RICHMOND, Va. -- The federal government is continuously concerned with how the Virginia Department of Health (VDH) handles money, according to audits obtained by CBS 6 through an open records request.
As VDH's Office of Emergency Medical Services faces a multi-million dollar budget deficit, another office within the same agency has been scrutinized for apparent financial mismanagement.
An audit by the U.S. Environmental Protection Agency (EPA), completed November 2023, found that VDH was not adequately accounting for, managing, and overseeing drinking water grants. Per standard, the EPA completes annual reviews of drinking water programs across the country to ensure compliance with federal guidelines.
The grants are used in a program designed to provide assistance to water systems that serve less populated communities across the commonwealth.
CBS 6 reporter Tyler Layne requested an interview with VDH a month ago to discuss the audits. Last week, a VDH spokesperson confirmed Drinking Water Director Dwayne Roadcap would do an interview Friday, March 15.
But the evening of March 14, after receiving a list of topics CBS 6 wished to discuss during the interview, a spokesperson canceled the interview, citing "scheduling concerns."
CBS 6 asked to reschedule, but a spokesperson instead emailed a written statement on Roadcap's behalf.
EPA Audit Findings
Here are some of the issues the EPA audit uncovered within the VDH and the Office of Drinking Water:
- More than $5,800 in ineligible costs were identified in a review of selected cash draws— and more ineligible costs may have been improperly allocated across other EPA programs
- An excessive number of negative draws
- Noncompliance with federal reporting requirements
- A failure to use drinking water grants in a timely manner
- A failure to follow a required cash management policy for three years in a row
Some of the findings of the audit weren't new issues. Financial management concerns were cited in audits completed in previous years including 2022 and 2021.
EPA also completed a wider audit of VDH's grant procedures in 2022 and found “several weaknesses” and “over a million dollars in ineligible costs.”
Additionally, the federal govnernment cited a 2022 state audit which revealed “significant internal control deficiencies” within VDH including financial reporting, systems access, and overtime payments.
"EPA continues to be concerned with the VDH Office of Financial Management’s ability to adequately account for, manage, and oversee grant funds," the EPA audit stated. "VDH’s grant management procedures continue to be inadequate to ensure the proper accounting and documentation of incurred costs."
EPA Audit Conclusion
The EPA concluded that VDH’s finance office "may not be sufficiently staffed and trained" to "ensure fiscal responsibility."
The EPA is now making VDH submit full documentation of all costs before being allowed to draw cash— requiring reimbursement as the method of payment.
Roadcap's statement to CBS 6 said that multiple measures have been put in place to improve financial controls.
"This past year, VDH Senior leadership put controls in place to create tighter alignment between our Office of Financial Management and Office of Drinking Water to ensure compliant business practices. These included dedicated Financial Management resources, enhanced grant compliance measures, and direct involvement by the Agency Senior Leadership. These measures resulted in increased partnership and greater alignment between the EPA and VDH to ensure the continued success of the Drinking Water Program in the Commonwealth," Roadcap said.
If fiscal concerns at the state health department sound familiar, they should.
CBS 6 investigative reporter Melissa Hipolit was the first to report last year that VDH's Office of Emergency Medical Services was missing millions of dollars.
The budget shortfall led to the cancellations of training efforts and dozens of EMS staff potentially not getting paid, according to an EMS Council Director.
CBS 6 later learned that the deficit equaled $33 million.
VDH Commissioner Dr. Karen Shelton said the possibility of fraud and little oversight of the budgeting process contributed to the missing money.
"There was a structure in place that did not have appropriate oversight, and so we have corrected that at this time," Dr. Shelton told CBS 6 in early 2024. "We now have better oversight in place as well as additional stopgaps to make sure that this will not happen."
Virginia State Senator Barbara Favola called the most recent EPA audit of the Office of Drinking Water "very troubling."
"This office is responsible for ensuring that Virginians have an adequate supply of safe drinking water," Sen. Favola (D - Northern Virginia) said. "Management practices and financial controls must meet the highest standards if this goal is to be met. I expect the office to implement corrective actions."
Meanwhile, Governor Glenn Youngkin's Office said audits of the Drinking Water Office showing ways to improve business practices date back multiple administrations.
"Governor Glenn Youngkin has taken numerous steps to improve financial controls, transparency, and accountability throughout VDH, beginning with the appointment of the first Chief Operating Officer at the department, Christopher Lindsay. This year, VDH contracted a firm to evaluate processes and procedures, enhance grant compliance measures, and bring best practices to the department," said Youngkin's spokesperson Christian Martinez.
This is a developing story. Email the CBS 6 Newsroom if you have information to share.
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