The Rundown with Kansas Legislative Division of Post Audit

Reviewing Veterans’ Claims Assistance Program Matching Requirements [March 2025]

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The Kansas Office of Veterans Services allowed participating Veteran Service Organizations to take fundamentally different approaches in reporting VCAP matching obligations, which may or may not comply with state law. The state’s Veterans Claims Assistance Program (VCAP) is meant to provide claims assistance to veterans in Kansas through congressionally chartered veteran service organizations. The Legislature appropriates annual funds for VCAP which is administered by the Kansas Office of Veterans Services. The VCAP grant program operates under a reimbursement model that’s overseen by KOVS. To participate in VCAP, veteran service organizations must also meet annual matching obligations. The veteran service organizations reported using VCAP funds primarily for VCAP-related salaries and wages for fiscal years 2022 to 2024. During this time, the American Legion reported between 28% and 34% in matching support related to the VCAP program. Most (76%) of the matching support we reviewed in more detail for the American Legion appeared to be related to VCAP, but we couldn’t verify the rest. The VFW reported that it greatly exceeded its matching obligations between fiscal year 2022 and 2024. More than half (55%) of our sample of VFW matching support was not related to the VCAP program, and we couldn’t verify the rest. 

We found that KOVS hasn’t provided sufficient guidance to participating veteran service organizations to ensure they understand the requirements related to matching support. KOVS’s oversight may be inadequate to ensure the veteran service organizations are meeting their matching obligations. Lax KOVS oversight in other areas may cause additional misunderstandings between KOVS and the veteran service organizations and their supporters. 

It was also unclear whether statute allows veteran service organizations to use the estimated rental values of the offices provided by the U.S. Department of Veterans Affairs as their own in-kind matching support.

SPEAKER_00:

Welcome to The Rundown, your source for the latest news and updates from the Kansas Legislative Division of Post Audit. I'm Andy Brienzio. In March 2025, LPA released a performance audit evaluating whether Veterans Service Organizations meet the matching obligations of the Veterans Claims Assistance Program. I'm with Matt Ferenbrook, Senior Auditor at Legislative Post Audit, who supervised this audit. Welcome to The Rundown, Matt.

SPEAKER_01:

Cool. Thank you, Andy.

SPEAKER_00:

Let's start with some background information. What are veterans service organizations and what do they do?

SPEAKER_01:

Sure. Now, if we were going to give, you know, full due to service organizations, we'd probably be here for an hour. But just in general, veteran service organizations, they tend to be nonprofit groups, often made up of members who have served in the armed services and their family members. The groups tend to be member-based and have goals or missions to support veterans, service members, and their families. Now, this can include all kinds of things. As an example, organizing job fairs and sports leagues for veterans, raising money for important programs like housing for homeless veterans or scholarships for veterans and their dependents, providing memorial and funeral services, and then, per the topic of this audit, helping veterans navigate the process of applying for veterans' benefits.

SPEAKER_00:

What are Veterans Claims Assistance Program, or VCAP, grants, and how do they work?

SPEAKER_01:

To start out with, most veterans have access to a variety of state and federal benefits. This can be disability payments, healthcare coverage, educational assistance and pensions and other types of benefits. However, navigating the process to get those benefits can be exceedingly complicated and time consuming. With applications, denials, appeals, it's not unheard of for it to take years for veterans to receive their benefits. With that in mind, in 2006, Kansas created the Veterans Claims Assistance Program. The goal of the program was to ensure that all veterans in Kansas can get help with basically the application process for receiving benefits. VCAP is administered by the Kansas Office of Veterans Services. The program provides grants to veteran service organizations to offer claims assistance services inside the VA hospitals in Leavenworth, Topeka, and Wichita, as well as the VA regional office in Wichita. So what do these individuals do? Well, VCAP staff help veterans understand their benefits. They gather important documents like military and medical records and help them submit accurate applications. They can also serve as power attorneys on the behalf of the veterans and prepare applications, track applications, help them with appeals if they're denied, etc. So the VCAP, the grants, help support these services by reimbursing the veteran service organizations for some of their VCAP-related operational expenses. Now to qualify, veteran service organizations must meet a few requirements. They must apply annually to KOVS for the grants. They must be officially chartered by the U.S. Congress. They must have headquarters in Kansas and membership in at least half of Kansas counties. They must employ service representatives in the VA office. offices that I mentioned before, and they must contribute matching resources to help support the VCAP program. There are a few other requirements as well. Since the program started, it's important to note that only two organizations have participated, the Kansas Department of the American Legion and the Veterans of Foreign Wars Department of Kansas, or the VFW.

