A-33194, JAN. 18, 1966, 45 COMP. GEN. 411

A-33194: Jan 18, 1966

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1966: FURTHER REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 16. IN WHICH YOU ASK WHETHER THE ADMINISTRATOR OF VETERANS AFFAIRS HAS DISCRETIONARY AUTHORITY TO ESTABLISH THE AMOUNT OF THE GENERAL POST FUND WHICH WILL BE MAINTAINED AS A FUNDED RESERVE FOR THE PAYMENT OF APPROVED CLAIMS UNDER SECTION 5226. OWNED BY HIM AT THE TIME OF DEATH AND NOT DISPOSED OF BY WILL OR OTHERWISE. UPON RECEIPT OF DUE PROOF THAT ANY PERSON WAS AT DATE OF DEATH OF THE VETERAN ENTITLED TO HIS PERSONAL PROPERTY. WAS OR WERE SO ENTITLED * * *. THIS AMOUNT IS INVESTED IN TREASURY BONDS AS AUTHORIZED BY 38 U.S.C. 5228. IT IS REPORTED. THAT PAYMENT OF APPROVED CLAIMS RARELY EXCEEDS 10 PERCENT OF SUCH ESTATE INCOME IN ANY 1 YEAR AND IT IS YOUR BELIEF.

A-33194, JAN. 18, 1966, 45 COMP. GEN. 411

VETERANS ADMINISTRATION - TRUST FUNDS - DECEDENTS' ESTATES - RESERVE LEVEL FOR PAYMENT OF CLAIMS THE RECEIPTS DERIVED FROM THE ESTATES OF VETERANS WHO DIE WHILE BEING FURNISHED CARE OR TREATMENT BY THE VETERANS ADMINISTRATION AND LEAVE NO SURVIVORS, NEXT OF KIN, OR HEIRS, AND WHICH PURSUANT TO 38 U.S.C. 5220 (A) VEST AS A TRUST FOR THE USE AND BENEFIT OF THE GENERAL POST FUND, SUBJECT UNDER SECTION 5226 TO CLAIM WITHIN 5 YEARS AFTER THE DEATH OF A VETERAN, AND AUTHORIZED UNDER SECTION 5228 TO BE INVESTED IN TREASURY BONDS, NEED NOT BE RESERVED IN THE AGGREGATE, AND THE ADMINISTRATOR OF VETERANS AFFAIRS, UNDER THE BROAD DISCRETIONARY AUTHORITY PRESCRIBED IN SECTION 5223 TO MAKE DISBURSEMENTS FROM THE GENERAL POST FUND FOR THE BENEFIT OF VETERANS RECEIVING CARE OR TREATMENT, MAY MAINTAIN THE FUNDED RESERVE AT A LEVEL RELATED TO REALISTIC NEED FOR THE PAYMENT OF SECTION 5226 CLAIMS, THEREBY MAKING A SUBSTANTIAL AMOUNT OF FUNDS AVAILABLE FOR THE BENEFIT OF HOSPITALIZED OR DOMICILED VETERANS.

TO THE ADMINISTRATOR, VETERANS ADMINISTRATION, JANUARY 18, 1966:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 16, 1965, IN WHICH YOU ASK WHETHER THE ADMINISTRATOR OF VETERANS AFFAIRS HAS DISCRETIONARY AUTHORITY TO ESTABLISH THE AMOUNT OF THE GENERAL POST FUND WHICH WILL BE MAINTAINED AS A FUNDED RESERVE FOR THE PAYMENT OF APPROVED CLAIMS UNDER SECTION 5226, TITLE 38, U.S.C.

RELATIVE TO THE QUESTION PRESENTED, 38 U.S.C. 5220 (A) PROVIDES IN PART AS FOLLOWS:

WHENEVER ANY VETERAN * * * SHALL DIE WHILE A MEMBER OR PATIENT IN ANY FACILITY, OR ANY HOSPITAL WHILE BEING FURNISHED CARE OR TREATMENT BY THE VETERANS' ADMINISTRATION, AND SHALL NOT LEAVE SURVIVING HIM ANY SPOUSE, NEXT OF KIN, OR HEIRS ENTITLED, UNDER THE LAWS OF HIS DOMICILE, TO HIS PERSONAL PROPERTY AS TO WHICH HE DIES INTESTATE, ALL SUCH PROPERTY, INCLUDING MONEY AND CHOSES IN ACTION, OWNED BY HIM AT THE TIME OF DEATH AND NOT DISPOSED OF BY WILL OR OTHERWISE, SHALL IMMEDIATELY VEST IN AND BECOME THE PROPERTY OF THE UNITED STATES AS TRUSTEE FOR THE SOLE USE AND BENEFIT OF THE GENERAL POST FUND * * *.

