Audit of the Fiduciary Program’s Effectiveness in Addressing Potential Misuse of Beneficiary Funds

This audit determined if VBA has reasonable assurance that VA-derived income and estates of incompetent beneficiaries are used solely for their care, support, welfare, and needs. We found VBA’s Fiduciary Program is not effectively protecting the VA-derived income and estates of incompetent beneficiaries. Specifically, the Program does not consistently pursue delinquent fiduciary accountings and follow up on potential misuse of beneficiary funds. VBA lacks elements of an effective management infrastructure to monitor program performance, effectively utilize staff, and oversee fiduciary activities. In particular, the Fiduciary-Beneficiary System, VBA’s case management system, does not possess data that would allow the agency to provide effective management oversight of the program or to better target some of its efforts towards those beneficiary estates that are most vulnerable to misuse. As a result, VA Regional Offices are not consistently taking timely or effective actions to ensure VA-derived income and estates of incompetent beneficiaries are protected. VBA needs to improve the management infrastructure to direct the Fiduciary Program nationwide more effectively. In addition, VBA needs to develop and disseminate policies and procedures to improve the effectiveness of analyzing annual accountings filed by fiduciaries and investigating and reporting allegations of misuse of beneficiary funds. The Acting Under Secretary for Benefits agreed with our findings and provided target dates to complete planned actions that address our recommendations.