SPEAKER_00:

Now, it looks like the audit team reviewed how much two veterans service organizations, the American Legion and the VFW, as you just mentioned, received in VCAP funds during fiscal years 2022 through 2024 and how they use these funds. What did you find?

SPEAKER_01:

So to start out with, to be clear, reimbursements were not the main focus of this audit, but due to some of the underlying questions about how KOVS has managed to be capped grant funds, we wanted to make sure that we could at least track the flow of funds appropriated by the legislature and make sure that what the service organizations were requesting was being distributed to them by KOVS. Okay, so... I already mentioned in passing, but it's important to emphasize that the VCAP grant is a reimbursement-based grant. The organizations do not receive any money upfront to use. They use their own funds to support their VCAP operations and then submit monthly reimbursement requests to KOVS. These reports provide general descriptions of VCAP-related expenses from the preceding month that the veteran service organizations would like to be reimbursed for. If approved, the veteran service organizations are sent a check, reimbursement check, through the mail. So what do we do? We compared monthly reimbursement requests from the two service organizations between fiscal years 2022 and 2024. We compared those to state accounting records from the Department of Administration. What we found was that$2.5 million was appropriated by the legislature for VCAP during these years. Of that,$2.34 million was distributed to the BSOs. Now, to be clear, all the reimbursement requests by the service organizations in these years were fulfilled by KOVS. The difference between what was appropriated and what was reimbursed to the service organizations was due to basically two accounting factors. First, in fiscal year 2024, the legislature appropriated$150,000 in supplemental funding for VCAP late in the fiscal year. KOVS officials told us that by the time they had access to those funds, it was too late in the fiscal year for the veteran service organizations to use them, so they were carried forward and reappropriated in fiscal year 2025, which was beyond the scope of this audit. Second, also in fiscal year 2024, the VFW did not request reimbursement for about$56,000 of grant funds that were available to them. These funds were still encumbered as of the end of fiscal year 2024 and per state encumbrance policy lapsed back to the state general fund in fiscal year 2025. Now, to be clear and overall, we were able to account for all VCAP funds appropriated to VCAP between 2022 and 2024. Now, in terms of what the reimbursements were for, the service organizations reported that the majority of the reimbursements were for some of their personnel costs, including salaries and benefits. That represented about 85% of the VFW's reimbursements and 99% of those for the American Legion. The remaining grant fund reimbursement requests were for a portion of VCAP office costs. This included expenses like office equipment leases, office supplies, phone internet services, and office support services like document shredding, for example. We didn't conclude on whether the reimbursement costs were appropriate or free of waste and abuse because it was outside the scope of the audit question, which focused on matching obligations instead.

SPEAKER_00:

As you just mentioned, you also reviewed how these two veteran service organizations met their matching obligations for fiscal years 2022 to 2024. Let's start with what you found for the American Legion.

SPEAKER_01:

