to be
going out and hitting the road and training, you are also going
to be bringing in folks from across the country to do an
overarching training program to ensure that as these new
policies have come out over the last year, we have a chance to
visit them together, make sure that there is a clear
understanding, and work towards that consistency that you
address.
Mr. Hall. Thank you. I am sure our families and relatives
who are acting as fiduciaries will appreciate that. I think we
all agree there needs to be a level of oversight to ensure
against abuses. And if there is sort of the same standard that
everyone is expected to meet, then no one will feel picked on.
Going back to professional fiduciaries, the compensation is
capped at 4 percent, as I understand it, and yet there is no
fixed limit to the number of beneficiaries that one fiduciary
can manage. In one case, a fiduciary oversees the affairs of
over 500 beneficiaries; is this a problem in your opinion? Do
you have concerns with the number of beneficiaries one
fiduciary can handle; or would you say that it depends on their
staff and the circumstances?
Mr. Mayes. I think that certainly some professional
organizations are more capable of handling greater volume than
others. I think it behooves the VA, and it was mentioned
earlier, it behooves us to get out there and recruit more
organizations that perform this type of work, get out there and
inform them of the fact that this program exists and encourage
them to engage us on behalf of our Nation's veterans.
In fact, Gary and I were just talking about that, and I
would like for him to share with you some of the things that we
have done to make some of our professional organizations aware
of this program.
Mr. Chesterton. In the previous year, we have started as a
staff to go out to conferences such as National Guardianship
Association. We are visiting and speaking at conferences for
the National Association of Elderly Law Attorneys. We are also
trying to work with AARP to go to their national convention.
Our general counsel has gone to the national probate court
judges conference, all in an effort to provide this outreach,
provide this information, and to recruit qualified fiduciaries
nationwide.
Mr. Hall. Thank you very much. One more question and then
we will submit some more questions for the record. And I want
to thank you for your listening skills and all of you for the
work that you are doing because I know we all have the same
goal here. We are simultaneously dealing with, VA is dealing
with, and the Congress is trying to help VA deal with a broad
spectrum of problems and come up with solutions all at the same
time, and it is affecting people in real-time in their lives as
things are happening that matter very much to an individual or
their family. And they matter to us as a country, too.
But we realize that this is a big agency with a lot of
irons in the fire and changes being asked for and developed at
the same time the work is going on day to day. So we are aware
of the challenge that you all face. We want to help in any way
we can.
I would say to the representatives of the service
organizations who spoke before, and to the Inspector General
and the GAO, we are all in a chain of oversight helping each
other hopefully get to the best possible solution.
With that, my final question to you Mr. Mayes, can fees
that are paid to fiduciaries, particularly family members who
act at fiduciaries, be bonded, to be deducted from the
beneficiary's account, or must a fiduciary pay out of pocket
for those fees? And can fiduciaries seek reimbursement from the
VA for fees that are paid to secure bonding?
Mr. Mayes. I am going to let Mr. Chesterton answer that
question. He is our expert in that area.
Mr. Chesterton. Whenever a fiduciary is required to provide
a bond, that all comes out of a beneficiary's funds. Any fees
generally associated with the maintenance of the beneficiary's
estate come from the beneficiary's funds. The fiduciary is not
normally required to pay out of pocket at all.
Mr. Hall. Thank you, Mr. Chesterton, and Mr. Mayes and Ms.
Rubens for your patience, testimony, and the work you are
doing. I will be submitting on behalf of the Subcommittee some
further questions. We will allow 5 days as usual for Members or
witnesses to revise and extend their remarks.
And just as the Gold Star Wives were largely unaware of the
existence of this program, I think much of America is probably
unaware of it. But it is very important to those who are in it
and who need the services of the Fiduciary Program, and it is
part of the contract, part of our honoring our commitment to
the men and women who served this country and are in the
position of needing this kind of help as a result.
So we are looking forward to working with you to help
improve the program and reduce the opportunities or the
instances of misuse or abuse of funds to the lowest level
possible and at the same time streamline the process for those
families who are either doing it themselves or bringing in a
professional, we are here to help as well as to do oversight.
Once again, I believe I speak for all of the Members of
Congress in expressing gratitude first of all to the veterans
for their service; and second, to the families and fiduciaries
for their continuing sacrifice, and finally to all of the
organizations represented here and you from the VA and from the
VBA who are working on this day to day. Thanks for your
testimony. Thank you in advance for answering the questions
that we are going to send to you in writing, and you are now
excused.
This hearing is adjourned.
[Whereupon, at 4:38 p.m., the Subcommittee was adjourned.]
A P P E N D I X
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Prepared Statement of Hon. John J. Hall, Chairman, Subcommittee on
Disability Assistance and Memorial Affairs
Good Afternoon.
Would everyone please rise for the Pledge of Allegiance?
Flags are located at the front and back of the room.
I welcome you all here today, just a day after we passed another
comprehensive veterans' health bill aimed at supporting veterans'
caregivers as well as enhancing veterans' physical and mental
wellbeing. I was honored to support this bill, S. 1963, The Caregivers
and Veterans Omnibus Health Services Act of 2009. This legislation
combines the recommendations of nearly 20 Members of Congress--
Democrats and Republicans alike. Provisions in S. 1963 will provide
training, education, and counseling for caregivers of veterans of any
era. In addition, the bill allows VA to recruit and retain nurses, home
health aides, and specialty care providers. Finally, this measure will
help VA better diagnose and treat those who suffer from the invisible
wounds of war, the stigma associated with them, and many other factors
that make effective treatment difficult. Specifically, S. 1963 expands
authority to fund services to treat wounded warriors suffering from
post-traumatic stress disorder (PTSD), traumatic brain injury (TBI),
and other combat-related disorders, which lead to homelessness and, in
some cases, suicides and criminal acts by veterans.
Our hearing today is entitled ``Examining the VA Fiduciary Program:
How Can VA Better Protect Vulnerable Veterans and their Families?''
This hearing is intended to examine VA's fiduciary program and assess
how Congress and VA can work together to better protect veterans and
dependents that are in need of fiduciary services.
Since 1926 when Congress passed the World War Veterans Act, VA has
been providing oversight of its benefits paid to those beneficiaries
who were incapable of handling their own affairs due to injury,
disease, or infirmities of age. Today, the VA Fiduciary Program
operates under authority contained in 38 U.S.C. Sec. 5502(a)(1). The
program is administered by VA Regional Offices and their respective
Offices of Regional Counsel, which interface directly with VA
beneficiaries and State courts in guardianship and commitment matters.
On average, impaired beneficiaries received approximately $14,400
in fiscal year 2008, about $4,200 more per year than the average for
all VA compensation and pension beneficiaries. In fiscal year 2008,
fiduciaries managed approximately $1.5 billion in VA benefits for more
than 103,000 beneficiaries. Thus far, for FY 2010, VA reports $696
million in benefits have been paid to more than 102,000 beneficiaries
with a cumulative estate value of $3.1 billion.
Recently, both VA's Office of Inspector General (OIG) and the GAO
issued reports on VA's fiduciary program. These reports underscored the
benefits of this program, but pointed to insufficient staffing,
training, and other resources that hamper the effective oversight of
the fiduciary program. In the absence of adequate oversight and
accountability, some fiduciaries have misused millions of dollars
belonging to our veterans and their dependents.
Let me take a moment to highlight some of the concerns about the
Fiduciary Program raised by the VA OIG and GAO reports. From October
1998 to March 2010, the VA OIG's Office of Investigations reports that
it conducted 315 fiduciary fraud investigations, resulting in 132
arrests and monetary recoveries of $7.4 million in restitution, fines,
penalties, and administrative judgments. One of these cases involved
the submission of false financial reports by a fiduciary who attempted
to conceal her embezzlement of nearly $1 million from 33 disabled
veterans whose accounts she managed. The funds embezzled by the
fiduciary were reportedly used to support her gambling habit.
It should be noted that these problems are not representative of
all fiduciaries. However, the fiduciary program is susceptible to abuse
as a result of deficiencies noted by both the VA OIG and GAO reports.
Specifically, both the VA OIG and GAO found: (1) VBA was not taking
effective action to obtain seriously delinquent accountings; (2) VBA
was not consistently verifying questionable expenses reported by
fiduciaries; and (3) VBA was not adequately following up and reporting
on allegations of misuse of beneficiary funds and estates. The VA OIG
pointed out that VBA has also not been diligent in replacing
problematic fiduciaries. In one case, a fiduciary was seriously
delinquent in submitting multiple reports, ranging from 134 to 215 days
late. In addition, during that period, VBA had received numerous
complaints concerning that fiduciary's performance. However, the VBA
took no action to replace this fiduciary.
On the other end of the spectrum, we will hear from VSOs who
complain that family-members who serve as fiduciaries are neither
supported financially nor through training by VBA to discharge their
duties. Moreover, the VSOs suggest that while it appears that some
professional fiduciaries are not subjected to as much VBA oversight,
family-member fiduciaries are viewed with suspicion and mistrust by
VBA, despite the sacrifices that they make to care for incapacitated
veterans and/or beneficiaries. For example, the Wounded Warrior Project
reports that VBA required a mother who served as a fiduciary for her
mentally disabled veteran son to reimburse funds spent on toilet paper
for the home.
This hearing provides a forum to explore these concerns with the VA
Fiduciary Program. With that, I look forward to the testimony of our
witnesses and insightful comments and questions from my colleagues on
the Subcommittee.
Prepared Statement of Hon. Doug Lamborn, Ranking Republican Member,
Subcommittee on Disability Assistance and Memorial Affairs
Thank you Mr. Chairman,
And welcome everyone, to this hearing on the Department of Veterans
Affairs fiduciary program.
The fiduciary program provides oversight of VA benefits to
beneficiaries who are incapable of managing their funds as a result of
injury or disease.
When the VA or a court determines that a veteran is incompetent to
handle his or her finances, the fiduciary program:
establishes an appropriate benefits payment method,
appoints a fiduciary to oversee his or her finances,
and provides continued oversight services.
Through periodic personal visits to the beneficiary's residence, VA
Field Examiners monitor the welfare and needs of the veteran.
My Subcommittee colleagues and I want to ensure that VA's fiduciary
program is taking every measure and has the support necessary to fully
safeguard beneficiaries' assets.
During the 108th Congress, we passed legislation that President
Bush signed into Public Law 108-454 on December 10, 2004.
The provision made improvements to increase fiduciary
accountability and strengthen protections for the beneficiary.
This included more thorough investigations of fiduciaries prior to
them being appointed and required VA to reissue benefits that were
misused in cases where negligence was found.
Today the Subcommittee would like a report on the effectiveness of
these provisions and whether further Congressional action is needed to
ensure that our most vulnerable veterans are afforded the highest level
of protection possible.
I look forward to hearing from our witnesses today, and I thank you
all for your participation.
Thank you, I yield back.
Prepared Statement of Belinda J. Finn, Assistant Inspector General for
Audits and Evaluations, Office of Inspector General,
U.S. Department of Veterans Affairs
INTRODUCTION
Mr. Chairman and Members of the Subcommittee, thank you for the
opportunity to discuss how the Department of Veterans Affairs (VA) can
better protect beneficiaries needing the care of a fiduciary and
specifically, the recent report from the Office of Inspector General
(OIG), Veterans Benefits Administration--Audit of the Fiduciary
Programs' Effectiveness in Addressing Potential Misuse of Beneficiary
Funds. Accompanying me is Mr. Timothy Crowe, Director of the OIG's
Audit Operations Division in St. Petersburg, Florida.
Our 2010 audit showed that many of the program weaknesses persist
since we last audited the program in 2006. In fact, some planned
actions provided by the Veterans Benefits Administration (VBA) in
response to our 2006 report, Audit of Veterans Benefits Administration
Fiduciary Program Operations, were not completed or did not fully
address our concerns about the protection of the estates of incompetent
beneficiaries. We continue to be concerned that VA regional offices
(VAROs) are not effectively employing some of the primary strategies
and tools to uncover and address potential misuse of these
beneficiaries' funds.
BACKGROUND
Federal fiduciaries are appointed by VA under authority contained
in Title 38, United States Code, Section 5502(a)(1), Payments to and
Supervision of Fiduciaries. The fiduciary may be the spouse of a
veteran; a chief officer of a VA or non-VA institution in which a
veteran is receiving care; a legal custodian; or another responsible
person. These beneficiaries are VA's most vulnerable constituencies. In
the fiscal year (FY) 2010 budget submission, VA reported approximately
$696 million in benefits payments to more than 102,000 beneficiaries
with a cumulative estate value of $3.1 billion.
A State court can appoint a fiduciary whose duties and authority
are established by Federal statute. In all cases, VA is responsible for
ensuring that the VA-derived income and estates of incompetent
beneficiaries are used solely for the care, support, welfare, and needs
of those beneficiaries. The VBA administers this program at VAROs and
the respective Regional Counsel offices.
VBA Field Examiners and Legal Instruments Examiners (LIEs) are
charged with monitoring the needs of Fiduciary Program beneficiaries
and the protection of VBA-derived funds. VBA Field Examiners determine
and appoint fiduciaries for incompetent and/or legally disabled VA
beneficiaries, establish and authorize the use of VA benefits and
assets, and provide ongoing case management services through scheduled
and unscheduled follow-up visits. During visits to the beneficiaries,
Field Examiners assess the competence, adjustment, and personal welfare
of the beneficiary; review fund usage, method of payment, and the
performance of the fiduciary; develop information affecting entitlement
to current or additional benefits; and ensure that the beneficiary's
dependents, if any, are adequately provided for with the funds
available.
LIEs share the responsibility with supervisors and Field Examiners
for making administrative and quasi-legal determinations involving the
overall supervision of beneficiary estates and the protection of rights
to benefits. LIEs oversee the management of the financial affairs of an
incompetent beneficiary through activities such as securing and
analyzing annual accountings filed by fiduciaries. Accountings are the
fiduciary's written report on the management of a beneficiary's income
and estate and must include a beginning balance, itemization of income
and expenses, and a statement of funds remaining at the end of the
accounting period. The LIEs analysis of accountings is a critical
component in monitoring fiduciary performance because it is where
questionable expenses can be detected at the earliest stage. In
addition, LIEs are to ensure that a required Surety Bond is in place in
an amount adequate to protect the existing VA estate as well as
anticipated VA income for the ensuing accounting period. Accounting
periods are normally 1 year but can be lengthened up to 3 years in
certain circumstances.
When the Fiduciary Program does not adequately supervise appointed
fiduciaries, incompetent beneficiary estates are subject to misuse. For
example, a joint Federal and State investigation in Minnesota disclosed
that a fiduciary submitted false accountings in an effort to conceal
the embezzlement of nearly $1 million from 33 disabled veterans while
acting as their appointed fiduciary. The defendant admitted to taking
funds from the veterans' bank accounts to support a gambling habit and
to submitting false accountings to VA and agreed to make restitution to
VA, the Social Security Administration, and a bonding company that
reimbursed the veterans for their losses. Earlier this year, the
fiduciary was sentenced to 55 months' incarceration after pleading
guilty to making a false statement to VA.
Historically, incompetent beneficiary estates have been at risk of
misappropriation by fiduciaries. The OIG reviews program performance
through investigations, audits of the program, and inspections of
fiduciary program operations and individual VAROs. From October 1998 to
March 2010, the OIG's Office of Investigations conducted 315 fiduciary
fraud investigations, resulting in 132 arrests and monetary recoveries
of $7.4 million in restitution, fines, penalties, and administrative
judgments. Our oversight efforts have shown that Fiduciary staff have
not always followed VBA policy when processing fiduciary claims or
providing oversight of fiduciary activities.
