Audit finds $47M error in Cleveland Veterans' Home finances

From News Channel 9: It's a system that's meant to care for those who have served our country.

But a new state audit has uncovered delays, errors, and millions in financial oversight at the Tennessee State Veterans’ Home in Cleveland.

That audit uncovered tens of millions of dollars in financial errors and system problems across Tennessee’s Veterans Homes.

The audit, covering the year ending June 30, 2024, shows management at the Tennessee State Veterans’ Homes Board struggled for months to produce timely, accurate financial statements, which was a problem flagged in two prior audits.

Auditors say it took six different versions of the statements, submitted between January and May 2025, to get something they could review, and even the final version still had cash balance discrepancies.

Among the most serious mistakes auditors found:

- $47 million in construction costs at the Cleveland Veterans Home were misclassified.
- Nearly $19 million in federal grant-related receivables and payables were recorded incorrectly.
- More than $7 million in vendor payments were not recorded in the system.
- Financial notes and cash flows contained major misstatements, and outstanding construction commitments were overstated by $67 million

Brittany Christine’s grandfather lived at the home in Cleveland before he passed away last year.

"You wouldn't have the liberties and freedoms that you have without them putting their life out there for you."

Auditors warn that these delays and errors increase the risk of fraud or misstatement, while late and inaccurate reporting can limit public transparency and the ability of decision-makers to act on financial information.

Management admitted the issues, pointing to problems with the current accounting system, AccuFund, which produces inconsistent results and requires hours of manual updates. To fix the problems, officials plan extra year-round reviews, tighter checks on financial notes, and the launch of a new accounting system, Sage Intacct, in February 2026. Sage is expected to automate reporting and handle bank and credit card transactions more accurately.

The audit also found weaknesses in accounts payable controls, which allowed over $7 million in vendor payments to go unrecorded. Management said the errors stemmed from system limitations and staff changes, and they have since implemented monthly reconciliations and updated procedures to detect future errors.

Finally, the report flagged a confidential internal controls issue that could put sensitive data at risk. Management says they will implement manual safeguards and update risk assessments, noting that previous improvements in October 2024 did not fully resolve the problem.

The Veterans’ Homes Board says it is committed to correcting these issues and strengthening internal controls to prevent errors and improve transparency.

For families like Christine, it’s about trust, transparency, and making sure Tennessee’s veterans get the care they’ve earned.

"They deserve better care. They deserve people that are there to help them no matter what. I don't care how difficult they are. I don't care how many times you have to help them do the same thing."

We reached out to the Cleveland Veterans Home for a statement, but did not hear back.

According to the state audit, the company plans to replace the current accounting software by early 2026 to automate reports and reduce errors.