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Financial Efficiency Review of the Miami VA Healthcare System

Report Information

Issue Date
Report Number
20-01796-195
VISN
8
State
District
VA Office
Veterans Health Administration (VHA)
Report Author
Office of Audits and Evaluations
Report Type
Financial Inspection
Report Topic
Financial Management
Major Management Challenges
Stewardship of Taxpayer Dollars
Recommendations
12
Questioned Costs
$0
Better Use of Funds
$0
Congressionally Mandated
No

Summary

Summary
The OIG assessed the oversight and stewardship of funds and identified opportunities for cost efficiency at the Miami VA Healthcare System in Florida. The review focused on four areas: 1. Use of the Medical/Surgical Prime Vendor-Next Generation Program. The program is a collection of contracts that streamlines purchasing and distribution for certain supplies. The team found that the healthcare system was unable to fully achieve the program’s cost savings because the prime vendor did not have enough stock to fill orders consistently. In addition, staff did not always use available tools to report issues with prime vendor performance. 2. Purchase card use. The healthcare system did not always maintain supporting documentation for transactions, conduct quarterly audits of the purchase card program on time, and consider contracts instead of purchase cards for ongoing, repetitive orders of goods or services. Using contracts can help VA leverage purchasing power and obtain competitive pricing. 3. Administrative staffing and labor costs. The healthcare system had higher administrative staff levels than similar facilities and did not ensure all administrative labor costs were recorded correctly. A difference in the number of personnel should be a starting point for deeper examination and in itself is not a determining factor. 4. Pharmacy efficiency. The healthcare system improved pharmacy inefficiencies, but it could avoid end-of-year purchases and increase the number of times inventory is used during the year. End-of-year purchases can reduce the inventory turnover rate, increase the cost to store inventory, and potentially lead to overstocking and spoilage. The OIG made 12 recommendations for improving cost efficiency to the healthcare system director. The number of recommendations should not be used, however, to gauge the system’s overall financial health. The intent is for system leaders to use these recommendations as a road map for improvement in the areas reviewed.

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 Veterans Health Administration (VHA)
The OIG recommended the director of the Miami VA Healthcare System develop a plan to work with the assigned prime vendor to address having adequate stock from the facility’s formulary list in its warehouse to provide supplies when ordered.
No. 2
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
The OIG recommended the director of the Miami VA Healthcare System ensure logistics staff use the tools available to inform the Medical Supplies Program Office of prime vendor performance issues.
No. 3
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
The OIG recommended the director of the Miami VA Healthcare System establish controls to confirm approving officials and purchase cardholders review their proposed purchases and make sure contracting is used when it is in the best interest of the government.
No. 4
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
The OIG recommended the director of the Miami VA Healthcare System require purchase cardholders to submit a request for ratification for any unauthorized commitments identified.
No. 5
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
The OIG recommended the director of the Miami VA Healthcare System develop checks on the successful completion of quarterly audits of the purchase card program as required by the Veterans Health Administration’s standard operating procedure, “Internal Audits—Purchase Cards and Convenience Checks.”
No. 6
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
The OIG recommended the director of the Miami VA Healthcare System ensure cardholders comply with record retention requirements as stated in VA’s Financial Policy, vol. XVI, “Charge Card Program.”
No. 7
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
The OIG recommended the director of the Miami VA Healthcare System develop measures to confirm completed VA Form 0242 submissions are accurate and updated for all cardholders
No. 8
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
The OIG recommended the director of the Miami VA Healthcare System provide guidance on implementing the healthcare system policy “Resource Management Board,” including measurable objectives or clear criteria to determine if a service line is efficiently managing administrative staffing.
No. 9
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
The OIG recommended the director of the Miami VA Healthcare System establish controls to make certain that budget or accounting staff review the salary cost data each pay period and promptly address cost center corrections with human resources staff as needed.
No. 10
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
The OIG recommended the director of the Miami VA Healthcare System ensure service chiefs and supervisors review labor mapping for accuracy and completeness.
No. 11
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
The OIG recommended the director of the Miami VA Healthcare System continue to develop and implement a plan to increase inventory turnover closer to the VHA recommended level.
No. 12
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
The OIG recommended the director of the Miami VA Healthcare System establish measures to improve compliance with the VA directive to avoid end of year pharmaceutical purchases.
Total Monetary Impact of All Recommendations
Open: $ 0.00
Closed: $ 328,000.00