Office of the Legislative Auditor - Financial Audit Division

Report Summary
Department of Veterans Affairs
Programs and Services Division and Centralized Administrative Functions
Internal Controls and Compliance Audit

The Minnesota Department of Veterans Affairs is a state agency dedicated to serving veterans and their families by assisting them in securing state and federal benefits and by providing programs and services relating to higher education, benefits, burial, claims, outreach, and veterans preference. The department also operates five veterans homes throughout the state. We examined the department’s internal controls over a portion of its financial operations and its compliance with certain finance-related legal requirements during the period from July 2013 through February 2016. This selected scope review included the financial activities of the department’s Programs and Services Division and the department’s expenditures on centralized administrative functions. This review did not include any of the financial activities of the department’s Veterans Health Care Division, which operates the veterans homes.

Conclusion

The Department of Veterans Affairs had generally adequate internal controls over the financial operations of its Programs and Services Division and centralized administrative functions and generally complied with the significant finance-related legal requirements we tested. However, the department had some weaknesses related to veterans benefits programs, grants, payroll, and federal reimbursements.

Findings

• The Department of Veterans Affairs provided certain benefits to veterans that were not specifically authorized in statute.
• The Department of Veterans Affairs did not administer grants in compliance with certain state policies.
• The Department of Veterans Affairs did not collect overpayments made to two employees and did not identify overpayments made to three other employees.
• The Department of Veterans Affairs did not have effective internal controls to ensure it collected all federal reimbursements for the State Veterans Cemetery in Preston.