Review of Alleged Use of Wrong VA Funds To Purchase IT Equipment

In November 2015, Congress referred to the OIG an allegation that VISN 23 may have misused medical funding when procuring IT; that purchase orders and contracts appeared to bundle together IT hardware and software with medical equipment classifying them as medical equipment. We sought to determine whether appropriate funds were used and procedures followed for 30 purchase orders and associated contracts. We did not substantiate the allegation and determined the 30 orders (about $57.9 million) and contracts were for IT hardware, software, and services dedicated to patient care. We found all 30 purchase orders were appropriately funded with medical appropriations but that VISN 23 improperly funded one purchase for patient WiFi and cable television services (about $245,000) by using the wrong type of medical appropriation. VISN 23 used MS&C funds instead of Medical Services funds because VA’s OI&T guidance on what VISN 23 was allowed to fund with IT appropriations was outdated, unclear, and incomplete. OGC’s determination that funding patient WiFi using Medical Services funds was acceptable was not communicated to VHA’s CFO. We recommended the VISN 23 Director consult with OGC and take corrective actions; the Director should ensure that appropriate funds are used for future IT procurements following the most recent VA policy and OGC guidance. The Director should work with the CFO to determine if an ADA violation occurred and take appropriate action. We recommended the Acting Assistant Secretary for IT update the 2016 IT/Non-IT Policy to address the dissemination of decisions and issues that may be systemic across VA. The Director concurred with Recommendations 1 and 2 and reported corrective actions were completed. We will close them once documentation is received. The Acting Assistant Secretary concurred with Recommendation 3; the corrective action plan is acceptable and we will follow up on its implementation.