(viii) Instituting any other action necessary to secure proper administration of the estate of a Veterans Administration beneficiary, such as filing petitions for the removal of guardians and certifying successor fiduciaries;

(ix) Taking appropriate action to recover funds improperly disbursed.

(3) In custodianship cases he may require an accounting, formal or informal as he deems necessary, of Veterans Administration benefits paid, terminate recognition of the legal custodian, institute proceedings for the appointment of a guardian and render legal services for such guardian in any action against the custodian necessary to the protection of the ward's interests.

(c) Unless a trial is de novo, no appeal shall be taken to an appellate court and no costs incurred in connection therewith without the prior approval of the Chief Benefits Director or his designee.

(d) When the evidence shows a prima facie case of misappropriation, embezzlement or violation of the Federal statutes, the Chief Attorney shall refer the case to the United States Attorney. [28 F.R. 10750, Oct. 5, 1963]

§ 13.101 Management and use of estates of minors.

Veterans Administration benefits payable in behalf of minors should be used for their benefit. Such funds should be expended only to the extent the person or persons responsible for their needs are unable to provide for them, except those derived from payments under 38 U.S.C. ch. 35.

[28 F.R. 10751, Oct. 5, 1963] § 13.102

dians.

Accountability of legal custo

(a) Institutionalized veterans without wife or child. The legal custodian of any incompetent veteran who has neither wife nor child and who is being furnished hospital treatment, institutional or domiciliary care by the United States or a political subdivision thereof, will account annually to the Veterans Administration for funds received from the Veterans Administration for the beneficiary and will submit annually a statement of all other income received during the accounting period and the total assets from any source held for the beneficiary.

(b) All other beneficiaries. Compliance with the agreement as to benefit use and any authorized modifications due to changed need, proof of existence

of funds surplus to immediate needs and proper investment thereof, if appropriate, will be established upon home contact, normally at triennial intervals. Periodic written accountings will not be required.

[30 F.R. 9814, Aug. 6, 1965]

§ 13.103 Investments by legal custodians.

Veterans Administration benefits paid legal custodians in a beneficiary's behalf may be invested only in United States Savings Bonds, or in interest or dividend paying accounts in state or federally insured banks, building and loan associations, or savings and loan associations, whichever is to the beneficiary's advantage. When funds are invested in bonds, they will be registered in this form: a minor, under cus

(Ward's Name) todianship by designation of the Veterans Administration.

[28 F.R. 10751, Oct. 5, 1963]

(Ward's Address)

§ 13.104 Accounts of guardians.

(a) The Chief Attorney will require accountings from guardians as provided by State law, but in no event less frequently than once every three years. Arrangements will be made with the courts whereby notices of filing of all petitions, accounts, etc., and of hearings on same, relative to guardianship cases wherein the Veterans Administration is interested, will be sent to the Chief Attorney. If this is done, the court will be notified in due time whether the Veterans Administration has any objections to offer.

(b) Accounts will not be required, in the discretion of the Chief Attorney, in cases when the fiduciary and ward permanently reside in a jurisdiction other than a State of the United States, the District of Columbia, the Commonwealth of Puerto Rico or the Republic of the Philippines, and the fiduciary appointment was made in said jurisdiction.

(c) Accountings normally will not be required in cases involving incompetent adults other than veterans.

[28 F.R. 10751, Oct. 5, 1963] § 13.105 Surety bonds.

(a) It is the policy of the Veterans Administration to require, where possible under State laws and rules of the court, corporate surety bonds in all guardianship cases where the fiduciary is an in

dividual and the estate is sufficient to justify the expense of procuring a corporate surety bond. Corporate bonds may be required of corporate fiduciaries in accordance with State laws. In cases wherein guardians neglect or refuse to furnish corporate bonds, as requested by the Chief Attorney, the Chief Attorney may decline to continue or open payments to such guardians and take necessary court action.

(b) When it is not practical or feasible for a fiduciary to obtain a corporate bond, the Chief Attorney is authorized to accept bonds of such number of personal sureties as is permissible under State law, in any event, not less than one. Evidence must be received that each such surety owns real property, over and above all liens, exemptions, and encumbrances, at least equal in value to the penal sum of the bond and qualifies in accordance with the requirements of the State law. In such instances the fiduciary will be required to furnish with each accounting evidence as to the financial status of the personal surety or sureties. Where any question arises as to the ability of a personal surety to meet any probable liability, the Chief Attorney will investigate such personal surety's responsibility. Where such responsibility is found to be insufficient, the Chief Attorney will promptly authorize suspension of payments until a surety of sufficient financial responsibility has been provided.

