THE VETERANS BENEFITS ADMINISTRATION’S 

FIDUCIARY PROGRAM, INCLUDING IMPLEMENTATION OF TITLE V OF PUBLIC LAW 108-454

Hearing

before the

Committee on Veterans’ Affairs

House of Representatives

Subcommittee on Disability Assistance 

and Memorial Affairs

one hundred ninth congress

Second Session

Thursday, June 8, 2006

Printed for the use of the Committee on Veterans’ Affairs

Serial No. 109-50

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Committee on Veterans’ Affairs

Steve Buyer, Indiana, Chairman

Michael Bilirakis, Florida Lane Evans, Illinois, Ranking

Terry Everett, Alabama Bob Filner, California

Cliff Stearns, Florida Luis V. Gutierrez, Illinois

dan burton, Indiana Corrine Brown, Florida

Jerry Moran, Kansas Vic Snyder, Arkansas

richard H. baker, Louisiana Michael H. Michaud, Maine

Henry E. Brown, Jr., South Carolina Stephanie Herseth, South 

Jeff Miller, Florida Dakota

John Boozman, Arkansas Ted Strickland, Ohio

Jeb Bradley, New Hampshire Darlene Hooley, Oregon

Ginny Brown-Waite, Florida Silvestre Reyes, Texas

Michael R. Turner, Ohio ShellEy Berkley, Nevada

John Campbell, California Tom Udall, New Mexico

 John T. Salazar, Colorado

JAMES M. LARIVIERE, Staff Director

Subcommittee on Disability Assistance

and Memorial Affairs

Jeff Miller, Florida, Chairman Shelley Berkley, Nevada, 

Jerry Moran, Kansas Ranking

Jeb Bradley, New Hampshire, Vice Chairman Tom Udall, New Mexico

Ginny Brown-Waite, Florida Lane Evans, Illinois

 

PAIGE MCMANUS, Subcommittee Staff Director

(II)
CONTENTS

June 8, 2006

 Page

The Veterans Benefits Administration’s Fidicuary Program,

Including Implementation of Title V of Public Law 108-454.. 

OPENING STATEMENTS

Chairman Miller .......................................................................... 

Prepared statement of Chairman Miller ...................................

Hon. Shelley Berkley, Ranking Democratic Member ..............

Prepared statement of Ms. Berkley ..........................................

Hon. Tom Udall ..........................................................................

Prepared statement of Mr. Udall .............................................

Witnesses

Szybala, Renee, Director, Compensation and Pension Service,

 Veterans Benefits Administration, U.S. Department of

 Veterans Affairs ..................................................................... 

Prepared statement of Ms. Szybala ......................................... 

WRITTEN STATEMENT FOR THE RECORD

Burns, William D., MPA, Mary Esther, FL.................................

(III)

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THE VETERANS BENEFITS ADMINISTRATION’S

FIDUCIARY PROGRAM, INCLUDING IMPLEMENTATION OF TITLE V OF PUBLIC LAW 108-454

Thursday, June 8, 2006

(1)

U.S. House of Representatives,

Subcommittee on Disability Assistance and

Memorial Affairs,

Committee on Veterans’ Affairs,

Washington, D.C.

The Subcommittee met, pursuant to call, at 10:00 a.m., in Room 340, 

Cannon House Office Building, Hon. Jeff Miller presiding.

Present: Representatives Miller, Berkley and Udall.

Staff Present: Paige E. McManus, Majority Counsel; Mary Ellen 

McCarthy, Minority Counsel.

Mr. Miller. Good morning, the hearing will come to order. We are 

meeting to receive testimony this morning on the Veterans Benefits 

Administration’s implementation of Title V of Public Law 108-454, as 

well as VBA’s Field Examination Activity.

