VA Medical Centers: Internal Control over Selected Operating
Functions Needs Improvement (21-JUL-04, GAO-04-755).
The Department of Veterans Affairs (VA) provides health care to
veterans through the $27 billion Veterans Health Administration
(VHA) medical programs. VHA administers and operates VA's medical
system, providing care to nearly 5 million patients in 2003. As
of September 2003, VHA operated 160 hospitals, 847 outpatient
clinics, 134 nursing homes, 42 domiciliaries, and 73
comprehensive home care programs, including facilities in every
state, Puerto Rico, the Philippines, and Guam. VHA is responsible
for effective stewardship of the resources provided to it by
Congress, which asked GAO to review internal controls in three
areas of operation at selected VHA medical centers. GAO conducted
a review to assess the effectiveness of control activities over
(1) personal property, (2) drugs returned for credit, and (3)
part-time physician time and attendance.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-04-755
ACCNO: A11040
TITLE: VA Medical Centers: Internal Control over Selected
Operating Functions Needs Improvement
DATE: 07/21/2004
SUBJECT: Attendance records
Data bases
Data integrity
Drugs
Health care cost control
Health care services
Internal controls
Inventory control systems
Personal property
Physicians
Property and supply management
Veterans hospitals
Policies and procedures
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GAO-04-755
United States Government Accountability Office
GAO Report to the Chairman, Subcommittee on Oversight and Investigations,
Committee on Veterans' Affairs, House of Representatives
July 2004
VA MEDICAL CENTERS
Internal Control over Selected Operating Functions Needs Improvement
a
GAO-04-755
Highlights of GAO-04-755, a report to the Chairman, Subcommittee on
Oversight and Investigations, Committee on Veterans' Affairs, House of
Representatives
The Department of Veterans Affairs (VA) provides health care to veterans
through the $27 billion Veterans Health Administration (VHA) medical
programs. VHA administers and operates VA's medical system, providing care
to nearly 5 million patients in 2003. As of September 2003, VHA operated
160 hospitals, 847 outpatient clinics, 134 nursing homes, 42
domiciliaries, and 73 comprehensive home care programs, including
facilities in every state, Puerto Rico, the Philippines, and Guam. VHA is
responsible for effective stewardship of the resources provided to it by
Congress, which asked GAO to review internal controls in three areas of
operation at selected VHA medical centers. GAO conducted a review to
assess the effectiveness of control activities over (1) personal property,
(2) drugs returned for credit, and (3) part-time physician time and
attendance.
GAO makes 17 recommendations to improve internal controls over personal
property, drugs returned for credit, and part-time physician time and
attendance, including (1) revision of property policies, (2) providing
oversight for drugs returned by pharmacies, and (3) assessing time and
attendance best practices for part-time physicians. In written comments on
a draft of this report, VA agreed with GAO's conclusions and
recommendations.
www.gao.gov/cgi-bin/getrpt?GAO-04-755.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact McCoy Williams at (202)
512-6906 or [email protected].
July 2004
VA MEDICAL CENTERS
Internal Control over Selected Operating Functions Needs Improvement
GAO's review found that six selected VA medical centers lacked a reliable
property control database. The property databases for the six medical
centers contained incomplete information. As a result, GAO could not
select a statistical sample of test items so that results could be
projected to each location's entire property universe. Key policies and
procedures established by VA to control personal property provided
facilities with substantial latitude in conducting physical inventories
and maintaining their property management systems, which resulted in
reduced property accountability. For example, VA's Materiel Management
Procedures handbook allowed the person responsible for custody of VA
property to attest to the existence of that property rather than requiring
independent verification. Also, personnel at some locations interpreted a
policy that established a $5,000 threshold for property that must be
inventoried as a license to ignore VA requirements to account for lower
cost items that are susceptible to theft or loss, such as personal
computers and peripheral equipment. These weak practices, combined with
lax implementation, resulted in low levels of accountability and
heightened risk of loss. VHA personnel located fewer than half of the 100
items GAO selected at each of five medical centers and 62 of 100 items at
the sixth medical center.
