Review of Alleged Mismanagement of VBA's Eastern Area Fiduciary Hub

OIG did this review to determine the merits of three allegations made to the VA Office of Inspector General Hotline in May 2013. The complainant alleged that the Eastern Area Fiduciary Hub (EAFH) in Indianapolis, IN, was not timely processing allegations of misuse of beneficiary funds, conducting field examinations, and processing some incoming mail. OIG substantiated the three allegations. EAFH did not complete merit reviews for 190 of 214 allegations of misuse of funds and did not complete 17 of 23 investigations of fiduciary misuse of funds within Veterans Benefits Administration (VBA) performance standards. In addition, EAFH made 12 determinations concluding fiduciaries misused approximately $944,000 of beneficiary funds. However, EAFH did not timely complete required actions, such as replacing the fiduciary, requesting repayment from former fiduciaries, or determining if VA was negligent in its oversight of the fiduciaries. As a result, VBA may be responsible for repayment of approximately $944,000 to the affected beneficiaries. We also substantiated that EAFH had more than 16,000 pending field examinations, including 11,000 pending field examinations that had exceeded VBA timeliness standards. As a result, the general health and well-being of beneficiaries are placed at increased and unnecessary risk. We also identified more than 3,200 pieces of mail that had yet to be processed and exceeded EAFH’s timeliness standards, some of which were time-critical. Delays in processing the 3,200 pieces of mail ranged from 11 to 486 workdays, with an average delay of 30 workdays. Without effective management of incoming mail, VA benefits may be affected. We recommended the Under Secretary for Benefits require EAFH implement controls to ensure timely processing of allegations of misuse of beneficiary funds. In addition, we recommended the Under Secretary for Benefits ensures EAFH implements a plan to expedite completion of the backlog of field examinations, and to ensure implemented actions continue to reduce the backlog of mail during FY 2014. The Under Secretary for Benefits concurred with our recommendations, but also included technical comments on our draft report.