As the veteran population ages, more Department of Veterans Affairs beneficiaries will require the appointment of a fiduciary to assist them in managing the monetary benefits provided by VBA. The 

process of appointing a fiduciary is different than the legal process of 

appointing a guardian or an conservator. However, the goal is the 

same, and that is to protect the interests of the beneficiary. Once a 

fiduciary is recognized by the VBA, the Department conducts periodic field examinations to ensure that the beneficiary’s assets are being properly managed. During 2005, the VBA completed over 77,000 

field exams, annual accountings and other fiduciary-related actions 

for over 100,000 beneficiaries.

Under Title V of Public Law 108-454, signed into law on the 10th 

of December of 2004, changes were made to VBA’s Fiduciary Program to improve fiduciary accountability and strengthen protections 

for the beneficiary. Among other things, the law requires VBA to 

conduct more thorough investigations of fiduciaries before being appointed, and requires VBA to reissue benefits that were misused if 
2

VBA was negligent in failing to investigate the fiduciary.

Today the Subcommittee would like a report on the implementation of these provisions. So, without further ado, I yield to my Ranking Member.

[The statement of Hon. Jeff Miller appears on p. 13]

Ms. Berkley. First, I would like to thank the Chairman for holding this hearing, and welcome our witnesses. I appreciate the time 

you’re taking to come here and help educate us.

Veterans and their survivors who are unable to handle their own 

financial affairs need appropriate assistance and oversight to obtain 

the benefits they deserve in a timely manner. I’m pleased that the 

Department of Veterans Affairs has made progress in implementing 

the Veterans Benefits Act of 2004, but in my mind more needs to be 

done.

Last December, this Committee was contacted by a veteran who 

had been rated 100 percent disabled, and was determined to be incompetent by the VA to handle his financial affairs. He wanted to 

move closer to his family, as his family wanted him to move closer 

to them, but he was unable to do so until a fiduciary was appointed, 

and he could receive the funds he needed to move. Resolving his issue took the Committee’s staff three months and repeated inquiries 

involving two Regional Offices. Due to the work of the Committee 

staff, a fiduciary was eventually appointed. However, the entire process was extremely stressful for the veteran, his family, and unfortunately, or fortunately, the Committee staff can’t do this for every 

veteran that needs the help.

I’m also worried that the VA does not recognize durable powers 

of attorney. A durable power of attorney executed under state laws 

becomes effective upon the person becoming incompetent or unable to 

manage his or her affairs. Because the VA is not recognizing persons 

who hold a durable power of attorney for purposes of filing an application for benefits, I plan to introduce legislation which would require 

the VA to do so.

I’m also concerned that there may be inadequate coordination between the Veterans Benefits Administration and the Inspector General’s Office to ensure that benefits are reissued when a fiduciary 

with ten or more beneficiaries misuses funds, which is shameful, and 

we shouldn’t even have to be discussing this, but unfortunately we 

do. It appears that this was not done in a recent case.

I hope that the witnesses will be able to address the issues that I 

have raised, and I thank you again for being here today. I look forward to your testimony.

[The statement of Hon. Shelley Berkley appears on p. 14]
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Mr. Miller. Thank you very much. We have one panel this morning. They are seated at the table, and testifying for VBA is Ms. Renee 

Szybala, Director of VBA’s Compensation and Pension Service. Ms. 

Szybala is accompanied by Ms. Patricia Knapp, Fiduciary Chief of the 

Compensation and Pension Service. I welcome both of you here this 

morning, and before you begin your testimony, I’d like to recognize 

Ms. Knapp for her years of dedicated service at VA. She’s retiring in 

July. She began her career in the Regional Office in Cleveland as a 

Benefits Counselor, and after 25 years at the Regional Office she was 

promoted to the VA Central Office where she was a Program Analyst 

at the Fiduciary Program. She was appointed Chief of the program 

in 2002. Ms. Knapp, we all thank you for service and we wish you the 

best of luck in your retirement.

Ms. Knapp. Thank you.

Mr. Miller. Ms. Szybala, you may proceed.