The process for obtaining credit for recalled, expired, or deteriorated
drugs was, in essence, an honor system. Each of the six pharmacies GAO
visited used a contractor to return drugs to the manufacturer for credit,
but only one of the pharmacies inventoried non-narcotic drugs before they
were turned over to the contractor. None of the pharmacies had enough
information about which drugs qualified for credit to be able to reconcile
the credits they received with the drugs they had turned over to the
contractor. There was no agency-level oversight of returned drug
information to help identify improvements that might increase the credits
that VA receives. At four of the six facilities, non-narcotic drugs held
for return were stored in unsecured open bins accessible to anyone in the
pharmacy. The combined lack of record keeping and physical controls over
non-narcotic drugs held for return exposed them to potential loss, theft,
or unauthorized use.
Scheduled and actual hours worked by part-time physicians at the six
locations GAO visited were not always documented in accordance with a
January 2003 VHA directive. Five of the six locations had not prepared
written work schedules for all part-time physicians as required. GAO found
that latitude provided in the directive resulted in wide variation in
procedures used by the six medical centers to verify physician compliance
with work schedules. While some timekeepers used informal notes to record
daily attendance, one facility required physicians to sign in. However, on
the day of GAO's review, only two of 15 scheduled physicians had signed
in. Attendance monitoring procedures at the six locations varied in
frequency and included monitoring all part-time physicians once per
quarter at one location and 5 percent of part-time physicians each month
at another.
Contents
Letter
Results in Brief
Background
Scope and Methodology
Property Management Policies and Procedures Provided Inadequate
Control over Medical Center Personal Property VHA Controls over Process
for Returning Drugs for Credit Was Weak Controls over Parttime Physician
Time and Attendance Could Be
Strengthened Further Conclusions Recommendations for Executive Action
Agency Comments
1 2 4 6
7
13
18 22 22 24
Appendixes
Appendix I:
Appendix II: Appendix III:
General Background Information for Selected VA Medical
Centers, Fiscal Year Ended September 30, 2003
(Unaudited) 26
Comments from the Department of Veterans Affairs 27
GAO Contacts and Staff Acknowledgments 29
GAO Contacts 29
Acknowledgments 29
Tables Table 1: Results of Personal Property Physical Observation Tests 9
Table 2: Categories of Sensitive Assets Not Located by Property
Officials 11
Table 3: Estimated Credits for NonNarcotic Drugs Returned
September 2002 15
Table 4: Parttime Physician Schedule Documentation 19
This is a work of the U.S. government and is not subject to copyright
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separately.
A
United States Government Accountability Office
Washington, D.C. 20548
July 21, 2004
The Honorable Steve Buyer
Chairman, Subcommittee on Oversight and Investigations
Committee on Veterans' Affairs
House of Representatives
Dear Mr. Chairman:
In fiscal year 2003, the Department of Veterans Affairs (VA) provided
health
care to veterans through the Veterans Health Administration (VHA)
medical programs at a cost of $27 billion. VHA's medical programs include
medical care, research, and medical administration and miscellaneous
operating expenses. VHA administers and operates VA's medical care
system, the nation's largest integrated health care system, providing care
to
nearly 5 million patients with over 741,000 inpatient episodes treated and
over 50 million outpatient visits in 2003. To carry out its medical care
mission, VHA operated (as of September 2003) 160 hospitals, 847
outpatient clinics, 134 nursing homes, 42 domiciliaries, and 73
comprehensive home care programs, including facilities in every state,
Puerto Rico, the Philippines, and Guam.
VHA is responsible for effective stewardship of the resources provided to
it
by Congress. In conjunction with that responsibility, you asked us to
review internal control activities in three areas of operation at selected
VHA medical centers to assess whether those controls were designed and
implemented effectively. Specifically, you asked that we assess the
effectiveness of control activities regarding (1) accountability over
personal property, (2) drugs returned for credit, and (3) parttime
physician
time and attendance. We evaluated whether procedures used in these three
areas of operation at the selected VHA medical centers incorporated
effective controls regarding accountability for agency resources.
To gain an understanding of VHA's policies and procedures and the related
internal controls for the three areas of operation, we obtained and
reviewed VA and VHA policy guidance and interviewed cognizant VHA
personnel on topics related to the scope of this report. We reviewed our
previous reports and reports issued by VA's Office of the Inspector
General
(OIG) .1 Using a case study approach to assess the effectiveness of the
key control activities that we identified, we reviewed transaction
documentation at six VA medical centers. We conducted our review from
February 2003 through March 2004 in accordance with U.S. generally
accepted government auditing standards.
