ODVA Audit
ODVA Audit
Oklahoma Department
of Veterans Affairs
For the period July 1, 2014 through June 30, 2017
Oklahoma State
Auditor & Inspector
Gary A. Jones, CPA, CFE
Oklahoma Department of Veterans Affairs
Pursuant to your request and in accordance with the requirements of 74 O.S. § 18(f), we
performed an audit with respect to the Oklahoma Department of Veterans Affairs for the period
July 1, 2014 through June 30, 2017.
The objectives of our audit primarily included, but were not limited to, concerns surrounding
the control environment and communication breakdown at the agency, changes in the level of
care for residents of the seven state veterans centers, various financial and operational
questions, and events related to the Talihina center. The results of this audit are presented in the
accompanying report.
Because the procedures performed do not constitute an audit conducted in accordance with
generally accepted auditing standards, we do not express an opinion on the account balances or
financial statements of the Oklahoma Department of Veterans Affairs for the period July 1, 2014
through June 30, 2017.
We also wish to take this opportunity to express our appreciation for the assistance and
cooperation extended to our office during the course of our engagement.
Sincerely,
Recommendations.......................................................................................................... 67
JUNE 2018
Executive Summary
Background
We were engaged at the request of the Attorney General, pursuant to 74 O.S. § 18f, to address a
wide variety of concerns expressed by legislators, citizens, and ODVA staff.
As a result of continual operational changes, removal of key financial staff, central
management’s interference in our communications, and growing reluctance of staff to be open
with us due to a fear of retribution, we lost our ability to rely upon information provided by the
agency. We then elected to cease detailed procedures, and focus on surveying employees and
reporting the current circumstances at the agency, along with any completed information from
our procedures.
What We Found
This report covers a wide variety of nuanced and interwoven topics. Here are the key findings
related to three of the most significant areas.
Tone at the Top and Communication
A culture of fear and intimidation exists at ODVA. Employees across the state actively fear for
their jobs and report experiencing dictatorial and aggressive leadership from the central office.
They expressed that management makes changes without explanation, and ridicules those who
offer input or disagree. Morale is reportedly at an all-time low, with staff left feeling
unsupported, without adequate resources, and reminded regularly that they are replaceable.
A silo effect appears to be at work at the agency, with central management and varying
divisions “cut off” from one another. Center management feels cut off from the Oklahoma
Veterans Commission; centers feel cut off from one other. A lack of clear directives at both the
central and veterans center levels obstructs the flow of information from the top down,
hindering project implementation and aggravating employee concerns.
Staff are frustrated by perceived central office favoritism and bias in staffing and incentives.
While the central office expands, center staff believe funds are being removed from veteran care
for that purpose. Management argues that cuts to staffing and services are due to a decline in
state appropriations, while staff are aware that state funds account for only a minor portion of
the agency’s overall revenues, which did not in fact decline over the audit period.
Overall, this toxic environment increases risk and lowers morale throughout the agency, no
doubt impacting the quality of care and services provided.
i
Level of Care
Responses to our employee surveys and interview questions echoed one of the initial questions
driving this audit with concerns that the level of care provided to residents of the state veterans
centers is declining. In recent years, laboratory services at the centers have been outsourced,
with reports that other services are soon to follow, as staffing shortages and turnover frustrate
center employees. Access to medical providers is reportedly being restricted, and specialty diets
have been limited while center menus were standardized. It is clear the historical level of in-
house care at the centers is declining.
However, as the veterans centers are licensed as long-term care facilities, these changes do not
appear to violate applicable regulations. Rather, they illustrate staff’s concerns that the centers
are being turned into nursing homes, that management is occupied with raising profits while
meeting minimal regulatory requirements, and that central office does not share their respect
and admiration for the residents in their care. These changes also contradict ODVA’s mission of
“providing to the Veterans residing in the state of Oklahoma the highest quality support and
care available anywhere in the Nation.”
Talihina Veterans Center
Management has presented varied reasons for wanting to relocate the Talihina Veterans Center,
and staff there is convinced that central management has a vendetta against the center, fearing
for their jobs and residents’ wellbeing. Whether or not the center is eventually moved, there are
residents living there and employees working there today, and by all appearances that will
continue to be the case until a new facility can be made ready. Estimates for that time period
have typically been in the range of five years. Providing quality care for the residents in the
interim necessitates that the agency maintains the center at an acceptable level, staffs the facility
adequately, and supports that staff in providing care and operating the center.
What We Recommend
1. The Commission should evaluate and address the negative control environment and
communication breakdown in the most efficient and positive manner possible. The
Commission should also recognize its authority and responsibility in appointing the
director, as outlined in 72 O.S. § 63.3.
2. Management should establish a system of clear communication that relays information
from the bottom of the organization to the top and vice versa.
3. The Commission should seek an independent evaluation of cost effectiveness and
impacts to services prior to relocating any veterans center.
4. Management should ensure policies and procedures are standardized or customized to
the extent that best ensures the agency meets its mission and complies with appropriate
requirements. Staff should receive adequate review time and training when policy
changes occur.
5. Management should ensure appropriate cost-benefit analyses are performed prior to
outsourcing key services or making other significant operational changes.
6. Management should pursue an independent examination of current financial controls
and other significant operational areas as outlined at the end of this report, as well as
any other areas that have undergone substantial changes.
ii
Oklahoma Department of Veterans Affairs
Special Audit
1
Oklahoma Department of Veterans Affairs
Special Audit
come forward, that we were being watched, or that they would try to
reach out using separate channels or in the future.)
It soon became clear that we no longer had willing, independent sources
of information regarding the individual veterans centers, and further
determined we could not rely upon, or in some cases verify, information
provided by central office. It was clear center personnel feared for their
jobs and did not feel comfortable contacting us. This situation resulted in
what is referred to as a “scope impairment” in a typical performance
audit, meaning a constraint imposed on the audit approach by limited
access to reliable evidence, or certain records or individuals. 1 It also put
us in a position of potentially putting further jobs at risk if we insisted
upon direct contact with staff.
We discussed the situation with the Attorney General’s office and agreed
to alter our planned procedures as necessary and to perform an
anonymous employee survey of ODVA staff across the state. Survey
recipients included most financial and administrative staff at the central
office and veterans centers, as well as a random sample of staff from
throughout the rest of the agency. Recipients were instructed that they
could provide the electronic survey link or auditors’ contact information
to other interested employees, including past employees who had been
present during the audit period. In total, 254 responses were received,
including several dozen sent by fax and by mail.