OIG Audit Results
In 2006 and 2010, we issued audit reports on the Fiduciary Program.
The 2006 report contained seven recommendations to improve Fiduciary
Program operations. Suggested improvements included ensuring staff
challenge fiduciary accountings and focus on key fraud indicators;
determining appropriate case load levels and staffing requirements;
developing a training program to enhance skills needed to effectively
conduct fiduciary oversight; and ensuring the accuracy of data reported
in the Fiduciary-Beneficiary System (FBS), VBA's case management system
used by the Program to support an array of functions necessary for day-
to-day operations.
Our 2010 audit found that VBA still needs to improve its management
infrastructure in the areas of information systems, staffing models,
and management oversight to support the Fiduciary Program.
Ineffective Support of Operations
FBS has functional and data limitations that have severely
affected management's ability to use the system as a tool to
support program operations effectively. VBA has not implemented
upgrades to FBS to address system weaknesses identified both
internally and by the OIG in previous reports. However, in
October 2009, VBA initiated a study to analyze FBS
functionality and to determine whether the system should be
modified or replaced to meet the Program's needs. VBA needs a
system that can:
Capture data necessary to target funds at risk of
misuse by fiduciaries. FBS does not maintain a list of
fiduciaries replaced due to misuse and does not record
accounting information such as VA and non-VA benefits,
fiduciary expenditures on behalf of beneficiaries, financial
institutions account balances, and Surety Bond values.
Contain reliable and accurate data for decision-
making and external reporting. For example, FBS currently
limits the user to a single entry for the estate value, which
according to VA policy, should include both VA and non-VA
funds. Since VA and non-VA assets are not recorded separately
in FBS, Fiduciary Program management cannot use FBS data to
identify VA estates that may require protection. In addition,
FBS tracks fiduciaries by name, not a unique identifier, such
as Social Security number or tax identification number. This
makes it difficult to match a fiduciary to all their
beneficiaries since the fiduciary's name is not always entered
into the system in a consistent manner.
Interface with other Compensation and Pension
Information Technology systems, such as the Veterans Service
Network (VETSNET), an application used to support VBA claims
processing. Consequently, FBS cannot automatically notify
Fiduciary Program staff of competency determinations or an
impending large retroactive payment caused by a change in a
beneficiary's service connected status.
Provide an automated interface for external
entities, such as fiduciaries, beneficiaries, or financial
institutions. This system shortcoming precludes electronic
submission of key data. Therefore, FBS cannot accept or process
electronically submitted accounting information from
fiduciaries or access financial institutions to secure account
balance and transaction information. Instead, fiduciaries must
manually prepare and mail accountings to VBA annually and staff
must manually review the data provided, check for math errors,
and reconcile income, expense, and estate balances to financial
institution data.
Lack of Staffing and Workload Models
Our recent report also noted that VBA lacks a staffing and
workload model for use by VAROs and Fiduciary Program
management. Instead, decisions regarding Fiduciary Program
staffing are left to the judgment of individual VARO Directors.
As a result, a wide variation exists in the number of
beneficiaries managed by individual LIEs, ranging from 188 to
1,576 beneficiaries per LIE. We found that the active
involvement of local Fiduciary Program management in
supervising the program was a decisive factor of whether the
Fiduciary Program staff took timely and appropriate action to
secure delinquent accountings. The Fiduciary Program
Headquarters component also indicated that it lacks sufficient
resources to address some program deficiencies.
We previously identified this issue in our 2006 audit. In
response to that report, VBA said it would complete a work
measurement study and convene a work group to examine Fiduciary
Program staffing at the regional office level and make
recommendations regarding caseloads. However, VBA's 2007
Fiduciary and Field Examination Pilot Implementation Team
Report indicated that historical guidelines relating fiduciary
activity resources to beneficiaries were long ago abandoned and
considered obsolete by program staff and field management.
Insufficient Guidance to Fiduciaries
VBA does not provide online information related to fiduciary
matters such as guides for best practices, frequently asked
questions, training, or other tools to assist fiduciaries. Some
coaches and LIEs believe the majority of VARO follow-up for
additional information and clarification is due to new
fiduciaries not being fully knowledgeable of their duties,
responsibilities, and program requirements. The availability of
online resources to assist fiduciaries could potentially reduce
requests to VBA for assistance and increase compliance with
Fiduciary Program requirements.
Inconsistent Quality Assessment
VBA is not consistently conducting activities that could
potentially increase the effectiveness of the Fiduciary
Program. VBA's Systematic Technical Accuracy Review (STAR) and
Site Visit programs both review fiduciary program activities to
ensure fiduciary staff comply with VBA policies and procedures
in areas such as timeliness, payee designation, fund usage, and
FBS accuracy. The Fiduciary Program does not analyze or trend
STAR errors and Site Visit Program findings nor identify and
disseminate best practices employed in the field. For example,
some VAROs provide newly appointed fiduciaries with locally
developed guidance. The literature discusses topics ranging
from fund usage to reporting requirements and includes local
VARO contact for the fiduciary activity.
Lack of Staff Training
Finally, training staff in this complex program is a continuing
problem. Centralized training for Fiduciary Program managers
has only occurred three times since 1987 and not at all since
2004. Centralized training for LIEs has only occurred twice for
LIEs since 1991. According to VBA, Field Examiners and LIEs
must complete a total of 80 hours of training each year. Of the
80 hours, 60 should be related to VBA-suggested topics while
the remaining 20 are at the discretion of the VAROs. In
response to our 2006 audit, VBA said it was developing a new
training curriculum for LIEs, but has yet to develop a
standardized curriculum for new LIEs. During the recent audit,
program management indicated that, during FY 2010, VBA would
implement standardized training for LIEs, conduct the first of
recurring managers training conferences, and deploy training
teams to provide 40 hours of standardized training to Field
Examiners, LIEs, and managers at each VARO.
In 2006, we reported that suspected misuse of incompetent
beneficiary estates went undetected because VARO staff did not follow
up on questionable or incomplete data in fiduciary annual accounting
statements and did not require documentation to support claimed
expenses. The following examples from our 2010 audit show that many of
the program weaknesses persist today.
VBA was not taking effective action to obtain seriously
delinquent accountings. Seriously delinquent accountings refers
to those which are at least 120 days past due. Under specified
circumstances, VBA policy requires fiduciaries to submit
periodic accountings listing beneficiary assets, income, and
expenses. We found that LIEs did not consistently pursue
receipt of seriously delinquent accountings from fiduciaries.
At 5 of 6 VAROs visited, 44 percent of the accountings drawn
from a random sample became delinquent up to 710 days. Further,
at 3 of these 5 VAROs, timely and appropriate actions were not
taken to secure 63 percent of the sampled delinquent
accountings. As a result, we concluded that VBA was not
managing the financial risks associated with the aggregate
estate value of 17 beneficiaries totaling over $1.5 million nor
were appropriate procedures followed to minimize the potential
risks related to untimely accountings.
VBA was not consistently verifying questionable expenses
reported by fiduciaries. We identified qualitative weaknesses
in the LIE review of expenditures of beneficiary funds by
fiduciaries. LIEs consistently failed to take effective action
to verify questionable expenses totaling $166,787 for 33 of the
137 accountings reviewed. For example, an LIE approved an
accounting statement related to one beneficiary's estate that
showed house and automobile expenses totaling $17,364 without
supporting documents or receipts, and did not challenge the
expense. Based on our statistical sample of accountings
reviewed, we projected that LIEs may not have adequately
verified approximately $2.9 million in expenditures for 551 (29
percent) of 1,906 accountings completed between April 1, 2009,
and May 22, 2009. Recent policy changes implemented by VBA have
strengthened fiduciary accounting requirements. However, VBA
lacks an agency-wide policy requiring receipts or other
documentation to substantiate unbudgeted and budgeted
expenditures that exceed a pre-designated threshold. This has
resulted in VAROs and individual staff applying different
standards when verifying questionable expenses submitted by
fiduciaries. Until VBA standardizes the accounting review
process to the extent practical and minimizes the subjectivity
in determining what constitutes a questionable expense, it
lacks reasonable assurance that unusual or inappropriate
expenditures are identified and verified to ensure funds were
expended appropriately.
VBA was not consistently replacing fiduciaries when
appropriate. At two VAROs visited, we found a fiduciary with
numerous late accountings while managing multiple beneficiary
estates. Actions were not in process to replace these
fiduciaries, in spite of these performance deficiencies. For
example, at one VARO, a fiduciary was seriously delinquent in
submitting four accountings ranging from 134 to 215 days late
during the period 2004-2009. In addition, the VARO received
multiple complaints from veterans regarding the fiduciary's
performance during this same period. However, the VARO had not
taken any actions to replace this fiduciary. When VBA fails to
take appropriate actions in a timely manner to replace
fiduciaries that are responsible for multiple delinquent
accountings, the potential for misuse or inappropriate
diversion of beneficiary funds is increased.
VBA was not adequately following up and reporting on
allegations of misuse of beneficiary funds and estates. Misuse
allegations of beneficiary funds may come to VBA as complaints
from the beneficiary, their friends and relatives, or other
interested parties. VBA policy requires staff to review, and if
necessary, investigate allegations of misuse of benefits
against a fiduciary within specified time frames. We found that
4 of 6 VAROs did not consistently process misuse actions timely
or appropriately in 22 (96 percent) of 23 cases reviewed. Two
VAROs did not report any misuse activity during the period
January 2008-March 2009. However, our audit identified four
cases of suspected misuse of funds at one VARO and one case at
the other VARO that should have been processed and recorded
according to VBA policy. Furthermore, for FYs 2005 through
2008, VBA did not include statistical information pertaining to
misuse of funds by fiduciaries in the Annual Benefits Report to
Congress as required by Title 38, United States Code, Section
5510. The required information includes:
The number of cases in which the fiduciary was
changed because of a finding that benefits had been misused and
how such cases of misuse of benefits were addressed by the
Secretary.
The final disposition of such cases of misuse of
benefits, including the number and dollar amount of any
benefits reissued to beneficiaries.
The number of fiduciary cases referred to the
Office of Inspector General and their disposition.
The total amount of money recovered by the
Government in cases arising from the misuse of benefits by a
fiduciary.
In our 2010 report, we recommended that VBA provide a robust
database to support program operations and develop a staffing workload
model to guide resource allocation decisions. We also recommended that
VBA develop and disseminate policies and procedures to improve the
analysis of annual accountings filed by fiduciaries that can result in
investigating and reporting allegations of misuse; provide more
guidance to fiduciaries; ensure regular periodic accountings of the
financial activities administered by fiduciaries; and ensure VAROs
conduct local quality assessments of fiduciary operations. The Acting
Under Secretary for Benefits agreed with our findings and provided
target dates to complete planned actions that address our
recommendations. We consider VBA's planned actions responsive to our
concerns and will follow up on their implementation.
OIG Inspection of VARO Fiduciary Program Operations
Our ongoing Benefits Inspection Program is an initiative to ensure
our Nation's veterans receive timely and accurate benefits and
services. Since April 2009, the OIG's Benefits Inspection Division
inspected fiduciary procedures to ensure staff provided proper
oversight of incompetent beneficiaries at four VAROs. We found
Fiduciary staff did not consistently follow VBA policy when processing
fiduciary claims or providing oversight of fiduciary activities. Our
analysis of 115 Personal Guardianship Folders found that 42 (37
percent) contained errors that affected or had the potential to affect
beneficiaries benefits.
Some examples of steps Fiduciary Program staff did not always
perform include:
Complete credit checks for potential fiduciaries.
Document the verification of beneficiaries' funds
controlled by the fiduciary.
Complete agreements with Fiduciaries to ensure how
beneficiaries' funds are to be spent.
Verify annual Fiduciary accountings for accuracy.
For example, a beneficiary's estate should have been increased
by $200,000 as the result of a property sale. Staff noted the
beneficiary had assets of $66.82 after the sale of this
property and did not question the disposition of funds
resulting from the sale of the property. Consequently, VBA
staff lacked assurance that these funds were spent
appropriately and solely for the welfare of the beneficiary.
We will continue to review and report on VARO performance in
managing the fiduciary and field examination activity in future OIG
benefit inspections.
CONCLUSION
VBA needs an effective Fiduciary Program in place to ensure
consistent and effective monitoring of fiduciaries and beneficiary
funds and estates. Effective oversight is necessary to the stewardship
of beneficiaries' financial affairs. During the course of our audit,
Fiduciary Program management at VBA Headquarters made positive changes
to the program such as requiring fiduciaries to submit monthly bank
statements with annual accountings. We believe that more improvements
are necessary to ensure the integrity of this program and the services
it provides to vulnerable veterans and their families.
Mr. Chairman, thank you for the opportunity to discuss these
important issues. We would be pleased to answer any questions that you
or other Members of the Subcommittee may have.
Prepared Statement of Daniel Bertoni, Director, Education, Workforce,
and Income Security Issues, U.S. Government Accountability Office
VA'S FIDUCIARY PROGRAM: VA Plans to Improve Program Compliance and
Policies, but Sustained Management Attention is Needed
GAO Highlights
Why GAO Did This Study
The Department of Veterans Affairs (VA) pays billions of dollars in
compensation and pension benefits to disabled veterans and their
dependents. For those beneficiaries who are unable to manage their own
affairs, VA appoints a third party, called a fiduciary, to manage their
VA funds. Congress, VA's Office of Inspector General (OIG) and GAO have
noted that VA does not always have, or adhere to, effective policies
for selecting and monitoring fiduciaries and therefore, does not fully
safeguard the assets of beneficiaries in the Fiduciary Program.
GAO was asked to discuss the Fiduciary Program and possible ways
that it could be improved to better serve veterans, their families, and
survivors. This statement is based on GAO's February 2010 report (GAO-
10-241), which examined (1) VA policies and procedures for monitoring
fiduciaries and safeguarding beneficiary assets and (2) challenges VA
faces in improving program performance and oversight. To conduct that
work, GAO reviewed program policies and relevant federal laws and
regulations, analyzed a nationally representative random sample of case
files, interviewed Central Office managers and staff, and conducted
three site visits to Fiduciary Program offices, which accounted for 25
percent of program beneficiaries.
What GAO Found
Inconsistent staff compliance with some Fiduciary Program policies
and weaknesses in others hinder VA's ability to effectively safeguard
beneficiary assets; however, per GAO's recommendations, VA plans to
take steps to improve the program. GAO found that VA did not always
take required actions to monitor fiduciaries within established time
frames or document in the beneficiary's case file that these actions
were taken. Inconsistent staff compliance occurred in four areas: (1)
initial visits to beneficiaries and fiduciaries, (2) follow-up visits
to beneficiaries and fiduciaries, (3) follow up to obtain annual
financial reports, and (4) oversight of surety bonds. For example, in
about 18 percent of the cases GAO reviewed, VA was late in conducting
required follow-up visits to monitor fiduciaries or did not provide
sufficient documentation to show whether these visits were conducted.
