Veterans’ board riddled with accounting problems: audit
NASHVILLE (AP) — The board that oversees the state’s homes for veterans has ongoing accounting problems and loose controls that could result in fraud, a report by state auditors showed Tuesday.
The report states many of the deficiencies, first discovered in prior years, have not been corrected.
The auditors said money could have been taken from some accounts without knowledge of the Veterans’ Homes Board.
“Failure to follow purchasing and cash disbursement policies and procedures could result in fraud, abuse, or waste,” auditors wrote in their report. Auditors did not report any illegal activity.
The report said the board does not have a complete accounts receivable setup or know exactly how much money it is owed.
The board, which agreed with many of the audit’s findings, said in its written response that the audit was a bit exaggerated in places.
For the sixth consecutive year, the auditors said they found the board had “significant deficiencies” in the way it handles capital assets, and may not be adequately insured. The most recent audit looked at the fiscal year ending June 30, 2002.
The long list of findings by the Division of State Audit notes problems with the way money is handled and the way transactions are documented.
Auditors said some records were in such poor shape they could not establish the financial position of the state agency. They suggested part of the problem, such as keeping control on some accounts, could be corrected with a better accounting system to track complicated transactions with Medicaid.
The state board said it will hire more employees to address the situation.
The board did take issue with some problems pointed out by auditors, including an assertion that the veterans’ homes could have defaulted on bonds, making them the responsibility of taxpayers.
“It is a real stretch to assert that at any time the board was in danger of defaulting on loan payments,” the board stated.
In most cases, the board said it would work to comply with the audit’s findings.
It said part of the problem was caused by the bankruptcy of a former management company and the transition to new managers.
The board was set up in 1988 to establish and run veterans’ homes. It consists of 10 members, nine of which are appointed by the governor, that run the two veterans’ homes in Murfreesboro and Humboldt. A third is planned for the Knoxville area.
The board’s commissioners said they would not see the audit until a Wednesday meeting and could not comment.
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On the Net:
Veterans’ Homes Board: http://www.tsvh.org/