Financial Efficiency Review of the VA El Paso Healthcare System in Texas and New Mexico

Report Information

Issue Date
Report Number
21-02197-165
VISN
17
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
Leadership and Governance
Recommendations
12
Questioned Costs
$0
Better Use of Funds
$0
Congressionally Mandated
No

Summary

Summary
The VA Office of Inspector General (OIG) conducted this review to assess the oversight and stewardship of funds by the VA El Paso Healthcare System and to identify potential cost efficiencies in carrying out medical center functions. The review assessed the following financial activities and administrative processes to determine whether the healthcare system had appropriate oversight and controls in place: open obligations oversight, purchase card use, Medical/Surgical Prime Vendor-Next Generation (MSPV-NG) program use, and pharmacy operations. The team identified several opportunities for improvement: • The healthcare system did not perform required reviews for five of 10 inactive open obligations, totaling almost $3 million, risking funds not being used in the year they were appropriated, as required. • The healthcare system did not always properly oversee purchase card transactions. Twenty-two of 38 sampled transactions contained errors that resulted in $159,000 in questioned costs. This occurred because cardholders did not adhere to VA policy on document retention. • The healthcare system did not meet the goal to purchase 90 percent of formulary items from the MSPV-NG prime vendor, reaching only 14 percent on average. For 21 of 30 sampled purchase records, the review team questioned about $26,500 because the healthcare system did not submit national contract waiver requests, as required by VA policy. • The healthcare system could improve pharmacy efficiency by narrowing the gap between observed drug costs and expected drug costs, bringing the turnover rates closer to the VHA recommended level, and meeting requirements for noncontrolled drug line audits. The OIG made 12 recommendations to the VA El Paso Healthcare System director to use as a road map to improve financial operations. The recommendations address issues that, if left unattended, may eventually interfere with effective financial efficiency practices and the strong stewardship of VA resources.

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)
Ensure healthcare system finance office staff are made aware of policy requirements for open obligations and the responsible healthcare system finance office conducts reviews on all open obligations as required by VA Financial Policies and Procedures, Volume II, Chapter 5, “Obligations Policy,” October 2020.
No. 2
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
Establish procedures to ensure cardholders comply with record retention and transaction-processing requirements as stated in VA’s Financial Policy, vol. XVI, “Charge Card Program.”
No. 3
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
Develop a plan to work with the prime vendor to address having adequate stock to meet orders, reducing the need for the healthcare system to use nonprime vendors.
No. 4
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
Ensure the healthcare system follows the Medical Surgical Prime Vendor-Next Generation ordering hierarchy and purchases items from the Medical Surgical Prime Vendor-Next Generation contract before using other sources.
No. 5
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
Ensure the healthcare system elects and is granted a delivery method that meets just-in-time requirements.
No. 6
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
Ensure the healthcare system submits Medical Surgical Prime Vendor-Next Generation waiver requests and obtains approval before purchasing available formulary items from nonprime vendor sources.
No. 7
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
Ensure logistics staff and contracting officer’s representatives use all the tools available to inform the Medical Supplies Program Office and Strategic Acquisition Center of prime vendor performance issues.
No. 8
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
Develop formalized processes for achieving identified efficiency targets and use available pharmacy data to make business decisions.
No. 9
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
Educate non-VA providers on prescribing lower-cost drugs.
No. 10
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
Develop and implement a plan to increase inventory turnover to the Veterans Health Administration-recommended level.
No. 11
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
Develop and implement a plan to complete facility-based inventory audits of noncontrolled drug line items in compliance with Veterans Health Administration policy.
No. 12
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
Develop a plan to ensure that appropriate metrics for monitoring compliance with Veterans Health Administration policy are calculated correctly in the Pharmacy Benefits Management inventory reporting tool.
Total Monetary Impact of All Recommendations
Open: $ 0.00
Closed: $ 185,533.00