Similarly, while GAO estimated that about 39 percent of fiduciaries did
not submit required annual financial reports on time, VA staff did not
consistently follow-up with fiduciaries or failed to document actions
that were taken. In addition to compliance issues, VA's policies for
conducting on-site reviews of professional fiduciaries who manage funds
for multiple beneficiaries do not ensure that these fiduciaries are
effectively identified and monitored. For example, the agency's case
management system uses the fiduciary's name--which may be entered
inconsistently--to match them to beneficiaries, rather than requiring a
unique identifier, such as a Social Security number. As a result, VA
cannot always identify the fiduciaries that need to be reviewed.
Moreover, VA does not have a nationwide quality review process to
ensure that on-site reviews are conducted properly and consistently.
Per GAO's February 2010 report recommendations, VA agreed to revise its
Fiduciary Program policies in an effort to enhance its oversight role,
increase staff understanding and staff compliance, and better safeguard
beneficiary assets.
Two key challenges hinder VA's ability to improve Fiduciary Program
performance and oversight, but VA has plans to address these
challenges. First, managers and staff said that limitations with VA's
electronic fiduciary case management system hinder their ability to
capture key information. Per GAO's recommendation, VA has established a
work group to evaluate alternative system modifications to meet the
program's case management needs. Second, managers and staff indicated
that training may not be sufficient to ensure that they have the
expertise to properly carry out program responsibilities, as many of
them had less than 2 years of program experience. In its response to
GAO's recommendations, VA stated that it would begin providing
additional standardized training for managers and staff this year. VA
is also piloting a consolidated Fiduciary Program unit covering 14 VA
regional offices to improve program performance and oversight. VA
encountered a number of challenges during the pilot's implementation
and has not yet evaluated it, but per our recommendation, plans to do
so by September of this year.
__________
Mr. Chairman and Members of the Subcommittee:
I am pleased to have the opportunity to comment on how the
Department of Veterans Affairs (VA) Fiduciary Program can better
protect vulnerable veterans and their families. Each year, the VA pays
billions of dollars in compensation and pension benefits to disabled
veterans and their dependents. For those who are unable to manage their
own affairs,\1\ VA appoints a third party, called a fiduciary, to help
manage and protect the beneficiary's funds. A fiduciary can be a spouse
or other family member, or an entity such as a law firm, hospital, or
nursing home. In fiscal year 2008, fiduciaries provided services for
more than 103,000 beneficiaries, and managed nearly 4 percent of the
$38.6 billion in compensation and pension benefits VA paid out in that
year. Moreover, the average annual benefit amount for beneficiaries in
this program was approximately $14,400 in fiscal year 2008, which is
about $4,200 more per year than the average for all VA compensation and
pension beneficiaries.
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\1\ VA regulations state that the agency may appoint fiduciaries
for beneficiaries and beneficiaries' dependents who are mentally ill
(incompetent) or under legal disability by reason of minority or court
action. 38 CFR Sec. 13.55.
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Over the years, both Congress and VA's Office of Inspector General
(OIG) have expressed concern that VA's Fiduciary Program is not fully
safeguarding beneficiaries' assets. Areas of concern included delays in
conducting visits to select fiduciaries and insufficient monitoring of
VA fund usage by fiduciaries on behalf of beneficiaries. You asked us
to discuss such issues and possible ways that the Fiduciary Program
could be improved to better serve veterans, their families, and
survivors. My statement draws on our recent report which examined (1)
VA policies and procedures for monitoring fiduciaries and safeguarding
beneficiary assets and (2) challenges VA faces in improving program
performance and oversight.\2\
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\2\ GAO, VA's Fiduciary Program: Improved Compliance and Policies
Could Better Safeguard Veterans' Benefits, GAO-10-241 (Washington,
D.C.: Feb. 26, 2010).
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Our work included reviewing program policies and relevant federal
laws and regulations, analyzing a nationally representative random
sample of 205 case files\3\ and visiting three Fiduciary Program units
located in VA regional offices--St. Petersburg, Florida; Cleveland,
Ohio; and Salt Lake City, Utah--where we interviewed managers and staff
about program policies, procedures, and internal controls.\4\ These
units accounted for 25 percent of the program's beneficiaries. During
these visits, we also conducted file reviews of cases where either VA
suspected that fiduciaries were inappropriately using beneficiary funds
or fiduciaries were seriously late in submitting annual financial
reports documenting how beneficiary funds were spent. We also reviewed
12 VA on-site reviews which are examinations of financial records of
fiduciaries who oversee multiple beneficiaries, whom we refer to as
professional fiduciaries. Finally, we interviewed Central Office
officials and staff as well as Veterans' Service Organizations about
the performance of the program. We conducted this performance audit
from December 2008 to February 2010, in accordance with generally
accepted Government auditing standards. Those standards require that we
plan and perform the audit to obtain sufficient, appropriate evidence
to provide a reasonable basis for our findings and conclusions based on
our audit objectives. We believe that the evidence obtained provides a
reasonable basis for our findings and conclusions based on our audit
objectives.
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\3\ We analyzed a sample of case files from a population of about
103,700 adult beneficiaries. This excluded beneficiaries whom VA
monitored with alternate methods (such as those who managed their own
funds for a probationary period and those who VA monitored through
letters or phone calls in lieu of some personal visits), as well as
those who had negative estate values. All percentage estimates in this
testimony have a margin of error of plus or minus 10 percentage points
or less, unless otherwise noted. For additional information on our
stratified random sample of cases, file review methodology and the
reliability of data from the Fiduciary Beneficiary System (FBS), please
see Appendix 1 in GAO-10-241.
\4\ GAO, Standards for Internal Control in the Federal Government,
GAO/AIMD-00-21.3.1 (Washington, D.C.: November 1999).
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Background
Many individuals receiving monthly compensation and pension
benefits from the VA have mental impairments that can prevent them from
managing their finances. These conditions may result from injury,
disease, or infirmities of age. The VA Fiduciary Program matches
beneficiaries who are unable to manage their financial affairs with a
fiduciary, giving preference to spouses. If VA is unable to locate a
qualified spouse who is willing to serve in this capacity, an
individual or other entity, such as a lawyer or nursing home, will be
appointed. VA appointed fiduciaries who are not dependents or close
family members can collect a fee for their services (generally up to 4
percent of a beneficiary's annual benefit amount) and can oversee
multiple beneficiaries. Whether a fiduciary is a family member or a
professional, the responsibilities are generally the same and may
include receiving the beneficiary's VA benefits, paying the
beneficiary's expenses, maintaining the beneficiary's budget, and
generally seeing to the financial well-being--and, in some cases, the
physical well-being--of the beneficiary. Finally, if a court has
determined that a beneficiary is unable to handle his or her own
affairs and appoints its own fiduciary, VA must assess the performance
of that fiduciary to determine if he or she is suitable for managing VA
benefits given the needs and welfare of the beneficiary. If VA decides
to use the court-appointed fiduciary, the agency generally defers to
certain rules set by the court, such as those pertaining to the fee
amount that the fiduciary can charge for his or her services.
Fiduciary Program policies and procedures are developed by
Fiduciary Program Central Office staff under the Office of Policy and
Program Management within the Veterans Benefits Administration (VBA).
Individual Fiduciary Program units are generally colocated in VA
regional offices that also oversee other VBA programs. One major
exception to this is the Western Area Fiduciary Hub, where Fiduciary
Program units and files from 14 western VA regional offices were merged
into a single unit colocated in the VA regional office in Salt Lake
City, Utah, beginning in January 2008.
Inconsistent Compliance with Some Policies and Weaknesses in Others
Hinder VA's Ability to Safeguard Beneficiary Assets
Our February 2010 report noted that VA Fiduciary Program staff did
not always take required actions within established time frames or
document in the case files that the required actions were taken. Below
are four areas where program staff did not always comply with program
policies and, per our recommendations, how VA plans to address them.
Initial Visits to Beneficiaries and Fiduciaries. VA policy states
that initial visits to appoint fiduciaries are to be conducted within
45 days of a request for a fiduciary, and VA's performance goal is to
conduct at least 90 percent of these visits on time. Conducting timely
initial visits is important because beneficiaries cannot begin
receiving VA benefits until they are completed.
We sampled and reviewed 67 case files in which initial visits were
supposed to be conducted between July 1, 2006, and June 9, 2009,\5\ and
found that 37 visits were conducted within the 45-day time frame, and
10 were from 3 to 39 days late.\6\ For one case, the file lacked
documentation that an initial visit was made at all.\7\ Managers and
staff in some offices we visited said compliance with the timeliness
policy for initial visits was improving, but was still a concern. They
attributed some compliance issues to a continued lack of staff and
resources.
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\5\ VA implemented recommendations from the VA OIG's June 2006
report on the Fiduciary Program (Report No. 05-01931-158) by July 1,
2006. Recommendations involved VA's efforts to conduct visits, obtain
and review fiduciary financial reports, and obtain fiduciary bonds. As
such, we chose this as the start date of our analysis. The concluding
date of June 9, 2009, is the date by which we requested all files be
sent to us.
\6\ We could not determine if VA met its nationwide performance
goal of conducting at least 90 percent of initial visits on time
because the number of cases in our sample for which we could assess
initial visit timeliness between July 1, 2006 and June 9, 2009 was too
small to project our results to the population.
\7\ In the remaining 19 cases, the files included documentation
that an initial visit occurred; however, we were unable to assess the
timeliness of these visits because documents lacked the date stamps
needed to determine when the visits were requested and/or completed.
Lack of date stamps could indicate that the photocopies of the files
that VA provided us were of poor quality or that the documents in the
original files were never stamped with one or both of the necessary
dates needed to assess timeliness.
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Follow-Up Visits to Beneficiaries and Fiduciaries. Once the
fiduciary is selected, staff conduct periodic follow-up visits to re-
evaluate the beneficiary's condition and to determine if funds have
been properly used and protected. The first routine follow-up visit
generally takes place 1 year after a fiduciary is selected, and
subsequent visits typically take place every 1 to 3 years
thereafter.\8\ According to VA managers, it is VA's policy that follow-
up visits to fiduciaries are to be conducted within 120 days of the
scheduled date, and the on-time goal for these visits is also 90
percent. Timely follow-up visits are important to determine the
continued suitability of the fiduciary and to protect beneficiaries
from potential misuse of their funds.
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\8\ In some cases, such as when the fiduciary is a spouse or when
the beneficiary is institutionalized, some of the subsequent visits may
be substituted by letters or phone calls.
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Based on a nationwide sample of VA beneficiaries that had been
assigned a fiduciary, we estimated that approximately 61,000 adult
beneficiaries were supposed to have had at least one follow-up visit
between July 1, 2006, and June 9, 2009. We estimated that 76 percent of
these visits occurred within the 120-day time frame. In about 18
percent of the cases, however, VA did not conduct these required
follow-up visits on time or provided insufficient documentation to show
whether these visits were conducted at all. For the cases that were
untimely (12 percent), they were between 1 to 216 days late. In the
most extreme example among the cases with insufficient documentation to
show whether visits were conducted (6 percent), the follow-up visit was
overdue by 16 months.\9\ Similar to initial visits, program managers
and staff noted that compliance with the 120-day time frame for follow-
up visits can be challenging due in part to a lack of staff and time.
Program managers said that conducting visits in a timely manner may be
especially challenging in regional offices with only one or two
Fiduciary Program staff who may also have responsibilities outside of
the Fiduciary Program. In addition, managers and staff noted that
conducting timely visits can be challenging in areas where staff must
drive long distances to see beneficiaries and fiduciaries.
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\9\ An additional estimated 6 percent of case files contained the
report documenting that the visit had occurred, but lacked the date
stamp necessary to assess timeliness.
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Annual Financial Reports. VA policy generally requires staff to
obtain yearly financial reports and bank statements from some
fiduciaries to determine how beneficiary funds were used. When
fiduciaries do not submit their financial reports on time, staff are
required to follow-up with them and document such actions in the
beneficiaries' files. Staff can follow-up with letters, telephone
calls, or face-to-face contacts. VA policy requires staff to conduct
the first of such follow-up actions when fiduciary financial reports
are 35 to 65 days late and again when they are 90 days late. At that
time, they may inform the fiduciary of the possible repercussions of a
failure to comply, which may include legal actions, a referral to the
OIG, or other actions. After 120 days, the financial reports are
considered ``seriously delinquent,'' and appropriate action is to be
taken. Failure to take aggressive action to secure timely financial
reports may result in a finding of negligence, which will require VA to
re-issue any misused benefits.
Based on our nationwide sample, we estimate that fiduciaries for
about 33,000 beneficiaries were required to submit such reports between
July 1, 2006, and June 9, 2009. Of these, 39 percent \10\ were
submitted between 1 and 140 days late and 47 percent \11\ were
submitted on time.\12\ In addition our sample and site visit file
reviews showed that follow-up contact was frequently not done or not
documented by program staff. Of the 30 case files in our sample where
financial reports were submitted more than 65 days late, 19 case files
either lacked documentation of any follow-up actions or showed that
such actions were not taken within required time frames.\13\
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\10\ The margin of error was approximately plus or minus 12
percent.
\11\ The margin of error was approximately plus or minus 13
percent.
\12\ It was not possible to determine if or when the remaining 14
percent of the financial reports were submitted, due to poor file
documentation, including lack of date stamps. The margin of error was
approximately plus or minus 11 percent.
\13\ The number of cases in our sample where financial reports were
submitted more than 65 days late was too small to project our results
to the population.
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Moreover, we found additional instances of inadequate staff follow-
up on seriously delinquent financial reports during file reviews
conducted at the three regional offices we visited. We reviewed 20 such
cases, and found only 1 where the initial follow-up contact was taken
within the required 65 days. For the other 19 cases, contact was either
between 3 days and 11 months late or there was not adequate
documentation to determine if or when such contact had occurred. In one
case, a fiduciary's financial report was submitted more than 2 years
later than the original due date, and only after VA initiated action to
suspend payment. In another case, a financial report due in June 2006
was not submitted until nearly 2 years later. The file did not indicate
that any follow-up actions had occurred, although the case is now being
investigated for possible misuse of funds. Staff in all regional
offices we visited said that they sometimes did not take follow-up
actions or failed to document actions they did take, in part, because
they lacked the time or believed that some actions did not warrant
documentation.
Surety Bonds. VA generally requires staff to obtain a surety bond
from fiduciaries overseeing estates with a value of $20,000 or more
that is attributable to VA funds. A bond ensures that the beneficiary's
estate will be reimbursed in the event of fiduciary mismanagement or
abuse of beneficiary funds. Our nationwide sample showed that program
staff sometimes failed to obtain proof that a fiduciary purchased a
bond, when required, or did not adequately document in the beneficiary
case files that the bond requirement was waived.\14\ Of the 52 case
files in our sample for which fiduciaries were required to purchase a
bond, 8 case files lacked adequate documentation to indicate whether a
bond was purchased or that the bond requirement was waived because the
fiduciary met conditions for an exception. Some of the 8 cases involved
substantial benefit amounts. For example, 2 cases which contained no
documentation that bonds were purchased had VA estate values of
approximately $82,000 and $62,000--leaving these beneficiaries and VA
vulnerable to a substantial loss if funds were misused. Some staff in
regional offices we visited said that they were often uncertain about
what types of bonds are required for certain types of fiduciaries, and
this was confirmed by our site visit file reviews. For example, in one
case, a Fiduciary Program staff member was told by a fiduciary who was
an attorney that an individual bond was unnecessary because the
fiduciary had a ``blanket'' bond that covered all VA responsibilities.