Results in Brief Internal control over the three areas of operation that
we reviewed at six selected VA medical centers did not provide reasonable
assurance that agency resources were safeguarded and that waste, fraud, or
abuse was prevented or would be detected in a timely manner. Specifically,
the medical centers we visited lacked reliable property control records as
well as controls over credits for returned drugs. In addition, parttime
physicians' scheduled and actual hours worked were not always documented
in accordance with VHA's policy.
The property control databases for the six medical centers we visited
contained incorrect or incomplete information, including property location
and acquisition cost information. As a result, we were unable to select a
statistical sample of items to test so that our results could be projected
to the entire property universe at each location we visited. Instead, we
performed a case study of 100 property items selected from each location's
property control record. Of the 600 items that we selected from the
property control records of the six medical centers, property officials
were able to locate only 201. VA's policies on inventory procedures and
property accountability2 contributed to the lack of reliable property
records by allowing the custodian of property to attest to the existence
of assets without independent verification. In addition, VA's property
handbook established a $5,000 threshold for property that must be
inventoried. For sensitive items, which are subject to loss or theft, it
required accountability regardless of cost. Some property managers,
however, lost accountability over these assets because they concluded that
they were only accountable for items costing $5,000 or more. Noncompliance
with other VA property management requirements also reduced the
possibility of control over
1 U.S. Department of Veterans Affairs, Office of Inspector General, Audit
of the Veterans Health Administration's Part-time Physician Time and
Attendance (Washington, D.C.: Apr. 23, 2003) and Follow-up of the Veterans
Health Administration's Part-time Physician Time and Attendance
(Washington, D.C.: Feb. 18, 2004).
2 U.S. Department of Veterans Affairs, "Materiel Management Procedures,"
VA Handbook 7127 (Washington, D.C.: Sept. 19, 1995).
larger items. Lack of proper bar code labeling, for instance, combined
with omission of serial numbers from the property records, prevented us
from verifying 17 items with a total cost of more than $29 million at four
medical centers.
The process used for obtaining credit for recalled, expired, or
deteriorated drugs returned to drug manufacturers (returned drugs) at the
six medical centers we visited was, in essence, an honor system. All six
pharmacies used a contractor to return drugs and relied on the drug
manufacturers to determine the amount credited to VA. Only one of the six
locations inventoried nonnarcotic drugs before they were turned over to
the contractor, and none had sufficient information to determine which
drugs qualified for credit. Accordingly, while we understand from VA
officials that contracting return drug services has yielded larger credits
for VA than the previous inhouse return system, medical centers did not
have enough information available to conclude whether the credits received
were reasonable based on the drugs that were returned. Also, four of six
facilities we visited lacked adequate security over nonnarcotic drugs held
for return. These drugs were stored in unsecured open bins accessible to
anyone within the pharmacies. This access, combined with the lack of an
inventory record, made these drugs highly vulnerable to undetected loss,
theft, or unauthorized use involving potentially dangerous substances.
We found that scheduled and actual hours worked by parttime physicians
were not always documented in accordance with a January 2003 VHA
directive3 and related local medical center policies. Five of the six
locations had not prepared required written work schedules for parttime
physicians in advance of the pay period, and the record of specific hours
worked sometimes differed between the payroll system and the time and
attendance form signed by the physician, though total hours worked per the
two records agreed in all test cases. We found that the latitude afforded
by the January 2003 directive resulted in substantial variation in how the
six centers attempted to confirm parttime physician adherence to work
schedules and variation in the effectiveness of the implemented
procedures. While some timekeepers relied on informal notes to record
daily attendance of parttime physicians, one facility required physicians
to sign in daily. However, the signin log was signed by only 2 of 15
physicians scheduled to work on the day of our review. Effectiveness of
the various
3 U.S. Department of Veterans Affairs, "Time and Attendance for Parttime
Physicians," VHA Directive 2003-001 (Washington, D.C.: Jan. 3, 2003).
attendance monitoring procedures that were implemented at the six medical
centers depended on how often they were used. These procedures included
monitoring attendance of 5 percent of parttime physicians one day each
month at one center and monitoring all parttime physicians at least once
each quarter at another.
Without improvements to its internal controls, VHA's ability to prevent
and detect waste, fraud, or abuse in these three areas of operation at the
six medical centers we visited will continue to be impaired. Accordingly,
we are making 17 recommendations to address the internal control
weaknesses discussed in this report.
