AG to determine state’s liability in veterans audit

Monday, Feb. 23, 2004 | 9:39 a.m.

CARSON CITY -- The attorney general's office is examining an audit critical of the state Office of Veterans Services to weigh the state's liability in poor record-keeping of veterans accounts and to see if any charges should be filed.

"We're going to jump right on this," Attorney General Brian Sandoval said. "The state may have some exposure."

He also said his staff would look at possible criminal conduct.

The veterans office failed to adequately record documents in receiving and spending more than $900,000 of money in the accounts of wards of the veterans office, according to an audit of the Legislative Counsel Bureau released last week.

For example, the audit said it found the office received nearly $24,000 in income and paid about $23,000 in expenses for a veteran, but none of the transactions had supporting documentation.

"Failure to maintain documentation increases the risk of liability to the office and the state," the audit reported.

In one case, a ward of the veterans' office contested payments of more than $1,400 deducted from his account. The office could not produce supporting documents, so the district court ordered the office to repay the ward.

Chuck Fulkerson, head of the veterans' office, said this was the first audit in 10 years of the program. He said his office has had to assume responsibility of two veterans' cemeteries and the veterans' nursing home in Boulder City without additional staff.

Fulkerson said despite the sloppy bookkeeping, no money was ever reported missing.

The legislative counsel audit division is required to advisory letters to lawmakers, the governor and the attorney general when an audit uncovers major problems. However, when asked about the audit on Friday, Sandoval said he was unaware the audit had been done.

Apparently communications broke down between the audit division and the attorney general's office, which are only two blocks apart.

Legislative Auditor Paul Townsend said he sent a letter and a copy of the report to Sandoval on Dec. 17 last year. Townsend's letter asks Sandoval to look to see if the state is liable for any mishandling of the money of veterans who are wards of the state agency.

Sandoval said there is no record of his office ever getting the report.

"It was never copied to our office," he said.

Townsend insists the audit and letter was sent. "It may have gotten lost in the mail," he said.

It's a "big deal" when the legislative auditors notify the attorney general to look into some problem in state government, Townsend said.

The Dec. 17 letter was addressed to the Legislative Commission and there were no "cc:" notations at the bottom of the correspondence.

But the letter to the legislative commission did say: "This report is being submitted to the governor, each member of the Legislature and the executive director of the Office of Veterans' Services. In addition, because of the possible liability to the state, we are providing a copy of this report to the Attorney General."

Townsend said all the legislators got their copy.