Although this staff member documented in the case file that he was
unsure if this was correct, he took the fiduciary's word that an
additional bond was not required. However, we were told by managers and
staff that a blanket bond was most likely not acceptable in this case,
and the staff person should have required the fiduciary to obtain an
individual bond.\15\
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\14\ The number of cases in our sample requiring a bond was too
small to project our results to the population.
\15\ Central Office managers explained that fiduciaries need a bond
for each individual beneficiary unless the fiduciary is a government or
nonprofit entity, in which case a blanket bond covering all of their
beneficiaries would be acceptable.
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In regard to the above findings, we recommended that VA ensure that
staff understand and carry out policies regarding file documentation,
follow-up with fiduciaries for late financial reports, and bond
acquisition. VA concurred and, in its comments to our report, outlined
several planned actions. For example, VA stated that it would roll out
additional training for staff in March of this year and expects to hold
a manager's training conference later in the year. The agency also
intends to revise the program's policy manual this year to clarify
existing guidance, establish new policies and procedures, and enhance
oversight of fiduciary activities.
In addition to compliance issues, we identified weaknesses in VA's
policy for conducting periodic on-site reviews of professional
fiduciaries who manage funds for multiple beneficiaries. Cumulatively,
such benefits can be a substantial amount of money. On-site reviews
examine the financial records across all beneficiaries that a
professional fiduciary manages to detect discrepancies among accounts,
which may not be detected by examining annual financial reports for a
single beneficiary. We found two weaknesses associated with the on-site
review policy VA developed.\16\ First, while VA is required to conduct
periodic on-site reviews for professional fiduciaries who oversee more
than 20 beneficiaries with combined benefits totaling $50,000 or more,
the agency can not ensure that all fiduciaries who need these reviews
are identified. To generate a list of fiduciaries meeting these
criteria, each Fiduciary Program unit uses VA's electronic case
management system to link or match a fiduciary to all of their
beneficiaries. This computer match is based on a fiduciary's name,
rather than a unique identifier, such as the fiduciary's Social
Security number (SSN) or tax identification number (TIN). However, if
fiduciary names are entered inconsistently into the system, a fiduciary
for which an on-site review is required may not be identified. While
VA's case management system includes a field for unique fiduciary
identifiers, VA policy does not require this information for all
fiduciaries. Central Office staff acknowledged that requiring a unique
identifier would decrease VA's chances of making mistakes in
identifying fiduciaries with multiple beneficiaries who require
reviews. In response to our recommendation, VA plans to begin requiring
that all fiduciaries supply unique identifiers (such as SSNs or TINs)
to better track fiduciaries who manage multiple beneficiaries.
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\16\ On-site reviews were required by the Veterans' Benefits
Improvement Act of 2004; VA developed its on-site review policy in
2005, and began conducting these reviews in 2006.
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We also found that VA lacks a nationwide quality review process to
ensure that on-site reviews are conducted properly and consistently.
While VA has quality review processes to ensure that actions--such as
conducting initial visits and obtaining financial reports and bonds--
are carried out in accordance with VA policies, Central Office managers
acknowledged that VA lacks a similar process for on-site reviews.\17\
Having such a process is not only a key internal control, but it is
also important for ensuring that on-site reviews are conducted properly
and consistently across all Fiduciary Program units nationwide.\18\ Our
examination of 12 files from the three regional offices we visited
revealed deficiencies in these exams which could be detected through a
national quality review process. Four of the files we examined lacked
key case selection information, preventing managers from determining
whether they were selected according to VA policy--which states that
cases associated with beneficiary complaints or a history of late or
questionable financial reports should receive priority. In addition,
although VA policy requires that at least 25 percent of a fiduciary's
beneficiary case files (or up to 25 case files) be examined during the
on-site reviews, we found that this threshold was not met in four
instances. At the time of our review, Central Office staff tracked
whether on-site reviews were completed; but, not whether they were
conducted in accordance with policy. In response to our recommendation,
VA noted that they recently began reviewing all completed on-site
reviews to ensure that they conform to program policy and procedures.
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\17\ Both regional office managers and Central Office managers and
staff regularly review a set number of beneficiary case files on either
a monthly or yearly basis.
\18\ Internal controls should generally be designed to ensure that
ongoing monitoring occurs in the course of normal operations, including
regular management and supervisory activities, comparisons,
reconciliations, and other actions people take in performing their
duties. See GAO/AIMD-00-21.3.1.
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System Limitations and Insufficient Training Hamper Program Performance
and Oversight; However, VA Is Taking Steps That May Help
We identified two key challenges that limit VA's ability to improve
Fiduciary Program performance and oversight. First, VA's electronic
fiduciary case management system does not provide sufficient
information to managers and staff about their cases, and it is
cumbersome to use. Second, some managers and staff may not have
received sufficient training to ensure that they have the necessary
expertise to effectively monitor individual fiduciaries and oversee the
program. VA is taking steps to build expertise about the case
management system and the program itself by developing additional
standardized training and piloting a consolidated Fiduciary Program
unit covering 14 western VA regional offices.
VA's Electronic Fiduciary Case Management System. The Fiduciary
Beneficiary System (FBS), VA's electronic fiduciary case management
system, does not provide sufficient data to effectively manage the
Fiduciary Program. Although it does provide some useful information on
individual case files, pending workloads, and program performance,
several system limitations hamper its ability to maintain accurate and
timely data and provide management with quality information about the
program.
FBS data fields are configured to track a fixed number of pending
activities, which can limit the accuracy and completeness of
information in the system. Staff and managers in the three regional
offices we visited said they often need to track more upcoming actions
than FBS permits. For example, staff noted that FBS accepts only one
due date for upcoming financial reports, even though multiple financial
reports may be due simultaneously if one or more is late. In such
cases, the due date for the most recent overdue report overrides the
older due date, even if the older financial report has not yet been
submitted. To compensate for this FBS limitation, staff may track
pending actions manually outside of the system or keep personal notes
as reminder.
In addition, some managers find that FBS management reports are not
always easy to generate or helpful in overseeing the program. For
example, one manager told us that monitoring staff performance was
difficult because the system does not generate a single report that
shows all upcoming work that staff need to conduct over a certain
period of time. Instead, several reports need to be generated and
cross-referenced, which can be cumbersome. In addition, FBS does not
store historical information beyond 30 days which would allow managers
to examine past issues with fiduciaries or staff performance. For
example, managers in two regional offices said that in order to look at
historical information on seriously delinquent financial reports, they
would have to manually examine monthly paper printouts generated in
prior months by FBS, which can be time consuming. A 2007 internal VA
report also stated that FBS requires extensive knowledge to use, which
inhibits effective oversight and management at all levels of the
program.\19\ Central Office managers acknowledged the shortcomings of
FBS and in response to our recommendations said that they would create
a work group to determine the feasibility of enhancing FBS or
developing a new case management system.
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\19\ VA, Fiduciary and Field Examination Pilot Implementation Team
Report, (Washington, D.C. Nov. 5, 2007).
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VA's Fiduciary Program Training. Managers and staff in all three
regional offices we visited said the Fiduciary Program is complex and
requires a great deal of specialized knowledge to effectively monitor
fiduciaries and provide program oversight. Although the Fiduciary
Program has a policy manual to guide staff in carrying out their
responsibilities, managers and staff said there are many nuances and
exceptions that take time to master, particularly since each fiduciary
and beneficiary situation may be different. In addition to these
program complexities, managers in all of the regional offices we
visited said that high staff turnover has contributed to a large number
of inexperienced managers and staff in their Fiduciary Program units
who need training.\20\ For example, in two of the three regional
offices we visited, only about one-third of staff (15 out of 47) had
more than 2 years of experience in the program.\21\ During our site
visits we were told that limited training for managers and staff may
have contributed to various program problems, including failures to
properly monitor fiduciaries or document certain actions in beneficiary
case files.
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\20\ One common reason managers gave for high staff turnover was
that Fiduciary Program positions tend to have low pay grade ceilings,
so if staff want to advance beyond these ceilings, they must leave the
Fiduciary Program. We attempted to obtain VA data on staff turnover to
determine both the Fiduciary Program turnover rate and how it compares
to other programs, but we were told that such data was not readily
available.
\21\ The third office, discussed in the next section, was the
office which consolidated staff from the fiduciary units in 14 western
regional offices.
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VA has provided some training to ensure that Fiduciary Program
managers and staff are proficient in carrying out their
responsibilities, and some regional offices have developed their own
training. VA provides a standardized computer-based training program
for new staff who conduct visits to beneficiaries and fiduciaries and
for those needing a refresher. Central Office managers and staff also
said that they hold monthly teleconferences and conduct periodic visits
to individual Fiduciary Program units to discuss selected topics. In
addition, managers and staff in all three regional offices we visited
said that they conduct their own weekly or biweekly training sessions
on selected topics, such as how to determine whether bonds are
required, and what kinds of situations constitute misuse. However, they
noted that individual training occurs primarily on the job, and the
effectiveness and consistency of such training depends on the expertise
of staff conducting the training. Central Office managers acknowledged
that standardized training would be beneficial and stated that they are
increasing training for managers and staff beginning this year.
VA's Consolidation of Western Fiduciary Program Units. From January
to September 2008, VA consolidated Fiduciary Program unit managers,
staff, and files from 14 western VA regional offices into a single
location in Salt Lake City, Utah--referred to as the Western Area
Fiduciary Hub--to improve program performance and oversight. VA
officials expect the hub to result in increased staff expertise, more
consistent training, better leveraging of staff resources, and
increased program efficiencies. For example, the hub created specific
management positions for the Fiduciary Program and divided staff into
teams to focus on specific actions and responsibilities in an effort to
build program expertise, including expertise with FBS. In addition, the
hub provides opportunities to train more staff at once, which could
help to further build staff expertise and potentially increase the
consistency of training. The hub also eliminated jurisdictional
boundaries that prevented staff from conducting visits that were
geographically close, but outside of their assigned area of
responsibility, which VA expects will help balance workloads among
staff and reduce travel time. Additionally, the hub moved from a paper
based to an electronic case file system, called Virtual VA, in an
attempt to more efficiently transfer information between Salt Lake City
hub staff and the staff conducting visits in other offices.
While some VA managers and staff in the hub believe consolidation
can help improve Fiduciary Program performance, they described some
challenges that have impeded effective implementation of the pilot
project. The hub's managers explained that there had been multiple
changes in management and that implementation began before appropriate
planning and resources were in place. For these reasons, hub managers
did not consider the hub to be fully functional until January 2009,
which was approximately 1 year after it opened. During our July 2009
visit to the hub, managers and staff mentioned such unforeseen
difficulties as: (1) inconsistent access was granted into Virtual VA;
(2) paper documents were being scanned into the wrong electronic
beneficiary case file and (3) substantial amounts of time were being
spent updating old cases that had been improperly maintained by the
previous Fiduciary Program units. For some improperly maintained cases,
staff had not taken required actions to address seriously delinquent
financial reporting and potential misuse of funds had gone unidentified
for significant periods of time. This required hub staff to perform
necessary follow-up actions, in addition to completing incoming new
work. Managers and staff noted that they have gained valuable insight
and knowledge in implementing the hub that could help inform future
office consolidations.
At the time of our review, the hub was still undergoing multiple
changes and had not yet been evaluated, thus it was unclear whether
consolidation of Fiduciary Program units has improved program
performance and oversight. In response to our recommendation that the
Central Office evaluate the performance of the hub, VA responded that
it anticipates completing such an evaluation by September 2010.
Conclusions
One of VA's most vulnerable populations--beneficiaries who are
unable to manage their own financial affairs--rely on VA's Fiduciary
Program to ensure that their benefits are safeguarded. To better serve
beneficiaries and protect their benefits, VA has taken or plans to take
a number of actions intended to increase staff understanding and
compliance with polices as well as enhance program oversight. Revising
program policies and procedures, increasing training, evaluating
alternatives to the program's case management system, and evaluating
the Western Area Fiduciary Hub are important steps. However, in order
for these actions to successfully address the longstanding shortcomings
we and others have identified, VA management must pay sufficient
attention to this program, including exercising adequate oversight of
its staff. Absent sustained management guidance and staff compliance,
beneficiaries may remain vulnerable to the consequences of fiduciaries
misusing their funds.
Mr. Chairman, this concludes my prepared statement. I would be
pleased to answer any questions that you or other Members of the
Subcommittee may have.
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Prepared Statement of Richard F. Weidman, Executive Director for
Policy and Government Affairs, Vietnam Veterans of America
Good afternoon, Mr. Chairman. Thank you for the opportunity to
appear here today to share our concerns and thoughts regarding concerns
as to how the Veterans Benefits Administration is managing the
Fiduciary program. This program is designed to protect some of our most
vulnerable veterans. Unfortunately it appears that the program as
currently operated falls far short of accomplishing that goal.
The basis of our comments today are based on the Inspector
General's Report (IG) 09-1999-120, dated Match 31, 2010, and on the
General Accountability Office Report GAO-10-241, dated February of
2010, as well as anecdotal evidence gleaned from our local leaders and
service representatives around the Nation.
First and foremost it is clear that there is no coherent plan for
getting a handle on the parameters of this problem. VA simply does not
know who is responsible for each veteran involved. Many of these
veterans have major impairments because of schizophrenia or other
condition that means that they are unable to properly care for
themselves to the point that someone else needs to take charge of their
financial affairs for their protection and well being. Seen from this
perspective, they are the protectors of these veterans. Yet VA
apparently does not know exactly who is responsible for each veteran,
and is not doing even a reasonable job of monitoring to ensure that
each and every veteran is properly cared for in regard to their safety
and general well being. The first step is getting a handle on who is
the fiduciary for each and every veteran involved in the program.
Second, it would appear that there are not clear guidelines on who
should be a fiduciary, i.e., meaningful minimum standards and
determination of eligibility for same. It is clear that such standards
and certification are needed, hopefully without creating a needlessly
bureaucratic mass of red tape. It also appears that there is a need for
training and quality assurance mechanisms that would be appropriate.
Third, what is perhaps most distressing about the IG report
referred to above is the lack of follow through and implementation of
many (most?) of the recommendations in the IG Report from 2006 had not
been actually implemented as pledged by the Veterans Benefits
Administration in their Agency response to that 2006 report.
Fourth, because the majority of the more than 100,000 veterans who
have fiduciary agents are in poor mental and/or physiological health,
there should be regular communication between Veterans Health
Administration (VHA) personnel and whoever is acting as fiduciary
agent/guardian. Unless we missed it, monitoring of health condition
does not even appear to be one of the key factors in any evaluation of
this program. Is the living situation for the veteran appropriate or
not, given his/her disabilities? Is he/she getting to regular
appointments at VHA?
Fifth, the aggregate amount of monthly income is very significant
for the veterans in this program. The size of the aggregate estate of
these veterans combined is at least several billion dollars. Any time
there is that kind of money there had better be accountability
mechanisms to ensure that it is being used for the intended purpose(s).
To not have clear guidelines and consistent monitoring only invites
misuse and misappropriation of these funds. There appears to be so
little in the way of effective tracking and oversight of this program
that VA does not have any idea if the funds are being used correctly.
This is akin to shipping $10 billion in cash into the war zone in Iraq
and then acting surprised that they could only account for less than a
third of the money. It is not a prudent or wise thing to do.
