Review finds problems with veterans spending

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The review, issued June 30, evaluates how chapters disbursed the money, and how the Veterans Fund is being administered.

The auditors identified questionable awards of assistance, and that some chapters used Veterans Fund money to pay for costs that were not allowed. They cited a lack of guidelines that has contributed to confusion and frustration in administering the money.

About 40 percent of original appropriation remains unspent, the audit found.

In February 2008, the council approved distributing $8 million from the tribe's general fund to assist veterans at the chapter level. The appropriation was a rider to a $1 million emergency bill for weather-related emergencies on the Navajo Nation.

President Joe Shirley Jr. vetoed the resolution in March 2008, but the council overrode the veto.

The Veterans Fund was allocated to chapters based on a 50-50 formula. Half the money was divided equally among chapters. Half the money was divided based on the number of registered voters. The number of veterans residing in each chapter, which is enumerated in the 2000 Census, was not considered in the distribution. (The number ranges from zero to nearly 500, according to the Census.)

Most of the chapters received their funds in April 2008.

Auditors found that after the money was distributed to the chapters, problems developed in administering the funds.

Part of the confusion was a result of vague language in the enabling legislation, the auditors said.

As a result, the chapters were left to determine how best to administer the funds. Some chapters used their five-management-system manuals while others worked with veterans committees to create policies and procedures.

The auditors mailed questionnaires to each chapter in order to develop a perspective on how each chapter was distributing its funds. Fewer than half the tribe's 110 chapters responded. Most of the 53 respondents described difficulty in administering the money.

"The mixed interpretations of the council's resolution also created discord in some chapters," stated the audit. "Some chapter administrations indicated that council delegates and agency representatives of (the Department of Navajo Veterans Affairs) told the local veterans that it was their monies intended to meet their needs. However, the chapter administration felt that some veterans took these interpretations literally and wanted to administer the funds directly without proper accountability."

The veterans committees also expressed frustration in survey forms sent to them by the auditors, who reported that 31 veterans committees responded to the survey.

Common complaints included too much paperwork, the chapters took too long to process veterans' financial requests, too much insistence on complying with chapter policies and procedures, and too much interference by the chapter and other entities in determining allowed and disallowed costs.

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Several chapters requested legal advice from both the Department of Justice and the Office of Legislative Counsel in an effort to clear up some of the confusion.

DOJ ultimately decided that the chapters, not the veterans committees, were legally responsible to administer the money.

Auditors also discovered that money was disbursed without specific funding guidelines, and without properly verifying the supporting documentation.

The audit stated that some chapters and veterans committees did not provide evidence that all aid recipients were eligible.

The auditors also found that some veterans received repeated assistance while not all veterans registered with the DNVA have received assistance from the Veterans Fund.

"It was noted some of these recipients were family members to living veterans, and this practice of assisting the veteran along with family members is characteristic of double-dipping which the DOJ legal advice clearly prohibited," stated the report.

"Rather than just qualifying the veteran for assistance, his/her family members were also qualified. This raises questions about the fairness of the chapter's process in awarding assistance to its veterans and this practice also limits available funds for other veterans who may otherwise have yet to be assisted."

The third finding focused on chapters incurring disallowed costs, including a determination that one in every five dollars of veterans' aid went to pay unauthorized administrative costs.

At the end of fiscal 2009, the chapters had used $4.6 million to fund both direct and indirect services.

Direct services were described as assistance to pay for housing, medical and personal needs.

Administrative costs were not eligible for reimbursement from the Veterans Fund under the council resolution, but auditors found that the chapters used 19 percent of the funds for administrative costs, despite a clarification from DOJ forbidding it.

"The funds were not intended for and may not be used for any administrative costs, including the administrative costs of a private veterans organization," according to the audit.

Examples of administrative costs paid from the Veterans Fund include personnel, office supplies, operating supplies, travel, office equipment, stipends and fees to cover training and conferences.

"Unfortunately, by expending the Veterans Fund for administrative costs, this practice reduced the amount of available funds for direct services such as assistance for housing, education, burial, medical transportation, traditional ceremonies and hardship," according to the audit.

The fourth finding discovered that most chapters are gradually distributing their funds. At the end of fiscal year 2009, 42 percent of the $8 million remained available to assist veterans.

The audit recommends that funding guidelines be developed to clarify who's in charge of the money, eligibility criteria, the application and disbursement process, compliance requirements, and allowed and disallowed costs.

Chapters should educate potential recipients about the funding guidelines and any restrictions that apply.

The auditors also recommend better planning when considering supplemental funding to the chapters. This planning should include discussions with the affecting tribal department or programs to gather support for the supplemental funding and to clarify key issues such as how and who will administer the funds.

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