Minnesota Office of the Legislative Auditor
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Report Summary
Minnesota Veterans Home - Hastings

Financial Audit For the Three Fiscal Years
Ended June 30, 1997

 

Public Release Date: August 14, 1998 No. 98-46

Background

The Minnesota Veterans Home - Hastings (Hastings Veterans Home) is one of five Minnesota Veterans Homes under the direct management of the Veterans Homes Board. The board consists of nine voting members appointed by the Governor with the advice and consent of the state senate. The Veterans Homes Board appointed Mr. Andrew Vinson as the administrator of the Hastings Veterans Home in December 1996. The Hastings Veterans Home provides board and care for eligible residents and their spouses. Currently, the home cares for 186 residents and is licensed for 200 residents. The home funds its operations through state appropriations, federal per diem payments, and resident maintenance payments.

Audit Objectives and Conclusions

Our audit objectives were to obtain an understanding of management controls for the period from July 1, 1994 to June 30, 1997, relevant to costs of care, payroll, lease receipts and operational expenditures, and resident trust account activities. We designed our audit to provide reasonable assurance that the home complied with the provisions of laws and rules.

We concluded that the Hastings Veterans Home designed and implemented internal controls to provide reasonable assurance that resident maintenance fees, federal per diem reimbursements, and lease receipts were properly deposited and accurately recorded in the state's accounting system. In addition, the home accurately calculated federal per diem reimbursements. However, the home did not accurately calculate its cost of care rate for fiscal year 1998. In addition, the home did not adequately verify the financial status of residents to ensure that resident maintenance fees were accurately calculated. For the items tested, the home's eligibility determination procedures were in compliance with statutory and rule provisions. However, the home did not calculate interest on delinquent resident accounts.

The Hastings Veterans Home designed and implemented internal controls to provide reasonable assurance that payroll expenditures and other operational expenditures were supported and approved. However, the home did not implement controls to ensure it used correct pay rates in determining payments to staff, or to ensure it complied with the salary requirements of the related bargaining agreements. The home needs to improve controls over access to its payroll and personnel system, resident employee pay checks, and approval of overtime hours. Finally, the home made errors adjusting leave balances and calculating retroactive pay adjustments.

The Hastings Veterans Home designed and implemented internal controls to provide reasonable assurance that resident account financial activities were promptly and accurately recorded in accordance with resident authorizations. We were unable to conclude on resident financial activities for the period July 1, 1994, to October 31, 1994, since supporting documentation for that time period was unavailable. For the items tested, the home complied with applicable finance-related legal provisions. However, the home did not reconcile resident financial activity to the state's accounting system on a regular basis. Also, the home did not transfer interest in accordance with Minnesota Statutes.

The Hastings Veterans Home response indicated general agreement with the majority of audit findings and that corrections were either completed or in progress. However, the home disagreed with our finding to recover fiscal year 1998 cost of care rates from certain residents based on its belief that recovery costs would exceed outstanding fees collected.

 

Office of the Legislative Auditor ♦ Room 140, 658 Cedar St., St. Paul, MN 55155