Financial Controls Related to VA-Affiliated Nonprofit Corporations: Idaho Veterans Research and Education Foundation

The VA Office of Inspector General (OIG) investigated allegations that the former executive director of the Idaho Veterans Research and Education Foundation, a VA-affiliated nonprofit, raised her own pay without the board of directors’ approval and misused the nonprofit’s credit card. The OIG also assessed controls over, and oversight of, the nonprofit’s expenditures and payments made by VA to the foundation. The OIG substantiated the allegation that the former executive director received a salary increase without approval. Furthermore, a former assistant who is now the executive director also received a questionable salary increase. The OIG also found that the Boise VA Medical Center made about $50,600 in improper payments to the nonprofit from January 2014 through April 2018 due in part to insufficient oversight. Inadequate board oversight also allowed the executive director to gain full control over the use of nonprofit funds, enabling her to use the nonprofit’s credit card for more than $44,000 in unallowable personal expenses. The former executive director pleaded guilty to one count of federal program theft in US District Court in April 2019. She admitted using the nonprofit’s credit card inappropriately and attempted to conceal that by altering bank statements. She paid about $44,300 in restitution and was later sentenced to five years’ probation. The OIG recommended that the medical center director determine whether administrative action should be taken against the nonprofit’s current executive director and ensure the nonprofit requires two or more responsible officials to oversee salary changes and implements stronger credit card controls. Additional recommendations were for the medical center director to establish procedures for staff to consistently review nonprofit invoices prior to payment to confirm receipt of contracted goods and services, and that periodic reviews are conducted of nonprofit invoices that staff authorized for payment.