(c) Additional or increased bonds will be required at each accounting period commensurate with the value of the estate. The Chief Attorney will take court action, if necessary, to assure that an adequate bond with good surety or sureties is in effect.

(d) If any surety company is placed in receivership or ceases to do business in the particular State, the Chief Attorney will take the necessary action to have proper bonds substituted in each case. In the case of receivership, bankruptcy, or other proceedings to conserve the assets, or wind up the affairs of a corporate surety, the Chief Attorney will ascertain the termination date for filing claims with local and general receivers or other designated officials and see that all adjudicated and contingent claims are filed in time to receive proper classification and allowances.

[25 F.R. 8256, Aug. 30, 1960, as amended at 28 F.R. 10751, Oct. 5, 1963; 31 F.R. 12056, Sept. 15, 1966]

§ 13.106

Investments by courtappointed fiduciaries.

(a) The Chief Attorney will recommend investments in United States Government bonds. He will insist that funds held by court-appointed fiduciaries be invested in accordance with State law. If requested, he will inform the fiduciary as to legal investments under appropriate State law.

(b) No preference shall be given to any bond dealer, or investment broker, nor any recommendation made with reference thereto.

(c) The Chief Attorney will advise fiduciaries or the courts with respect to any known doubtful or undesirable characteristics of any legal investment which might jeopardize the safety of the beneficiary's estate.

(d) The Chief Attorney will require the investment of surplus funds and shall obtain from the fiduciary, preferably prior to investment, evidence identifying the type of investment. If the investment is not proper or legal, or not for the best interests of the beneficiary, the Chief Attorney will so advise the fiduciary and take the necessary action, under the State law, to prevent or object to the investment.

[25 F.R. 8256, Aug. 30, 1960]

§ 13.107 Accounts of Chief Officers of private or State hospitals.

(a) The Chief Officer of an institution, other than a Federal institution, shall render an account annually to the Veterans Administration for funds received from the Veterans Administration on account of an incompetent beneficiary. The Chief Attorney will require an accounting annually of such institutions for such funds only, and may assign Veterans Administration personnel to assist in the rendition of such accounting.

(b) The Chief Attorney shall obtain annually from the Chief Officers of the aforementioned institutions a statement of all of the income received for the current year and the total assets held for account of the incompetent.

[25 F.R. 8256, Aug. 30, 1960]

§ 13.108 Estate $1,500; incompetent

veteran, without wife or minor or helpless children, is being furnished hospital treatment, institutional or domiciliary care by the United States or a political subdivision thereof. (a) Where a veteran, rated incompetent by the Veterans Administration by

reason of mental illness, without wife or minor or helpless children, is receiving hospital treatment, domiciliary or institutional care in a public institution other than a Veterans Administration institution or has a fiduciary and is receiving hospital treatment or domiciliary care in a Veterans Administration institution, and his estate equals or exceeds $1,500, the Chief Attorney shall immediately notify the Adjudication activity so that payments, other than insurance, may be discontinued. In those cases in which the payment has been discontinued, the Chief Attorney shall, when such estate has been reduced to $500, immediately notify the Adjudication activity of that fact.

(b) In any case in which a veteran, without wife or child, is hospitalized by the United States or a political subdivision thereof and his award of compensation, pension or emergency officers' retirement pay has been discontinued because his estate equals or exceeds $1,500, an apportionment of the award otherwise payable may nevertheless be made to a dependent parent, if any, based upon actual need as determined by the Chief Attorney. So much of any monthly remainder of the discontinued payments as equals the amount charged to the veteran for his current care and maintenance in the institution in which treatment or care is furnished, but not more than the amount determined by the Chief Attorney to be the proper charge as fixed by statute or valid administrative regulation, may be paid to the institution. The Chief Attorney shall recommend to the adjudication activity the amount of either award.

(c) In the event of the incompetent veteran's death in other than a Veterans Administration institution, the Chief Attorney should make certain that the provisions of the pertinent laws are applied as to the gratuitous benefits in Personal Funds of Patients.

