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Financial Efficiency Review of the VA Boston Healthcare System in Massachusetts

Report Information

Issue Date
Report Number
21-03853-174
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
8
Questioned Costs
$0
Better Use of Funds
$0
Congressionally Mandated
No

Summary

Summary

The VA Office of Inspector General (OIG) assessed the VA Boston Healthcare System’s stewardship and oversight of funds in fiscal year (FY) 2021 and identified potential cost efficiencies in carrying out medical center functions. The review team looked at open obligation oversight, purchase card use, inventory and supply management, and pharmacy operations. From the healthcare system’s 421 open obligations, the team selected 20 totaling $20.6 million and found half were at least 90 days past their end date, most without being reviewed to see if they were still valid and necessary, and two had residual funds totaling approximately $4,439 that should have been released from obligation and used elsewhere to support veterans. Of 36 purchase card transactions totaling $441,000, the team found 28 lacked evidence to show they were properly approved and that payments were accurate, and 25 were processed by cardholders and approving officials whose duties were not segregated as required. The team also identified 10 purchases that should have been procured through contracting but were intentionally split into multiple transactions to stay below the cardholder’s single purchase limit. The team found inaccurate entries in the inventory system that caused it to show insufficient amounts of stock on hand in more than 70 percent of tested cases. The inaccuracies result in inefficient purchasing and receiving and could adversely affect patient care. The healthcare system had a low pharmacy turnover rate, an efficiency measure. In FY 2021, the healthcare system reported a rate of 8.2 compared to the recommended 12. Low inventory turnover rates could indicate an inability to properly forecast needed drug inventories, which could adversely affect patient care. The OIG made eight recommendations to improve the stewardship of VA resources and address issues that could adversely affect patient care.

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 that healthcare system finance office staff are made aware of policy requirements and that reviews are conducted on all inactive open obligations, and deobligate any identified excess funds as required by VA Financial Policy, vol. 2, chap. 5, “Obligations Policy.”
No. 2
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
Ensure cardholders comply with record retention requirements as stated in VA’s Financial Policy, vol. XVI, “Charge Card Programs.”
No. 3
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
Establish controls to confirm approving officials and purchase cardholders review their 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)
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)
Ensure quarterly purchase card audits are performed 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)
Ensure supply chain management staff implement a plan to improve data reliability within the Generic Inventory Package system.
No. 7
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
Ensure the chief of supply chain management signs quarterly physical inventory memorandums of “A” classified items and makes them available to Veterans Integrated Service Network personnel as required in the VHA’s Directive 1761 Supply Chain Management Operations.
No. 8
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
Develop and implement a plan to increase inventory turnover to meet the level recommended by the Veterans Health Administration Pharmacy Benefits Management Office.
Total Monetary Impact of All Recommendations
Open: $ 0.00
Closed: $ 379,439.00