In commenting on a draft of our report VA concurred with our conclusions
and recommendations and reported that it is developing an action plan to
implement them.
Background To meet property management requirements and provide data for
personal property reporting needs, VA field facilities use an inventory
accounting system, the Automated Engineering Management System/Medical
Equipment Reporting System. The system was originally designed to schedule
preventive maintenance. In 1996, the system was expanded to incorporate
the agency's previously separate property management function, becoming
the agency's official record of inventory for capitalized and
noncapitalized equipment. VHA's Acquisition and Materiel Management (A&MM)
service maintains the property management portion of the system while
Engineering Services operates the property maintenance portion. The
property management system includes a detailed listing of the agency's
personal property, providing information that among other things, is (1) a
control for the accuracy of property cost information presented in the
agency's financial report, (2) the basis for physical inventories of
agency personal property, and (3) the primary control record for
accountability over the agency's personal property. The system is used to
prepare bar code labels that are affixed to nonexpendable property
acquired by VHA to identify items as VHA property and to provide for
efficient physical inventories using portable bar code readers. The
property management software has been updated occasionally to incorporate,
for example, the addition of a disposal date capability and changes in the
agency's cost thresholds for property accountability and capitalization. A
VHA official told us that once a property item is entered in the system's
database, a system application control retains the record, even after
disposal of the item.
Pharmaceutical manufacturers allow VA a credit for certain drugs that are
returned. Each manufacturer establishes its own criteria for issuing
credit, which can change at any time and differ among a single
manufacturer's products. The differing criteria can include such
attributes as units of packaging and length of time between the return
date and the expiration date. Some drugs are not returnable and must be
destroyed if not used before the expiration date. To obtain available
credits with minimal agency resources, VA has arranged contracts with
pharmaceutical returns vendors that individual VHA medical facilities may
utilize. One hundred forty of VHA's 160 medical centers use the services
of Devos, Ltd., doing business as Guaranteed Returns, to assist them in
returning drugs for credit or disposing of nonreturnable drugs in
accordance with environmental standards and preparing required paperwork
to monitor the movement of narcotic drugs. Guaranteed Returns receives a
percentage of credits issued for returnable drugs and a fee based on
weight for destruction of nonreturnable drugs.
VHA also uses the services of parttime physicians where necessary to
alleviate recruitment difficulties or when practicality would not indicate
fulltime employees. While VA policy states a parttime appointment requires
a tour of duty scheduled in advance that normally does not significantly
change from one pay period to another, it also provides that a parttime
physician whose other responsibilities make adherence to the same schedule
every pay period impractical may have an adjustable work schedule.
Parttime physicians with adjustable tours of duty have a biweekly work
requirement consisting of noncore hours that may be adjusted at the
request of the employee and core hours that are the days and times when
the employee must be present unless granted an appropriate form of leave
or excused absence. VA policy requires core hours to be at least 25
percent of total scheduled hours. In April 2003, the OIG reported4 that
parttime physicians were not working the hours established in their VA
appointments. A February 2004 followup report5 by the OIG stated that
while most parttime physicians were on duty as required, 8 percent of the
parttime physicians tested were not on duty or on approved leave or
authorized absence as scheduled.
4 U.S. Department of Veterans Affairs, Office of Inspector General, Audit
of the Veterans Health Administration's Part-time Physician Time and
Attendance.
5 U.S. Department of Veterans Affairs, Office of Inspector General,
Follow-up of the Veterans Health Administration's Part-time Physician Time
and Attendance.
Scope and Methodology
To gain an understanding of VHA's policies and procedures and the related
internal controls for the three areas of operation we assessed, to
identify key control activities, and to assess the design effectiveness of
those controls, we obtained and reviewed VA and VHA directives, handbooks,
and other policy guidance and reports issued by VA's OIG. We also
conducted interviews and system walkthroughs with VHA personnel and
reviewed our previous reports. To assess the implementation effectiveness
of the key control activities for the three areas of operation, we used a
case study approach, reviewing transaction documentation at six VA medical
centers selected based on size and medical specialization diversity of the
location's parttime physicians and other factors.
For personal property management, we discussed requirements and procedures
with VHA headquarters and medical center personnel. We performed tests of
each medical center's property records to assess their accuracy. Because
our initial review disclosed incomplete and inaccurate information in
property database records from each location we visited, we could not
design our work to make a statistically based projection on the results of
our work. Instead, we tested a nonstatistical selection of 100 items from
each location's property records to verify property existence by locating
the item and comparing bar code, serial number, and item description
information in the records to the item that we observed.
