For three years, more than $43 million the Department of Veterans Affairs had set aside to inform veterans about their benefits sat in an account, not a penny spent, until an agency financial manager happened to notice.
By then, it may have become too late for the cash-strapped agency to spend the money, a new report says.
The Inspector General’s office, in a report issued last week, cited a “breakdown of fiscal controls” and “lack of oversight” in concluding that VA officials had “no need” for the $43.1 million. At least not for the purpose they claimed, which was to print personalized handbooks that explain in detail what benefits a veteran is eligible for.
Acting Inspector General Richard Griffin’s audit comes as top VA officials prepare to tell House lawmakers Thursday that they’re facing a $2.6 billion budget shortfall that’s partly responsible for a new explosion in wait times for medical care. Senior leaders say they may have to start a hiring freeze or furlough employees unless funding is reallocated for the federal government’s second-largest agency.
Now comes $43.1 million that officials in the Veterans Health Administration “parked” at the Government Printing Office for three years. Investigators discovered that VHA, which runs the sprawling health-care system for veterans, had the money deposited by contracting officials to be “held” for some future use. VHA said the money was earmarked for handbooks, but auditors found no documents to that effect.
The money sat from fiscal 2011 through fiscal 2014 “with no designated purpose,” auditors found, and $2.3 million that eventually was spent did not produce handbooks but business cards, pamphlets and mailings about the Affordable Care Act, instead.
“A breakdown of VA fiscal controls and a lack of oversight led to the parking of funds for an excessively long period and the failure to detect and properly use and manage these funds,” auditors wrote in their June 17 report. They cited a “lack of supervisory review” to ensure that the money was spent properly.
The VHA, it turned out, had “no current need” for the money and wanted to save it for another year, a strategy that’s considered poor financial policy.
Money budgeted for one account is not supposed to be spent for other needs without congressional approval. In this case, the $43.1 million came from a fund designated for administrative support for veterans’ hospitals, including supplies, training, janitorial expenses.
Adding to the mismanagement, the contracting fund took $5.6 million in service fees from VHA, but no services were rendered, the inspector general found.
VA officials concurred with the watchdog’s account and said they are tightening their internal financial controls in response.
The biannual handbooks, an initiative of former VA Secretary Eric Shinseki, provide each veteran with information about his or her health benefits and other services. They list contacts for the veteran’s preferred clinic, instructions on how to schedule appointments, information on the Affordable Care Act, any co-pays and other information. VA began sending the handbooks to millions of veterans last year.
The agency had plenty of money to produce the handbooks, with a $20.1 million balance in the handbook account when the $43.1 million showed up in 2011. During the three years it went unspent, the fund grew by $6.7 million, investigators said.
VA officials are now looking at whether they have any unpaid bills for fiscal 2011 they can use the money for. If not, it must be returned to the Treasury, auditors said.