In order to bring to light our serious concerns about the negative control
environment and damaging tone at the top of ODVA, which we consider
to be one of the most pressing overall issues currently impacting agency
staff, finances, and the level of care provided at the veterans’ centers, it
was important to cease detailed procedures focusing on the past so we
could provide this information about the current environment to decision
makers as soon as possible.
This report includes the results of procedures we were able to perform,
with the level of detail or support that was available and appropriate, as
well as a list of topics that bear further consideration. For issues we noted
that were not applicable to the contents of the report or not supported by
sufficient information to be considered significant to the report, we have
listed additional issues and allegations for the Attorney General’s
consideration in a separate memo and provided that, along with
supporting documents, to his office.
1
Performance audit scopes and related limitations are discussed in the Government Accountability Office’s
Government Auditing Standards, 2011 revision, Chapter 7. Section 7.11 specifically states auditors should report any
significant constraints imposed on the audit approach by information limitations or scope impairments, including
denials or excessive delays of access to certain records or individuals. While an engagement under 74 O.S. § 18f is not
statutorily bound to auditing standards, this standard illustrates why an auditor cannot in good conscience perform
procedures or report results based upon what he or she believes to be insufficient or unreliable evidence.
2
Oklahoma Department of Veterans Affairs
Special Audit
3
Oklahoma Department of Veterans Affairs
Special Audit
our official audit period retired in January 2018, and the audit period
deputy director was appointed director at that time.
4
Oklahoma Department of Veterans Affairs
Special Audit
Hostile Tone at Management’s ethics, integrity, attitude, and operating style are the
the Top foundation of all other internal control components that help an entity
achieve its objectives and minimize risk. According to government
internal control standards produced by the federal Government
Accountability Office (GAO standards) 2, an effective internal control
system has in place policies and procedures that reduce the risk of errors,
fraud, and professional misconduct within the organization. Key factors
in this system are the environment established by management, and
effective information and communication to achieve the agency’s
objectives.
The agency-wide control environment has a pervasive influence that
affects all activities of the organization. The governing board, executive
director, and entire management team must all contribute to creating a
positive control environment or “tone at the top.” The governing board
sets the proper tone for the control environment when it establishes and
communicates a code of ethics, requires ethical and honest behavior from
all employees, observes the same rules it expects others to follow, and
requires appropriate conduct from everyone in the organization.
Management’s philosophy and methods of employee direction and
development also greatly influence this environment. Management
demonstrates the importance of integrity and ethical values through their
directives, attitudes, and behavior.
It was made clear to us immediately upon beginning interviews and
regularly throughout our contact with staff statewide that a culture of
fear and intimidation exists at ODVA. Employees across the state
reported fearing for their jobs and experiencing dictatorial and aggressive
leadership from the central office. This top level of the agency was
described as generating a “toxic environment,” having a “very strong
barrier of intimidation,” as being, in employees’ words, dictatorial,
totalitarian, and vengeful, and it was remarked of central management
that “when they say jump, you ask how high.” Most reports we received
credited the audit period deputy director (now director) and the director
of clinical compliance with creating and sustaining this negative agency-
wide environment.
Of 144 survey respondents with an opinion 3, 60% believe central office
management “Seldom” or “Never” demonstrates high ethical standards.
2
Unless otherwise stated, references to GAO standards throughout this report refer to the United States Government
Accountability Office’s (GAO) Standards for Internal Control in the Federal Government. While this publication addresses
controls in the federal government, the criteria it contains can be treated as best practices. The theory of controls
applies uniformly to federal or state government.
3
Some survey respondents elected not to answer all survey questions, or were not provided certain questions based
upon their position and location. “No opinion” and blank responses are excluded from survey figures in this report.
5
Oklahoma Department of Veterans Affairs
Special Audit
6
Oklahoma Department of Veterans Affairs
Special Audit
Low Employee The fact that management’s philosophy and methods of direction greatly
Morale influence the agency’s control environment is evident in the low morale
currently articulated by employees throughout ODVA. Numerous survey
respondents included comments such as, “I have never seen the morale of
staff this low before,” and, “The satisfaction amongst workers is at an all-
time low.” Veterans center staff members at all levels reported fearing for
their jobs, feeling unsupported and replaceable, and specifically feeling
that the central administration of the past few years is at fault. They
conveyed that central office staff is cut off and decisions impacting center
jobs are made in a vacuum. Multiple employees remarked that morale is
low while turnover is high, and many expressed disgust and
disheartenment at the change in environment and declining level of care
for the veterans.
Several final survey comments illustrate this experience:
• “I have been discouraged by the lack of understanding towards
the effect on resident care when business/financial decisions are
made, as well as the personal effect to the employees and their
families.”
7
Oklahoma Department of Veterans Affairs
Special Audit
8
Oklahoma Department of Veterans Affairs
Special Audit
Communication GAO standards also provide best practices for an entity such as ODVA in
the area of communication:
Management should communicate the necessary quality
information to achieve the entity’s objectives, both internally and
externally.
Management communicates quality information throughout the
entity using established reporting lines. Quality information is
communicated down, across, up, and around reporting lines to all
levels of the entity.
As part of establishing an organizational structure, management
considers how units interact in order to fulfill their overall
responsibilities. Management establishes reporting lines within an
organizational structure so that units can communicate the quality
information necessary for each unit to fulfill its overall
responsibilities.
As these standards emphasize, accurate and timely communication is
essential within the organization, at all levels, as well as with outside
parties. Methods of communication should be designed to flow
effectively through all levels of the entity.
ODVA employees are experiencing a culture of change, fear, and
intimidation, and a serious breakdown in internal communication
appears to be a key cause of that challenging environment. Of 146 survey
respondents with an opinion, 70% believe central office management
“Seldom” or “Never” provides a clear sense of purpose and direction.
Countless comments referred to management, varying divisions, and
centers as “cut off” or “isolated.” They discussed central leadership being
secretive, lying, and purposefully fostering division, and complained of a
lack of staff meetings and clear directives at both the central and veterans
center levels, hindering the flow of information from the top down. Many
staff members do not understand the reasoning behind decisions that
impact their work, and receive information second and third hand, with
9
Oklahoma Department of Veterans Affairs
Special Audit
10
Oklahoma Department of Veterans Affairs
Special Audit
11
Oklahoma Department of Veterans Affairs
Special Audit
4 PointClickCare is care management software popular in the long-term care and nursing home industry. Its modules
range from medical and patient records to financial recordkeeping, and its implementation at ODVA is discussed
further beginning on page 57.
12
Oklahoma Department of Veterans Affairs
Special Audit
5 As we received a photograph of the email on a computer screen, it has been retyped here for legibility.
13
Oklahoma Department of Veterans Affairs
Special Audit
Other Control Additional issues related to the overall agency environment at ODVA
Environment came to our attention during our work and as a result of our employee
Concerns surveys. Overall, this degraded control environment increases the risk of
misappropriations, errors, and declining quality of care for the veterans
the agency is designed to serve.