For drugs returned for credit, we discussed requirements and procedures
for managing turnedin drugs with personnel at VHA headquarters, the
selected medical centers, and a pharmaceutical return contractor. Also,
for each of the six medical centers we visited, we obtained and reviewed
inventory lists of returned drugs for one contractor pickup of drugs held
for return and vendor credit documents.
For parttime physician time and attendance, we discussed policy
requirements with VHA headquarters personnel and asked medical center
staff about the processes for collecting, approving, and recording time
and attendance data for parttime physicians. We reviewed time and
attendance and corresponding payroll documentation for a judgmental
selection of 10 parttime physicians for two biweekly pay periods ending in
September 2003 at each of the six medical centers that we visited. We also
reviewed medical center procedures for monitoring parttime physician
attendance.
We reviewed and used as guides, our Standards for Internal Control in the
Federal Government6 and the Internal Control Management and Evaluation
Tool. 7 The Comptroller General issued these standards to provide the
overall framework for establishing and maintaining internal control.
According to these standards, internal control, also referred to as
"management control," comprises the plans, methods, and procedures used to
meet the missions, goals, and objectives of an organization. Internal
control also serves as the first line of defense in safeguarding assets
and preventing and detecting errors and fraud. Our Management and
Evaluation Tool provides a systematic, organized, and structured approach
to assessing internal control.
We performed our work at VA medical centers in Atlanta, Houston, Los
Angeles, San Francisco, Tampa, and Washington, D.C.; at VA headquarters;
and for drugs returned for credit, at a return contractor's facility in
East Setauket, New York. Our work was performed using a case study
approach, and therefore, results of our study cannot be projected beyond
the locations and transactions we reviewed.
We conducted our review from February 2003 through March 2004 in
accordance with U.S. generally accepted government auditing standards.
We requested comments on a draft report from the Secretary of Veterans
Affairs or his designee. Written comments were received from the Secretary
of Veterans Affairs and are reprinted in appendix II.
Property Management Policies and Procedures Provided Inadequate Control
over Medical Center Personal Property
We found that VHA's property control databases did not provide a complete
and accurate record of personal property on hand, compromising effective
management and security of agency assets at the six locations we visited.
Our tests to determine whether the six medical centers had adequate
control over items that were recorded in the property control databases
showed that property officials could locate only about onethird of the 600
items we selected. We found that in addition to noncompliance with VA
property management requirements, current VA physical inventory and
6 U.S. General Accounting Office, Standards for Internal Control in the
Federal Government, GAO/AIMD0021.3.1 (Washington, D.C.: November 1999).
7 U.S. General Accounting Office, Internal Control Management and
Evaluation Tool, GAO011008G (Washington, D.C.: August 2001).
property accountability policies were a major cause of unreliable property
records and reduced the opportunity to adequately control personal
property at five of the six medical centers we visited.
Medical Centers Lacked a Reliable Property Control Database
Standards for Internal Control in the Federal Government8 requires that
agencies establish physical control to secure and safeguard vulnerable
assets such as equipment, periodically count those assets, and compare the
counts to control records. However, through our initial reviews, we found
that the property control records for the six locations we visited
contained incomplete or incorrect information, such as missing property
location or acquisition cost information. The property control records
were such that we could not select a statistical sample of test items that
would allow our results to be projected to the location's entire property
universe. We proceeded instead with a case study approach, reviewing 100
property items selected from each of the six medical centers' databases
using a nonstatistical selection method. Medical center property officials
told us that some of the incorrect or incomplete information in the
databases resulted from the incorrect transfer of some information from
the previous property control system to the current system in 1996. The
lack of accurate property control records hampered medical center property
managers' efforts to effectively safeguard and manage VHA personal
property.
Property Managers Found about OneThird of the Property Items Selected for
Testing
Property officials located only 201 of 600 items (or about onethird) that
we selected from the six medical centers' property control records to
observe and verify. At five locations, VHA officials found from 13 to 39
of the 100 items we tested at each location to determine if they were on
hand, while at the sixth medical center, Atlanta, 62 of 100 items were
found. The 600 assets we selected to observe were recorded at a total
value of $104,220,868 in the property control system. However, because 125
of the 600 test items selected had no acquisition cost entered in the
databases, the total cost of our selection could not be determined. Table
1 summarizes the results of our property observation tests at all
locations we visited. Each category of items not observed is discussed
below.
