Report 2018-112 Recommendation 6 Responses

Report 2018-112: California Department of Veterans Affairs and Department of General Services: The Departments' Mismanagement of the Veterans Home Properties Has Not Served the Veterans' Best Interests and Has Been Detrimental to the State (Release Date: January 2019)

Recommendation #6 To: General Services, Department of

To ensure that leases of veterans home property comply with state law and are consistent with the veterans homes' mission to serve the veteran residents, by June 2019 DGS should adopt, in consultation with CalVet, a definition of what constitutes the best interests of the veterans homes and begin incorporating that definition into the State Administrative Manual. DGS should deny any requests for leases that do not meet that standard. When leasing veterans home property, DGS should document its reasons for determining that the terms of the lease are in the best interests of the home.

Annual Follow-Up Agency Response From October 2020

DGS and CalVet have agreed upon a definition of what constitutes being "in the best interests of the Veteran's homes." DGS has referenced this in RESD Bulletin 18-08, and DGS and CalVet are using the definition for leases. In addition, DGS has incorporated the definition into the State Administrative Manual, Section 1323.1. This recommendation is fully implemented as of October 2020.

Completion Date: October 2020

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

DGS provided documentation of the definition of what constitutes the best interests of the veterans homes, as well as evidence that DGS incorporated that definition into the State Administrative Manual. The property use policy that established that definition also requires that property use arrangements contain a written analysis that sets forth the manner in which the arrangement meets that definition, including a description justifying and memorializing the benefits of that arrangement to the home.

1-Year Agency Response

Completion Date: September 2019
Response Date: January 2020

California State Auditor's Assessment of 1-Year Status: Partially Implemented

The definition that DGS refers to is the same definition that CalVet developed during our audit and which we describe in the report. However, the recommendation includes that DGS incorporate the definition of what constitutes the best interests of the veterans homes into the State Administrative Manual, which would make that definition a regulatory requirement rather than a policy. However, DGS has not incorporated the definition into the State Administrative Manual. Additionally, the RESD Bulletin that DGS refers to in its response makes no specific reference to the definition, nor does it require its application. Until DGS incorporates that definition into the State Administrative Manual, DGS will not have fully implemented the recommendation.

Auditee did not address all aspects of the recommendation

6-Month Agency Response

As noted in prior responses, DGS and CalVet have met for the purposes of collaborating on defining what constitutes being "in the best interests of the Veteran's homes." A draft document has been produced, and both departments are currently reviewing/editing the draft. DGS and CalVet anticipate that the editing process will continue through July. After an agreed upon definition is established, DGS will incorporate the definition by reference into RESD Bulletin 18-08.

Estimated Completion Date: September 2019
Response Date: July 2019

California State Auditor's Assessment of 6-Month Status: Pending

60-Day Agency Response

As previously noted, DGS believes that a standardized process for departments to submit - and for DGS to review - justifications for leases is most appropriate. Specifically, for CalVet leases, CalVet has begun drafting an internal definition of what constitutes being "in the best interests of the Veteran's homes" when leasing veterans home property. DGS has met with CalVet and will have future meetings with them to provide guidance on that definition. When CalVet submits a lease request, they will need to show how it meets their definition as part of the process outlined in DGS' Bulletin 18-08.

Estimated Completion Date: June 2019
Response Date: March 2019

California State Auditor's Assessment of 60-Day Status: Pending

All Recommendations in 2018-112

Agency responses received are posted verbatim.