Snap Decisions
Staff at all levels relayed concerns and examples of central office
management attempting to operate on generalizations, assumptions, and
numbers, without acknowledging the complexities and human factors
14
Oklahoma Department of Veterans Affairs
Special Audit
Consolidations
During our audit procedures, central management initiated a
consolidation of business office staff at the centers, including terminating
via a Reduction in Force (RIF), the business managers at five centers, and
absorbing the other two business managers (from Ardmore and Norman)
into central office finance staff. Some of these business managers and
other staff contacted us with concerns about the way they were informed
of the consolidation, the terms of their departures, potential
noncompliance with state merit rules, as well as the demoralizing lack of
a “thank you” or “goodbye” after years and even decades of service.
15
Oklahoma Department of Veterans Affairs
Special Audit
Center administrators must now rely on central office personnel who are
new to their positions and in some cases unknown to the administrators,
to conduct the financial activities and control the budgets of their centers.
Center staff have relayed that it now takes weeks to make a purchase,
instructions for the remaining financial duties at the center are unclear or
non-existent, there are no clear provisions for emergency purchases, the
accounting technicians remaining at the centers are overwhelmed, and
back-ups for these positions may not be available.
GAO standards for internal controls state that management should
establish an organizational structure designed to achieve the entity’s
objectives. This entails assigning responsibility and delegating authority
to key roles throughout the entity. By withdrawing more and more
control to the central office, executive management is doing the opposite,
thereby decreasing the presence of expertise at the centers and further
hindering agency-wide communication, as there are fewer individuals
entrusted with authority and information at each location.
Another troubling aspect of this removal of financial oversight from the
centers is that it removes control from the administrators, not only
hindering their ability to efficiently and effectively run each center, but
potentially threatening their long-term care licenses. The Administrator
Code of Ethics outlined in the Oklahoma State Board of Examiners for
Long Term Care Administrators (OSBELTCA) administrative code
(490:10-13-1) includes the following expectations and admonishments:
• Individuals shall strive, in all matters relating to their professional
functions, to maintain a professional posture that places
paramount the interests of the facility and its residents.
• The Health Care Administrators shall not: Defend, support, or
ignore unethical conduct perpetrated by colleagues, peers, or
students.
• Administrators have a fiduciary duty to the facility.
Further, 490:10-13-2 outlines that: “It is the responsibility of the long-term
care administrator, as the managing officer of the facility to plan,
organize, direct, and control the day-to-day functions of a facility and to
maintain the facility’s compliance with applicable laws, rules, and
regulations. The administrator shall be vested with adequate authority to
comply with the laws, rules, and regulations relating to the management
of the facility.”
It is clear from these guidelines that the administrator is expected to be in
effective financial and operational control of his or her facility. As the
administrator’s control diminishes, and their fear of termination or
central office retribution rises as has been described by all levels of center
staff, their ability to stand up to unethical directives or activities
impacting their facilities and residents surely diminishes as well. Without
16
Oklahoma Department of Veterans Affairs
Special Audit
licensed and capable administrators to run its centers, ODVA could not
legally serve its many resident veterans.
As discussed earlier, the removal of center business managers also
negatively impacted our ability to gather detailed, reliable, independent
financial information from the centers. Agency employees also expressed
numerous concerns about this consolidation in our surveys, including
• The centralization of purchasing food and medical supplies,
which has led to delays in ordering and receiving these essential
products
• Bills not being paid on time since the consolidation occurred
• The loss of institutional knowledge and expertise at the centers
regarding policies, rules, and regulations related to purchasing
and financial activities
• The breakdown of key financial internal controls previously in
place at the centers
• Administrators losing their ability to control their spending and
budgets and to expediently meet the needs of the facility
• Feeling like the central office had “pulled the rug out from under”
center staff and failed to communicate about terminations and
process changes
• Negatively impacting processes underway at the centers such as
debt collection
• Potentially unqualified individuals being left in charge of the
center business offices
• The feeling that no cost savings actually resulted from this and
other terminations, while the quality of life of residents and
remaining staff have suffered
We received a specific report of an accounting technician in the business
office of the Norman center who had previously misappropriated funds
at that center, allegedly from the veterans’ trust fund, had repaid the
money, and is still employed there – now without business manager
oversight. Additional records, including related legal records, will be
provided to the Attorney General’s office for follow-up on this matter.
One employee commented that central office had stated its centralization
of the business offices was based on a recommendation by the auditor’s
office, which they “know is a lie.” We were made aware several times
during our procedures that personnel actions and process changes were
being explained by central management as “auditor recommendations.”
We contacted the agency to let them know these changes were not
recommended in any past report, and clarified the only consolidation-
related report contents we had provided in the past, including specific
support of decentralized maintenance. We noted in this correspondence
that we did not endorse the ongoing changes and found it unusual for
17
Oklahoma Department of Veterans Affairs
Special Audit
18
Oklahoma Department of Veterans Affairs
Special Audit
19
Oklahoma Department of Veterans Affairs
Special Audit
6For reference, the central office currently employs approximately 34 individuals, not including IT staff, as of June
2018. It should also be noted that some individuals who received raises while working as central office employees
may have been subsequently transferred to other departments or terminated.
20
Oklahoma Department of Veterans Affairs
Special Audit
21
Oklahoma Department of Veterans Affairs
Special Audit
Commission
As discussed earlier, GAO standards emphasize the key role the
governing board, in this case the Commission, plays in the agency’s
overall environment and tone at the top. It is also essential that the
Commission gather appropriate information to properly maintain
oversight of the agency and deal with any issues that may arise:
The oversight body should receive quality information that flows
up the reporting lines from management and personnel.
Information relating to internal control communicated to the
oversight body should include significant matters about
adherence to, changes in, or issues arising from the internal
control system. This upward communication is necessary for the
effective oversight of internal control.
Personnel should use separate reporting lines to go around
upward reporting lines when these lines are compromised.
As discussed in our communication section, ODVA staff generally
reported not having access to or contact with the Commission, which
22
Oklahoma Department of Veterans Affairs
Special Audit
7 Oklahoma Department of Veterans Affairs performance audit, for the period of July 1, 2011 through June 30, 2012,
23
Oklahoma Department of Veterans Affairs
Special Audit
LEVEL OF CARE
24
Oklahoma Department of Veterans Affairs
Special Audit
8
See discussion of service-connected compensation on page 53.