[25 F.R. 8256, Aug. 30, 1960, as amended at 27 F.R. 3630, Apr. 17, 1962]

any nature whatsoever, as well as other property, both personal and real (which is capable of being liquidated), and interest therein owned by the veteran, will be included in arriving at the value of the veteran's estate.

(1) The value of real and personal property, including any interest therein, will be established at the estimated net price the veteran's equity in the property will bring at forced sale after payment of all costs incident to liquidation.

(2) United States savings bonds, war bonds, adjusted service bonds, and other appreciation bonds, the current value, including accrued interest, will be used.

(3) Bonds and stocks, the current price listed on recognized stock exchange or by over-the-counter dealers will be the value to be used. In the absence of either, other reliable evidence of value may be used.

(4) The following will not be included as assets:

(i) Adjusted service certificate.

(ii) Insurance policy having cash surrender or loan value.

(iii) Dividend credits on National Service life insurance and United States Government life insurance policies.

(iv) Personal property, such as furniture and household equipment, working tools, livestock and jewelry, which are included under State exemption statutes.

NOTE: Cash in the estate will be considered, notwithstanding it was derived from any of the above excluded items. [25 F.R. 8256, Aug. 30, 1960]

In the event of the death of the beneficiary under guardianship, the Chief Attorney will secure from the guardian a final account showing the amount, if any, of funds held by the guardian derived from payment of benefits under laws administered by the Veterans Administration for the purpose of determining the amount of any funds which may escheat to the United States pursuant to 38 U.S.C. 3202(e), or which may vest in the General Post Fund pursuant to 38 U.S.C. 5220(a). The Chief Attorney will ascertain whether administration will be had on the estate of the deceased beneficiary and, also, whether there are any heirs capable of inheriting. If there are no such heirs, he will report the fact to the appropriate adjudication activity and, in the case of an institutional award, to the Chief Officer of the institution. In

such cases the Chief Attorney will endeavor to effect the return of the estate in the hands of the particular fiduciary to the United States, in connection with the final accounting of the fiduciary, or in any manner which may be possible under local procedure and practice, without litigation. If unsuccessful in this effort, a complete report will be submitted to the General Counsel. [25 F.R. 8256, Aug. 30, 1960]

§ 13.111 Claims of creditors.

Under 38 U.S.C. 3101(a), payments made to or on account of a beneficiary under any of the laws relating to veterans are exempt, either before or after receipt by the beneficiary, from the claims of creditors and State and local taxation. The fiduciary should invoke this defense where applicable. If he does not do so, the Chief Attorney will raise the issue by a proper plea unless the amount involved is inconsequential, or if he deems it inequitable. The Chief Attorney will protect the record for possible appeal. [25 F.R. 8257, Aug. 30, 1960]

§ 13.200 Central Office Board on Waivers and Compromises; field station committees.

(a) Establishment. There are established in Central Office a Board of Waivers and Compromises and in each field station a Committee on Waivers and Compromises to perform the duties and assume the responsibilities delegated by §§ 13.201 and 13.202. All determinations with respect to waivers made pursuant to §§ 3.1900 through 3.1908, and all determinations with respect to compromises or waivers relating to loan guaranty matters made pursuant to §§ 36.4380 through 36.4389, prior to the activation of the Central Office Board and the field station Committees established by this section shall be deemed valid and binding on all parties concerned.

(b) Board on Waivers and Compromises (1) Composition. The Board shall consist of a Chairman and five members. Members shall be selected so that in each of the debt claims activities of compensation, pension and education, insurance, loan guaranty, and finance, there is at least one member with special competence. An alternate Chairman and alternate members shall be designated to act in the absence of the principals.

(2) Selection. The Chairman, members of the Board and alternates shall be appointed by the Chief Benefits Director. Service on the Board shall be duty in addition to regular assignments at the call of the Chairman.

(3) Administrative control and staff. The professional and clerical staff of the Board will function under the supervision and administrative control of the Director, Guardianship Service.

(c) Committee on Waivers and Compromises (1) Composition. The Committee shall consist of a Chairman and five members at stations having loan guaranty activities or four members at other stations. Members shall be selected so that in each of the debt claims activities of compensation, pension and education; insurance; loan guaranty (at station having such activities); and finance, there is at least one member with special competence. An alternate Chairman and alternate members may be designated to act in the absence of their principals at stations, when needed.

(2) Selection. The Manager or Center Director shall designate the employees to serve as Chairman, members and alternates. Except upon specific authorization of the Chief Benefits Director, when work load warrants a full-time committee, such designation will be parttime additional duty upon call of the Chairman.