STATEMENT OF RENEE L. SZYBALA, DIRECTOR, COMPENSATION AND PENSION SERVICE, VETERANS BENEFITS ADMINISTRATION; ACCOMPANIED BY PATRICIA K. KNAPP, FIDUCIARY CHIEF, COMPENSATION AND PENSION SERVICE, 

VETERANS BENEFITS ADMINISTRATION

STATEMENT OF RENEE L. SZYBALA

Ms. Szybala. Mr. Chairman, and Ms. Berkley, I’m happy to appear 

before you today to report on the activities and accomplishments of 

the Fiduciary Program, and our implementation of the law that was 

passed in December, 2004. I’m really happy to be accompanied by 

Pat Knapp, who has 23 years of experience which will get you the 

best answers to the questions you may have.

As you know, the Fiduciary Program oversees VA benefits paid to 

others on behalf of beneficiaries who have been found incompetent, 

incapable of handling their VA funds due to their minor status, injury, disease, or the infirmities of age. We currently provide supervision to just over 100,000 VA beneficiaries. These beneficiaries are 

among the most vulnerable, and they receive more than $114 million 

monthly in VA benefits. They have estates exceeding $2.8 billion. 

 The program is administered by the Fiduciary Field Examination 

activities in VA’s 57 Regional Offices throughout the country. Monitoring the needs of beneficiaries of the program and the protection of 

their funds is the shared responsibility of the field examiners and the 

legal instrument examiners within those Regional Offices. There are 

currently 241 field examiners, and 110 legal instrument examiners at 

the VA Regional Offices.

Field examiners make determinations concerning the type of fiduciary best suited to the situation, and monitor the welfare of the 

beneficiary through personal contacts and visits. They observe living 
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conditions, financial requirements, and capacity of the beneficiary to 

handle their own affairs, recommending action in state court when 

necessary.

In fiscal year 2005, VA field offices conducted more than 55,000 

field examinations, in which they had personal contact with incompetent beneficiaries and their fiduciaries. Many federal fiduciaries and 

all state court appointed fiduciaries are required to submit accountings at regular intervals, which are established by VA policy or state 

law. Monitoring the filings of such accountings, and reviewing them, 

is the responsibility of VA’s legal instrument examiners. The LIE’s 

review the information submitted by the fiduciary, following up as 

necessary when the need arises.

Oversight of the field’s efforts in this program is the responsibility 

of my office under Pat Knapp’s direction, our Fiduciary staff at C & 

P Service. That staff conducts site visits to each Regional Office on 

a three year schedule. It conducts 242 quality reviews of field station work monthly as part of our quality assurance program. The 

Fiduciary staff has organized three national conferences in the past 

five years, including one last month in Baltimore for legal instrument 

examiners.

The responsibility for implementing Title V of Public Law 108-454 

also fell to Pat Knapp’s staff. I’m very proud of the manner in which 

this responsibility has been implemented. VA welcomed the legislation, which gave it additional fiduciary qualification and oversight 

responsibilities, and we went at it with no time wasted. Within one 

month of the passage of the law, we hit the ground running, convening a working group to develop basic procedures and a plan of action. 

A nationwide teleconference was held with all 57 Regional Office Fiduciary Activities, to make them aware of the Title V provision, and 

outline the preliminary plans for implementation. As procedures developed during the first quarter of 2005 and beyond, a series of three 

instructional letters was issued to the field, covering a wide range of 

topics that were included in the legislation. Two additional nationwide teleconferences assisted us in communicating later instructions 

to the field. 

All of these procedural letters, and all of the teleconferences occurred prior to July 1, 2005, when most of the requirements of Title V 

became effective. We accomplished all of the subsidiary tasks, most 

of them, that need to be accomplished as well, including changing 

our procedural manual. We sent changes to the field in late October, 2005. We modified the Fiduciary Program database to gather 

the data needed by the law. To help us review the qualifications 

of proposed fiduciaries, we developed a new VA form, the Fiduciary 

Statement in Support of Appointment that is now required for every 

fiduciary who wants to work in VA. We posted training materials on 

the Fiduciary Website. And finally, we have gathered the statistical 
5

information required for the next annual report.