25
Oklahoma Department of Veterans Affairs
Special Audit
26
Oklahoma Department of Veterans Affairs
Special Audit
how they can practice medicine. The transition to the new computer
system has been over a year and is still not complete. This also has a
significant impact on the ability to provide quality care to our residents.”
Multiple letters we received alleged that individual residents removed
from the Talihina SNU may have passed away prematurely due to
complications resulting from their removal from the center. No matter its
level of certainty, this perception impacts morale.
Overall the survey respondents repeatedly worried that the centers are
being turned into nursing homes. Respondents seemed particularly
distressed because they truly care about, respect, and admire the resident
veterans, and feel that central office does not share this care and respect,
despite the military background of some central executives.
While the results of our discussions and procedures showed that the level
of care provided within the centers does appear to be declining, we
determined it was important to also ask whether this change ultimately
contradicts any significant laws, regulations, or other guidelines that
apply to the agency.
According to GAO standards, the oversight body and management
reinforce the commitment to doing what is right, not just maintaining a
minimum level of performance necessary to comply with applicable laws
and regulations, so that these priorities are understood by all
stakeholders, such as regulators, employees, and the public. The
following is a survey response, echoing a sentiment expressed in multiple
surveys: “The philosophy of this Agency has changed to ‘meeting
regulatory requirements.’ That is far from the best we are capable of.”
While current management is making changes to the historical level of in-
house care provided at the centers, and this has caused internal concerns
and brought forward some vocal critics among stakeholders outside the
agency, the situation is complicated by the fact that the changes do not
appear to violate any applicable laws or regulations. Veterans centers are
licensed as long-term care facilities, and are therefore liable to the
standards of such a facility, including Oklahoma State Department of
Health regulations for nursing facilities and VA regulations. The care and
services provided above that standard could be considered “extra,” and
while staff repeatedly expressed the feeling that the veterans deserved
this excellent care as a result of their patriotic service, the requirements
are more minimal.
We again noted that the centrally directed changes impacting residential
care may be impacting authority of the center administrators. Under the
terms of the Administrator Code of Ethics outlined in the OSBELTCA
administrative code (490:10-13-1):
• Individuals shall hold paramount the welfare of persons for
whom care is provided.
27
Oklahoma Department of Veterans Affairs
Special Audit
9 Full text from ODVA website, “About ODVA” page, last accessed May 8, 2018.
28
Oklahoma Department of Veterans Affairs
Special Audit
Vision: The state of Oklahoma is a state known for the best Veterans
care and services in the nation, where Veterans are provided tools that
are readily accessible, while facilitating their needs and requirements to
continue a quality life among the community in exchange for their
service to the nation, which has been paid in advance.
29
Oklahoma Department of Veterans Affairs
Special Audit
offer services to far too few veterans and must expand our reach.
Management has shown clear intentions and movement toward
expanding its services to veterans outside the seven residential centers.
This is commendable, and no doubt necessary, as Oklahoma has a
population of veterans outside the centers far larger than the population
receiving long-term care from the agency. A high-level mission and
planning document provided to us by the central office documented
ODVA’s progress and further plans in place to increase the agency’s
outreach to veterans in need of services other than residential care and
claims and benefits assistance – including education, employment, and
mental health aid. Central office efforts include increased social media
presence and other visibility tactics, community and government
partnerships, events, and legislative initiatives.
Employees believe the central office is defunding the veterans centers in
order to support these other services. Whether or not this is the case, this
situation highlights the breakdown in communication within the agency.
Employees are left to wonder whether and how their leaders are choosing
to serve the veterans, and they cannot assist in meeting the mission and
vision of the agency without being educated about them. If management
indeed believes it is necessary and appropriate to alter the level of agency
involvement in residential care in order to adequately attend to the state’s
other veterans, transparency and communication with both internal staff
and the public would be crucial to securing buy-in and support.
Several other factors remain unclear: Are the commission or the
legislature aware of the decline in service level provided at the veterans
centers? Is it their intention to decrease in-house services provided to
veterans? Could the decrease in medical care provided at the centers, as
survey respondents worried, affect the volume of federal reimbursements
the centers are eligible to receive?
The agency’s handing of the Talihina center also conflicts with its mission
to provide the “highest quality” care. A detailed discussion of events at
the Talihina center begins on page 32. While the agency has sought
legislative authority to move the Talihina center to a different location, it
has also reported that it will take at least five years to do so.
Management’s avoidance of maintenance responsibilities at the center in
the recent past, and its consistently negative public statements about the
center, do not place the administration there in a position to provide
excellent care in the interim.
The following responses from our surveys illustrate two employees’
feelings related to the ODVA mission:
• It seems our efforts are lost in the process of what's really
important for our vets or maybe I don't understand the mission.
Do we just provide healthcare, food, and shelter? Are families
important and part of their health care plan? Do volunteers
30
Oklahoma Department of Veterans Affairs
Special Audit
matter? . . . Our vets know the difference between lip service and
action and what we do is more than just another job.
• It sure doesn't look good when the resident's worry if they are
going to have a place to live and people to take care of them in the
right way when they gave their lives for this country.
As it stands, the veterans centers are by far the most visible and highest
cost division of the agency, and are relatedly the focus of most of the
concerns we were asked to address. The same mission and planning
document we received that outlines the expansion in veterans services
also details the agency’s “values,” which reflect those of the various
military services: loyalty, duty, respect, honor, integrity, and selfless
service, among other laudable characteristics. Unfortunately, the majority
of ODVA’s staff does not see these values reflected in management’s tone
or actions, and the fear and confusion they are experiencing is impacting
their morale and the care they are providing.
31
Oklahoma Department of Veterans Affairs
Special Audit
32
Oklahoma Department of Veterans Affairs
Special Audit
These events were reported in the press and comingled with claims of
other problems at the center by central management. These included low
staffing and high turnover levels, a limited pool of qualified applicants in
the rural Talihina area, and a comparably small wait list for the center
when compared with other centers. Where these claims were made in the
press, they did not appear to be accompanied by evidence.
In a December 2016 a local news station interviewed Senator Frank, who
explained that he had listened to complaints from Claremore, Norman,
and other facilities over the past five years, and he was part of the move
to overhaul the administration of the state agency. He expressed the
belief that relocating the Talihina facility to a more easily accessible area
would be the best long-term solution for both recruiting and retaining
qualified staff members in the future. The Senator was also quoted in the
same article saying, “I know there are concerns about the economic
impact it would have on the community, and those are serious concerns
that we’ve got to take a look at, but my primary concern is to make sure
we can provide the quality care that our veterans need.”
