Maryland’s Department of Veterans Affairs gave employees access to hundreds of thousands of donations without proper oversight, according to a newly released audit.
The department charged two employees with recording and depositing nearly $1 million in donations and federal reimbursements, even though those employees had control over the receiving the donations — and therefore had access to the funds, according to an audit by Maryland’s independent Office of Legislative Audits.
State law requires that employees involved in receiving collections remain independent from recording and depositing the money — the process that ensures the amount donated matches the amount received by Veterans Affairs.
The audit also found the employees failed to record cash receipts within 24 hours, as is required by state law.
Veterans Affairs further gave those employees the power to process unauthorized expenditures.
“Specifically, [the] two employees could both initiate and process certain purchasing or disbursement transactions without being subject to independent approval, and one of these employees could also release … transactions to the Comptroller of Maryland’s General Accounting Division for payment,” the audit noted.
A security feature in the state’s electronic financial management system is set up to flag unapproved expenditures, but the veterans agency chose not to use that feature.
In a written response to the audit, the veterans agency blamed the lack of oversight on short stafffing.
“There are only two employees providing fiscal support services,” the agency stated. “These same employees are multitasked with personnel, payroll, time keeping, and large procurement for requisition orders in [the electronic financial management system]. … Therefore the agency cannot make use of available security features.”
Agency officials noted they requested additional funding to hire more employees last year, but did not receive the money.
“The agency’s 2010 budget build will once again attempt to alleviate this fault with a request for additional staffing,” the veterans agency response stated.
The agency has hired additional staff to independently manage recording and depositing cash receipts, in response to the audit’s findings.
