DETROIT (AP) – State auditors raised questions Thursday about the costs of running a program that gives grants to distressed Michigan veterans or their families, noting that 49 percent of the money spent in 2009-10 went for administration.

The audit rapped the Michigan Veterans’ Trust Fund for not identifying more ways to reduce administrative costs at state and local levels. Costs at the county level varied significantly, from $46 in Otsego County to $98,353 in Wayne County.

“There’s merit to the recommendations,” said Jason Allen, state senior deputy director for veterans affairs.

The audit focused on an emergency grant program, created after World War II, that provides money to veterans or their families stuck in a short-term financial squeeze. The money for rent, utilities, home repair or mortgages comes from investment earnings off a $50 million trust.

Slightly more than half of $1.7 million was spent on veterans while the rest was used to run the program in the budget year that ended Sept. 30, 2010, the audit found.

The average local cost of handling an application was $139, but the price in some counties was much higher. Oceana County, for example, handled just one application but had $942 in administrative costs. The audit found Washtenaw County handled eight at an average cost of $888 each.

Macomb County, No. 3 in volume, had an average cost of $84 each for 226 applications, auditors said.

In response, the trust fund said it has reduced state staff and renegotiated at least nine agreements with people who handle the grant program at the local level, typically workers in county government.

Administrative costs represented 38 percent of the money spent in the budget year that just ended Sept. 30, down 11 percentage points from the audit period, said Anne Dutcher, trust fund director.

“We try to reduce the amount of money going out for administration. But if we didn’t have people doing administration in a county, we wouldn’t have anyone serving the veterans,” Dutcher said.

Under state law, counties are not required to handle applications or pay for the service, she said.

“No veteran was not given a grant because of a lack of money,” Dutcher said.

Copyright 2011 by The Associated Press. All Rights Reserved.


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