I’m confident that we’ve responded promptly and diligently in implementing the provisions of Title V. We’ll continue to fine tune our 

operational processes as necessary, as we learn through real life situations. And I welcome any questions that the Committee may have.

[The statement of Ms. Renee L. Szybala appears on p. 16]

 Mr. Miller. Thank you very much. Mr. Udall, do you have a 

statement you want to make, or enter into the record?

Mr. Udall. I do have an opening statement. I’ll just pass it to be 

put in the record.

Mr. Miller. That will be very good.

Mr. Udall. So we can move on.

[The statement of Hon. Tom Udall appears on p. 15]

Mr. Miller. Let me ask you one question, and we’ll rotate through 

the members here. And this pertains to someone from my district. I 

had a conversation with the family of a veteran in my district, and 

it’s my understanding through conversations with them that the St. 

Petersburg Regional Office has not been accepting Durable Powers of 

Attorney under the Fiduciary Program. My statement is, that it is 

about an $80,000 cost to the family because of the delay. It appears 

that every other organization accepts Durable Powers of Attorney. 

And I want to know, is there a specific mandate that precludes you 

from recognizing it?

Ms. Szybala. The durable power of attorney is not the same thing 

as being appointed as a fiduciary under VA’s regulations. This law 

requires us to do certain steps to qualify fiduciaries. Those are not 

necessarily covered by a durable power of attorney. In truth, durable 

power of attorney wasn’t mentioned to me until two days ago. It’s 

the first time I’ve heard the word in this context. And it’s certainly 

something we can look at. I’m not sure, Ms. Berkley described what 

a durable power of attorney is, I really don’t know what it is. I always thought it was like a healthcare proxy. But it’s something we 

will look at. Anything that can help us do this better and faster is 

something we want to do. Right now, though, in the Fiduciary Program, we need to do certain things accepting someone as a fiduciary, 

including meet with them, including look into their background. And 

we take these responsibilities seriously. We think it helps protect the 

beneficiary.

Mr. Miller. And of course the question, I guess, would be, do you 

anticipate that this is something that can be resolved by rule? Or 

does it need a legislative change?

Ms. Szybala. It doesn’t need a legislative change. Should we look 

at it, and should it be the right thing to do, we can do it.

Mr. Miller. How long do you think it will take you to look at it?
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Mr. Szybala. I’ll say, we’ll do it quickly. Give me quarter. We’ll 

do it very quickly.

Mr. Miller. Thank you. Ms. Berkley?

Ms. Berkley. Actually, the Chairman has asked the question that 

I was going to ask you about. If you guys can resolve this without 

legislation, that would be fine with me. If you need the legislation, I 

would be delighted to introduce it because I think there’s a need and 

an issue here. But, we will wait as long as you will do this shortly.

Ms. Szybala. We will absolutely do it shortly. And we want to do 

it smarter and better, and if we’re missing what can help, we will 

grab it.

Ms. Berkley. Well, it’s very apparent to me just listening to your 

testimony and observing your demeanor that you have the best interests of the veterans in your heart and mind and will do whatever it 

takes to make this work. And I appreciate that very much.

Let me ask you a question. The Committee is aware of a number 

of cases in which erroneous information has been provided to the VA 

by incompetent veterans who have been directed to sign a document 

by an “X’’ or a thumbprint, with no indication that the veteran understood the document which was being signed. Thousands of dollars 

of overpayments, I understand, have resulted when the VA did not 

communicate with the spouse or the person handling the veteran’s 

finances. Should VBA letters which request that an application or 

other form be signed by a veteran with an “X’’ or a thumbprint also 

indicate that if the veteran is not able to understand the document 

that he or she is signing, the Regional Office should be notified? And 

should the applications for aid and attendance, or other disability information, indicate that the veteran or other claimant has dementia, 

or Alzheimer’s, trigger inquiry into a claimant’s competency? I mean, 

just the reality that they are suffering from dementia or Alzheimer’s, 

should that be a pretty good indication that they’re not fully competent?

