	Background

Many individuals receiving monthly compensation and pension benefits  from the VA have mental impairments that can prevent them from  managing their finances. In 1935, Congress created an early version of the VA Fiduciary Program to select and oversee responsible third parties,  called fiduciaries, who help manage and protect beneficiaries’ funds. Inconsistent Compliance with Some Policies and Weaknesses in Others Hinder VA’s Ability to Monitor Fiduciaries and Safeguard Benefits

		Program Staff Do Not Always Comply with Policies for Conducting Visits and Obtaining Timely Financial Reports and Bonds

Although VA has established Fiduciary Program policies intended to  ensure that qualified fiduciaries are selected and regularly monitored, staff  did not always take required actions within established time frames or  document in the case files that required actions were taken. 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. VA’s Policy for Periodic On-site Reviews Does Not Ensure Effective Monitoring of Professional Fiduciaries

In 2005, VA developed a new policy requiring Fiduciary Program staff to  conduct periodic on-site reviews of professional fiduciaries as required  by the Veterans’ Benefits Improvement Act of 2004. These financial  reviews examine records kept by fiduciaries who manage funds for  multiple beneficiaries. Though managers and staff in  regional offices we visited and in the Central Office said that on-site  reviews are useful when conducted properly, we found two associated  policy weaknesses: (1) not all fiduciaries who need these reviews can be  reliably identified and (2) VA lacks a nationwide quality review process to  ensure that these on-site reviews are conducted properly and consistently. However,  this computer match is based on a fiduciary’s name, rather than a unique  identifier, such as the fiduciary’s Social Security number or tax  identification number. 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 reports. 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’s Fiduciary Case Management System Provides Insufficient Information and Is Cumbersome to Use

VA’s electronic fiduciary case management system, FBS, does not provide  sufficient data to effectively manage the Fiduciary Program. VA Provides Some Training for Fiduciary Managers and Staff, but Additional Standardized Training Is Needed

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. Central Office management said that they  expect to implement these training programs some time in fiscal year 2010. VA Consolidated Western Fiduciary Program Units to Improve Performance and Oversight but Has Not Yet Evaluated the Outcomes of This Effort

Beginning January 2008 through 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. Also, in the absence of sufficient  standardized training, managers and staff may not have the expertise  needed to effectively carry out program responsibilities. Appendix I: Objectives, Scope, and Methodology

The objectives of our report on the Department of Veterans Affairs (VA)  Fiduciary Program were to examine (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.
Why GAO Did This Study

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.

What GAO Found

VA's Fiduciary Program has policies in place that are intended to ensure that qualified fiduciaries are selected and regularly monitored; however, insufficient staff compliance with some policies and weaknesses in others hinder VA's ability to safeguard veterans' benefits. For example, VA was late in conducting required follow-up visits to monitor fiduciaries or provided insufficient documentation to show whether these visits were conducted in about 18 percent of the cases GAO reviewed. In addition, while GAO estimated that nearly 40 percent of fiduciaries who were required to submit financial reports to demonstrate how beneficiary funds are managed turned their reports in late, VA did not always take actions to obtain them on time or provide documentation that an attempt had been made, as required by VA policy. GAO also found that files did not always contain documentation that a bond was secured when required to safeguard beneficiary estates or that the requirement was waived. Fiduciary Program managers and staff said that they did not always comply with VA policies due, in part, to a lack of time, resources, and staff. In addition, VA's policies for conducting on-site reviews of professional fiduciaries who manage funds for multiple beneficiaries do not ensure these fiduciaries are effectively identified and monitored. For example, VA's policy may not ensure that all fiduciaries who need to be reviewed are identified because the agency's policy allows the use of 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. Moreover, VA does not have a nationwide quality review process to ensure that these reviews are conducted properly and consistently. GAO identified two key challenges that hinder VA's ability to improve Fiduciary Program performance and oversight. First, managers and staff in the three regional offices visited said VA's electronic fiduciary case management system does not provide sufficient information and is cumbersome to use. For example, the system limits staff's ability to track multiple actions on a case or enter all needed information. Also, the system does not generate comprehensive management reports that would facilitate effective oversight. In addition, managers and staff indicated that available training may not be sufficient to ensure they have the necessary expertise to carry out program responsibilities. Moreover, many managers and staff had less than 2 years of program experience, and the lack of sufficient training may have contributed to inconsistent compliance with some program policies. VA is developing standardized training that it expects to implement some time in fiscal year 2010. VA is also piloting a consolidated Fiduciary Program unit covering 14 western units, in part, to address program challenges. While the pilot is intended to improve program performance and oversight, managers and staff noted that difficulties, such as not having resources in place and up-to-date case files, impeded effective implementation. VA has not yet evaluated the impact and effectiveness of this model.