Review of Alleged Wasted Funds in VHA's Southern Arizona VA Health Care System

The VA Office of Inspector General (OIG) received an allegation in February 2015 that the Southern Arizona VA Health Care System’s (HCS) Tucson facility was leasing $1.5 million worth of urology equipment that had not been used since October 2014. The complainant alleged that HCS had not used the equipment because of installation delays and the updating of equipment cleaning procedures. We substantiated the allegation that HCS leased, but did not use, about 360 pieces of urology equipment from November 2014 through March 2015. The 3 year lease was valued at about $1.8 million. HCS delayed using the urology equipment because of inadequate acquisition planning and coordination with its support services. The lack of coordination occurred, in part, because HCS had not established policies and procedures to ensure support services staff review leased equipment requests during acquisition planning. As a result, HCS missed the opportunity to provide veterans services using endoscopic urology equipment with improved visualization. In addition, we estimated HCS spent approximately $217,000 on wasteful lease expenses, while the equipment was idle from November 2014 through March 2015. We recommended the Veterans Integrated Service Network 18 Director ensure the Southern Arizona VA HCS develop and implement a policy requiring coordination and review of leased equipment requests with HCS support services during the acquisition process. The Director of Veterans Integrated Service Network 18, concurred with our finding and recommendation. HCS management provided evidence of its new local policy, and we consider the recommendation closed.