Ms. Szybala. There is. There’s a couple of questions in there. I’ll 

take the last one first.

Things coming from the doctor, or applications for A & A, or housebound, that show that the veteran is mentally disabled, 100 percent 

mentally disabled, or needs A & A because of mental disability, do 

trigger immediate fiduciary investigations. That is, we start a competency rating, and then a fiduciary gets appointed. They are linked. 

So, if we get a medical from VHA that says, ``Housebound is needed 

because of the veteran’s condition,’’ we immediately start a competency rating. That much is easy.

The “X’’ is a little more difficult. The “X’’, which I’m not sure we all 

understand is the same thing. The “X’’ is our proof that the veteran 

is there, that the veteran is in the room. But the “X’’ is supposed to 

be witnessed by either two strangers, or people who are close, fam-
7

ily members, or the POA, or the veteran’s rep, who would be then, 

I would hope, making sure that information being submitted is the 

correct information.

Ms. Berkley. If they are strangers, how do they know that?

Ms. Szybala. Well, by stranger, I mean, the person in the hospital. 

If the veteran is hospitalized, and they are putting an “X’’ on a desire 

for an increased rating, say, the nurse can say, “This is the veteran 

who put this ‘X’ here.’’ Without real situations, I’m having trouble 

thinking of hypotheticals. But the “X’’ is not meant to slow things 

down, it’s meant to speed things up. And to accept an initial claim 

without any signature or mark from the veteran would be a very big 

change in VA processes. In one formal claim, the veteran has to have 

signed. That’s really the only requirement for the veteran’s signature 

in the whole thing. 

To the extent we get hung up, and RO’s are waiting for signatures, 

sometimes we’re just wrong. There are just many situations after the 

formal claim has been done where the POA, doesn’t even have to be a 

durable power of attorney, the POA can sign for the veteran, do lots of 

activities within the claim. And in those that he can’t, where the veteran is incapable of signing, the “X,” the thumbprint witnessed does 

the trick. Before, and without needing, a fiduciary to be appointed.

Ms. Berkley. Let me see if I’ve got this. All right, so a veteran 

puts their “X’’ and that triggers the beginning of the claim process?

Ms. Szybala. Yes. An original claim can be filed, the formal 556, 

can be filed with a thumbprint, witnessed by two people, starts the 

duty to assist, which might lead to an incompetency rating.

Ms. Berkley. And, I know you’re going to look into this, but the durable power of attorney, would that trigger the need for the durable 

power for attorney? How would that work in your mind? What’s the 

sequence here?

Ms. Szybala. I’m not sure. I don’t think I can answer that. I’m not 

sure where the durable power of attorney comes in. But the sense 

I’m getting is that the durable power of attorney would tell us who 

the fiduciary is, and would maybe, and you guys are thinking, that it 

would tell us that we need a fiduciary, it would stand in for the rating 

of the competency. That’s where I have more of a problem, because 

we can’t take someone else’s paper and have that be our rating. And 

so we’ll have to look at that closely. We’ll do it quickly, but we will 

look at it. 

The durable power of attorney I would think would come in at the 

point of which we find somebody incompetent, this is where I can see 

it working well, and they have a durable power of attorney, that person might with no further ado be the fiduciary.

Ms. Berkley. So if the “X’’ is not an indication, in your mind, of 

incompetence. What is it an indication of?

Ms. Szybala. The fact that they can’t sign. Whether it’s physical 
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infirmity, whether it’s a moment, they’re unconscious. They cannot 

at the moment sign. It doesn’t trigger an automatic competency review.

