Improving Oversight of Federal Fiduciaries and Court-appointed Guardians
GAO-11-949T: Published: Sep 22, 2011. Publicly Released: Sep 22, 2011.
Today's hearing is on the appointment and oversight of guardians. As people age, they often reach a point when they are no longer capable of handling their own finances or have difficulty making other decisions for themselves. To ensure that federal cash payments received by incapacitated adults are used in their best interest, the Social Security Administration (SSA), Department of Veterans Affairs (VA), and other federal agencies assign a responsible third party or fiduciary to oversee these benefits. SSA and VA can designate spouses, other family members, friends, and organizations to serve as fiduciaries. Similarly, when state courts determine that adults are incapacitated, they have the authority to grant other persons or entities--guardians--the authority and responsibility to make financial and other decisions for them. Incapacitated adults are vulnerable to financial exploitation by fiduciaries and guardians, so these arrangements are not without risk. In 2010, we identified hundreds of allegations of abuse, neglect, and exploitation by guardians in 45 states and the District of Columbia between 1990 and 2010. At that time, we reviewed 20 of these cases and found that guardians had stolen or otherwise improperly obtained $5.4 million from 158 incapacitated victims, many of whom were older adults. To protect against financial exploitation, state courts as well as federal agencies are responsible for screening prospective guardians and federal fiduciaries, respectively, to make sure suitable individuals are appointed. They are also responsible for monitoring the performance of those they appoint. This statement today is based on our recent report on this topic. It will cover (1) SSA and VA procedures for screening prospective federal fiduciaries, and state court procedures for screening prospective guardians; (2) SSA and VA monitoring of federal fiduciary performance, and state court monitoring of guardian performance; (3) information sharing between SSA and VA fiduciary programs and between each of these programs and state courts; and (4) federal support for improving state courts' oversight of guardianships.
In summary, we found that SSA and VA are required to and have procedures for screening prospective fiduciaries and are also required to monitor fiduciary performance. Most states, as well, have laws requiring courts to follow certain screening procedures for prospective guardians and to obtain annual reports from them, but there is evidence that courts often find monitoring guardian performance challenging. SSA and VA do not systematically share with one another the identities of beneficiaries determined to be incapacitated or the identities of fiduciaries who have misused an incapacitated adult's benefit payments, and there is evidence that state courts have difficulty obtaining similar information from SSA about SSA beneficiaries the courts have determined to be incapacitated and in need of a guardian. Finally, the federal government has a history of supporting technical assistance and training for state courts related to guardianship, primarily with funding from the Administration on Aging (AoA) in the Department of Health and Human Services (HHS).