The OIG assessed the oversight and stewardship of funds and identified opportunities for cost efficiency at the Eastern Oklahoma VA Health Care System. The review focused on four areas:
1. Open obligations. The team found that the system’s fiscal staff did not always review open obligations for goods and services to determine if they were still valid and necessary. This leaves the system vulnerable to the risk that funds will be not used in the year they were appropriated, as required. In addition, some end dates for contracts’ period of performance were not accurate.
2. Purchase card use. The 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.
3. Administrative staffing and labor costs. The system had higher administrative staff levels than similar facilities, but system leaders have taken several actions to strengthen oversight of this area. (A difference in the number of personnel should be a starting point for deeper examination and is not a determining factor by itself.) The OIG also found that staff reviewed salary cost data as required to ensure labor costs were recorded correctly.
4. Pharmacy operations and cost-savings efforts. The system could improve pharmacy efficiency by narrowing the gap between the facility’s observed and expected drug costs, increasing the rate that inventory is used to reduce storage costs, and following the required process for buying drugs not included in VA’s national formulary listing.
The OIG made nine recommendations for improving cost efficiency. 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.