Department of Veterans Affairs Mismanages State Property, Auditor Says

The California Department of Veterans Affairs (CalVet) and Department of General Services (DGS) are mismanaging state property, failing to serve the interests of veterans and putting the state at unnecessary risk, the state auditor reported January 29.

The auditor found:

  • CalVet and DGS mismanaged veterans home property by entering into agreements that do not align with state law or the interests of the veteran residents.

  • CalVet permitted four entities to occupy space at its Yountville facility without written agreements to protect the state from liability and without compensating the home.

  • Despite a history of questionable leases of veterans home properties, CalVet did not implement policies and procedures to ensure that leases comply with state law.

  • CalVet and DGS have inadequately overseen rental fees and payments, reducing the funds collected and reinvested for the benefit of the veteran residents.

  • CalVet and DGS have not ensured that the rental revenue they collect has been directed to the veterans homes as required by state law, and CalVet has failed to collect all of the rent owed to it by lessees. Over the last three fiscal years, CalVet and DGS have not ensured that $610,000 in rent was directed to the veterans homes.

  • CalVet’s poor oversight of the veterans home properties exposed the state to risk and caused CalVet to forgo revenue that would have benefited veterans.

  • CalVet allowed third parties to host a variety of events at the veterans homes, such as cycling events and fun runs, sometimes without obtaining written agreements to protect the state against liability.

  • CalVet has failed to monitor compliance with the terms of its leases.

In one instance, a lessee entered into a contract allowing another company to launch hot air balloons daily from a veterans home property, in violation of the lease terms. “Although CalVet has been aware of this activity for two years, it has not acted to stop it,” the auditor reported.

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