TENNESSEE - A new performance audit released by the Tennessee Comptroller of the Treasury shows they have identified significant financial, operational, and care-quality concerns within the Tennessee State Veterans’ Homes Board, which oversees the operations of five veterans’ homes across the state and one under construction, with an executive office in Murfreesboro. The audit, covering the period from July 1, 2022, through June 30, 2025, was conducted as part of a statutory review ahead of the board’s scheduled termination date of June 30, 2026. The findings will be used by the Tennessee General Assembly to determine whether the board should be continued, restructured, or terminated.

Auditors reported that the Murfreesboro State Veterans’ Home saw its federal quality rating fall from four stars in 2022 to one star by early 2025. The facility was also cited for an “Immediate Jeopardy” abuse and quality-of-care violation, leading to a temporary suspension of Medicare and Medicaid payments and a fine exceeding $193,000, Scroll down for more details. 

Auditors will present the results of their report at a public hearing before the Education, Health, and General Welfare Joint Evaluation Committee of the Government Operations Committee on Tuesday, December 16, 2025, at 9:00 a.m. in House Hearing Room I of the Cordell Hull Building (Watch Hearing HERE). 

Key Comptroller Findings - According to the Comptroller’s report, auditors issued six formal findings and six observations, highlighting systemic weaknesses across multiple areas:

Financial Stability: Auditors found that management failed to develop a specific financial plan to address recurring operating losses and declining cash balances. While the board’s overall net position increased, the Comptroller noted this was largely due to non-recurring federal construction grants, not improved operating performance. Without those grants, the board’s financial position would have worsened, raising concerns about long-term sustainability.

Resident Trust Funds and Personal Property: Auditors found that at the Murfreesboro State Veterans’ Home, staff failed to obtain required written authorization to manage personal funds for 13 of 36 residents, representing 36 percent of those reviewed. Management said some residents initially opted out of the trust fund program but later allowed staff to manage their funds, though staff did not update or secure new authorization forms to reflect that change. Auditors noted the home could not provide documentation showing the authorizations were later corrected. The lack of written permission increases the risk that management does not meet its fiduciary responsibilities and raises the potential for mismanagement of residents’ personal funds.

At the Murfreesboro home, auditors further found that 50 percent of sampled residents lacked complete personal property inventory records, a violation of state health facility rules.

The report noted: "As of March 27, 2025, the Murfreesboro facility had 104 residents. We selected a nonstatistical, random sample of 30 residents and reviewed their personal property inventory lists to ensure that the facility maintained a record of all clothing, personal possessions, and money for the residents. Based on our review, we noted that management could not provide an inventory list of personal property for 15 of the 30 residents (50%)."

Staffing and Turnover: The Comptroller reported extremely high staff turnover, particularly among nursing staff, with turnover rates reaching as high as 554 percent at the Murfreesboro home during the audit period. Auditors concluded that the board and management had not effectively addressed turnover issues, which threaten continuity of care and operational efficiency.

Improper Federal Grant Reimbursements: Management was also found to have improperly claimed reimbursements under a federal nurse retention grant, raising compliance concerns related to federal funding requirements.

Clinical Assessments and Oversight: For the third consecutive audit cycle, management failed to consistently perform and document required supplemental clinical assessments, a repeated finding that auditors said could affect resident care planning and outcomes.

Quality Ratings and Abuse Citation: Auditors noted that the Murfreesboro State Veterans’ Home experienced a sharp decline in federal CMS quality ratings, dropping from four stars in 2022 to one star by early 2025. The facility was cited by the Tennessee Health Facilities Commission for an “Immediate Jeopardy” abuse and quality-of-care violation, which temporarily resulted in suspended Medicare and Medicaid payments and a fine of more than $193,000.

The Murfreesboro State Veterans’ Home opened in June 1991 and was the first state veterans’ home. The home is a 69,278-square foot facility with 140 beds that is situated on the campus of the Alvin C. York Veterans Affairs Medical Center.

What Happens Next - While the Comptroller found no deficiencies in board composition or meeting compliance, the report stresses that unresolved financial instability, staffing shortages, and quality-of-care concerns pose risks to veterans residing in the homes.

Auditors stated they will follow up to monitor corrective actions taken by management. The Joint Government Operations Committee will now use the audit to determine the future structure and oversight of the Tennessee State Veterans’ Homes Board.

Tuesday, Dec. 16, 2025: Auditors will present the results of their report at a public hearing before the Education, Health, and General Welfare Joint Evaluation Committee of the Government Operations Committee on Tuesday, December 16, 2025, at 9:00 a.m. in House Hearing Room I of the Cordell Hull Building. Watch the Hearing HERE.

• SEE The Report (Click to See PDF from the TN Comptroller of the Treasury)
• Past Report: Financial Reporting Error during the board's fiscal year 2024 - SEE Report Here