VA mismanaged West L.A. campus, GAO says

An audit of the West L.A. VA facility finds under-billing for land use and improper diversion of funds

The U.S. Department of Veterans Affairs has mismanaged its West Los Angeles campus by under-billing for land use agreements and by improperly diverting funds, according to a Government Accountability Office report issued Wednesday.

The GAO found weaknesses in the billing and collection processes for so-called sharing agreements at three VA medical centers, including the sprawling, 387-acre campus between Westwood and Brentwood. The VA has leased portions of its land to theater operators, a hotel laundry service, a private school for use as tennis courts, UCLA for a baseball field and an entertainment company for set storage.

Saying that they were deeply disturbed by the findings, three Democratic lawmakers from California urged Robert McDonald, the new chief of the VA, to act quickly to bring all land use agreements into compliance with federal laws and policies, and to recover revenue that the West L.A. Veterans Affairs Medical Center did not collect, or misused, and ensure that it be used for veterans' medical care.

"It is clear to us that the West Los Angeles [VA] violated federal law and shortchanged veterans in Southern California," said Sens. Dianne Feinstein and Barbara Boxer and Rep. Henry A. Waxman.

The GAO, the auditing arm of Congress, identified instances in which potentially millions of dollars in land use revenue went uncollected by the West Los Angeles VA. In addition, it found that the campus inappropriately coded some billings so that proceeds of more than $500,000 were sent to its facilities account.

According to the facility's chief fiscal officer, the GAO report said, these proceeds were mainly used to fund maintenance salaries. That's a violation of VA policy, which requires that such revenue be deposited into the medical care appropriations account that benefits veterans.

The West Los Angeles VA initially told the GAO that sharing agreements produced about $700,000 in revenue in fiscal 2012, but the GAO concluded that the agreements should have generated $1.5 million.

"They couldn't figure out the number of active agreements or revenues," said Steve Lord, the GAO's managing director of forensic audits and investigative service. "In some cases, they didn't bill the entities correctly."

The report, which also looked at facilities in North Chicago and New York, is the latest blow to the veterans agency, which has been under intense congressional scrutiny because of reports that veterans had to wait months for medical appointments and that VA medical centers were covering up the delays.

The West Los Angeles VA has long been in the cross-hairs of veterans advocates. In 2011, the ACLU Foundation of Southern California in Los Angeles and others filed suit on behalf of veterans, alleging misuses of the West Los Angeles campus and failure to provide adequate housing and treatment for homeless veterans.

In 2012, a VA accountant pleaded guilty to theft of government funds after an investigation determined that $681,000 of VA funds had been embezzled.

In August 2013, a federal judge ruled that the VA had abused its discretion by leasing land for purposes "totally divorced from the provision of healthcare." The VA appealed the ruling, as did UCLA and the private Brentwood School. The case is now in mediation.

The GAO report made six recommendations for improving billing, data reliability and monitoring of land-use agreements. The VA said it generally agreed with the report's findings and concurred with the recommendations.

A congressional hearing on the report is scheduled for Friday in Washington.

martha.groves@latimes.com

Twitter: @MarthaGroves

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