Report Summary

Title: Review of Alleged Unauthorized Commitments Within VA
Report Number: 13-00991-154
Issue Date: 5/21/2014
City/State:
VA Office: Office of Acquisitions, Logistics, and Construction (OALC)
Office of Management
Report Author: Office of Audits and Evaluations
Report Type: Audits, Reviews & Evaluations
Release Type: Unrestricted
Summary: VA OIG initiated this review in response to allegations made to the OIG's Hotline Division. The complainant alleged that cardholders made unauthorized commitments and VA has not performed ratification actions on identified unauthorized commitments. These unauthorized commitments circumvent federal acquisition laws and increase the risks of VA misusing taxpayer funds.

OIG substantiated the allegations. Specifically, we estimated during FYs 2012 and 2013, VA made about 15,600 potential unauthorized commitments valued at approximately $85.6 million, which require ratification actions. Unauthorized commitments occurred because of inadequate warrant information, insufficient verification of cardholder warrant limitations, and insufficient training. VA lacked adequate controls to prevent cardholders from making a high volume of unauthorized commitments, which made it resource intensive to perform ratification actions for each unauthorized commitment. In December 2012, VA institutionally ratified thousands of unauthorized commitments made with the Pharmaceutical Prime Vendor, instead of performing individual ratification actions for each unauthorized commitment. By deviating from ratification requirements, VA lacked reasonable assurance cardholders protected the Government’s interests when goods and services were acquired. For example, these actions do not provide assurance of obtaining fair and reasonable prices or that competition requirements were met. Further, the practice of institutional ratification does not hold individuals accountable for this serious offense. We recommended the Executive in Charge, Office of Management and Chief Financial Officer, review FYs 2012 and 2013 purchase card transactions and submit identified unauthorized commitments for ratification. We also recommended the Principal Executive Director, Office of Acquisition, Logistics, and Construction, maintain an accurate database of warranted contracting officers and limit institutional ratifications. The Executive in Charge, Office of Management and Chief Financial Officer, and the Principal Executive Director, Office of Acquisition, Logistics, and Construction, concurred with the findings and recommendations. We consider the corrective action plans they submitted acceptable and will follow up on their implementation.