Senator Simpson authored SB 544 during the 2017 Legislative session, to
relocate the Talihina veterans center. The bill read in part:
33
Oklahoma Department of Veterans Affairs
Special Audit
The following is the entire body of the email, dated March 28, 2017, with
the header removed 10:
Following the receipt of the above email, the administrator wrote a letter
to the Federal Veterans Affairs Medical Center dated March 28, 2017,
informing them of the planned closure of 48 beds in the SNU.
10 Correspondence has been limited to the body of each document, with significant parties and dates noted in the
report text, both to save space and to eliminate the inclusion of any unnecessary identifying information.
34
Oklahoma Department of Veterans Affairs
Special Audit
is the body of the April 14, 2017 email from the assistant chief of social
works service at the Muskogee USDVA office:
On June 9, 2017, the deputy director sent the following to the Talihina
administrator:
35
Oklahoma Department of Veterans Affairs
Special Audit
In reviewing the hires for the same time period, it appears all seven
centers trended toward hiring fewer individuals than were terminated,
and this was the case for all centers in FY 2017, and for Talihina in each
fiscal year.
Clare- Central
Hires more
Ardmore Clinton Norman Sulphur Talihina Lawton
Office
Others Total
36
Oklahoma Department of Veterans Affairs
Special Audit
37
Oklahoma Department of Veterans Affairs
Special Audit
38
Oklahoma Department of Veterans Affairs
Special Audit
Management chose to have the building tested for mold, and Terracon
Consultants, Inc. conducted. The scope of the project included collecting
surface samples within the air duct system of the building and collecting
air samples for culturable and non-culturable mold spores from within
the site building. The inspection results, conclusions, and
recommendation are as follows:
39
Oklahoma Department of Veterans Affairs
Special Audit
40
Oklahoma Department of Veterans Affairs
Special Audit
41
Oklahoma Department of Veterans Affairs
Special Audit
42
Oklahoma Department of Veterans Affairs
Special Audit
On August 1, 2017, the deputy director emailed a copy of this letter to the
Talihina administrator with the message, “Please see the attached
decision by the Governor concerning future capital improvement at
Talihina.” When the center’s administrator argued that not updating the
call system was a life safety concern as there were remaining veterans
residing at the center that were not in the infected area, the matter was
forwarded to the central office clinical compliance nurse, who asked the
administrator essentially to prove that not updating the Nurse Call
System was a life safety concern. The administrator provided detailed
43
Oklahoma Department of Veterans Affairs
Special Audit
11
Minor typographical errors have been fixed for ease of reading.
44
Oklahoma Department of Veterans Affairs
Special Audit
issues; however, there was no such language that would have given
central office permission to not update crucial lifesaving medical
equipment; her letter specifically says “life-critical situations excepted.”
The Nurse Call System plays an integral role in basic veteran care,
allowing the veteran to push a button and notify medical staff of a
possible medical emergency. In the instance a veteran is bed ridden or
there is a medical reason that prevents a veteran from verbally being able
to ask for help, the Nurse Call System provides an immediate notification
to medical staff. Medical staff cannot properly and efficiently do their jobs
without having reliable medical equipment.
Management’s dismissal of an administrator’s concern that there is a risk
that could adversely affect a veteran in their care is illustrative of the tone
at the top of ODVA’s administration discussion earlier in this report.
Additionally, reluctance to update lifesaving equipment until it has failed
does not appear to support the ODVA mission to “provide to Oklahoma
Veterans and their families residing in the State of Oklahoma the highest
quality services and care available anywhere in the Nation.”
According to the central office, the centers in Norman, Clinton,
Claremore, and Lawton use Responder 5. The Sulphur center has
Responder IV on Units 1,2,3,6 & 7, while units 4 & 5 have Responder V
system. Clinton has the Rauland Responder IV/4000 Nurse Call System.
It appears the agency has seen fit to outfit some centers with the more
recent version of the Responder nurse call system. The other centers or
units are potentially at the same risk for failure without possible
replacement or repair as is the Talihina center.
Boiler System
The records of audit period ODVA Projects we reviewed also included a
steam boiler replacement project in the amount of $310,498.81 that had
been cancelled at the Talihina Veterans Center. During our interviews we
had been told that a steam boiler project at the center was approved and
subsequently canceled, which led to the center incurring a multitude of
emergency repair costs. We obtained a copy of a purchase order for this
steam boiler replacement signed by the CFO and director in June 2016,
but did not encounter documentation as to why it was later canceled.
According to center management, many boiler system repair costs have
been incurred since that time.
Employee Perspective
Staff are clearly uncertain of the direction management has chosen for the
Talihina center, and particularly the motivation or reasoning for that
direction. There are no clear lines of communication about the future or
how and when the changes will occur. The comments gathered through
our employee surveys are a true reflection of how individuals feel and
45
Oklahoma Department of Veterans Affairs
Special Audit
what they believe the situation to be, and often frankly express the
conviction that central office is sabotaging the Talihina Center in order to
close it by firing employees, removing medical equipment, closing the
SNU for unclear reasons, not allowing input from veterans, and allowing
holds to be put on admissions. The following is a sample of comments
received, in the survey respondents’ own words:
• Central Office is leading the charge to have our facility relocated,
at any cost. Our SNU has been closed and I have heard 3 different
excuses for this closure: 1. mold in the air system which staff and
residents are still being submitted to each day as it supplies air to
other areas of our building, 2. Staffing – our direct care staffing
numbers do not indicate staffing is an issue, 3. Admissions – the
most recent excuse that our director stated during the hearing for
the Nurse Practitioner. I’m not sure Central Office know why they
directed the SNU to be closed.
• In normal circumstances a new building for veterans is a good
thing, but it’s my understanding that the new building model
would not meet the needs of a large majority of our current
resident population, leaving families with the burden of taking
care of our veterans.
• The center at Talihina has been portrayed in a terrible light in the
media and rather than fix things wrong in the building central
office personnel are seeking to abandon it and move it to another
town so it will be a "feather in their cap". I have been told that the
mold in the Alzheimer's unit is very fixable and the whole
building does not need to come down.
• Central office has refused to fix life safety issues at Talihina while
fixing them at the other centers. One is the nurse call system
which is in the infirmary part of the facility. Without it we would
have to close rooms and not admit residents. This system is
needed to install another type of wander management system for
dementia residents. Without it we cannot keep residents that
show dementia signs. They have to be discharged or not admitted
at all at Talihina.
• [The audit period deputy director] loves to send E-mails with a
double meaning. He said his main agenda is to close Talihina.
Now how stressful would you say that would be for someone
with kids . . . . And there are very little to no jobs in our area.
Please help these state employees.
• I would like to know why they have chosen to attack Talihina in
the papers? If Central Office wanted to close the Talihina center –
why did they choose to lie, tell ½ truths + slander one of their own
centers? Why not just close it?
