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Review of Alleged Unauthorized Commitments Within VA

Report Information

Issue Date
Report Number
13-00991-154
VA Office
Acquisitions, Logistics, and Construction (OALC)
Office of Management (OM)
Report Author
Office of Audits and Evaluations
Report Type
Audit
Recommendations
9
Questioned Costs
$0
Better Use of Funds
$0
Congressionally Mandated
No

Summary

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.

Open Recommendation Image, SquareOpenClosed and Implemented Recommendation Image, CheckmarkClosed-ImplementedNot Implemented Recommendation Image, X character'Closed-Not Implemented
No. 1
Closed and Implemented Recommendation Image, Checkmark
to Office of Management (OM)
We recommended the Executive in Charge, Office of Management and Chief Financial Officer, review FYs 2012 and 2013 purchase card transactions above the micro-purchase threshold and submit identified unauthorized commitments to Heads of Contracting Activities for ratification actions.
No. 2
Closed and Implemented Recommendation Image, Checkmark
to Office of Management (OM)
We recommended the Executive in Charge, Office of Management and Chief Financial Officer, establish policies and procedures to perform recurring reviews of purchase card transactions above the micro-purchase threshold to identify transactions made by cardholders without appropriate warrant authority.
No. 3
Closed and Implemented Recommendation Image, Checkmark
to Office of Management (OM)
We recommended the Executive in Charge, Office of Management and Chief Financial Officer, revise policies and procedures to verify that purchase card spending limits do not exceed warrant authority limits before issuing individuals purchase cards with spending limits above the micro-purchase threshold.
No. 4
Closed and Implemented Recommendation Image, Checkmark
to Office of Management (OM)
We recommended the Executive in Charge, Office of Management and Chief Financial Officer, require recurring unauthorized commitment training for purchase cardholders and their approving officials.
No. 5
Closed and Implemented Recommendation Image, Checkmark
to Office of Management (OM)
We recommended the Executive in Charge, Office of Management and Chief Financial Officer, ensure the Management Quality Assurance Service follow-up on the status of ratification of identified unauthorized commitments.
No. 6
Closed and Implemented Recommendation Image, Checkmark
to Acquisitions, Logistics, and Construction (OALC)
We recommended the Principal Executive Director, Office of Acquisition, Logistics, and Construction, direct Heads of Contracting Activities to perform individual ratification actions for unauthorized commitments identified by the Executive in Charge, Office of Management and Chief Financial Officer’s review of FYs 2012 and 2013 purchase card transactions above the micro-purchase threshold.
No. 7
Closed and Implemented Recommendation Image, Checkmark
to Acquisitions, Logistics, and Construction (OALC)
We recommended the Principal Executive Director, Office of Acquisition, Logistics, and Construction, create and maintain an accurate database of warranted VA contracting officers that includes warrant effective and expiration dates, and specific warrant authority limitations.
No. 8
Closed and Implemented Recommendation Image, Checkmark
to Acquisitions, Logistics, and Construction (OALC)
We recommended the Principal Executive Director, Office of Acquisition, Logistics, and Construction, establish policies and procedures requiring Heads of Contracting Activities to complete ratification actions within a specified time period after the identification of unauthorized commitments.
No. 9
Closed and Implemented Recommendation Image, Checkmark
to Acquisitions, Logistics, and Construction (OALC)
We recommended the Principal Executive Director, Office of Acquisition, Logistics, and Construction, limit institutional ratifications by ensuring every unauthorized commitment meets the ratification review requirements.
Total Monetary Impact of All Recommendations
Open: $ 0.00
Closed: $ 85,600,000.00