Report I2011-0837 Recommendation 5 Responses

Report I2011-0837: California Department of Veterans Affairs: Wastefulness, Failure to Comply With State Contracting Requirements, and Inexcusable Neglect of Duty (Release Date: October 2013)

Case Number I2011-0837

Recommendation #5 To: Veterans Affairs, Department of

Institute a policy that requires any expenditure of recreation fund moneys to a person or business in the amount of $5,000 or more during a fiscal year be listed as a separate line item in the budget of the recreation fund as presented to the secretary for approval.

Agency Response From October 2016

Veterans Affairs stated that prior to the beginning of each fiscal year, the veterans homes' administrators submit their budget proposals to the secretary for Veterans Affairs. These budgets are divided into "service areas," which include expenditures by category and expenditure justifications for those categories. The budget for each service area is preceded by a memorandum describing and justifying the anticipated uses. Executive leadership in its Homes Division review each memoranda and budget to ensure the proposals are consistent with state law and, as needed, discuss line items with the home's administrator. Furthermore, Veterans Affairs' administrative procedures for the Morale, Welfare, and Recreation program require the homes to obtain specific headquarters' approval throughout a given fiscal year for expenditures of $5,000 or more and for expenditures that fall into certain categories.

California State Auditor's Assessment of Status: Fully Implemented


Agency Response From October 2015

Veterans Affairs stated that it is working with the veteran homes to establish a standardized budget format and a uniform level of detail for the budget documents, including the concepts mentioned in this recommendation. However, it did not provide us with an expected completion date for these actions.

California State Auditor's Assessment of Status: Pending


Agency Response From April 2015

Veterans Affairs reported that it believes additional steps may be needed before implementing the draft procedures it provided to us in December 2014. Thus, Veterans Affairs stated that it convened a team to further explore potential issues and identify options to resolve them. However, Veterans Affairs did not provide us with an expected completion date for these actions.

California State Auditor's Assessment of Status: Pending


Agency Response From December 2014

Veterans Affairs stated in December 2014 that the new policy it has drafted to address our recommendation would be in place by January 2015. A draft version of the policy was provided to our office for our review.

The draft policy does not include a requirement that any recreation fund expenditure to a person or a business in the amount of $5,000 or more during a fiscal year be listed as a separate line item in the budget of the recreation fund presented to the secretary for approval. When we brought this to Veteran Affairs' attention, it stated that it understood our concern and that additional discussion would occur to see if this could be added to the final policy expected to be issued in January 2015.

California State Auditor's Assessment of Status: Pending


Agency Response From September 2014

As of September 2014, Veterans Affairs reported that it is still considering whether it will require expenditures of recreation fund moneys to a person or business in the amount of $5,000 or more during a fiscal year be listed as a separate line item in the budget of the recreation fund as presented to the secretary for approval. No expected date was provided on when a decision will be reached.

California State Auditor's Assessment of Status: No Action Taken


Agency Response From May 2014

In late March 2014 Veterans Affairs reported that it had not yet reached a decision about whether it would continue to require as part of this process the annual review and approval of recreation fund budgets from each home. We then asked Veterans Affairs to provide us with an expected date when it would reach a decision. Veterans Affairs did not provide us with an expected date for its decision but in April 2014, Veterans Affairs reported that it was still considering the policy changes.

Veterans Affairs provided no new information in May 2014 as it was undergoing a major reorganization of responsibilities.

California State Auditor's Assessment of Status: Pending


Agency Response From March 2014

In December 2013, Veterans Affairs reiterated that it would begin itemizing expenditures in excess of $5,000 in its recreation fund budgets, but provided no update regarding its development of appropriate policies to implement this recommendation. Then in January 2014, Veterans Affairs told us that before making any policy changes it wanted to receive a report from the Department of Finance regarding an audit it was conducting of the accounting and contracting procedures of the veterans home, but it expected to institute the policy changes necessary to implement this recommendation by the next time the recreation fund budgets were being reviewed for approval. However, in March 2014, Veterans Affairs stated it was reconsidering whether to continue using its current process for the annual review and approval of recreation fund budgets, although if it continues using this process, it will include our recommendation for the itemization of expenditures.

At present, Veterans Affairs has left us without any estimate of when it will implement our recommendation and with some doubt about whether it will implement our recommendation at all.

California State Auditor's Assessment of Status: Pending


Agency Response From November 2013

Veterans Affairs has not provided any additional information.

California State Auditor's Assessment of Status: Pending


Agency Response From September 2013

Veterans Affairs reported that it concurred with our recommendation to include a separate line item in recreation fund budgets for any proposed expenditure of $5,000 or more and that it will develop appropriate policies to implement this recommendation.

California State Auditor's Assessment of Status: Pending


All Recommendations in I2011-0837


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