Financial Efficiency Inspection of the Northern Arizona VA Health Care System

The VA Office of Inspector General (OIG) assessed the oversight and stewardship of funds by the Northern Arizona VA Health Care System. The review team looked at four areas to determine if appropriate controls and oversight were in place for open obligations oversight, purchase card use, inventory and supply management, and pharmacy operations. The team reviewed available data from fiscal year 2022. The report includes the following findings: • Inactive obligations were not always being reviewed, some were not deobligated, and quality assurance reviews were not always completed. • The healthcare system did not always reconcile transactions promptly or consider using contracts. • The healthcare system needs to improve the accuracy of inventory data. • The healthcare system could increase inventory turnover and needs to ensure the required reconciliation process is completed. The OIG made 10 recommendations to the healthcare system director: ensure finance office staff and initiating services know to conduct reviews on all inactive open obligations and deobligate any identified excess funds; ensure finance office staff are conducting the accounting operations finance quality assurance review, including the review of undelivered orders; establish controls to confirm approving officials and purchase cardholders review their purchases and make sure contracting is used when appropriate; review for overcharges all invoices for continuous positive airway pressure machines; develop a control to ensure supporting documentation is received from vendors that ship directly to veterans; ensure all supplies are entered into the Generic Inventory Package; implement a plan to achieve an inventory turnover rate closer to the Veterans Health Administration-recommended level; develop a plan to align inventory management practices with VHA policy; and ensure reconciliation of invoices with purchase orders as required under the B09 reconciliation process, which is how VA medical center pharmacies assure they are making correct payments for the drugs they receive.