Audit finds missing records for National Guard tuition assistance; DMVA to tighten retention and reconciliation

Auditors told the Legislative Audit Committee that the Department of Military and Veterans Affairs (DMVA) lacked records and reconciliations for the Colorado National Guard Tuition Fund and Tuition Assistance Program, prompting a significant deficiency in internal controls.

Chris McLean, presenting the DMVA audit, said the program received 463 applications across four semesters for fiscal year 2025 and that auditors could not find supporting documentation for the summer 2024 semester for 66 members. Those missing records corresponded to about $145,000 in tuition payments, and auditors could not determine whether the payments met statutory eligibility requirements. McLean also cited a roughly $53,000 difference between program records and what the department recorded in CORE for fiscal year 2025 that could not be supported due to missing documentation after a system change in July 2024.

"When that happened, the applications and documentation for the summer 2024 semester that were in the old system were not maintained," McLean said, and auditors recommended that DMVA establish record-retention policies, reconciliation procedures tying program billing records to CORE, and staff training.

Representative Brett Bacon asked whether the tuition fund earns interest and how unspent balances are treated. DMVA officials, including Chief Financial Officer Nick Severn and Deputy Executive Director Michael Bruno, said the fund is a continuous appropriation that does not bear interest in the Treasury sense and that unspent funds roll over to cover tuition liabilities that may arise after the fiscal year because the academic calendar and state fiscal year do not align. Severn said the fund's continuous appropriation is necessary to pay summer-semester obligations.

General Michael Bruno acknowledged the finding and described steps DMVA initiated: transitioning records to a state-managed SharePoint environment for secure retention, initiating quarterly reconciliations, and modernizing internal controls to ensure data integrity. "We have used these findings to modernize our internal controls and ensure 100% data integrity moving forward," Bruno said. He added the tuition program (statutorily transitioned to a tuition waiver program) remains a top priority for service members.

The committee had no further questions at the hearing; DMVA offered to provide additional written information to members who requested further detail.