Sixth, the GAO report is much more complete and thoughtful than the
IG report, and is clearer as to the problems, although both overlooked
one key thing that may in fact be widespread. We hear anecdotal cases
about attorneys or others who are acting as agents/guardians for many
veterans whom they have never met except over the telephone. It seems
pretty clear to us that these people are getting more than the 4
percent of funds being handled in the name of the veteran. In fact the
record keeping at the VBA does not appear to even be to the level where
this can even be monitored or detected. Looked at from both a fiscal
point of view as well as a human point of view, this must change.
To not make a significant effort to put such a system in place as
quickly as possible (in real time, not traditional VA time) would be
irresponsible, and leave many of our most vulnerable veterans subject
to abuse and theft of resources that is rightfully theirs.
To essentially almost start over is the theme of much of what this
Committee has heard in testimony the last few years about the
Compensation & Pension system for adjudication of claims. VVA suggests
that this is essentially the case with this program. There is finally
progress toward straightening out the C&P system because VA has
admitted that they have a problem, and is now recognizing that the VBA
must treat the Veterans Service Organizations (VSO) as well as state
and local partners as true equal partners in this process of reform. We
suggest that the same holds true for the fiduciary program at VA.
Rightly or wrongly the VA has received much criticism for the
problems in the C&P system, to the point that many consider it a
scandal that we have come to the sorry situation we all find ourselves
with that system. I would suggest that this program is a major scandal
just waiting to happen.
The welfare of the individual veterans who are least able to fend
for him/herself should be enough to drive immediate reform. Added to
that primary responsibility is the need to properly account for
taxpayer dollars, and the VA and Congressional responsibility to ensure
those funds are being used correctly for the welfare of the intended
recipients.
Thank you for this opportunity to present our views here today. I
will be happy to answer any questions.
Prepared Statement of Sarah Wade, Coordinator, Family Issues and
Traumatic Brain Injury, Wounded Warrior Project
Chairman Hall, Ranking Member Lamborn, and Members of the
Subcommittee:
Thank you for inviting Wounded Warrior Project to testify on VA's
Fiduciary Program. Through our long work with severely-wounded veterans
and their family caregivers, many of whom are fiduciaries, Wounded
Warrior Project brings a unique understanding to the operation, and
shortcomings, of VA's Fiduciary Program. As a caregiver myself of a
severely wounded veteran of Operation Iraqi Freedom who sustained
severe traumatic brain injury, and as one who has worked with many
other caregivers of severely wounded warriors, I believe I can offer a
helpful perspective.
WWP appreciates the important responsibility vested in VA's
Fiduciary Program to safeguard the benefits of veterans who are unable
to manage their own affairs. That program unquestionably has a critical
mission and performs vital work. But we are gravely concerned that in
managing the program, VA does not take account of, or even recognize,
the unique circumstances of family members who have devoted themselves
to the full-time care of severely wounded veterans, and who also serve
as their fiduciaries. Parents and spouses who have made great
sacrifices--often giving up careers and depleting savings--to care for
their loved ones hardly pose a risk of misusing the veteran's benefits,
and in fact should be free to apply part of their loved one's benefits
to help maintain a household that they share. We welcome this
opportunity to document the critical need for VA to revise its policy
and practice with respect to caregiver-fiduciaries who have
demonstrated their dedication to the veteran's well-being. Adoption of
the recommendations we will be discussing would end the often shameful
and arbitrary treatment that too many families have endured.
Let me reiterate. WWP recognizes that the risks the VA fiduciary
program is designed to counter are certainly real, and appropriate
oversight is needed. In that regard, we appreciate the Government
Accountability Office's (GAO) emphasis in its February report on the
importance of improving VBA compliance with Fiduciary Program policies.
Importantly, those policies recognize that all fiduciary cases do
not require the same degree of attention and supervision, and that
field examiners should consider the unique circumstances of each case.
Unfortunately, there appears to be wide variability in examiners'
exercise of that judgment with respect to many of the fiduciaries with
whom WWP works-- family members who are not only fiduciaries for
severely wounded veterans, but also their full-time caregivers.
GAO makes an important observation in stating that VA's fiduciary
case management system does not provide sufficient information to
managers and staff about their cases. That statement highlights that VA
is not sufficiently aware of, and not sufficiently attuned to, the
unique circumstances of these caregiver-fiduciaries.
The many, many caregivers of wounded warriors whom I've known and
with whom I've worked over the years have made great personal
sacrifices to provide daily care to their loved ones. They've chosen to
give up, or indefinitely suspend, careers or career plans. These family
members have put their own lives ``on hold'' to be caregivers. Many
have been appointed fiduciaries. I can assure you that their love and
dedication to their wounded spouses and children did not change in any
way by virtue of taking on new responsibilities as a fiduciary.
Yet, in dealing with caregivers who serve as fiduciaries, the
Veterans Benefits Administration (VBA) too often fails to recognize
their sacrifice. Instead, parents and spouses who over time have surely
proven their dedication to their loved one, too often encounter a VBA
system marked by its rigidity, intrusiveness, and unreasonableness when
it conducts oversight of those caregivers in their role as the
veteran's fiduciary.
Let me illustrate my point by way of examples:
A VBA field examiner imposing a summer-vacation
expenditure limit for a profoundly wounded warrior, his wife and two
children;
A mother/caregiver having to explain to a VBA examiner
why she allowed her wounded-warrior son to spend ``too much'' money on
Christmas gifts;
The spouse/caregiver of a traumatically brain-injured
veteran having to get permission from a VBA field examiner to purchase
a couch;
A devoted mother-caregiver to her minimally-conscious son
being required to pay back money for toilet paper purchased for the
home with the veteran's funds;
A family's being questioned about expenditures for
gasoline when the wounded warrior does not drive or own a car, but the
fuel was used to transport the veteran;
Several instances of mothers, who are full-time
caregivers to wounded veterans, being required to pay rent to the
veteran rather than residing in the home for ``free;''
A field examiner denying a mother-caregiver's request to
replace the (now-wheelchair bound) veteran's 8 year-old high-mileage
truck that she uses to transport him in a rural, snowy part of the
country; and
A mother-caregiver having to relinquish her role as a
fiduciary because she had had to declare bankruptcy after leaving her
job to care for her wounded warrior son.
Let me assure you--from personal knowledge--that these families do
not deserve to be treated in the demeaning, petty and hurtful manner
reflected in these examples. At the same time, we would acknowledge
that VBA examiners have not universally been as unreasonable as these
examples suggest. Yet these specific illustrations are not isolated
problems, or remote outliers. Further compounding these problems is
that as these caregivers have looked to one another for clarity in
understanding the often-inexplicable workings of VA programs, what
becomes apparent is the stark variability in VA oversight across the
system. The impression, frankly, is of a program marked by arbitrary
and capricious decision-making.
It should be recognized that a family member or members residing
with the veteran may have no income--and may well have depleted some of
their own assets--to become the veteran's caregiver. We see no basis
whatsoever for precluding such families from drawing on the veteran's
benefits to pay for the family's living expenses! VA Fiduciary Program
policy should make that abundantly clear. But even more fundamentally,
a devoted family member who provides daily care for a severely wounded
veteran should not be treated as an object of VA suspicion--either in
terms of rigid management of their budgeting or intrusive home visits--
simply because the individual serves as the veteran's fiduciary. We
believe these families are owed a presumption of honesty, and should be
treated with dignity.
Over the past year we have discussed these concerns with officials
in the Veterans Benefits Administration, offered to work with them on
these issues, and arranged for them to meet with a family caregiver-
fiduciary to appreciate better these families' experiences under the
program with the hope that necessary modifications could be made. But
more than half a year since first raising these concerns with VA, it
remains unclear whether promised remedial revisions to Fiduciary
Program policies will ever come to fruition.
Separate from the issues of inconsistent oversight and arbitrary
requirements, VA has acknowledged a need for more training, consistent
with GAO's findings. WWP strongly agrees. But VA must not only provide
more training for its fiduciary program staff, it should better inform
family members of their responsibilities in agreeing to serve as
fiduciaries. These steps would be helpful, but certainly would not go
far enough. VBA must substantially revise its policy and practice to
reflect far greater balance and understanding as it relates to
caregiver-fiduciaries whose sacrifices have surely demonstrated that
they do not pose significant risk.
Given the resource and staffing problems GAO described in reporting
on the Fiduciary Program, it is particularly difficult to understand
devoting resources to close scrutiny of family caregiver-fiduciaries
who have proven themselves over time.
Indeed, the caregivers are well known to VA. Each has worked
closely with a Federal Recovery Coordinator and/or case-managers in
connection with their veteran's care. In the isolated instance in which
there is some indication of a problem concerning a caregiver,
caseworkers in the Veterans Health Administration, and often care-
coordinators in other VA offices, become aware of it. From the
caregivers' perspective, ``VA'' is a single entity, and they have every
reason to believe VA knows they are reliable and have integrity. So
imagine how confusing it is for a caregiver who has worked closely, and
developed relationships of trust, with other VA staff to encounter VBA
personnel whose fiduciary-requirements convey fundamental mistrust. It
does not seem too much to ask that VBA and other arms of the Department
work more closely together to share information relating to caregiver-
fiduciaries, rather than requiring these dedicated individuals to prove
themselves yet again.
In short, Mr. Chairman, devoted family members who have clearly
made great sacrifices to care for their loved ones hardly pose a risk
of misusing the veteran's benefits. VA Fiduciary Program policies and
practices must be revised to draw distinctions among categories of
fiduciaries. A devoted family member who provides consistent, high-
quality daily care for a severely wounded veteran should not be treated
as an object of VA suspicion simply because the individual serves as
the veteran's fiduciary. We believe these families are owed a
presumption of honesty, and should not be subjected to rigid budgeting
and ongoing intrusive scrutiny without substantial cause. Finally, VA
must work to achieve more uniform standards and greater consistency in
its application of fiduciary oversight policy.
Mr. Chairman, we look forward to working with the Subcommittee
staff in addressing these concerns regarding the VA's Fiduciary
Program.
That concludes our testimony. I'd be pleased to address any
questions you may have.
Prepared Statement of Jacob B. Gadd, Assistant Director for
Program Management, Veterans Affairs and Rehabilitation
Commission, American Legion
Mr. Chairman and Members of the Subcommittee:
Thank you for the opportunity to provide The American Legion's
views on the Department of Veterans Affairs (VA) Fiduciary Program and
improvements VA can make in providing quality health care and benefits
for those veterans with mental health injuries or disease. As a
majority of World War II and Korea veterans are aging, improvements to
the VA's Fiduciary Program is needed to ensure they receive their
benefits in a timely manner. Additionally, veterans that are filing
claims for Post Traumatic Stress Disorder (PTSD), Traumatic Brain
Injury (TBI) as well as other geriatric illnesses such as Alzheimer's
or Dementia may require use of a Fiduciary and without effective
oversight, coordination and management, these veterans will continue to
experience delays and/or financial hardship in accessing their earned
benefits.
Title 38, Code of Federal Regulations (CFR), Sections 13.1 to
13.111 provides the guidance for VA to manage the Fiduciary Program. VA
defines a fiduciary as a person or an institution responsible for
managing money or property for another and exercising a standard of
care imposed by law or contract in such management activity. VA is
charged with appointing a fiduciary to manage and handle the veteran's
VA Compensation and Pension (C&P) benefits, if a veteran is deemed
mentally incompetent.
A recent VA Office of the Inspector General (OIG) report, Audit of
the Fiduciary Program's Effectiveness in Addressing Potential Misuse of
Beneficiary Funds, found that the ``Veterans Benefits Administration
(VBA) lacks elements of an effective management infrastructure to
monitor program performance, effectively utilize staff, and oversee
fiduciary activities.'' In addition, in VA's Fiscal Year (FY) 2009
Performance and Accountability Report, VA achieved an 82 percent result
out of an 88 percent goal, due to challenges with reorganization of
workflow and the training of 20 new Legal Instruments Examiners. FY
2009 was the first year that all fiduciary activities for regional
offices in the Western Area were consolidated to the Western Area Pilot
Fiduciary Hub in Salt Lake City. Additionally, VA transitioned all
fiduciary activities to paperless processing in an effort to increase
its targeted goal for the next fiscal year.
The Government Accountability Office (GAO) also released a report
in February 2010, ``Improved Compliance and Policies Could Better
Safeguard Veterans' Benefits,'' which recommended VA ``strengthen
Fiduciary Program policies for monitoring fiduciaries, improve staff
compliance with program policies, evaluate alternative approaches to
meet electronic case management system needs and evaluate the
effectiveness of consolidating 14 western Fiduciary Program units.'' VA
has consolidated the Fiduciary Program to ensure that these policies
are streamlined and have better centralization of management.
While VA is moving forward with the Fiduciary Hub in Salt Lake City
and is taking actions to rectify their Fiduciary Program problems,
based on the recommendations from OIG and GAO. The American Legion,
however, continues to have several concerns. These concerns include the
difficulty and delay in processing the appointed fiduciary, VA's
national centralization model and feedback from American Legion
Department (State) Service Officers and Pension Management Center
staff.
In researching fiduciary forms required by VA Regional Offices, the
number of forms, the accompanying delay in processing and the stress it
places on veterans and their family members is monumental. In fact, as
noted in the chart below from VA Pamphlet 21-05-1: Federal Fiduciary
Program Pocket Folder, 21 different VA forms are required to appoint a
fiduciary.
------------------------------------------------------------------------------------------------------------------------------------------------
1. VA Form 21-0509: Notice of Fiduciary
Commission
------------------------------------------------------------------------
2. VA Form 21-0520: Certificate of
Commissions Approval
------------------------------------------------------------------------
3. VA Form 21-555a: Designation of Payee
------------------------------------------------------------------------
4. VA Form 21-555: Certificate of Legal
Capacity to Receive and Disburse
Benefits
------------------------------------------------------------------------
5. VA Form 21-592: Request for Appointment
of a Fiduciary, Custodian or Guardian
------------------------------------------------------------------------
6. VA Form 21-0792: Fiduciary Statement in
Support of Appointment
------------------------------------------------------------------------
7. VA Form 21-3045: Estate Action Record
------------------------------------------------------------------------
8. VA Form 21-3190: Minor Beneficiary
Field Examination Request and Report
------------------------------------------------------------------------
9. VA Form 21-3537a: Field Examination
Request
------------------------------------------------------------------------
10. VA Form 21-3537b: Field Examination
Report
------------------------------------------------------------------------
11. VA Form 21-4703: Fiduciary Agreement
------------------------------------------------------------------------
12. VA Form 21-4706: Court Appointed
Fiduciary's Accounting
------------------------------------------------------------------------
13. VA Form 21-4706b: Federal Fiduciary
Account
------------------------------------------------------------------------
14. VA Form 21-4706c: Court Appointed
Fiduciary's Accounting
------------------------------------------------------------------------
15. VA Form 21-4707: Estate Summary
------------------------------------------------------------------------
16. VA Form 21-4709: Certificate as to
Assets
------------------------------------------------------------------------
17. VA Form 21-4716a: Adult Beneficiary
Field Examination Request and Report
------------------------------------------------------------------------
18. VA Form 21-4718: Account Book
------------------------------------------------------------------------
19. VA Form 21-4718a: Certificate of
Balance on Deposit and Authorization
to Disclose Financial Records
------------------------------------------------------------------------
20. VA Form 21-8473: Withdrawal Agreement
------------------------------------------------------------------------
21. VA Pamphlet 21-05-1: Federal Fiduciary
Program Pocket Folder
------------------------------------------------------------------------
Second, The American Legion has been concerned about VA's
centralization policies and that Veterans' Service Organizations (VSOs)
are not included in these processes. For example, when VBA consolidated
general inquiry telephone calls from individual regional offices to
eight national call centers (NCCs), claimants, beneficiaries and VSOs,
who had general questions concerning VA benefits programs, were routed
to one of the eight call centers, rather than being able to call the
local Regional Office (RO). The American Legion continues to urge VA to
provide internal access phone numbers for accredited VSO
representatives, so the representative could bypass the consolidated
call centers and contact the RO directly in order to access information
in a timelier manner to provide better service to their clients. VA
commented on this recommendation stating, ``providing direct internal
telephone access to VSO representatives at each Regional Office (RO)
would require the redirection of resources currently dedicated to
disability claims processing.''
