Federal Reports

The closeout memorandum addresses concerns about DOI’s oversight of NFWF related to the Hurricane Sandy Coastal Resilience Competitive Grants Program.

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The Fiduciary Program within the Veterans Benefits Administration (VBA) was established to protect beneficiaries who are unable to manage their VA benefits by appointing and overseeing fiduciaries—individuals or legal entities charged with stewarding the funds on behalf of beneficiaries for their well-being. VA-appointed fiduciaries can be removed and barred from future service if they are found to have misused or misappropriated benefits, been convicted of a qualifying felony offense, or knowingly violated or refused to comply with VA regulations. Staff are required to flag these barred fiduciaries in VBA’s electronic system to prevent a reappointment. The OIG conducted this review to determine whether VBA’s oversight ensures individuals and entities barred from serving as a VA fiduciary are identified and flagged.

When fiduciaries were removed for a reason that would constitute a bar to future service, the OIG found that staff did not flag them in 88 of 129 sampled cases, or 68 percent of the time. This occurred because the Fiduciary Program Manual lacked clear procedures about when the flag should be placed and by whom. Unclear guidance in the manual also led to inadequate staff training and insufficient oversight. Training did not address use of the flag or its purpose in protecting vulnerable beneficiaries, and checklists used for the quality assurance process had no specific questions or error descriptions to confirm the flag was properly applied.

Failure to properly flag barred fiduciaries increases the risk that they will be reappointed. The OIG made three recommendations to the under secretary for benefits, including updating the program’s manual to specify when a removed fiduciary should be flagged, developing and providing training about updated manual procedures regarding flagging, and updating the quality review process.

The audit objectives were to determine whether program funds were managed in accordance with the ARC and Federal grant requirements.

During this semiannual reporting period, the National Endowment for the Arts (NEA) Office of Inspector General (OIG) completed the Congressionally mandated NEA financial statement audit for fiscal year (FY) 2024, and a performance audit of the Georgia Council for the Arts. We also collaborated with the NEA on the follow-up process required by the Office of Management and Budget, leading to corrective actions on eight OIG recommendations by the NEA and awardees during this period. Additionally, we resolved all hotline complaints received during the semiannual reporting period.

I applaud the NEA and the OIG staff for continuing to press forward and effectively work together to deliver our respective missions in a high-quality manner. The value-added work that the NEA and OIG accomplished this period is due to their commitment, leadership, and effectiveness; while helping to ensure integrity, excellence, and value in the delivery of NEA’s mission.