LPA audit finds inconsistent reporting of matching support for Kansas Veterans Claims Assistance Program

An audit presented to the Legislative Post Audit Committee found the Kansas Office of Veterans Services has allowed participating veteran service organizations to take different approaches to reporting matching obligations for the Veterans Claims Assistance Program (VCAP), producing records that auditors said could not always be independently verified.

The audit, introduced by Legislative Post Audit auditor Matt Farenbrooke, addressed one question: how are veteran service organizations meeting the matching obligations of VCAP. “We found that the Kansas Office of Veterans Services, formerly the Kansas Commission on Veterans Affairs, has allowed participating veteran service organizations to take fundamentally different approaches to reporting VCAP matching obligations which may or may not comply with state law,” Farenbrooke told the committee.

The discrepancy matters because VCAP provides state-funded reimbursements to veteran service organizations that operate in VA facilities and requires participating organizations to document matching support equal to a percentage of the grant, a practice KOVS sets annually. The nut graf: auditors concluded KOVS’s rules and oversight leave large room for interpretation about what may be reported as matching support, and auditors recommended KOVS provide clearer written guidance and supporting documentation procedures.

Auditors reviewed reimbursements and match reports for the two organizations that have participated in VCAP since its inception in 2006: the Kansas Department of the American Legion and the Veterans of Foreign Wars Department of Kansas (VFW). Between fiscal years 2022 and 2024 the legislature appropriated $2,550,000 to VCAP; auditors reconciled about $2,340,000 in reimbursements to the two organizations (about $1.2 million to the American Legion and about $1.14 million to the VFW). The audit found the difference was primarily because $150,000 appropriated late in fiscal 2024 was carried forward and because the VFW did not request roughly $56,000 of its 2024 allocation, which later lapsed back to the general fund.

The auditors examined monthly match summary reports and supporting records for two selected months per year for each organization. They found the American Legion reported just over $375,000 in matching support from 2022–2024, with most reported support attributed to staff salaries and benefits and, in 2024, the estimated rental value of VA-provided office space. Auditors said they could confirm about three-quarters of sampled American Legion match items with payroll records and invoices; the remainder were estimates without documentation showing how percentages were calculated.

The VFW reported nearly $2 million in matching support for the same period, and auditors said 70 percent or more of that reported support reflected direct costs and volunteer work the VFW classified as general veteran services that were not specifically tied to VCAP activities. “We found that about half of the support [in the in-depth sample] was for non‑VCAP related general veteran service activities,” Farenbrooke said. The report cited examples including funeral services, meals, rides to appointments and help with household tasks; auditors concluded they could not determine whether those activities met the statutory requirement that match be “in support of the Veterans Claims Assistance Program.”

Auditors also reviewed KOVS oversight. They reported KOVS regulations and contracts specify the required match percentage but lack clear guidance on what activities or costs qualify as matching support and on how shared costs at state headquarters should be allocated. KOVS requires organizations to keep supporting documentation but does not require submission of those records with monthly match summaries; agency officials told auditors they rarely request underlying documentation and instead rely on staff judgment and conversations with organizations.

The audit addressed a specific recurring practice: both organizations report an estimated rental value for office space the U.S. Department of Veterans Affairs provides free of charge at VA hospitals and regional offices. KOVS has allowed the practice and, according to the audit, consulted the Kansas Attorney General’s Office in 2023. Auditors wrote that AGO advice provided to KOVS described the practice as “ethically ambiguous but not technically prohibited” under broad interpretations of in‑kind support. Auditors wrote they agree the provision of free office space is an in‑kind support related to VCAP but said the statute states the matching support “shall be provided by the veteran service organizations,” and that the lack of detailed guidance and documentation increases the risk that reported match will not meet statutory requirements.

Kansas Office of Veterans Services Director Bill Turner told the committee his agency values the work of the service organizations and concurs with the need for clearer guidance. “We do and concur in terms of, yes, we need to work together to come up with some clarifying language that may be more, succinctly, that directly approaches what we need to do here with the in kind services and the monetary funds,” Turner said. He told members the agency reviews reimbursement invoices and that his office’s director “meticulously looks at the invoices coming in from these organizations each month.”

Herb Schwartzkopf, VFW Department adjutant quartermaster, described the VFW’s historical role in forming the program and defended the department’s reporting processes. Schwartzkopf said the VFW worked with KOVS staff and the legislature to develop the match reporting form (referred to in the audit as “attachment F”), and described how the organization assigns values to volunteer hours and mileage for reporting. “We went to the attorney general, and they said all 4 of those could be used,” Schwartzkopf said, referring to earlier, broader VFW reporting categories before the VCAP-specific approach was adopted.

Several lawmakers asked whether statutory changes would be required to tighten reporting. Senator Thompson asked whether statute or KOVS sets the matching definitions; auditors and KOVS witnesses said statute is broad and gives KOVS the authority to set the match percentage but does not define in detail what qualifies as matching support. Senator Tyson praised the depth of the audit recommendations and noted the agency concurred with them.

The audit report contains recommendations for KOVS, including drafting written guidance that defines allowable matching support and clarifies documentation requirements, and directing KOVS to more regularly review supporting documentation rather than relying solely on monthly summaries. The report lists those recommendations on pages 18–20.

Ending: Committee members discussed the prospect of drafting clearer statutory language if necessary. The LPA report and the agency’s concurrence set the stage for KOVS to develop more prescriptive guidance; the committee did not take a formal vote on statutory changes during the meeting.