Mr. Chairman and Members of the Subcommittee, The American Legion
recommends authorizing personnel solely to administer the Fiduciary
Program to ensure this program remains their priority and expertise.
VA has successfully demonstrated that the Consolidated Patient
Account Centers (CPACs) model has helped mitigate problems with
veterans' third-party insurances being improperly billed. The American
Legion understands the importance of collecting data at VA's national
level so that trends can be analyzed in order to develop best
practices. The only recommendation The American Legion has is that this
Subcommittee is to exercise oversight over VA's centralization plans.
We urge this Subcommittee to monitor the progress to ensure that VSOs
are given internal access phone numbers to better represent their
clients.
The American Legion has approximately 2,000 accredited Department
(State) Service Officers and County Veterans' Service Officers (CVSO)
nationwide that help veterans file claims for VA benefits. Several of
these service officers have witnessed firsthand some of the
difficulties experienced with the Fiduciary Program. For example, a
service officer reiterated the concern that, ``it's difficult for
veterans to contact anyone in the Fiduciary Hub because they do not
have a `public contact' number dedicated solely to fiduciary issues and
the general VA public contact line can only provide limited
information.'' Other service officers commented that the ROs and
Pension Centers are not always notifying the Hub by way of the VA Form
21-592 (Request for Appointment of a Fiduciary, Custodian or Guardian)
that an appointment of a fiduciary is required until someone such as a
VSO makes an inquiry.
The third problem American Legion Service officers have encountered
with the Salt Lake City Hub was that the center inherited a huge
backlog when they consolidated 14 Western Fiduciary Program units in
January, 2008. In most cases, the center has improved, to 45 days, the
backlog of initial visits to appoint fiduciaries. However, the large
backlog of follow-up visits (over 120 days) remains. The Salt Lake City
Hub currently is authorized 112 positions, 56 of which are field
examiners. Although the center is considered to be fully staffed, the
current staffing level does not appear to be sufficient in light of the
backlog that still needs to be addressed.
Additionally, The American Legion has national representatives at
the three Pension Management Centers (PMCs) in Minneapolis,
Philadelphia and Milwaukee. American Legion representatives at these
locations have unanimously voiced their concerns in one area--improving
the coordination between the Regional Offices of jurisdiction, Pension
Centers and Fudiciary Hubs. For example, one of our service officers
helped a veteran file for benefits in August 2009 and the rating
decision was completed on February 2010 proposing incompetency. On
March 2010, a letter was sent to the veteran in regards to
incompetency. The veteran waived due process later in March 2010, which
enabled VA to act on the claim prior to waiting the 65 days. Waiving
the due process helped speed up the process. The award letter was sent
in early April stating the first payment was sent in May, but the
retroactive benefits will be withheld until the Guardianship Unit can
make their visit. After all this process is complete, the Pension
Management Center sends VA Form 21-592 (Request for Appointment of a
Fiduciary, Custodian or Guardian) to the Hub in Salt Lake City. The Hub
then notifies the Guardianship unit in the particular RO which can take
months. Once the field exam is completed, the VA Form 21-555
(Certificate of Legal Capacity to Receive and Disburse Benefits) is
sent back to the PMC for authorization of the retro benefits.
In another case, the Fiduciary process took 4 years which made the
family bear the cost of this delay. The American Legion service
officers also reiterated that there is not a dedicated phone number for
the Fiduciary Hub that a family member or VSO representative can
contact to check on the status of claim. The American Legion is
concerned that other veterans are experiencing the same delays,
financial hardships and inability to reach the Fiduciary Hubs because
of the lack of seamless coordination between ROs, PMCs, Guardianship
Units and Field Exams.
Prior to October 2009, it was VA's policy to withhold benefits
payable to a beneficiary while competency is considered, and during the
period required to appoint a fiduciary. VA issued Fast Letter 09-41 in
October 2009 providing revised procedures for VA to pay all monthly and
recurring benefits, then withhold only retroactive benefits pending
appointment of a fiduciary. However, many beneficiaries continue to
suffer hardships as a result of the delays. The American Legion Service
Officers have stated that VA workers receive credit for processing the
case within the 45-day period. If a case is not completed during the
45-day period, there are not any work credits or staff initiative to
get the case finalized. In one office, there are over 100 cases over 3
months to 1 year. Additionally, a service officer in a Pension
Management Center helped schedule a fiduciary field exam because the
veteran had been waiting for over 4 years.
Mr. Chairman, this is unconscionable that a veteran's claim can be
delayed for this period of time and that the veteran's family member or
appointed VSO representative cannot access the system through VA's
computer system or an internal phone number. Our Nation's veterans and
their beneficiaries deserve better.
In closing, The American Legion has six recommendations:
1. The American Legion recommends an additional Full Time Employee
(FTE) be funded and authorized within each RO and PMC solely dedicated
to Fiduciary Program management and oversight.
2. The American Legion recommends Congress appropriate funding to
VBA's Information Technology (IT) budget to set up an IT software
package within all of the RO's Fiduciary Program Units, PMCs, and Salt
Lake City Fiduciary Hub to enhance communications between each of these
offices.
3. The American Legion recommends that part of the software
package include reminders or alerts throughout the process to ensure
that no paperwork is lost or falls through the cracks.
4. The American Legion recommends that Congress assure VSO
representatives are given an internal access phone number for each of
the facility's Fiduciary Program Units to improve the timeliness,
quality and full coordination of the program.
5. The American Legion recommends that Congress assure VA creates
a Fiduciary national toll-free number for family members and the
general public. The American Legion recommends that Congress direct VA
to establish a VA Voluntary Service (VAVS) Pilot Program to train
volunteers on how to become VA Fiduciary Volunteers.
Mr. Chairman, The American Legion has over 6,000 volunteers that
serve veterans every day in the community that help veterans in VA
Medical Centers, Community-Based Outpatient Clinics, Vet Centers,
Fisher Houses, Domiciliaries and State Veterans Homes. Each year,
Legionnaires serve over 916,000 hours of service to help veterans. The
VAVS Program is the largest volunteer program in the Federal
Government, providing over 64 years of voluntary service to the
Nation's veterans. In 2008, the VAVS Program developed a pilot program
for Caregivers and The American Legion is assured that if given the
necessary training and supervision by the Voluntary Service Program
Managers at each VA Facility, a program could be similarly developed
for these volunteers. Additionally, the current Fiduciaries for these
veterans within the program would receive standardized training and
evaluation.
As the Nation's veterans experience mental health trauma or
diseases, they or their family members should not have to worry about
receiving their earned benefits. Mr. Chairman and Members of the
Subcommittee, The American Legion sincerely appreciates the opportunity
to submit testimony. Thank you.
Prepared Statement of Vivianne Cisneros Wersel, Au.D., Chair,
Government Relations Committee, Gold Star Wives of America, Inc.
``With malice toward none; with charity for all; with firmness
in the right, as God gives us to see right, let us strive to
finish the work we are in; to bind up the Nation's wounds, to
care for him who has borne the battle, his widow and his
orphan.''
. . . President Abraham Lincoln, Second Inaugural Address,
March 4, 1865
Chairman Hall, Ranking Member Lamborn and Members of the Disability
Assistance and Memorial Affairs Subcommittee, I am pleased to be here
today to testify on behalf of Gold Star Wives of America. My name is
Vivianne Wersel, Chair of the Gold Star Wives' Government Relations
Committee. I am the widow of Lt. Col. Richard Wersel, Jr., USMC, who
died suddenly on February 4, 2005, one week after returning from his
second tour of duty in Iraq.
Gold Star Wives of America, Incorporated (GSW), founded in 1945, is
a Congressionally Chartered organization of spouses of military members
who died while serving on active duty or as a result of a service-
connected disability. GSW is an all-volunteer organization. We could
begin with no better advocate than Mrs. Eleanor Roosevelt, at the time
newly widowed, who helped make Gold Star Wives a truly ``national''
organization. Mrs. Roosevelt was an original signer of our Certificate
of Incorporation as a member of our Board of Directors. Our current
members are widows and widowers of military members who served during
World War II, the Korean War, the Vietnam War, the Gulf War, the
conflicts in both Iraq and Afghanistan, and every period in between.
We begin by thanking this Committee and our Government for
providing essential services necessary to help us through our loss,
many services being done well, in a caring and helpful way. But I also
want to stress the importance of staying vigilant so that no one who is
grieving the loss of a loved one will have to endure indignities or a
lack of benefits because of the lack of knowledge. Therefore, we need
consistent and relevant assistance before and at the time of the death,
and for some period of time thereafter. While there have been huge
strides made over the last several years in alleviating problems with
benefit and eligibility misinformation coming to those who are
grieving, confusion about the complete benefits available will be a
normal beginning, with the best of information provided. We owe
information to those in the throes of grief about the all the benefits
available with the best information provided. We owe it to these
families to help secure their futures with the most accurate
information possible at an appropriate time--when it is ready to be
received--because the confusing array of decisions that must be made
have consequences for the rest of that their lives.
VA Fiduciary Program
Gold Star Wives was unaware of VA's Fiduciary Program until we were
asked to testify at this hearing. As we delved into the subject matter,
the research became a game of 20 questions. It's difficult to critique
or make suggestions for a program of which we were unaware. There have
been several hearings about the Fiduciary Program over the last 7
years; today is our first exposure to this VA Fiduciary Program.
Therefore, Gold Star Wives' main concern about the Fiduciary Program is
the lack of information provided to eligible surviving spouses. Other
concerns are the hardships surviving spouses encounter as well as the
limitations of the VA fiduciary program.
Lack of Information
From the perspective of Gold Star Wives, the major problem is a
lack of publicity and available information. There is no mention of the
Fiduciary Program in the VA Handbook for Veterans, Dependents and
Survivors. The surviving spouse needs prior knowledge of this existing
program in order to obtain information on the VA Web site. Yet,
according to VBA, there are 35,000 surviving spouses who are
beneficiaries in the VA Fiduciary Program. This is a third of the total
of the approximate 109,000 participating in this program. Furthermore,
this subject has neither been discussed in prior testimonies that
included Gold Star Wives nor has it been a topic discussed in the VA/
DoD Survivor Forum quarterly meetings. Lack of information and
participation does not promote optimal care for the surviving families.
How can we improve a program if we have no knowledge of the existing
program? We have many questions that we hope will be answered as the
result of this meaningful hearing today.
Hardships
Many Gold Star Wives were their spouse's fiduciary before their
military spouse died. Some were young and required an annual bonding
fee because their credit score was not sufficient. Why do spouses have
to pay significant fees to be bonded?
In 2002, Petty Officer 2nd Class Anthony Palmer collapsed while
playing basketball. He was kept alive via medical devices. When the
respirator was removed, he unexpectedly continued living; however, he
was totally incapacitated. He was then medically retired, but when he
died 2 years later, his VA disability compensation suddenly stopped.
His wife and two toddlers were left without support. What role did the
VA Fiduciary Program play for this new Gold Star Wife with young
children? Mrs. Palmer sought assistance from the Navy Marine Corps
Relief Society when the disability compensation ceased. At that time,
the Navy Marine Corps Relief Society referred her to Gold Star Wives.
Limitations
When the SGLI was assigned by name to Mrs. Palmer's two small
children, she had to pay several thousand dollars for a civilian court
guardianship. Why is this required when she is the biological parent of
the small children? She is one of the many young widows with children
who are experiencing this problem. Why is the Fiduciary Program not
used for SGLI, which is administered by the VA?
Mrs. Dora Aja married her college sweetheart in 1953. His heart
attack in 1976 eventually left him totally incapacitated. She has to be
bonded to be a fiduciary at a cost of $250.00 annually. When purchasing
a home to be closer to family she had to receive permission from VA and
the Defense Finance and Accounting System to purchase a home. She must
submit a spreadsheet of all her expenses. Accountability is important;
however, why does she have to pay to be bonded? Also, are the spouses
provided with the tools they need to monitor the administration
required from them annually? Mrs. Aja stated, ``I have cared for him
and loved him for over 50 years and the Government treats me like a
juvenile. It is a good thing that my husband is not aware of what is
happening because he would be angry.'' She is not a widow or a veteran,
and she is not treated as the dedicated military spouse that she is
even though she is a soon to be a Gold Star Wife.
There are approximately 35,000 surviving spouses who are
incapacitated and have fiduciaries. Who takes the lead when the
surviving spouse becomes incapacitated? If the surviving spouse wasn't
a fiduciary for the veteran spouse, they may well not know anything
about the program and, by extension, neither would their children. How
many spouses (current and surviving) are also fiduciaries for the
nearly 18,800 adult disabled children in the program?
Concerns
What I can report to you today is that our number one concern with
the VA Fiduciary Program is our lack of information. It is imperative
that we are provided more information on the Fiduciary Program, so it
provides meaningful support to surviving spouses as well as the soon-
to-be surviving spouses who find themselves in this position. As the
result of today's hearing we hope our questions will be answered.
Gold Star Wives of America has the following questions:
1. Are there ongoing problems with the program that have yet to be
fixed?
2. Where and how is this program publicized?
3. What is the protocol for the information to be provided in a
timely fashion?
4. Is it only provided to those for whom the program is necessary?
5. What training is available for the challenged spouse who is
caring for an incapacitated, perhaps dying veteran, who does not have
the accounting and clerical skills to manage the tedious, demanding
paperwork required by the annual audit?
6. Some may find it necessary to hire a professional to do the
reports for the audit at additional expense to them. Is there funding
for this assistance?
7. At what point is a fiduciary necessary? Who makes the
determination?
8. Could the VA select someone other than the spouse?
Thank you for this opportunity to testify. The families of the
Nation's fallen have already suffered the greatest loss; there is no
need to make these families struggle financially unnecessarily. Gold
Star Wives appreciates the compassionate work which Members of this
Subcommittee and the staff do on our behalf. We always stand at the
ready to provide this Subcommittee with any additional needed
information.
Prepared Statement of Katherine R. Pflanz, Field Examiner,
Winston-Salem Veterans Affairs Regional Office, on behalf of
American Federation of Government Employees, AFL-CIO, and
AFGE National Veterans Affairs Council
Dear Chairman and Members of the Subcommittee:
The American Federation of Government Employees, AFL-CIO (AFGE) and
the AFGE National Veterans Affairs Council (NVAC), the exclusive
representatives of VBA employees working in the Fiduciary Program,
appreciate the opportunity to present the views of front line employees
on how to better protect vulnerable veterans and their families.
