Delays in disbursing money at the U.S. Department of Veterans Affairs left Maryland on the hook for $2.7 million in costs for burying veterans, state auditors found.
Some of the federal payouts were delayed more than three years, the Office of Legislative Audits said in a report published Thursday.
The VA is in the process of paying the state back. The VA told the auditors that the delays were caused by staff turnover in the department that handles the payouts.
Peter Pantzer, the finance director at the state Department of Veterans Affairs, told The Baltimore Sun on Thursday that federal authorities had made a "specific effort to clean this up."
In the six months since the end of the audit period, the VA has paid off a year's worth of the backlog, Pantzer said. The agency is now processing two months' worth of claims every month to eliminate the rest.
The delays are the latest problem at the VA. The department has faced criticism in recent years that it has been too slow to award benefits to veterans and had a huge backlog of cases. At one point, the Baltimore benefits office was among the worst-performing in the country.
The burial benefits are separate from those disability payouts. When a veteran is buried in a state cemetery, the state can apply for about $730 from the federal government, auditors said.
They found that state officials were slow in applying for the money — sometimes submitting requests almost six months late — and the VA was slow in making payouts.
The state had to step in to cover the gap, auditors said.
Thomas J. Barnickel III, the auditor, said no veterans' families were directly affected by the problems.
A VA spokesman said officials are taking steps to address the problems.
"The Baltimore VA Regional Office has established a working relationship with the state office to address these burial benefits and put a process in place to expeditiously pay all overdue burial benefits," he said.
The auditors found other problems at the state Department of Veterans Affairs.
The auditors said the department overpaid contractors that run a veterans nursing home in St. Mary's County by $180,000 after they didn't fill vacant positions.
Pantzer said that the payments were within the department's discretion and that the contractor was actively looking to hire staff, not holding the positions open merely to reap the extra money.
In another case, the auditors said the department held on to $126,000 in credits from utilities companies that it should have returned to the state's general fund at the end of the year.
Pantzer attributed that to a delay in getting advice from another state agency, and said the money was ultimately paid back.
Pantzer said that before he was hired about two years ago, the team responsible for overseeing the department's finances had "frankly fallen apart."
"We had to rebuild from scratch," he said. "We built up a unit."
The department has made progress, Pantzer said, and he was generally pleased with the audit's findings.
"We're not perfect, but we're getting better," he said. "I was personally quite happy frankly with what this audit reported."