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Opening Statement of Hon. Jerry McNerney, Democratic Member, Subcommittee on Oversight and Investigations

Thank you Mr. Chairman.

Today’s hearing is intended to examine VA’s Fiduciary program and assess how VA can strengthen management controls and accountability to protect some of our most vulnerable citizens.  

Since 1926 when Congress passed the World War Veterans Act, VA has been providing oversight of its benefits paid to those beneficiaries who were incapable of handling their own affairs due to injury, disease, or infirmities of age. Today, according to VA, the VA Fiduciary Program manages approximately $171 million in VA benefits for more than 121,000 beneficiaries.   
In April 2010, the DAMA Subcommittee conducted an oversight hearing examining the VA Fiduciary Program based on then-recent reports from VA’s Office of Inspector General and the GAO.  These reports pointed to a number of deficiencies in VA’s management controls and oversight, including insufficient staffing, training, and workload management.  Additionally, both the VAOIG and GAO expressed serious concerns with the inadequacy of the Fiduciary Beneficiary System, VA’s electronic fiduciary case management and tracking program.

As indicated in these reports, in the absence of adequate oversight and accountability, some fiduciaries have misused millions of dollars belonging to our veterans and their dependents.  

In fact, from October 1998 to March 2010, the VA OIG’s Office of Investigations reported that it conducted 315 fiduciary fraud investigations, resulting in 132 arrests and monetary recoveries of $7.4 million in restitution, fines, penalties, and administrative judgments.  

It should be noted that these abuses are hardly representative of all fiduciaries—they are the exception not the rule.  In fact, on the other end of the spectrum, we heard during that hearing from VSOs and family members that caregivers and other relatives who serve as fiduciaries receive no training or support from VA.  In fact, the witnesses seemed to indicate that in many instances, professional fiduciaries are not always subjected to as much VBA oversight as family member and caregiver fiduciaries.  That even worse, during the audits by VA staff, these caregiver fiduciaries are treated with suspicion and mistrust.  For example, the Wounded Warrior Project testified that VBA required a mother who served as a fiduciary for her mentally disabled veteran son to reimburse funds spent on toilet paper for the home.    

I think this is a scenario of being pennywise and dollar foolish—of VA watching the pennies, while the dollars flow out of the window. We must insist that VA strike a better balance while protecting our vulnerable beneficiaries.

[I also note that none of the VSOs, AFGE or the VAOIG are represented on the witness list or are testifying today.  I think their presence would have been helpful for today’s hearing].

Finally, I understand that since the DAMA 2010 hearing, VA has made a number of internal management and structural changes within its Fiduciary Program. I look forward to hearing of your progress.  I also want to know in particular what VA’s plans are in light of the recent Freeman v. Shinseki decision. I look forward to the insight that all of our witnesses may provide today and thank them for being here.
 
Mr. Chairman, our most vulnerable VA beneficiaries deserve a 21st Century system that reflects the service and sacrifice they gave to our nation, VA must do better.  

With that Mr. Chairman, I yield back.