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Financial Efficiency Review of the Eastern Oklahoma VA Health Care System

Report Information

Issue Date
Report Number
21-00942-16
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
Leadership and Governance
Recommendations
9
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 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.

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 Eastern Oklahoma VA Health Care System ensure finance office staff are made aware of policy requirements and reviews are conducted on all open obligations as required by VA Financial Policies and Procedures, vol. 2, chap. 5, “Obligations Policy,” January 2018.
No. 2
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
The OIG recommended the director of contracting for Network Contracting Office 19, VA Rocky Mountain Network, 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. 3
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
The OIG recommended the director of the Eastern Oklahoma VA Health Care System establish controls to confirm approving officials and purchase cardholders review their purchases and make sure contracting is used when it is in the best interests of the government.
No. 4
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
The OIG recommended the director of the Eastern Oklahoma VA Health Care System ensure cardholders comply with record retention requirements as stated in VA’s Financial Policy, vol. XVI, “Charge Card Program.”
No. 5
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
The OIG recommended the director of the Eastern Oklahoma VA Health Care System develop measures to confirm completed VA Form 0242 submissions are accurate and updated for all cardholders.
No. 6
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
The OIG recommended the director of the Eastern Oklahoma VA Health Care System develop formalized processes for achieving identified efficiency targets and use available pharmacy data to make business decisions.
No. 7
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
The OIG recommended the director of the Eastern Oklahoma VA Health Care System develop and implement a plan to increase inventory turnover closer to the VHA recommended level.
No. 8
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
The OIG recommended the director of the Eastern Oklahoma VA Health Care System develop and implement a plan to complete facility based inventory audits of noncontrolled drug line items in compliance with VHA policy.
No. 9
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
The OIG recommended the director of the Eastern Oklahoma VA Health Care System establish measures to improve compliance with the nonformulary request process.
Total Monetary Impact of All Recommendations
Open: $ 0.00
Closed: $ 95,000.00