Sure. So as you just mentioned, the core focus of this audit was to review how veteran service organizations met their matching obligations. So to begin, before I talk about the American Legion, it's important to explain upfront what the matching obligation is. So when it comes to state law, State law is quite vague on the topic. State law simply says that the veteran service organizations need to provide their own matching support to VCAP and that support should be equal to a percentage of the VCAP grant funds that the organization receives. Statute does not really define what matching support entails, only that it support VCAP. Support can be actual expenses related to BCAP or in-kind services that can be given a cash value, such as volunteer work that supports BCAP. And I'll get into more detail about this here in a minute. So state law also does not define what the match percentage should be. It leaves this up to KOBS to set each year. So in KOVS set the match percentage at 33% in fiscal years 22 and 23, and then 25% in fiscal year 2024. So just to kind of explain this for the listeners as an example. So in 2024, match percentage was 25%. What this means is, is that each organization had to show that for every$1,000 in VCAP grant funds they received, that they provided$250 in additional support. Now, To be clear, the veteran service organizations do not pay any of this matching support to KOVS. The only thing that the organizations send to KOVS is a monthly match report, which provides a general accounting of the support the organization provided to VCAP in the preceding month. So what did we do? We reviewed all monthly matching summary reports for the American Legion and the VFW submitted to KOVS between fiscal year 22 and 24 to understand what type and the amount of matching support the service organizations were reported. We also looked in-depth at a non-projectable sample of six monthly reports for each year. organization. Our approach to this was fairly conservative. In terms of what we considered support of VCAP, we based it on whether we could tie the support to the VCAP program was supporting documentation. This included things like payroll records for VCAP employees, billing invoices and receipts for goods and services that included billing, shipping or service addresses that corresponded to VCAP office locations. Okay, with that out of the way, onto American Legion. So what did we find with American Legion? So we found that American Legion reported over$375,000 in matching support between fiscal year 22 and 24. Their matching percentages for these years were 34% in 2022 and 2023, and then 28% in 2024. As reported by the American Legion, this was sufficient to meet the required matching percentages in those three years. So what were some of the things that were submitted as matching support? Well, over those years, between 43% and 79%, the bulk of the support was for direct costs for a portion of the salaries and benefits for the VCAP office staff and some state headquarters support staff. Between 10 and Roughly 10% and 20% over those years was for a portion of office costs related to VCAP. This included things like phone, internet, document shredding services, business insurance coverage, office supplies, equipment leases, maintenance costs. And I'll get to a little bit more detail here in a minute when we talk about the sample. And between zero and 48% of the reported support was based on the estimated rental value of the VCAP office space that the VA provides to the VCAP program for free. So before I move on to discussing our sample work, this type of support, I think, necessitates some more or requires some more explanation. So the three Veterans Affairs hospitals, as I just mentioned, provide free office space to the VCAP program. As mentioned before, the Veterans Service Organizations employ Veterans Service Representatives as part of the VCAP program in these offices. The Veterans Service Organizations estimate the rental value of these offices based on what they think they'd have to pay for similar offices if they weren't receiving them for free. They then report this estimated value as an in-kind matching support. So we agree that The provision of free office space for veteran service representatives is indeed support related to VCAP. But based on statute, statute states the matching support shall be provided by the veteran service organizations. As such, we think it's unclear whether statute allows the veteran service organizations to claim VA support of VCAP as their own. So when we asked KOVS about this, they told us that they consulted with the Kansas Attorney General's office and they provided us an email response from the AG's office. And basically the AG's take on it was that it was, ethically questionable, but not technically prohibited due to broad legal interpretations of what kind of support, what in-kind support can be. So as such, KOVS has allowed this practice for at least several years with the VFW and recently advised the American Legion in 2023 that they could do the same thing. Okay, now with that out of the way, I'd like to discuss our sample that we looked at. So we looked at six months of supporting documentation in detail. We reviewed, it was equal to about$87,000 in matching support, or about 23% of the American Legion's roughly$375,000 in matching support over the three years we've looked at. Of that support, we were able to connect about three quarters of it or 76% directly to VCAP. This support was for VCAP related staff time and operations. And as I mentioned above, these are things we were able to connect with documentation that showed either an expense was related to a documented VCAP employee or was related to a VCAP office location. We were unable to confirm the remaining support in our sample because they were based on American Legion estimates. Now, to be clear, we are not saying that this support was not related to VCAP. The American Legion and KOVS were able to provide explanations for the support. We simply were not able to confirm these estimates with the documentation we were provided. So of this, 13% of the support was related to estimated office costs and staff time, primarily for state headquarters in Topeka. This included an estimated portion of salaries and benefits, office expenses. Officials explained to us that headquarters staff support VCAP in a variety of areas, including finances, contract management, reporting, and training. As such, a percentage of those expenses are allocated to VCAP and reported as matching support. The remaining 11% of the matching support in our sample was related to the estimated value of the VCAP office spaces that the VA hospitals provide to the VCAP program, as previously explained.

SPEAKER_00:

And what did you find when you reviewed the VFW's matching funds?

SPEAKER_01:

So when we looked at the VFW, we found that the VFW had a fundamentally different understanding of how the matching requirement works compared to the American Legion. Whereas the American Legion told us that they've always been under the understanding that matching support had to be related to VCAP, The VFW told us that it was their understanding, based on previous conversations with KOVS officials, that any veteran service activity could be included as matching support, whether it was related to VCAP or not. As a result, we found that the VFW reported significantly more matching support than required. The VFW reported almost$2 million in matching support between fiscal years 2022 and 2024. These amounts equated to matching percentages of well over 100% in the years we looked at. And as reported, this far exceeded the minimum requirements of 33% in 2022 and 2023 and 25% in fiscal year 2024. Of this support, about three quarters was related to volunteer work for general veteran service activities. The VFW told us they regularly include non-VCAP-related volunteer work as part of their matching support. These activities include things like volunteer veterans funeral services, taking veterans out to meals, helping veterans with house and lawn care work, giving veterans rides to doctor's appointments, and many, many other activities. Between 13% and 19% of the reported support was related to costs for part of the salaries and benefits for the state headquarters staff who supported VCAP activities, as well as a portion of headquarters office expenses. This included things like phone and internet service, office supplies and equipment leases, utilities and maintenance costs. And then the remaining 8% to 12% was in-kind support based on the estimated rental of the VCAP office space that the VA provides for free, as previously described. So now in terms of our sample work with the VFW, We reviewed the six months of matching summaries, which equated to about 185,000 or 9% of the VFW's roughly$2 million in matching support in the three years we looked at. We were unable to confirm with documentation that any of the support was related to VCAP, unfortunately. About 55% of the matching support reported was for veteran service activities not related to VCAP, as previously described. We couldn't verify the remaining support because similar to the American Legion, they were based on VFW estimates. About 28% was related to estimated office costs and staff time, primarily for state headquarters staff in Topeka. This included estimated portion of salaries and benefits, copy machine leases, office supplies, and utilities. Similar to the American Legion, Officials explained that the headquarter staff pay bills, manage contracts and payroll, prepare monthly reports, help out with trainings, and do other things to help support the program. And as such, a percentage of those office expenses are allocated to VCAP and reported as matching support. And again, to be clear, we're not saying that the support was not related to VCAP. VFW and KOBS were able to provide explanations for the support. We simply weren't able to confirm the estimates with the documentation provided. And then the remaining 17% of our sample was related to the estimated value of the VCAP office space that the VA hospitals provide for free.