I have to say that we did a survey, very informal survey, of the 

service centers, asking how many times they take an “X’’ or a thumbprint. We could only get three to tell us that they knew of one. It’s a 

very, very rare thing. It’s a safeguard. It’s not something that’s done 

often. But it helps you if you have a veteran who is right now totally 

unconscious, there is a way to get his claim started.

Ms. Berkley. Okay, thanks a lot.

Mr. Miller. Thank you very much. Mr. Udall?

Mr. Udall. Thank you, Mr. Chairman. And thank you to the witnesses. We very much appreciate you being here today, and obviously these are very difficult situations, I think, for veterans and 

their families in terms of having somebody have to have a fiduciary. 

I’ve run into this situation several times as a state attorney general, 

where we were giving advice to the veteran’s agents in the State of 

New Mexico, where they were dealing with these kinds of situations.

Now, could you please describe the circumstances under which the 

VA appoints a fiduciary for a veteran without first proposing a finding of incompetency?

Ms. Szybala. We do not do that. Right now, under the new law, 

under Title V, we can appoint a temporary fiduciary for a competent 

veteran, while we look at a rating of incompetency. While the competency rating is ongoing we can appoint a temporary fiduciary, which 

is a very helpful provision in this law. Otherwise, I’ll bounce to Pat 

whether we can do that at any other time, appoint a fiduciary before 

a rating of incompetency.

Ms. Knapp. No. But we did welcome the temporary fiduciary measure, although we did implement that to be used in only extreme situations. Because what you’re doing is taking a competent individual 

and putting a fiduciary over them without the regular due process 

period. So when we receive an indication that a beneficiary may be 

incompetent, and it’s an emergency type situation, perhaps such as 

the one you spoke about, sir, we do immediately go out and do a field 

examination to actually find out what the facts and circumstances 

are before that appointment of a temporary fiduciary. Which, again, 

as Renee indicated is only for 120 day period while we develop to get 

the actual medical information or court information that we need.

Mr. Udall. I’m curious to your opinion on this part of the statute. I 

guess this is Title 5502, Payments to and Supervision of Fiduciaries, 

where it says, ``The Secretary may be made directly to the beneficiary, or to a relative or some other fiduciary for the use and benefit 

of the beneficiary, regardless of any legal disability on the part of the 

beneficiary.’’ And your opinion is you can’t move forward under that 

statute?
9

Ms. Knapp. Our interpretation of that portion of the statute was to 

allow VA to select a fiduciary other than a court appointed fiduciary, if 

it would be in the best interest of the beneficiary. That language was 

added to allow us to bypass a court appointed fiduciary. For example, 

if it would be better to pay benefits directly to a nursing home as fiduciary for an incompetent beneficiary rather than a court appointed 

fiduciary, which would incur additional legal costs, accountings, etc. 

That was our take on that. Other than the temporary fiduciary that 

I just described, we do not automatically appoint a fiduciary without 

either the rating of incompetency, or evidence of a legal disability.

Mr. Udall. Has the VA issued any guidelines to staff as to the 

circumstances under which a fiduciary can be appointed regardless 

of any legal disability?

Ms. Szybala. Legal disability of the fiduciary?

Mr. Udall. Of the beneficiary.

 Ms. Szybala. Of the beneficiary. We’ve disseminated guidelines 

on temporary fiduciaries, and the kinds of circumstances in which 

we should appoint one. And those are, you know, as Pat described, 

cases in which we are looking, we think that the beneficiary’s incompetent, but the beneficiary has not yet been rated incompetent. I 

don’t think we have any circumstances in which we have suggested 

the appointment of a fiduciary for someone who is otherwise believed 

to be competent.

Mr. Udall. Thank you very much.

Mr. Miller. Can I ask you, off Ms. Berkley’s question regarding 

the thumbprint. Who takes the thumbprint? How does that usually 

work?

Ms. Szybala. I would assume, and I’m going to bounce it to Pat 

in a minute, but I assume it’s something that is done the same way 

someone signs a will. I mean, somebody just goes to the person who’s 

in bed at home, takes a thumbprint, and signs as witness.