RECOMMENDATION: PROVIDE NATIONALLY UNIFORM, FORMALIZED TRAINING ON
FIDUCIARY ISSUES
AFGE and NVAC agree with the Government Accountability Office (GAO)
recommendation for a national training program for the Fiduciary
Program. Field Examiners (FE) and Legal Instrument Examiners (LIE) need
formal training prior to assuming their responsibilities and refresher
training at least every 2 years.
Standardized formal training is also an invaluable tool to form
bonds with co-workers across the Nation and share lessons learned and
best practices. A national Q&A mailbox or employee-only Web site could
facilitate ongoing sharing of information. This teaching tool would be
a timesaver and improve quality for the employees trying to protect
beneficiaries in receipt of VA benefits.
New employee training should be centralized, as it is for Rating
Specialists and Veterans Service Representatives (VSR). Currently, the
initial training for new FEs is woefully inadequate, consisting only of
online course, without being able to ask questions of an instructor or
supervisor. This online curriculum is only designed to explain how
fiduciary process works, e.g. conducting field exams, and does not
address other critical issues, such as entitlement to pensions and
other benefits. Only those FEs who have previously worked as VSRs
received formal training on benefits, which is important to ensuring
the beneficiary is receiving all the funds to which they are entitled.
On-the-job training needs to be standardized. New FEs are sent out
to the field to observe other FEs conducting interviews. While this is
helpful, there is no standardization to ensure that all new FEs have
sufficient exposure to different types of cases.
Inadequate new employee training slows production, increases
errors, and causes undue duplication of work. Often times more
experienced FEs and LIEs must interrupt their own work to answer
questions or correct errors.
Training for experienced employees is minimal and haphazard. VBA no
longer provides centralized training that bring FEs into one location,
e.g. RO, regional or national sites, for face-to-face instruction.
Ongoing training often consists of conference calls where management
merely points out common errors, local policy changes, and the newest
hot topic. This limited time does not provide for proper guidance on
correcting errors. Also, significant changes in policies and procedures
are implemented without proper training or input from front line
employees.
RECOMMENDATION: DISCONTINUE THE HUB PILOT PROGRAM
AFGE and NVAC have serious concerns about the Hub Pilot Program.
This model has had serious ramifications; it has adversely affected
training, case management, case tracking, and the proper application of
different state rules.
The Fiduciary Program works with a special population and it is
critical that the employees oversee all their needs, not just their
money. The RO model facilitates that oversight far better than the Hub
model. At the RO, staff has tighter control over the accounting
process, and is able to work much more closely with both the veteran
and the payee to ensure the beneficiary lives the best life possible.
RECOMMENDATION: INCREASE STAFFING AND REVISE THE WORK CREDIT SYSTEM AND
PERFORMANCE STANDARDS
The Fiduciary Program is facing increased demand for its services,
especially among OIF/OEF veterans returning from two wars and an aging
veteran population from earlier conflicts. In addition, due to our
mobile society and current economic difficulties, many families are
less able to assist disabled beneficiaries physically or financially
than they were in the past. Families look more and more to VBA to
protect disabled beneficiaries.
Additional FE hiring has begun but more is needed. FEs are always
working frantically to meet their production standards, ensure quality,
maintain personal safety, and keep apprised of all the new changes. The
expectation is that this can be accomplished with inadequate training,
experience, and within an 8 hour day. The current performance standards
are unrealistic for the tools currently provided to the Fiduciary
staff. When overtime is offered, it frequently raises the production
expectation which is already unobtainable to the less experienced.
Managers also need training on the workings of the Fiduciary
program, as well as employee issues such as personal safety and workers
compensation claims for injuries incurred in the field.
As a result of inadequate management, understaffing, unrealistic
performance standards, and lack of training, the Fiduciary Unit is less
able to properly serve and protect those who need our protection the
most in today's environment.
RECOMMENDATION: IMPROVE ACCESS TO IT TOOLS AND OTHER NEEDED EQUIPMENT
AFGE and NVAC agree with GAO's recommendation for more efficient
automated tools, including more informative reports from the Fiduciary
Beneficiary System. In addition, there are a number of problems with
National Field Examiner Report Generator Program. Although this system
was intended to increase uniformity in the process of typing field
exams, in practice, it is a difficult system to use and dramatically
increases the time required to type reports. For example, FEs spend
substantial time deleting information from the Initial Appointment
Report for follow up reports, and the system lacks separate templates
for reports for Adult Helpless Children, Insurance Cases and Minors. If
FEs on the front lines had been involved in the design and testing of
this system before it was rolled out, it would function more
effectively.
FEs are not provided with other needed equipment on a sufficient or
timely basis. There are frequent delays in issuing Government vehicles,
thus requiring some FEs to share vehicles. As a result, both the well
being of the beneficiary and FE timeliness suffer.
Phone access is an essential part of the FE's job each and every
day, all day long. They have to schedule appointments, find
beneficiaries, get information over the phone from legal custodians,
and in some cases, the entire field exam is conducted by phone.
Currently, the cell phones that are provided to FEs often lack adequate
geographic coverage. FEs should have a long distance phone card as back
up.
In addition, travel funds that FEs need to manage their casework
are often difficult to obtain due to budget constraints.
RECOMMENDATION: PROVIDE MORE EXPERIENCED LEADERSHIP
The Fiduciary Program is facing a serious lack of experienced
coaches to mentor employees. Front line employees are being trained and
supervised by managers who do not fully understand the fiduciary rules
and regulations. Coaching is only effective if done by someone with
extensive hands-on experience and subject matter expertise.
Too often, the message from management is ``get it done'' to make
production without an understanding of the mechanics. This approach
hurts both beneficiaries and the Fiduciary Unit. If managers had more
direct experience on the front lines, they would have more realistic
expectations of what is required and how long it takes to do the job
correctly.
RECOMMENDATION: REVISE REVIEW EXAMINATION SCHEDULES
FEs are unnecessarily burdened with conducting annual field review
of claims in cases that already demonstrate accurate discharging of the
fiduciary responsibilities, thus preventing them from completing work
needed for other claims. AFGE and NVAC do not advocate complete
elimination of the field review, but rather, many can be done less
frequently or on a random basis. The current limitation on review
examinations that are input in 2 or 5 year increments should be lifted;
less frequent exams are recommended where there are no questions of
impropriety or uncertainty about the fiduciary's conduct.
For example, currently, FEs are required to visit beneficiaries in
Adult Living Facilities every 3 years. These beneficiaries should be
reclassified as ``institutionalized'', which would reduce the
requirement to a phone call every 6 years. This would suffice because
the VA benefits are totally consumed by cost of care and all their
housing and medical needs are being met in a safe manner. Also, these
facilities are monitored by other Federal, state and local agencies.
More infrequent visits to beneficiaries with dementia who are in
the locked section of the facility would also suffice. More generally,
in cases like these, it would be more effective to make unannounced
visits on a random schedule in addition to scheduled audits.
VBA could also eliminate field exams for beneficiaries receiving
small amounts of funds, e.g. the old law pension rate of $61, or anyone
receiving less than the 30 percent compensation rate. When
beneficiaries are given the entire VA benefit for person spending, they
are in effect managing their own funds. Visits for spouse payees
receiving less than the 30 percent rate could be replaced by an
occasional call or letter.
Annual follow-up exams for accounting cases should be conducted on
a 14-15 month basis to allow for accountings to be reviewed and
problems to be addressed. Follow up field exams should be limited to
problem cases.
RECOMMENDATION: IMPROVE COMMUNICATION WITH OTHER AGENCIES
Although FEs are only responsible for ensuring the proper use of VA
funds, they are also expected to detect misuse of other benefits such
as Social Security and military retirement pay. We urge Congress to
improve the lines of communication between the Fiduciary Program and
other agencies to enable FEs to alert them to problems. National
dissemination of reports from Field Examiners at other agencies would
help VBA understand the proper use of those benefits.
Currently, Social Security and VBA have a joint program for
incarcerated beneficiaries; a joint program based on this model for
Field Examiner fiduciary selection and monitoring should be considered.
In contrast, we believe that FEs should not be held accountable for
informing beneficiaries about non-VA rules or benefits such as park
passes and fishing and hunting licenses; this should be carried out by
local Veterans Service Organizations.
RECOMMENDATION: INCREASE EMPLOYEE INPUT INTO NEW POLICIES AND PRACTICES
Frontline Fiduciary Program employees are rarely given the
opportunity to make suggestions, and when given that opportunity, their
suggestions are often not seriously considered. Some employees feel
that they have been chastised or ostracized for making suggestions.
This program will be greatly improved by input from the people who
actually know the job--the ones on the front lines who go into
beneficiaries' homes and nursing facilities on a daily basis.
Currently, management is making all the decisions based on what they
feel is best. The front line employees are forced to simply follow
their lead. Managers make many significant decisions during conference
calls without considering the effect on FEs and LIEs. Decisions that
change nationwide directives should not be made without input from the
field. FEs and LIEs should be included in these conference calls. It is
too difficult for the managers to communicate all the changes and
directives after the call takes place.
Minutes of a meeting should not be policy. Rather, the Fiduciary
Program should adopt the approach used for Rating Specialists and VSRs
to issue Fast Letters accompanied by explanations, directives, and
guidelines.
OTHER RECOMMENDATIONS
Workforce Recruitment and Retention: The current senior FE career
ladder--that tops out at a GS-11--is not aligned with recently added FE
responsibilities. The decisions made by FEs are more consistent with
the complexity and impact of decisions made by IRS Officers and INS
agents whose career ladders top out at a GS-12. LIEs should also
receive have a career ladder that is aligned with that of a VSR.
Finally, the agency should pay the full cost of FE liability protection
against civil suits; currently, FEs have to pay half the cost.
Guidance to Fiduciaries: A subject matter expert should teach a
structured course on an initial or quarterly basis to inform
fiduciaries of applicable requirements and their responsibilities. The
course should include a hands-on component. Their travel costs and lost
time from work should be reimbursed.
Quality Assurance: AFGE and NVAC commend VBA for centralizing
Quality Reviews to increase their consistency, but better training is
also needed to reduce errors. STAR reviews have become punitive in
recent years; they are now part of Directors Dashboard, and therefore
can make or break a performance rating. This also requires employees to
focus on quantity far more than quality.
Time Frames for Selection of Fiduciaries: Current time frames for
completion of initial appointments of fiduciary are not sufficient.
Given new parameters that apply (with more stringent accounting and
oversight), it takes more than 45 calendar days to select proper
fiduciaries who will serve the veteran's best interests. This 45 day
time frame fails to take into account logistics, and the fact that
compliance with our requests (including scheduling of appointments and
returning paperwork) is largely voluntary.
Case Files: Since there is no need to see the fiduciary after the
initial appointment, the Principal Guardianship File (PGF) should be
kept where the beneficiary is, especially because the FE at that
regional office completes the exam. It is difficult to compare finances
and accountings without the file. In the alternative, the file could be
accessed electronically as part of the Virtual VA, which would be
especially helpful if the fiduciary resides in a different state than
the beneficiary.
Improve coordination with state courts. Frequently, state courts
appoint a fiduciary before VBA gets involved in the case. Problems
sometimes arise when VBA appoints its own fiduciary, and the court
dispenses funds in violation of VBA's restrictions that apply to the
VA-derived portion. Better coordination between the courts and the
Fiduciary Unit is needed to reduce the incidence of this problem.
Thank you for the opportunity to testify on this important matter.
Prepared Statement of Bradley G. Mayes, Director,
Compensation and Pension Service, Veterans Benefits Administration,
U.S. Department of Veterans Affairs
Mr. Chairman and Members of the Subcommittee, I am pleased to
appear before you today to speak of the initiatives underway to enhance
the Department of Veterans Affairs (VA) Fiduciary Program. I am
accompanied by Ms. Diana Rubens, Associate Deputy Under Secretary for
Field Operations; and Mr. Gary Chesterton, Chief, Fiduciary Staff,
Compensation and Pension (C&P) Service.
The Fiduciary Program oversees VA benefits paid to those Veterans
and beneficiaries who, because of injury, disease, or the infirmities
of age, are unable to manage their financial affairs. VA currently
supervises more than 108,000 VA beneficiaries with cumulative estates
exceeding $3 billion. These Veterans, and their widows and children,
are among our most vulnerable clients.
VA takes very seriously the recommendations made by the Government
Accountability Office (GAO) and VA's Office of Inspector General
(VAOIG) and is working to implement recommendations made in those
reports as well as other important measures we believe will further
strengthen the program.
I would like to highlight some of the strides VA has made within
the last 18 months, which are contributing to improved service delivery
and oversight of benefits to this group of Veterans and beneficiaries.
In September 2008, a new Chief of the Fiduciary Staff was recruited to
spearhead reform efforts for our Fiduciary Program. Shortly thereafter,
we selected a new Assistant Compensation and Pension Service Director
for Veterans Services, who has responsibility for this Program area.
These individuals bring many years of technical and management
experience to bear on our efforts to strengthen the Fiduciary Program.
In addition to these leadership changes, we have increased the staff
responsible for fiduciary policies and procedures and reassigned a
portion of the work previously assigned to this staff to VA's National
Quality Assurance Staff in Nashville, Tennessee. The result is
significantly more resources dedicated to oversight and policy changes
aimed at strengthening protections for these Veterans and
beneficiaries.
VA is taking steps to clarify existing procedural guidance. The
operations manual for fiduciary activities, M21-1 MR, Part XI, is
undergoing a complete revision. Several policy changes are already in
place to increase protections. Guidance was disseminated to all VA
regional offices implementing new requirements to obtain documentation
of any unbudgeted expenses in excess of thresholds agreed to between VA
and an approved fiduciary in their fund usage agreement. Fund usage
agreements document recurring expenses that are allowed to be paid out
of VA benefits to support an incompetent Veteran, beneficiary or
dependent. Additional requirements are in place for documentation of
budgeted expenses that exceed pre-approved limits by more than 15
percent and cannot be verified by bank statements submitted as part of
the annual accounting requirement. This guidance was issued in C&P
Service Fast Letter 10-12 dated April 19, 2010.
Periodic or onsite reviews at a fiduciary's place of business are
required for those fiduciaries that manage the benefits of 20 or more
beneficiaries. Increased oversight was established in October 2009 to
review compliance with this policy. VA's site survey protocol related
to fiduciary activities now includes an assessment of these onsite
reviews. Further, policy guidance was released in Fast Letter 10-12,
which requires the collection of a taxpayer identification number or
Social Security number for every corporate and individual fiduciary.
This will assist in identifying those fiduciaries subject to the onsite
review requirement. The fast letter also requires all onsite review
reports be submitted to VA Central Office Fiduciary Staff for review
and analysis. Finally, VA is considering a third-party audit process,
which could potentially assist with conducting onsite reviews and
investigations relating to misuse, as well as provide independent
audits of local fiduciary activities nationwide.
VA has deployed several measures to improve oversight of
investigations into allegations of misuse of beneficiary funds.
Beginning in fiscal year (FY) 2010, the Fiduciary Staff will complete a
systematic analysis of operations related to VA's misuse determination
process. This annual review will be incorporated as a standard business
process for continuous process improvement. The goal of the analysis
will be to identify areas in which VA fiduciary activities could
improve in compliance and oversight, and areas in which VA's Fiduciary
Program could be enhanced to eliminate the potential for misuse of
Veterans' and beneficiaries' benefits.
