YELLOW SHEET Office of the State Auditor of Missouri Claire McCaskill

Report No. 2004-61

August 27, 2004

The following problems were discovered as a result of an audit conducted by our office of the Department of Public Safety, Missouri Veterans Commission, Cape Girardeau Veterans' Home.

The Cape Girardeau Veterans' Home Foundation Board is a not-for-profit organization which raises private funds to benefit residents of the Cape Girardeau Veterans' Home.  Donations, as well as canteen and vending machine proceeds, are used for this purpose. 

A review of purchases noted some expenditures did not appear to benefit the residents.  During 2002 and 2003, $19,533 was spent for costs related to volunteer banquets and staff recognition awards, including $15,734 for employee recognition and retention and $3,799 for volunteer banquets.  In addition, board approval was not always noted on purchases over $500 that were not for canteen operations or donor specified purposes. 

Residents, employees, and visitors may all purchase items from the vending machines owned and operated by an independent vendor.  The facility receives commissions from the vendor and deposits these into a separate fund within the Foundation Board.  These monies are used for employee recognition awards, flowers for staff members, the annual staff picnic, and the annual employee Christmas party.  As a result, these expenditures do not appear to benefit the residents.  Recent audits of other homes noted that vending machine profits at those homes are deposited in the Assistance League accounts to be used for the benefit of the residents.  To ensure consistency with other homes operating in the state, vending commissions should be used for the benefit of the residents.

The approval of the facility administrator or department head was not documented for some expenditures.  50 percent of invoices tested did not have the approval of the department head or administrator noted on the purchase requisition.

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