Ailing veterans still at risk of theft from those appointed by VA
June 11, 2015
WASHINGTON — Despite years of restructuring, a Department of Veterans Affairs financial management program still lacks enough oversight to prevent fiduciaries from stealing millions from vulnerable veterans, according to testimony Thursday in front of a Congressional committee.
Through the program, the VA appoints and oversees fiduciaries to help veterans who are ill, injured or mentally incapacitated handle their benefits. A VA Inspector General report in 2010 found that fiduciaries had stolen nearly $15 million from veterans between 1998 and 2010, and a more recent review found persistent problems with the program and millions more stolen.
The review found that the Veterans Benefits Administration failed to meet its own deadlines to conduct field examinations of fiduciaries in 42 percent of cases, putting more than $800 million in benefits and estate values at risk.
Testimony from the VA Inspector General’s office also highlighted egregious examples of fraud. In one case, a Houston attorney who served as a guardian for 54 veterans conspired with his wife to steal more than $2 million from veterans’ bank accounts. Some of the cases detailed in written testimony from the VA Inspector General describe fiduciaries stealing from incapacitated relatives, including a New Hampshire woman who was incarcerated for a year after stealing hundreds of thousands of dollars from her father.
“Without more effective controls, including more consistent and timely completion of some of the program’s most important functions, unacceptable risks to the general well-being and VA benefits of some of VA’s most vulnerable beneficiaries will remain,” Deputy Assistant VA Inspector General Gary Abe wrote in testimony submitted to the House Committee on Veterans Affairs Subcommittee on Disability Assistance and Memorial Affairs.
A particular area of concern is widespread mismanagement found in the Eastern Fiduciary Hub in Indianapolis, which oversees the program in 14 states. An Inspector General’s audit found that officials failed to investigate nearly 90 percent of allegations of fiduciary misuse of funds within 14 days as required, and that it took an average of 162 days instead. Auditors also found more than 3,000 pieces of mail, some “time critical,” that had not been processed within five days as required. Instead, the processing of correspondence, including allegations of fiduciary malfeasance, took from 11 to 486 days.
Rep. Ralph Abraham, R-La., said he was incensed that the VA’s Eastern Area Hub manager failed to appear at the hearing despite being requested to answer questions.
“This appears to be another example of the VA’s failure to follow through on Secretary McDonald’s promise of improved VA transparency and accountability,” he said. “Our nation’s veterans deserve better than the status quo.”
While the VA has made significant improvements in the program, it has struggled to keep up with an aging veterans population and a growing demand for the program, which remains understaffed, VA Acting Deputy Under Secretary for Disability Assistance David McLenachen said in written testimony.
“Despite the VA’s successful implementation of many program enhancements over the past few years, challenges remain,” he said.
But Rep. Bill Johnson, R-Ohio, said he was frustrated at the slow pace of changes three years after a congressional inquiry uncovered similar problems with the program.
“It was clear then that the (Veterans Benefits Administration) fiduciary program was in dire need of reform and I have to tell you, it sounds like there might be an echo in the room, because here we are three years later and we’re still talking about some of the same issues,” he said.
The VA is reeling from a national scandal that has embroiled the second-largest federal agency for more than a year. What started as a veterans health care crisis that cost former VA Secretary Eric Shinseki his job has grown to envelop nearly every facet of the department, with new mismanagement regularly surfacing and lawmakers growing increasingly impatient with the pace of reforms within the agency.