• It appears Central Office is trying to divide the staff at Talihina –
encouraging an atmosphere of distrust – manipulating the
administrative + upper level nursing till you can’t trust anymore.
46
Oklahoma Department of Veterans Affairs
Special Audit
47
Oklahoma Department of Veterans Affairs
Special Audit
RESULTS OF PROCEDURES
AND EMPLOYEE SURVEYS
Sources of The agency’s main sources of revenue are federal funding, state
Revenue appropriations, and institutional care charges.
Federal reimbursements include
• Per diem payments from the USDVA based on the veteran’s
eligibility, calculated based on the daily rate and the number of
days that a Veteran has been a resident. (Over 95% of federal
reimbursements are per diem payments.)
• Funding for ODVA construction projects that have been placed on
the federally approved construction priority list; the USDVA pays
65% of the cost of construction while ODVA pays a 35% match.
(Just under 4% of federal reimbursements)
• Funding for approving veterans for on-the-job training and
apprenticeship programs, managed by the State Accrediting
Agency. (Less than 1% of federal reimbursements)
State dollars are appropriated by the Oklahoma legislature. During our
interviews and review of press articles, we noted that management often
references this decrease when discussing the need for changes within the
agency and cost-cutting measures. While ODVA’s state appropriations
decreased by nearly 13% during the audit period, this resulted in their
overall revenues decreasing less than 3%, and it appears federal revenues
increased nearly 9%. See table below for details. Overall, the agency’s
revenues fluctuated but did not actually decrease between FY 2015 and
FY 2017.
Institutional care comprises care and maintenance charges collected from
the residents who are not eligible for federal per diem reimbursements
(i.e. not 70% or greater service-connected disability). These charges
amount to 85% of the resident’s income, or 50% for residents contributing
to the support of legal dependents, with a current cap of $3,925/month
(with additional specifications outlined in 72 O.S. § 63.5). The agency
noted that this funding is used for the general operations, state match for
construction projects and financial assistance.
48
Oklahoma Department of Veterans Affairs
Special Audit
Revenue sources bringing in less than $150,000 over the three fiscal years
(and totaling less than a tenth of a percent of the agency’s income
altogether) are grouped as “Other Revenues” in the table. These minor
revenue streams are derived from various sources and include sales and
auctions of assets, court awarded judgments, other sales and services, and
commissary and concession income.
FY 2015 FY 2016 FY 2017 TOTAL % of total
Federal Reimbursements 88,285,119 96,643,990 96,159,462 281,088,571 60.96%
Net appropriations 34,396,712 31,005,211 30,011,916 95,413,838 20.69%
Institutional Care 28,889,625 26,520,378 26,592,967 82,002,970 17.78%
Other Grants, Refunds, & Reimbursements 858,995 51,151 - 910,146 0.20%
Food & Beverage Sales 256,510 260,834 237,777 755,122 0.16%
Refunded Money Prev. Disb - Gds & Svc 342,896 109,232 157,055 609,183 0.13%
Other Revenues 89,893 156,035 94,756 340,684 0.07%
$ 153,119,750 $ 154,746,831 $ 153,253,933 $ 461,120,514
49
Oklahoma Department of Veterans Affairs
Special Audit
Annual Budgets Using data from the statewide accounting system and approved budget
by Location reports, including revisions, provided by the Office of Management and
Enterprise Services (OMES), we compiled the annual budgets for fiscal
years 2015 through 2017. The table below provides the centers’ annual
budgets in terms of average number of veteran residents. Also presented
are annual budgets for Central Office and “Other,” which consists of
Information Technology, Claims and Benefits, Capital Lease, Veterans
Services, and Financial Aid.
Budget Comparison Analysis
Fiscal Year 2015 2016 2017
Avg. Budget Avg. Budget Avg. Budget
Center Annual Budget Number of Breakdown Annual Budget Number of Breakdown Annual Budget Number of Breakdown
Veterans Per Veteran Veterans Per Veteran Veterans Per Veteran
Claremore $ 26,318,037.00 289 $ 91,065.87 $ 26,640,537.00 287 $ 92,824.17 $ 26,706,385.00 284 $ 94,036.57
Ardmore 17,924,277.00 168 106,692.13 18,470,594.00 169 109,293.46 18,107,273.00 167 108,426.78
Clinton 16,091,071.00 145 110,972.90 16,829,101.00 143 117,686.02 16,009,570.00 145 110,410.83
Norman 26,419,023.00 297 88,952.94 27,038,930.00 299 90,431.20 26,766,461.00 296 90,427.23
Sulphur 14,239,098.00 109 130,633.93 14,635,214.00 115 127,262.73 13,953,467.00 117 119,260.40
Talihina 18,202,224.00 175 104,012.71 18,165,181.00 174 104,397.59 18,141,131.00 153 118,569.48
Lawton 20,395,099.00 195 104,590.25 21,043,435.00 196 107,364.46 20,475,943.00 196 104,469.10
Central Office 3,636,408.00 - - 4,333,467.00 - - 3,537,016.00 - -
Other 6,582,332.00 - - 6,662,491.00 - - 7,439,025.00 - -
FY 2018 Budget When compared with the data in the previous section, the agency’s
budget for FY 2018 presented higher expenditures for most locations,
with a significant drop in Talihina and smaller drop at the Lawton center.
Budget Comparison Analysis
2018 as of
Fiscal Year 2015 2016 2017
February 2018
Center/
Annual Budget Annual Budget Annual Budget Annual Budget
Location
Claremore $ 26,318,037 $ 26,640,537 $ 26,706,385 $ 27,182,189
Ardmore 17,924,277 18,470,594 18,107,273 18,532,912
Clinton 16,091,071 16,829,101 16,009,570 16,034,039
Norman 26,419,023 27,038,930 26,766,461 26,914,257
Sulphur 14,239,098 14,635,214 13,953,467 14,048,223
Talihina 18,202,224 18,165,181 18,141,131 14,967,984
Lawton 20,395,099 21,043,435 20,475,943 19,958,912
Central Office 3,636,408 4,333,467 3,537,016 4,254,910
Other 6,582,332 6,662,491 7,439,025 8,836,963
50
Oklahoma Department of Veterans Affairs
Special Audit
A comparison of the budget reports for fiscal years 2017 and 2018 also
showed the following increases in central budgets, all of which are
included in the “Other” category above and are therefore separate from
the general increase in Central Office budget illustrated in the table:
• Central Administration IT (dept 8807011) increased 18%, from
$2,378,787 to $2,815,672
• Veterans Services (dept 2000002) increased 38%, from $498,363 to
$688,228
• Central Office IT (dept 8807001) increased 39%, from $38,800 to
$54,000
• ODVA Commission (dept 1100002) increased 100%, from $5,500 to
$11,000
Policies and Over the past several years, central management has worked to centralize
Procedures the agency’s policies. Centers are permitted to develop procedures
unique to themselves as long as they do not contradict or interfere with
centrally approved policies. This is reportedly to ensure regulatory
compliance and standardization prior to implementing policies, and
center-unique procedures are required to be approved by the central
office. However, some administrators expressed that they had center-
specific procedures that had not been submitted to the central office for
review. It stands to reason that, because each center is unique, individual
procedures could be justified at the separate centers. Management may
need to better communicate or enforce the requirement for central review
of such procedures after discussion with the administrators.
