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Highlights

Many individuals receiving monthly compensation and pension benefits from the Department of Veterans Affairs (VA) have mental impairments that prevent them from managing their finances. VA's Fiduciary Program selects and oversees third parties, called fiduciaries, to help manage and protect beneficiaries' funds. GAO examined (1) how effective program policies and procedures are in monitoring fiduciaries and safeguarding beneficiary assets, and (2) challenges VA faces in improving program performance and oversight. GAO reviewed program policies, 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. During these visits GAO interviewed regional office managers and staff and conducted 32 file reviews.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Veterans Affairs 1. To ensure that maximum efforts are made to safeguard beneficiary assets, the Secretary of Veterans Affairs should ensure that policies regarding file documentation, follow-up with fiduciaries for late financial reports, and bond acquisition are understood and carried out by staff. This might be accomplished by increasing standardized training for staff, clarifying certain policies, and improving management review and oversight.
Closed - Implemented
In VA's response to our recommendations and its November 2010 update, the agency stated that it has issued guidance and provided extensive training to both management and staff on a variety of issues, including file documentation, bond acquisition and follow-up with fiduciaries on late financial reports.
Department of Veterans Affairs 2. To ensure that maximum efforts are made to safeguard beneficiary assets, the Secretary of Veterans Affairs should improve the policies for periodic on-site reviews of professional fiduciaries by taking additional actions such as: (1) requiring a unique identifier for all fiduciaries to better determine which professional fiduciaries meet the criteria to have on-site reviews; and (2) implementing a nationwide systematic quality review process to examine completed on-site review reports.
Closed - Implemented
In an April 2010 Fast Letter, the Department of Veterans Affairs (VA) directed its staff to collect a unique identifier on all fiduciaries and input this information into the Fiduciary Beneficiary System (FBS). In a subsequent conversation, a Fiduciary Program Central Office official told GAO that one of the ways the unique identifiers will be used is to determine whether professional fiduciaries meet the criteria for having a financial audit, known as an on-site review. The same FAST letter also requires VA regional offices to submit all signed on-site review reports and supporting documentation to the Central Office within 10 days of completion for a quality review.
Department of Veterans Affairs 3. To ensure that maximum efforts are made to safeguard beneficiary assets, the Secretary of Veterans Affairs should evaluate alternative approaches to effectively and efficiently meet the electronic case management system needs of Fiduciary Program managers and staff. This could include developing or acquiring a replacement system or enhancing the existing system.
Closed - Implemented
In a November 2010 update on this recommendation, VBA stated that they have evaluated alternate approaches to meet the electronic case management needs of the Fiduciary Program and have decided to replace the Fiduciary Beneficiary System. A Request for Information has been prepared and released to the private sector to accomplish this.
Department of Veterans Affairs 4. To ensure that maximum efforts are made to safeguard beneficiary assets, the Secretary of Veterans Affairs should move forward with developing a plan to systematically evaluate the extent to which the hub pilot project is addressing identified program weaknesses. This could include documenting lessons learned during implementation.
Closed - Implemented
In November 2010, VBA stated that it has conducted a full analysis of the Western Fiduciary Hub pilot project, including lessons learned.

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