Mr. Miller. And how often, you said it’s very rare?

Ms. Szybala. Very, very rare.

Mr. Miller. All right, and once that’s done, then what happens? 

I mean, all right, they do that, then what’s the next step in the process?

Ms. Szybala. Then whatever that paper was is signed and accepted 

by VA. Whatever the people who are trying to help the person who 

is in bed get done VA will process. Whether it’s a claim, or a bank 

transfer.

Mr. Miller. Is there a chance that somebody could take a fingerprint from somebody who’s not living?

Ms. Szybala. Absolutely. But that’s why there are two witnesses 

required. And those witnesses are signing notarized, and, you know, 

I assume there’s penalties for them if this is a fraud.

Mr. Miller. I just wanted to know, under those very special cir-
10

cumstances, does VA take any additional actions to verify the legality 

of the document?

Ms. Szybala. I think this is seen as the protection against fraud. 

I think this is seen as better protection against fraud than would be 

just acceptance of someone else’s signature in lieu of the veteran’s. 

Because you have two people who have signed, and attested to the 

fact that this is the veteran’s thumbprint. It’s actually a very, very 

old, longstanding section of VA regs. It probably should be looked at 

again to see if it makes any sense, but in advance of this hearing I 

had numerous discussions with my staff about it. They all believe it’s 

still good procedure.

Mr. Miller. I know people in my district that would sign with an 

“X’’, so I’m not saying that they’re incompetent people today, but my 

question is, if someone wants to commit fraud they can still commit 

it. I would think that in these special circumstances that there might 

be a little additional follow-up.

On the 20th of this month, we’re going to have a joint hearing with 

the Economic Opportunity Subcommittee on the recent data theft and 

current cyber-security procedures at VBA. While we’ll delve further 

into the security measures for fiduciaries in the next two weeks, I 

want to know today what your oversight procedures are of fiduciaries 

after they’ve been appointed.

Ms. Szybala. Beyond the accountings and the visits? I mean, we do 

visit fiduciaries. Under the law, we visit those who have more than 

ten beneficiaries on a regular schedule. Twenty, excuse me. And we 

review their accounting. In terms of their use of data, I don’t know of 

any oversight that we do of their use of our data.

Mr. Miller. Can you tell me what the regular schedule would be?

Ms. Knapp. For the field examination? After the initial appointment of a fiduciary, we routinely do a one year follow-up of that fiduciary, and then subsequent visits are as the individual circumstances 

dictate. A beneficiary that receives minimal benefits, or is in a nursing home, say on Medicaid, may only be seen every five years. A 

case of 100 percent service connected veteran, who’s living in a very 

unstable situation, would obviously receive more frequent visits.

Ms. Szybala. Many fiduciaries are the parents of the child, or the 

spouse of the veteran. And they are visited less frequently. I mean, 

fiduciaries where the situation is very good, and where there’s no 

questions that any thing is going wrong, the schedule gets further 

and further pushed out. And so, it’s really as needed. We go to those 

we need to go to.

Mr. Miller. Ms. Berkley?

Ms. Berkley. According to the Inspector General, an individual 

who was fiduciary for 11 beneficiaries misused funds and was charged 

in federal court in Texas in August of 2005. It doesn’t appear that 

the procedures to reissue checks was followed in that particular case. 
11

Are you aware of this? How does the VA determine the date of the 

termination for purposes of the reissue provision? And how does the 

information concerning the misuse by a fiduciary for ten or more persons get communicated to the Veterans Benefits Administration in 

cases where the Inspector General is involved, so that the checks can 

be reissued?

Ms. Szybala. We work very closely with the Inspector General. 

That is, as soon as we have doubts we ask them to investigate, because they are better at investigating that kind of thing than we are. 

I’m surprised because I don’t know of the case that you have mentioned, the case where 11 beneficiaries had their funds reissued.

