‘Shocking and disturbing’: New report on Virginia Department of Health highlights years of financial mismanagement

The report by a state watchdog included 31 recommendations to help the health agency get its finances in order and address staffing challenges.

Years of financial mismanagement, staffing shortages, and high employee turnover at Virginia’s top public health agency have significantly undermined its ability to operate, according to a new report from a state watchdog. 

The Joint Legislative Audit and Review Commission, or JLARC, presented its scathing report on the Virginia Department of Health, or VDH, last week to lawmakers in Richmond. The report found that VDH is dealing with substantial operational challenges and the agency’s many financial problems are impacting other organizations. The report also found that VDH is dealing with serious staffing issues compounded by an inefficient hiring process and low morale. 

“These problems have developed over multiple years,” Drew Dickinson, a chief legislative analyst at JLARC, told lawmakers. “And it’s going to take multiple years to address them.”

VDH’s financial management issues are so bad that the Environmental Protection Agency no longer gives the state agency grant money in advance over concerns about VDH’s ability to manage federal funds. VDH must instead ask the EPA for reimbursements for grant expenses, an uncommon practice that has created cash flow issues at VDH, Dickinson said. 

“It’s shocking and disturbing,” Del. Charniele Herring said of the report. 

VDH’s longstanding problems are the result of the challenges created by the pandemic but also the failure of key leaders at VDH to properly oversee the agency’s operations, Dickinson said. The Virginia Department of Health has dealt with significant leadership changes and vacancies. Its current commissioner, Dr. Karen Shelton was appointed by Gov. Glenn Youngkin in 2023. 

“While my team and I did not create these challenges, we have been and continue to be committed to solving them,” Shelton told lawmakers last week. 

VDH is the top public health agency in the state. It has a staff of about 3,300 and oversees 35 local health districts across Virginia. It’s responsible for many public health efforts including tracking diseases and administering vaccines; administering health and nutrition programs; and inspecting restaurants and drinking water sources. 

Sen. Barbara Favola said in an interview with The Dogwood that the corrective actions recommended by JLARC need to be put in place as soon as possible, and the General Assembly will have to monitor VDH’s progress. The report included 31 recommendations to deal with VDH’s issues, including things like creating new positions and adding staff to help oversee its finances. 

“We’ve got to rebuild in a way that makes more sense, that bolsters our local public health units, and reinstates confidence in the Virginia Department of Health,” Favola said.