HOWEVER, 38 U.S.C. 5226, REFERRED TO ABOVE AND WHICH GIVES RISE TO YOUR QUESTION, PROVIDES IN PERTINENT PART THAT---

NOTWITHSTANDING THE CREDITING TO SAID FUND OF THE ASSETS, OR PROCEEDS THEREOF, OF ANY DECEDENT * * * PURSUANT TO THE PROVISIONS OF SECTION 5220 OF THIS TITLE, ANY PERSON CLAIMING A RIGHT TO SUCH ASSETS MAY WITHIN FIVE YEARS AFTER THE DEATH OF THE DECEDENT FILE A CLAIM ON BEHALF OF HIMSELF AND ANY OTHERS CLAIMING WITH THE ADMINISTRATOR. UPON RECEIPT OF DUE PROOF THAT ANY PERSON WAS AT DATE OF DEATH OF THE VETERAN ENTITLED TO HIS PERSONAL PROPERTY, OR A PART THEREOF, UNDER THE LAWS OF THE STATE OF DOMICILE OF THE DECEDENT, THE ADMINISTRATOR MAY PAY OUT OF THE FUND, BUT NOT TO EXCEED THE NET AMOUNT CREDITED THERETO FROM SAID DECEDENT'S ESTATE LESS ANY NECESSARY EXPENSES, THE AMOUNT TO WHICH SUCH PERSON, OR PERSONS, WAS OR WERE SO ENTITLED * * *.

YOU STATE IN ORDER TO MEET THE CLAIMS PRESENTED UNDER SECTION 5226, IT HAS BEEN THE PRACTICE OF THE VETERANS ADMINISTRATION TO MAINTAIN AN AMOUNT IN THE GENERAL POST FUND APPROXIMATING THE AGGREGATE OF RECEIPTS DERIVED FROM THE ESTATES OF DECEASED BENEFICIARIES DURING THE PRECEDING 5-YEAR PERIOD. THIS AMOUNT IS INVESTED IN TREASURY BONDS AS AUTHORIZED BY 38 U.S.C. 5228, WHICH PROVIDES THAT:

MONEY IN THE FUND NOT REQUIRED FOR CURRENT DISBURSEMENTS MAY BE INVESTED AND REINVESTED BY THE SECRETARY OF THE TREASURY IN INTEREST BEARING OBLIGATIONS OF THE UNITED STATES OR IN OBLIGATIONS GUARANTEED AS TO BOTH PRINCIPAL AND INTEREST BY THE UNITED STATES. IT IS REPORTED, HOWEVER, THAT PAYMENT OF APPROVED CLAIMS RARELY EXCEEDS 10 PERCENT OF SUCH ESTATE INCOME IN ANY 1 YEAR AND IT IS YOUR BELIEF, THEREFORE, THAT IT WOULD BE IN THE BEST INTERESTS OF THE VETERAN AND OF THE GOVERNMENT IF THE FUNDED RESERVE WERE MAINTAINED AT A LEVEL MORE NEARLY RELATED TO REALISTIC PROJECTIONS OF ACTUAL PAYMENTS OF SECTION 5226 CLAIMS. SUCH ACTION WOULD MAKE A SUBSTANTIAL AMOUNT OF FUNDS AVAILABLE FOR THE BENEFIT OF HOSPITALIZED OR DOMICILED VETERANS. IN THIS CONNECTION YOU SUGGEST A LEVEL AS OF JUNE 30 OF ANY YEAR EQUAL TO FIVE TIMES THE TOTAL AMOUNT PAID ON CLAIMS DURING THE PRECEDING 5-YEAR PERIOD.

SECTION 5223 OF TITLE 38, U.S. CODE, PROVIDES THAT DISBURSEMENTS FROM THE GENERAL POST FUND SHALL BE MADE---

* * * UPON THE ORDER AND WITHIN THE DISCRETION OF THE ADMINISTRATOR FOR THE BENEFIT OF MEMBERS AND PATIENTS WHILE BEING SUPPLIED CARE OR TREATMENT BY THE VETERANS' ADMINISTRATION IN ANY FACILITY OR HOSPITAL. * * *

IT APPEARS FROM THIS THAT THE DISCRETION OF THE ADMINISTRATOR IS QUITE BROAD AND IS LIMITED PRIMARILY BY THE RESTRICTION THAT EXPENDITURES BE MADE FOR THE BENEFIT OF THE MEMBERS AND PATIENTS. ALSO, IN VIEW OF THE FACTS NOW REPORTED, WE AGREE THAT THE AMOUNT RESERVED FOR THE PAYMENT OF SUBSEQUENT CLAIMS MAY BE UNNECESSARILY HIGH.

ACCORDINGLY, YOU ARE ADVISED THAT WE WOULD NOT QUESTION A DETERMINATION BY YOU THAT THE AMOUNT IN THE FUNDED RESERVE BE REDUCED TO A MORE REALISTIC LEVEL SUCH AS THAT SUGGESTED IN YOUR LETTER.