SPEAKER_00:

The team also looked at the Kansas Office of Veteran Services, or KOVS, which oversees VCAP. The report says you found that this office isn't providing sufficient guidance and oversight to the veteran service organizations. Tell me more about this.

SPEAKER_01:

Sure. So as you mentioned, KOVS oversees the VCAP program by state law. They're charged with setting and enforcing program rules, and participating veteran service organizations should be expected to understand their obligations under the program. However, we found that neither organization could recall receiving written guidance from KOVS regarding what could be included as matching support. The only recollections they had were of undocumented conversations and meetings. As a result, we found that the American Legion of VFW have fundamentally different understandings of how the match works. Without clear oversight, the participating veteran service organizations in effect are operating by different rules and standards. And one of the recommendations we had for KOVS was to develop and provide written guidance to the veteran service organizations that define what activities or costs are allowable as matching support for the VCAP program and how they can go about estimating and reporting shared costs, such as those of the headquarters, where staff are sometimes working on VCAP activities and sometimes not. Another thing we found was that we had concern that KOBS's oversight may be inadequate to ensure that veteran service organizations are meeting their matching obligation. So KOVS by law is required to oversee the program and ensure that participants are adhering to program rules. Well, the main tool that KOVS uses to determine if a veteran service organization is meeting their matching obligations is the matching monthly summary. But in our work, and especially our sample work, we found that these monthly reports do not provide adequate information to understand the matching support. In our sample work, we found that these reports only include you know, at most a business name or a general category like salaries, supplies, or utilities, and they don't provide detail about what support is or how it's related to VCAP. KOBS officials told us the matching summaries are usually very similar month to month and that the types of matching support claimed have generally remained the same since VCAP was created. The officials told us that they often rely on the matching summaries and staff professional judgment to determine if reported matching support is allowable. The organizations are required to maintain more detailed supporting documentation, but they're not required to submit it unless requested. And KOBS officials told us that if they have a question, they tend to call veteran service organizations to get clarification, but they rarely request review supporting documentation. And this raised a question in our minds, Without reviewing the supporting documentation, KOVS can't verify that matching support is allowable. We recommended that KOVS should require organizations to provide documentation with their matched summary reports that's sufficiently detailed to allow them to determine what the amounts are and how they support the VCAP program.

SPEAKER_00:

Finally, what's the main takeaway of this audit report?

SPEAKER_01:

So the main takeaway of this audit report, the main finding, I think, would be that the Kansas Office of Veterans Services, KOVS, has allowed the two participating veteran service organizations to take fundamentally different approaches to reporting VCAP matching obligations. And now these approaches may or may not comply with state law. For example, the VFW reports costs for broad veterans service activities, regardless of whether they're related to VCAP, whereas American Legion only reports things that are related to VCAP. Furthermore, both organizations regularly reported matching support based on estimates that lack verifiable documentation or methods. These reporting practices create confusion about whether and how the two organizations met the state's VCAP matching obligations. In addition, inadequate guidance and oversight from KOVS contributes to misunderstandings and confusion about program operations. To ensure transparency and accountability, clearer guidance and stronger oversight are necessary to standardize reporting methods and ensure compliance with program requirements.

SPEAKER_00:

Matt Ferenbrook is a senior auditor at Legislative Post Audit. He supervises an audit evaluating whether veterans service organizations meet the matching obligations of the Veterans Claims Assistance Program. Thanks again, Matt. Thank you. Thank you for listening to The Rundown. To receive newly released podcasts, subscribe to us on Spotify or Apple Podcasts. For more information about Legislative Post Audit and to read our audit reports, visit kslpa.gov, follow us on Twitter at KSAudit, or visit our Facebook page.