Veterans audit vexes panel
Via the Arkansas Democrat-Gazette. Over $197,000 is unaccounted for and a former employee went on a spending spree with a department credit card (that the department didn’t know about).
The Legislative Joint Auditing Committee on Thursday questioned the director of the Arkansas Department of Veterans Affairs about audit findings of $200,000 in missing or unaccounted equipment and lax budgetary oversight across his agency.
The Legislative Audit Division found four areas where lack of oversight by Veterans Affairs Director Dave Fletcher and his deputies over the past two years resulted in illegal use of an improperly acquired state credit card, lost inventory and untracked expenditures that contributed to recently discovered budget shortfalls at the Little Rock Veterans Home.
Committee Chairman Rep. Kim Hammer, R-Benton, told Fletcher at Thursday’s hearing that he respects the work the Veterans Affairs Department does, but pointed to one of Fletcher’s responses in the audit as an indicator of larger, systemic problems with its operations.
Hammer took aim at Fletcher’s formal response and proposed remedy to the audit’s finding that his agency failed to maintain proper oversight of spending. Regarding the finding, Fletcher wrote that he, his deputy director and finance director will monitor the department’s budget and spending each month and make changes to minimize cost overruns.
“That should be the job being done every day and not be written into a response,” Hammer told Fletcher. “Given some of these findings, I encourage you to tighten things up.”
The audit revealed that the agency failed to get approval from the Department of Finance and Administration, as required by state law, before opening a credit-card account for purchasing bulk goods for the Fayetteville Veterans Home.
The agency’s former administrative services manager, Robyn Clark, used the account to charge more than $1,800 in personal purchases from Little Rock liquor stores, beauty salons and pet shops for six months last year, according to the audit. Clark was the only person in the Veterans Affairs Department who looked at charges to that account.
She was allowed to resign in September and has not paid back the money.
“I think that one was pretty well resolved,” Fletcher told the committee.
Hammer asked what Fletcher had done to try to recover the funds.
Fletcher said he sent Clark a letter last month to which she responded that she couldn’t afford to repay the state. Fletcher added that the decision to prosecute or try to recover the funds was “out of his hands” and up to the state Legislative Audit Division.
When asked whether Clark was paid for unused vacation time or was due retirement benefits when she resigned, Fletcher said he didn’t know.
“In your agency, have you changed?” asked Rep. Tommy Wren, D-Melbourne, who called the situation embarrassing. “Do you look at what happens in your agency now?”
“We’ve put a lot of things in place to track things closer,” Fletcher said, but didn’t give specifics.
The audit also faulted the agency on its lack of inventory oversight, finding $197,405 in equipment missing, improperly recorded or disposed of and still held on property books.
Some of the items either missing or not tracked on inventory control logs included a Kawasaki Mule vehicle, commercial freezer, generator, ice maker, lawn mowers and a computer.
“Sir, it troubles me that we can’t locate a Kawasaki Mule or a commercial freezer,” Wren told Fletcher. “They don’t just walk away on their own.”
Tracy Pearsal, the department’s financial officer, clarified that they weren’t all missing, but they were not properly recorded or tracked. He said every piece of inventory has since been located except for a copier that had been purchased in 1980.
The agency’s inventory records were out of date and inaccurate, indicating a lack of oversight, according to the audit.
“I hope we have something in place to avoid this in the future,” Wren said. “To have this kind of disorganization is really troubling.”
Fletcher told the legislator that he believes he now has the team in place to make that happen. Earlier this week, however, Fletcher blamed his staff for recent problems within his agency.
Thursday’s hearing was the latest in a series of events after problems were recently discovered within the Veterans Affairs Department, which runs the state’s two veterans nursing homes and two veterans cemeteries.
In February, Rep. John Edwards, D-Little Rock, told the state Veterans Commission, the advisory body for the Veterans Affairs Department, that if the state was going to stay in the nursing home business, it needed to fund the homes, manage them and take care of them.
After seeing Thursday’s report, he said, “You can delegate authority, but you can’t delegate responsibility. And I don’t think [Fletcher’s] been responsible with the operation of the veterans homes of this state.”
Fletcher fired the director of the Little Rock Veterans Home two weeks ago, claiming that she knowingly and illegally collected $580,000 in maintenance fees from the home’s war-wounded and most disabled residents for three years after federal law prohibited the collection of such fees.
At the same time, Gov. Mike Beebe asked the Department of Finance and Administration to look at the books of the Little Rock Veterans Home. Spokesman Matt DeCample said Thursday that members of the governor’s staff are sifting “a significant amount of background” as they review operations within the Veterans Affairs Department.
Beebe appointed Fletcher to head the agency in 2007.
E-mails and congressional testimony indicate that Fletcher knew about the fees long before he fired Janet Levine as administrator of the Little Rock home.
Fletcher testified before a joint congressional committee in March that fees were being collected from those veterans because federal funding fell short of costs. A 2009 change in federal law increased to $7,000 the monthly funding per resident of state-run nursing homes who have a service connected VA disability rating of 70 percent or higher.
The increased funding is supposed to cover the total cost of care for those veterans. The law forbids states from collecting any additional out-of-pocket fees from those residents.
The $580,000 in fees collected from residents at the Little Rock home since 2009 has not yet been returned to the veterans or their families.
The increased funding also was to be used by states to provide primary care and related prescriptions to residents of the home. The state Veterans Affairs Department has collected those funds for the Little Rock home residents, but continued to use VA facilities and prescriptions for free.
Lawrence Pickard, deputy director of the Veterans Affairs Department, said there are cost overruns at the Little Rock Veterans Homes despite increased federal funding.
The legislative audit, however, found poor internal controls and management oversight of spending.
“Should we expect to see you coming back at the next session to address these issues?” Hammer asked Pickard at the close of Thursday’s hearing.
“Absolutely,” Pickard answered.
Legislative Audit findings on Veterans Affairs Department:
Managerial employee uses agency credit card to make $1,837 in unauthorized charges.
The department opened the credit account without state finance agency approval as required by law.
Poor inventory controls prevent auditors from accounting for $197,405 in equipment.
Records do not support all department expenditures nor show in some cases proper levels of approval.