ODVA policies are generally updated on a schedule, for regulatory and
internal process changes and to ensure consistency, though not
necessarily due to specific events. In the past, updates were distributed to
the centers by the central office, but the agency now has an electronic
system in place for handling policies and requiring staff
acknowledgement of changes.
According to several interviewees and records obtained from the agency,
in late 2016, all centers’ nursing policies and procedures were removed
from the agency intranet and replaced with one standard template set of
policies. Reportedly, these policies were not provided to center
administrators or medical staff for review prior to implementation, and
initially lacked an index. This sudden change in policies and procedures
created concerns within the centers that the removal of specific guidance
previously put in place in response to inspections and peer reviews
would leave them open to poor inspection results in the future. Center
management also noted that without adequate time to review and
provide training on over 1,000 pages of new policies, it is difficult to
conform to, or to hold employees accountable to, those policies.
51
Oklahoma Department of Veterans Affairs
Special Audit
Cost per Bed We were asked to provide the cost per bed at ODVA facilities. This was
determined by verifying ODVA data on the applicable direct and indirect
costs incurred, then recalculating the cost per bed using quarterly costs
divided by quarterly patient days. The table below summarizes each
center’s average number of veterans per year and the corresponding cost
per bed for state fiscal years 2015 through 2017 (July 1, 2014 through June
30, 2017). Also presented are total average veterans across the agency
each year and the agency-wide average cost per bed, weighted by
number of veterans at each center. Note that the significant drop in
number of veterans at the Talihina center in 2017 is due to the closure of
its special needs unit.
52
Oklahoma Department of Veterans Affairs
Special Audit
Total Avg. Weighted Avg. Total Avg. Weighted Avg. Total Avg. Weighted Avg.
Veterans Cost per Bed Veterans Cost per Bed Veterans Cost per Bed
1,378 $279.21 1,383 $292.05 1,358 $277.55
Service- We were initially asked to investigate the impact to the agency of the
Connected change in USDVA compensation for wartime veterans. However, this
Compensation change took place well before the beginning of our audit period and
before audit period management was in place. While eligibility and
priority for admission to Oklahoma veterans homes are outlined in
statute and in ODVA’s administrative code, USDVA regulations (38 CFR
51.41) outline service connected compensation rules as follows:
Service Connected Compensation is payment for a disability that started or
was aggravated while the veteran was on active duty. The amount
payable depends on the degree of disability and the number of
dependents. The veteran's income and assets have no effect on the
amount of compensation.
Non-Service Connected Compensation is a non-service connected pension
payable to any veteran who is permanently and totally disabled and who
meets certain income and asset limits set by congress. The veteran must
have served a minimum of 90 days active duty of which at least one day
is during a wartime period. Income, unreimbursed medical expenses, and
the number of dependents could affect eligibility and the amount of the
pension.
The USDVA regulations state that the USDVA and State homes may enter
into both contracts and provider agreements, through which the USDVA
pays for each eligible veteran's care. Eligible veterans are those who
(1) Are in need of nursing home care for a USDVA adjudicated
service-connected disability, or
(2) Have a singular or combined rating of 70 percent or more based
on one or more service-connected disabilities or a rating of total
disability based on individual unemployability and are in need of
nursing home care.
53
Oklahoma Department of Veterans Affairs
Special Audit
54
Oklahoma Department of Veterans Affairs
Special Audit
Contracts with We were made aware of concerns related to contracts between the agency
Arts Council and and the Oklahoma Arts Council for an art education pilot project, as well
Related Issues as the motivation behind these contracts and the methods of payment
used. ODVA has signed two contracts for services from the Arts Council
in recent years: one at the Norman Center in 2015 for $9,400, and one at
the Lawton center in 2017 for $10,000. The Norman payment was made
from the Veterans’ Benefit Fund, a portion of resident trust funds and
donations designated for expenditures that benefit the residents, as
justified by the art classes provided under the contract being for the
residents. The Lawton center, however, made arguments against this
funding source and payment was made using appropriated dollars from
their operating budget, as directed by the central office.
While we had heard allegations that a member of the Arts Council was
somehow connected to a member of ODVA management at the time of
these agreements, the director of the Arts Council stated that she
personally contacted ODVA of her own volition and presented the pilot
project. Both the Lawton and Norman Arts Council agreements were
signed by the ODVA director. The center administrators reportedly had
no prior knowledge or input into the agreements, and did not necessarily
approve of the projects.
We noted some irregularities with the Lawton payment: the contract was
signed and the original invoice received before any authorizing
paperwork (such as the Departmental Purchase Request required in
advance for all purchases by ODVA SOP 330.2) was prepared. The
business manager had concerns with this timeline as well as other aspects
of the project; these concerns were provided to us in memo form and
documented in emails to the central office and administrator at the time
of the payment. However, in the business manager’s understanding she
was instructed by central office personnel to pay the invoice in spite of
her concerns about noncompliance with purchasing rules. These emails
also documented concerns by the administrator that the Arts Council’s
services could be provided by volunteers and that she was unsure what
the center was paying for. We reviewed documentation showing that the
original invoice was dated April 28, 2017, a requisition signed by the
administrator on May 17, 2017, and the same invoice then revised with a
date of May 18, 2017.
Both contracts also included a requirement that full payment be received
within 30 days of the agreement being signed. The Norman Agreement
was signed on December 29, 2015, and payment was made on March 1,
2016. The Lawton Agreement was signed March 24, 2017, and was paid
May 18, 2017. Both payments exceeded the 30-day deadline.
