Excess Purchase of Surgical Supplies and Improper Purchase Card Transactions at the New Orleans VA Medical Center in Louisiana

The VA Office of Inspector General (OIG) evaluated an August 2019 hotline complaint alleging mismanagement of supplies, equipment, and operating rooms while activating the New Orleans VA Medical Center in Louisiana. The OIG substantiated that the medical center purchased about $1.85 million in excess surgical supplies. Employees also violated VA supply chain management policies by not properly accounting for nor advertising the excess supplies to other facilities. Employees violated Federal Acquisition Regulations and VA financial policy when they used purchase cards instead of contracts to obtain supplies. The OIG did not substantiate that the facility purchased unnecessary equipment, nor that funds were wasted on purchasing surgical equipment and related service contracts. The OIG was unable to determine if operating rooms were underused because sufficient data on percentage of surgeries being outsourced were not available. However, the OIG substantiated that two operating rooms were not being used two years after the surgical department opened and the department’s activation was delayed. Employees provided evidence supporting the decisions to not yet open all the operating rooms. COVID-19 also affected delays in surgical department activation. The OIG recommended the Southeast Louisiana Veterans Health Care System director account for undocumented excess supplies and determine if any administrative action should be taken on some $675,000 in missing supplies listed in a report of survey. The director should also ensure identified FAR violations are reported to the Financial Services Center, appropriate remedies or penalties are imposed, and all unauthorized commitments are ratified per policy. The director should ensure employees coordinate with and obtain guidance from National Purchase Card Program staff when they are uncertain about proper use of government purchase cards. Leased equipment should be returned to the contractor for any operating rooms that will not be used for at least one year.