(3) Administrative control and staff. The Committee and professional and clerical staff shall function under the administrative control of the Chief Attor

ney.

(d) Panels. When a claim is properly referred to the Board or Committee, the Chairman shall designate a panel of three (of whom the Chairman may be one, and one other shall be specially qualified in the program field from which the debt arose), who shall consider and determine the action to be taken. If their decision is unanimous, it will be the Board or Committee decision. Otherwise, the case will be considered by the entire membership of the Board or Committee and a majority shall determine the decision. In such cases the Chairman shall not vote except when necessary on four-member committees to break a tie.

[32 F.R. 4534, Mar. 25, 1967] § 13.201

Jurisdiction.

The Central Office Board and field station Committees are authorized, except

as to determinations under § 2.6(d) (2) of this chapter where applicable, to consider and determine as limited in

§§ 13.200 through 13.217, questions of school liability, compromise, waiver and suspension or termination of collection action concerning the following debts and overpayments:

(a) Arising out of operations of the Department of Veterans Benefits:

(1) Overpayments or erroneous payments of pension, compensation, dependency and indemnity compensation, burial allowance, subsistence allowance, education or insurance benefits.

(2) Debts arising out of the loan program under 38 U.S.C. Ch. 37 after liquidation of security, if any.

(3) Such other debts as may be specifically assigned by the Chief Benefits Director.

(b) Resulting from services erroneously furnished.

[32 F.R. 4534, Mar. 25, 1967]

§ 13.202 Board and Committee authority.

(a) Central Office Board. On matters covered in § 13.201, the Central Office Board is authorized to determine the following issues:

(1) Compromise. Where approval of a compromise is recommended by the field station Committee, and the debt or overpayment exceeds $2,500, but not $20,000 exclusive of interest (except in loan guaranty matters, which, under 38 to U.S.C. Ch. 37, are unlimited as amount).

(2) Termination of collection action. When approval of termination of collection action is recommended by the field station Committee, and the debt or overpayment exceeds $2,500 but not $20,000 exclusive of interest.

(3) School liability. Where a field station Committee makes a recommendation concerning liability of a school, or liability of both the school and the veteran or eligible person, and the debt or overpayment exceeds $2,500, or, regardless of the amount, the school requests administrative review of its liability pursuant to the § 13.214.

(4) Jurisdiction assumed. Where jurisdiction within § 13.201 is otherwise assumed.

(b) Field Station Committee-(1) Decisions. On matters covered in § 13.201,

the field station Committee is authorized to determine the following issues:

(i) Waivers. A decision may be rendered to approve or deny waiver.

(ii) Compromises. A decision may be rendered where a compromise offer is rejected, or, if the debt or overpayment is $2,500 or less, to accept a compromise offer.

(iii) School liability. A decision may be rendered as to school liability as provided in § 13.214, where the debt or overpayment is $2,500 or less.

(iv) Suspension of collection action. A decision may be rendered to approve or disapprove suspension of collection action where the debt or overpayment is more than $150 but not over $20,000, exclusive of interest.

(v) Termination of collection action. A decision may be rendered to disapprove termination of collection action where the debt or overpayment is more than $150 but not over $20,000, or if the debt or overpayment is more than $150 but not over $2,500, exclusive of interest, to approve termination of collection action.

(2) Tentative decision. When the Committee is not authorized to render a decision, a tentative decision will be prepared for approval by the Central Office Board.

(c) Fiscal officer. The Chief of the Fiscal Activity may suspend or terminate collection action on debts of $150 or less, in conformity with the standards.

[32 F.R. 4534, Mar. 25, 1967, as amended at 32 F.R. 13771, Oct. 3, 1967]

§ 13.203 Finality of decisions.

A decision by the Central Office Board or a field station Committee operating within the scope of its authority, denying waiver of all or a part of an overpayment is subject to appeal. There is no right of appeal from a decision rejecting a compromise offer or that a school is liable for the amount of an overpayment. [32 F.R. 4534, Mar. 25, 1967]

§ 13.204 Records and certificates.

The Chairman of the Board or Committee shall execute or certify any documents pertaining to its proceedings. He will be responsible for maintaining needed records of the transactions of his Board or Committee and preparation of any administrative or other reports which may be required.

[32 F.R. 4534, Mar. 25, 1967]