We considered whether these contracts were reasonable given the
agency’s mission to provide “the Veterans residing in the state of
Oklahoma the highest quality support and care available anywhere in the
Nation.” The written agreements do appear to outline services that could
55
Oklahoma Department of Veterans Affairs
Special Audit
56
Oklahoma Department of Veterans Affairs
Special Audit
57
Oklahoma Department of Veterans Affairs
Special Audit
12
Michigan Veterans Affairs Agency, “State veterans homes pursuing Medicare, Medicaid certification,” February
10, 2016. https://www.michiganveterans.com/a/State-veterans-homes-pursuing-Medicare-Medicaid-certification
58
Oklahoma Department of Veterans Affairs
Special Audit
13
Minimum Data Set (MDS) is a tool for assessing the residents’ capabilities in certified nursing facilities. MDS
coordinators, or nurse assessment coordinators, use these results in creating resident’s individual care plans, and are
responsible for transmitting MDS data. The federal regulations regarding resident assessment are set forth in 42 CFR
483.20.
59
Oklahoma Department of Veterans Affairs
Special Audit
60
Oklahoma Department of Veterans Affairs
Special Audit
Headquarters In late 2017, ODVA relocated its central headquarters from an aged
Move and New building west of the capitol to a newly renovated building a few miles
Building away, near the Military Department and several other state agencies.
Renovation While it was reported in the press that the headquarters move and
renovation costs exceeded $3 million, the approximate $3 million
renovation cost in the news reports was the value of the project on the
state’s Capital Improvement Plan, and was paid by OMES, not by ODVA.
ODVA has paid for other costs associated with the move, such as rent,
office furniture, moving fees, and supplemental construction costs. These
have primarily been paid using state appropriations, although a portion
of office furniture costs were paid from the ODVA revolving fund.
Construction costs included supplemental needs for the facility, such as a
flag pole and OMES IT services. According to ODVA, there was $700,000
budgeted for these purposes in FY17 and the majority of that has been
rolled into FY18, as some expenditures related to the move, for which
ODVA is responsible, are still being made.
The following table details actual ODVA expenditures for the central
office move, through December 31, 2017. Management reported
additional, pending construction expenses of $33,071 and audio-visual
costs of $107,171. Monthly rent payments of $13,028 are ongoing.
Specialty Diets Specialty diets (diets that limit residents regarding ingredients, calories,
and Menu solid food, or otherwise for medical reasons) have been limited at the
Standardization veterans’ centers. According to central management, this is to ensure
regulatory compliance as well as resident satisfaction. Administrators did
not report any health issues arising from the removal of specialty diets as
of our discussions in August 2017. While various diets may be prescribed
for veterans, they generally have access to alternative foods and have the
right to eat what they desire. Several administrators mentioned, and our
research supports, that it is the industry standard in long-term care to
liberalize diets, easing restrictions and allowing residents more flexibility
in choosing their foods. While our veterans centers are not typical long-
term care facilities, standards supported by CMS show that liberalized
diets can be beneficial in various realms of medical care because patients
have access to familiar foods and can increase their intake as needed,
thereby decreasing their risk of malnutrition, honoring their personal
preferences and dietary needs, and potentially improving their overall
quality of life.
61
Oklahoma Department of Veterans Affairs
Special Audit
14 Electrocardiography machines, used to record the electrical activity of the heart, commonly used to record patterns
62
Oklahoma Department of Veterans Affairs
Special Audit
Outsourcing of Since late fiscal year 2016, ODVA has discontinued on-call laboratory
Laboratory services and terminated all clinical laboratory scientists at the veterans
Services centers. There are one to two laboratory technicians remaining at each
center, available Monday through Friday. Lab techs draw blood and
perform dipstick urinary analyses, rapid flu testing, and x-ray services.
They are responsible for ordering and processing specimens to send to
the reference lab, receiving and charting results, and are completing
training to perform occult blood and gastroccult testing. One lab
administrator, working from the Norman center, is now responsible for
the labs at all centers, including traveling to the centers statewide
regularly for administrative purposes, and is on call 24 hours a day.
The majority of laboratory services are now outsourced to Hospital and
Health System Executive Diagnostic Laboratory of Oklahoma, L.L.C.
(DLO). Throughout our procedures and as discussed earlier in our
discussion of Level of Care, this decrease in on-site services has been
repeatedly cited as a major concern by ODVA staff as well as outside
parties. As stated by ODVA in their response to State representative Mike
Ritze, “Veterans centers are not acute care facilities and the luxuries of a
24-hour lab service is no longer feasible due to budget cuts.” However,
the agency has not completed a cost analysis of this outsourcing decision.
While an analysis was reportedly underway throughout the duration of
our audit procedures, it had not been completed as of March 2018.
According to central office personnel, the analysis covers a variety of
information, including data on residents’ insurance status and review of
test type and frequency across agency and by center, all of which seems
like it would have been pertinent and necessary for analysis before
choosing to outsource laboratory activity. When the analysis is complete,
if it shows minimal or no cost savings, or increased burden to the
residents, management will be in a complicated situation, having already
63
Oklahoma Department of Veterans Affairs
Special Audit
64
Oklahoma Department of Veterans Affairs
Special Audit
65
Oklahoma Department of Veterans Affairs
Special Audit
veterans who have Medicare coverage for 80% of their costs are
being left to cover the other 20% themselves.
Cancelled We received concerns about ODVA capital projects that had been
Capital Projects cancelled despite costs already invested. We were able to compile
information related to the following projects:
Lawton Roofing Project
We determined through discussions with OMES staff and review of
related contracts, correspondence, and other supporting documentation
that this project involving replacement of the Lawton Veterans Center
roof was originally handled via the OMES Roofing Program (RAMP).
ODVA received a roof replacement proposal for a standing seam metal
roof, under the heightened standards and guarantees inherent in this
specific program. The proposal price was $3,229,369.50. After ODVA
accepted the proposal and the contractor had begun work, ODVA
leadership cancelled the project. An email from ODVA’s construction
programs administrator to OMES staff stated, “I was just directed to stop
this project. Our Deputy Director wants to have the project publicly bid.”
The project was now split into two pieces. One included the roof, with
metal roof and shingle roof options, and the other included
waterproofing the exterior walls, replacing doors and some windows,
and making the site more conducive to moving rainwater away from the
building. The winning bid was won by the original contractor, Clayco
Industries.
The roof project bid totaled $2,354,918.00, and the second project bid
totaled $1,345,000, plus OMES CAP fees on each project, for a total newly
bid cost of $3,728,265.73.
Talihina HVAC, Boiler, and Nurse Call Systems
The cancellation of projects at the Talihina center are discussed
previously in this report beginning on page 38.
66
Oklahoma Department of Veterans Affairs
Special Audit
RECOMMENDATIONS
67
Oklahoma Department of Veterans Affairs
Special Audit
68
OFFICE OF THE STATE AUDITOR & INSPECTOR
2300 N. LINCOLN BOULEVARD, ROOM 100
OKLAHOMA CITY, OK 73105-4896
WWW.SAI.OK.GOV