Federal Reports

The VA Home Loan Guaranty program is meant to help veterans finance the purchase of homes with favorable loan terms. Veterans typically pay a funding fee to defray the cost of administering the program; however, veterans who receive VA service-connected disability compensation are exempt from paying it. If veterans receive a disability determination with an effective date for receiving benefits before their loan closing date, they are entitled to a refund of any funding fee. As a result of the PACT Act, many veterans became eligible to receive refunds for the funding fees they had paid on home loans before receiving their disability compensation.

The audit team found deficiencies with funding fee refunds for veterans using dual entitlement (two or more veterans using some or all of their combined eligible loan benefits) on joint loans and also noticed that some veterans exempt from paying funding fees were inappropriately charged at their loan closings. The team estimated that 250 veterans were entitled to a funding fee refund due to either lenders’ errors at closing or retroactive disability determinations between October 1, 2021, and September 30, 2024. The estimated average for the refunds for the 250 veterans was $6,100, totaling $1.5 million during the review period. In the OIG’s sample, the range for these refunds was about $2,200 to $10,800 per veteran. The OIG determined that the Loan Guaranty Service’s automated system improperly charged a funding fee.

The VA Office of Inspector General made two recommendations to improve processes. The acting principal deputy under secretary for benefits, performing the delegable duties of the under secretary for benefits, concurred.

The VA Office of Inspector General (OIG) conducted a healthcare inspection to evaluate allegations that sleep medicine physicians at the VA Sierra Pacific Network, Veterans Integrated Service Network (VISN) 21 Clinical Resource Hub (CRH) treated patients without having sleep medicine privileges. The OIG found noncompliance with VHA Directive 1100.21(1) and VHA Credentialing and Privileging Office Standard Operating Procedure – P11, “Lapse of Privileges.”

The OIG substantiated that two VISN 21 CRH sleep medicine physicians treated patients during a lapse in their sleep medicine privileges. Inadequate oversight by the San Francisco Healthcare System (system) Chief of Staff and administrative deficiencies by the medical staff office contributed to the lapse. The two physicians maintained privileges in areas other than sleep medicine and should have been removed from patient care while their care was reviewed. The OIG did not learn of patient harm or receive complaints related to patient harm.

The OIG determined that a lack of national guidance for sleep medicine privileges contributed to a lack of clarity among sleep medicine physicians and CRH leaders about privileging sleep medicine physicians. Although aware of sleep medicine physicians’ concern following the standardization of sleep medicine privileges, the VISN 21 CRH director did not resolve confusion among sleep medicine physicians regarding the impacts of privileging changes, including potential disruptions in sleep medicine services due to the lack of other specialty privileges. 

The OIG made five recommendations. The Acting Under Secretary for Health agreed to providing detailed written guidance regarding privileging sleep medicine physicians. The VISN reported educating VISN and system leaders. The System Director confirmed monitoring of CRH sleep medicine practitioners privileges, planning to provide sleep medicine practitioners with core privileges and education regarding referring veterans to other specialists, and notifying medical center directors and chiefs of staff of privileging and practice changes.

This report summarizes the oversight work performed by EAC OIG during the 6-month period ended September 30, 2025.