Ms. Berkley. You know, I’m going to provide you, we received a 

copy from the office of the Inspector General, Department of VA, 

semi-annual report to Congress. So let me provide this to you so you 

can see it.

Ms. Szybala. Thank you.

Ms. Berkley. You’re welcome.

Ms. Szybala. That would be failing in whatever our procedures are. 

We get to them locally, at the RO, where the problem is. They would 

contact their local, whatever the local office of the IG is, and ask them 

to investigate. The IG would assess and would determine whether 

they’re going to go or not. I mean, I’m aware of one case in which we 

went to the IG quickly. They assessed, and they said, ``No, we’re not 

going to get involved.’’ And we continued on. Ultimately, the IG was 

interested, and now that fiduciary has been charged in court. It took 

a while to get the IG interested. Everybody’s got their own judgements on these things. But working with the IG is very important. 

They have the forensic accounting expertise to get to the bottom of 

what was misused and that’s what we need.

Ms. Knapp. I just wanted to add that I also am not familiar with 

this particular case. But the reissuance provisions of the law were 

effective on the date of passage, December 10, 2004, and applied to 

any misuse determinations made after that date, regardless of when 

the misuse occurred. Now, this particular case could have been in the 

pipeline prior to the law. It may have been a case that we actually 

referred to the IG prior to the implementation of the law. So, this 

would have been the procedure in effect at that time, is to refer the 

case to the IG, and then the IG would go about its business and its investigative technique. So it may not have fallen under that criteria, 

but we will look into it.

Ms. Szybala. Yes, we will follow up.

Ms. Berkley. Can I just do a quick follow-up? And how does the 

VA determine the date of determination for the purposes of the reissuance provision?

Ms. Knapp. Any misuse determinations that have been made after 

December 10, 2004, again, even if they refer to prior periods of mis-
12

use, and if it meets one of the reissuance categories, i.e. a multiple 

fiduciary serving more than ten, as you mentioned, or an individual 

fiduciary where VA has been negligent in the oversight, that would 

also trigger reissuance. So far, and all those negligence determinations on individual fiduciaries are done in the VA Central Office, and 

we have made no findings of negligence to date, nor have there been 

any multiple fiduciaries to date where there has been reissuance. 

That may change.

Ms. Szybala. But, what would be reissued is all the funds found 

to be misused. And so, it depends on the accounting. The date from 

which the misuse starts is the date from which we would reissue the 

funds.

Ms. Knapp. Based on factual evidence, a field exam has to be done, 

etc., etc. we don’t want to reissue more than was misused, obviously. 

We have to guard the taxpayers’ money also.

Mr. Miller. Very good. Mr. Udall, any more questions?

Mr. Udall. I don’t have any other questions. So, Ms. Berkley, you 

can continue if you wish?

 Ms. Berkley. When you review that case, could you get back to us 

so that we can actually discuss the real case?

Ms. Szybala. Absolutely.

Ms. Berkley. All right, thanks.

Mr. Miller. Any other questions? If not, thank you very much for 

being with us this morning. We all agree it’s vitally important that 

VBA ensure the beneficiaries who are no longer competent to handle 

their compensation have access to trained staff as well as honest and 

trustworthy fiduciaries. And if they don’t receive their benefits, neither the veterans’ nor VA’s interests are served. Without objection, 

the statement from Mr. William Burns will be entered into the record. Ms. Szybala, I’d ask that you review Mr. Burns’ statement and 

provide a written response to me by the 22nd of this month addressing his concerns.

[The statement of Mr. William D. Burns appears on p. 24]

Mr. Miller. All members will have five legislative days to submit 

a statement for the record, as well as pose post-hearing questions to 

the witnesses. And with nothing further, the hearing is adjourned 

and we’ll move into Executive Session, marking up several bills pending before the Subcommittee. Thank you.

[Whereupon, at 10:40 a.m., the Subcommittee proceeded to other 

business.]
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APPENDIX
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