In October 2009, VA's site survey protocol for reviewing fiduciary
activities at VA regional offices was amended to include a review of
all documentation pertaining to any misuse allegation. Additionally, in
cases where a misuse allegation has occurred, policy is now in place
that requires VA regional office fiduciary activities to forward all
documentation pertaining to the investigation of these allegations.
Previously, VA fiduciary activities were required to forward only the
final misuse determination; however, some allegations had been
determined to be without merit at the local level and did not warrant a
formal misuse determination. This policy allows for centralized
oversight of all allegations, regardless of whether a formal misuse
determination is determined necessary.
A major initiative is also underway to develop and deploy
standardized training for all VA fiduciary activities. The training,
which is being deployed this month, is an intense, 40-hour session for
all fiduciary employees nationwide. The training focuses on the
specific responsibilities of fiduciary managers, field examiners, and
legal instruments examiners. The prepared course material includes
instruction on vulnerabilities of the Fiduciary Program, file
documentation, account audits, estate protection, and fiduciary
appointments. Additionally, the Fiduciary Staff will conduct a National
Fiduciary Managers Training Conference in June 2010, to provide in-
depth training on a myriad of fiduciary matters.
To improve operational efficiencies, VA consolidated the management
of 14 fiduciary activities within the Western Area under the Fiduciary
Hub Pilot Program. The Western Area Fiduciary Hub, located at the VA
Regional Office in Salt Lake City, Utah, is responsible for all
fiduciary work including field examinations, account audits, fiduciary
appointments and oversight, and related program responsibilities. VA is
conducting a full analysis of the Western Area Fiduciary Hub Pilot. The
analysis with recommendations will be completed by September 30, 2010.
The analysis will address program strengths, weaknesses, and lessons
learned, and make recommendations on the feasibility of expansion of
the hub concept.
To date, the Western Area Hub has demonstrated improvement in
processing fiduciary accountings. The standard requires account audits
to be completed within 14 days of receipt. The Hub has processed
ninety-four percent of its accountings within the prescribed timeliness
standard, which is higher than the national average of ninety-three
percent.
The Hub is the only fiduciary activity operating in a paperless
environment, which has served its unique configuration well. Electronic
forms, field examination packets, and other important information are
available to every employee of the Hub regardless of the employee's
location. The Hub also created a Misuse Team, which specializes in
misuse investigations. The Hub is unique in that it has integrated
Microsoft MapPoint software in the scheduling of field exams within the
Western Area Hub's jurisdiction. Utilizing this technology has reduced
overall travel times and increased the effectiveness of field
examiners. These are examples of improvements realized with the
consolidation.
VA also recognizes the need to improve the information technology
systems available to its field fiduciary personnel in the
administration of this program. The current fiduciary electronic case
management system, the Fiduciary Beneficiary System (FBS), poses some
limitations with historical data, interfacing with other systems
currently employed by VA, workload management, and fiduciary oversight.
We have initiated steps to replace FBS. A project team was established
in October 2009, to assess the functional requirements for a
replacement fiduciary case management system. The project team will
present its findings and recommendations in June 2010. Concurrently, we
are preparing a request for information to solicit interest from the
private sector in an alternative electronic case management system.
Recently, VA had the opportunity to participate in audits of the
Fiduciary Program conducted by GAO and VAOIG. These audits confirmed
the validity of our current efforts to eliminate vulnerabilities in
this important program.
Finally, VA is taking steps to collaborate with other agencies that
perform similar functions. We intend to host a round table forum with
other Federal agencies to share best practices and explore ways to
strengthen our program.
In conclusion, I want to affirm the commitment of VA to serve and
protect our most vulnerable population of Veterans and beneficiaries.
The interest expressed in our program from VAOIG, GAO, and this
Committee is a testament to the very important task at hand. VA is
committed to take every step necessary to ensure we fulfill our
obligations to protect this special segment of Veterans and
beneficiaries whom we serve.
Mr. Chairman, this concludes my prepared remarks. I would be happy
to address any questions or comments regarding my testimony here today.
MATERIAL SUBMITTED FOR THE RECORD
Committee on Veterans' Affairs
Subcommittee on Disability Assistance and Memorial Affairs
Washington, DC.
May 13, 2010
Honorable Eric K. Shinseki
Secretary
U.S. Department of Veterans Affairs
810 Vermont Avenue, NW
Washington, DC 20420
Dear Secretary Shinseki:
On Thursday, April 22, 2010, the House Committee on Veterans'
Affairs' Subcommittee on Disability Assistance and Memorial Affairs'
convened an oversight hearing entitled ``Examining VA's Fiduciary
Program: How Can VA Better Protect Vulnerable Veterans and their
Families?'' Through its Fiduciary Program the Department of Veterans
Affairs currently supervises more than 108,000 of our most vulnerable
veterans and their widows and children with cumulative estates of more
than $3 billion. In FY 2010 VA paid more than $696 million in benefits
payments to these beneficiaries.
In 2010, both VA's Office of Inspector General (VA OIG) and the
Government Accountability Office issued reports criticizing the VA's
Fiduciary Program for lacking the proper staffing, training, and other
resources needed for effective oversight of this program and delivery
of benefits. What is also disturbing is that the issues identified in
these reports seem to be longstanding because they are almost identical
to those identified in a 2006 VA OIG Report. In the absence of adequate
supervision and accountability by VBA, some fiduciaries have misused
millions of dollars belonging to our veterans and their dependents.
This is an unacceptable outcome that can be avoided with better
internal controls.
In light of the importance of this program, I would like to bring
to your attention a number of issues that were raised during last
month's oversight hearing:
The Veterans Benefit Administration (VBA) has failed to
(1) obtain seriously delinquent accountings; (2) consistently verify
questionable expenses reported by fiduciaries; and (3) adequately
follow up and report on allegations of misuse of beneficiary funds and
estates.
VBA's data tracking and case management system, the
Fiduciary Beneficiary System, does not store data needed to allow the
agency to effectively manage the Fiduciary Program or accurately target
vulnerable beneficiary estates.
The VBA lacks the number of trained staff to fully
oversee fiduciary-managed estates. Additionally, training for
fiduciaries may assist VBA in preventing misuse of funds reserved for
VA beneficiaries.
The VA OIG noted deficiencies in staffing and workload
models for the Fiduciary Program. For example, VA OIG observed that
there was no national fixed maximum number of cases assigned to each
Field Examiner and Legal Instrument Examiner, nor a fixed limit on the
number of beneficiaries that any single fiduciary can manage.
Outreach regarding the Fiduciary Program could be
improved by updating the material on VA's Web site about the Fiduciary
Program and including information on the program in the VA Handbook for
Veterans, Dependents and Survivors and including statistical
information pertaining to the misuse of funds by VA fiduciaries in the
Annual Benefits Report to Congress as required by title 38, United
States Code, section 5510.
This is an area of serious concern that warrants immediate
attention. While I appreciate your recent efforts to improve service
delivery and oversight of benefits, clearly more is needed to improve
the efficiency and effective of this program. I would appreciate your
response to these issues by Friday, June 11, 2010. Due to the
processing delays with Congressional postal mail, please also send your
responses to Ms. Megan Williams by fax at (202) 225-2034. If you have
any questions, please call (202) 225-3608.
Sincerely,
John J. Hall
Chairman
Enclosure
KR/tk
__________
The Secretary of Veterans Affairs
Washington, DC.
July 23, 2010
The Honorable John J. Hall Chairman
Subcommittee on Disability Assistance and Memorial Affairs
Committee on Veterans' Affairs
U.S. House of Representatives
Washington, DC 20515
Dear Mr. Chairman:
I am responding to your letter in which you listed several
significant issues raised during your Subcommittee's oversight hearing
conducted on April 22, 2010, entitled ``Examining the U.S. Department
of Veterans Affairs' Fiduciary Program: How Can the VA Better Protect
Vulnerable Veterans and Their Families?''
I assure you that I share your concerns regarding VA's duty to
protect our most vulnerable beneficiaries. I agree that the issues
raised in your letter are vulnerabilities within our Fiduciary Program.
VA's Chief of Staff, Acting Under Secretary of Benefits, Associate
Deputy Under Secretary for Field Operations, and Director of the
Compensation and Pension Service have all been personally involved in
addressing the deficiencies of the fiduciary program. The process to
enhance VA's Fiduciary Program began in September 2008 when a new Chief
was hired to reengineer the program. The enclosure provides the most
current update on each of your issues of concerns.
Thank you for your support of VA's efforts to safeguard the assets
of our most vulnerable Veterans and beneficiaries.
Sincerely,
Eric K. Shinseki
Enclosure
__________
Response to Inquiry from the Honorable John J. Hall
Department of Veterans Affairs Fiduciary Program
Issue #1: The Veterans Benefits Administration (VBA) has failed to
obtain seriously delinquent accountings.
Response: Seriously delinquent accountings are defined as
accountings that have not been received within 120 days of the due
date. VBA continues to take all steps necessary to obtain seriously
delinquent accountings. VA does not simply conduct an accounting on a
sampling of cases; accountings are required from every fiduciary who
meets certain criteria (i.e. VA estate exceeds $10,000, the fiduciary
receives a fee, 100 percent service-connected veteran, court-appointed,
etc.). Currently, VBA requires 30,444 accountings annually which equate
to approximately 28 percent of all beneficiaries in the program. To
eliminate instances of seriously delinquent accountings, VBA developed
and deployed a national training program that includes methods for
addressing overdue accountings. The methods include aggressive follow-
up and initiating misuse investigations. In June 2010, VBA hosted a
National Fiduciary Managers Training Conference, attended by 82
managers from every regional office, pension management center and area
office, as well as the Western Area Fiduciary Hub. The training
conference included comprehensive focus on delinquent accountings and
methods to obtain them. Since February 2010, VBA reduced the seriously
delinquent accounting rate from 5.7 percent to 5.2 percent, and
anticipates making greater progress by the end of the fiscal year.
Issue 2: VBA has failed to consistently verify questionable
expenses reported by fiduciaries.
Response: On April 20, 2010, VBA released Fast Letter 10-12,
Revised Fiduciary Policies and Procedures (enclosed), which
significantly heightens the requirements for addressing questionable
expenditures. This guidance mandates that all non-recurring
expenditures over $1,000 must have receipts for verification and all
expenditures exceeding the Fund Usage Agreement by more than 15 percent
that cannot be verified with financial institution documents must also
be confirmed by receipts. VBA's Quality Assurance Staff reviews
completed accountings on a monthly basis for compliance with this
requirement. Additionally, VBA's Quality Assurance Staff provides a
quarterly analysis of errors found during the quality reviews.
Issue 3: VBA has failed to adequately follow up and report on
allegations of misuse of beneficiary funds and estates.
Response: VBA's adjudication manual mandates that allegations of
misuse of beneficiary funds and estates must be addressed by VBA within
14 days of receipt. In October 2009, the Compensation and Pension
Service revised the site-visit protocol for VA regional office
fiduciary activities to include a review of misuse allegations. With
the release of FL 10-12 on April 20, 2010 (enclosed); every RO
Fiduciary Activity is now required to submit findings in every instance
of an allegation of misuse. C&P Service Fiduciary Staff is collecting
and reviewing these reports. C&P Service will complete an annual
analysis of misuse processes and procedures to identify areas that may
be improved.
Issue 4: VBA's data tracking and case management system, the
Fiduciary Beneficiary System (FBS), does not store data needed to allow
the agency to effectively manage the Fiduciary Program or accurately
target vulnerable beneficiary estates.
Response: VBA recognizes the need to replace FBS and prepared a
Request for Information (RFI) seeking private companies with the
capabilities to provide a replacement product for FBS. The RFI is
scheduled to be released by the end of fiscal year 2010 and will
require responses by November 30, 2010. Upon review of the RFI
responses, VBA will determine the necessary budgetary requirements for
a replacement program. The proposed timeline calls for a replacement
FBS program by the end of fiscal year 2011. Additionally, the business
requirements for the Veterans Benefits Management System (VBMS) include
a fiduciary component that will allow for greater integration of
fiduciary functionality.
Issue 5: VBA lacks the number of trained staff to fully oversee
fiduciary-managed estates. Additionally, training for fiduciaries may
further assist VBA in preventing misuse of funds reserved for VA
beneficiaries.
Response: Because of a lack of standardized training for VA
fiduciary activity personnel, VBA deployed a program of standardized
training in April 2010, which includes a 40-hour classroom-training
course. Through the end of fiscal year 2011, the training will be
delivered to approximately 500 VBA employees who staff fiduciary
activities within the regional offices. Headquarters staff members are
delivering the training onsite to increase the interactive
participation and establish a greater level of communication and
collaboration between Headquarters and the regional offices.
VBA is also in the process of developing an Internet site for
private individuals or entities that serve as fiduciaries for our
veterans and beneficiaries. The proposed site will detail the duties
and responsibilities of a private fiduciary and provide responses to
frequently asked questions, links to forms, and links to other sites
with important information to fiduciaries, e.g. the Social Security
Administration. The new Web site will be launched by September 30,
2010.
Issue 6: The VA OIG noted deficiencies in staffing and workload
models for the Fiduciary Program. For example, VA OIG observed that
there was no fixed maximum number of cases assigned to each Field
Examiner and Legal Instruments Examiner, nor a fixed limit on the
number of beneficiaries that any single fiduciary can manage.
Response: The Compensation and Pension Service is currently
developing staffing and workload models for fiduciary activities
nationwide. The models will include variations for density of
population, remoteness of beneficiaries (number of miles traveled), and
a ratio of field examiners and legal instruments examiners based on the
number of beneficiaries in the fiduciary program. The models will be
completed by September 30, 2010.
VBA does not place a fixed limit on the number of beneficiaries
assigned to any private fiduciary since each beneficiary's case is
unique and fiduciary capabilities vary. Fiduciaries with substantial
experience may be capable of managing a larger number of cases.
Ultimately, if it is determined that a fiduciary is not performing
satisfactorily for any or all beneficiaries he or she manages, VBA will
relieve the fiduciary of cases. Fiduciaries are not VA employees, and
they are unable to appeal the decision to remove them as fiduciary.
Issue 7: Outreach and information regarding the Fiduciary Program
could be improved by updating the material on VA's Web site about the
Fiduciary Program and including information on the program in the VA
Handbook for Veterans. Dependents. and Survivors and including
statistical information pertaining to the misuse of funds by VA
fiduciaries in the Annual Benefits Report to Congress as required by
title 38, United States Code, section 5510.
Response: VBA has significantly broadened outreach efforts to the
National Guardianship Association, the National Association for Elder
Law Attorneys, the National College of Probate Court Judges, and
various State conventions for fiduciaries and guardians. Additionally,
VBA will provide representation at the American Association of Retired
Persons (AARP) national convention which is expected to draw 25,000
attendees. VBA has accepted an invitation to be a plenary speaker at
the 2010 National Guardianship Association national convention.
The actions being taken to update VA's Web site regarding the
Fiduciary Program are addressed in the response to Issue 5. VBA will
provide information for inclusion in the annual Federal Benefits for
Veterans, Dependents and Survivors reference guide. VBA anticipates the
2010 online version will be updated by August 31, 2010, and the 2011
print version will include the additional fiduciary information.
VBA is in the process of gathering the data required for the Annual
Benefits Report (ABR). The ABR is posted on VA's Web site. The next ABR
will include statistical information, and VBA will amend fiscal year
2009 ABR to include the data as well.