8 GAO/AIMD0021.3.1.
Table 1: Results of Personal Property Physical Observation Tests
Atlanta Houston Los San Tampa Washington, Total
Angeles Francisco D.C.
Number of items 100 100 100 100 100 100
tested
Items observed 62 38 25 24 39 13
Items not
observed 38 62 75 76 61 87
Items not observed due to:
Database errors / omissions 24 10 14 36 27 45
Inadequate label - - 8 3 5 1
Mobile / portable assets 3 13 10 6 7 3
Unexplained 11 39 43 31 22 38
Source: GAO analysis of test findings.
Database errors or omissions represented 156 items that were not observed
ostensibly because of insufficient database information. These errors
included assets for which the property database did not (1) indicate a
disposal date, though property officials told us the item had been
disposed of, or (2) did not indicate a location for the property item. One
property official said the predecessor property control system had not
included a field for a disposal date, and when the program was modified to
add that capability, thenexisting records were not updated. Other database
errors included records that did not accurately identify the asset as
building service equipment, which represent items that are essentially
part of facility buildings rather than personal property, or entries with
one equipment identification number that represented several component
items constituting one system.
At the Washington medical center, we could not locate three property
items, each valued at over $1 million, because of other data entry errors.
The explanation for two of the three items was that the assets were on
order but had not yet been received. Center officials attributed these
errors to property personnel entering these assets into the property
control system prior to receipt. For the third item, center officials
informed us that one bar code number had been issued for a system of
several pill dispensing machines, the components of which were at various
locations throughout the medical center and had a combined value over $1
million, rather than bar coding each component and entering it in the
property record to provide a means of controlling each item.
Inadequate labeling of property items prevented us from verifying the
identity of 17 items with a total acquisition cost of $29,463,952 selected
from the property records at four medical centers. According to VA
officials, nonexpendable property costing $5,000 or more must be bar coded
and recorded in the property system. However, none of these 17 items had
bar code labels attached, and either serial number labeling was also not
attached to the asset or the serial number was not entered in the property
records. For example, at the Tampa medical center, five property items
totaling $9,996,491, including a telephone operating system, two Xray
systems, and two components of an Xray system, were inadequately labeled.
Although items that we observed matched the general description and
location indicated by the property records for these items, we were unable
to specifically verify their identity because bar codes had not been
placed on the items and serial number information could not be compared
between the property records and the physical items. When both bar code
and serial number information cannot be compared between the property
records and the property item, the physical inventory process is impaired
and property accountability is compromised. Under these circumstances,
even the most effective physical inventory procedure cannot provide the
requisite assurance that assets are controlled adequately.
Fortytwo mobile or portable items, such as a wheelchair, adjustable bed,
and Intensive Care Unit module, also could not be located. Officials
stated that these items are moved from one location to another within the
medical centers to meet patients' needs. At the Houston medical center,
from our selection of 100 items, property officials were unable to locate
13 portable assets, totaling $19,997, before the end of our visit. Some of
these items included patient beds, patient feeding pumps, and a portable
defibrillator.
Regarding the remaining 184 items, property officials at the six medical
centers could neither locate them at the time of our visits nor provide
documentation supporting the disposal, loan, or loss of the items, or
otherwise explain why they were not found.
A 1997 addition to VA's Handbook 7127, "Materiel Management Procedures,"9
established a $5,000 threshold for property that must be inventoried. The
handbook stated that it is a local decision to maintain inventory on
"other" nonexpendable equipment not capitalized or accounted for and also
required accountability for sensitive property regardless of cost.
Referring to the inventory provisions, A&MM staff at
9 U.S. Department of Veterans Affairs, "Materiel Management Procedures,"
VA Handbook 7127.
four of the six locations we visited told us they were only accountable
for property items costing $5,000 or more and items in the four categories
of sensitive assets specifically identified by VA policy: handguns,
ammunition, canines, and automobiles. By ignoring VA's general requirement
to account for sensitive property regardless of cost, property managers at
those locations did not keep the property control database current for
most items costing less than $5,000 and lost control of the items not
tracked. Medical center property officials at two centers said we should
not expect to locate items with a cost lower than $5,000 because they do
not inventory these assets. This practice means that some items, such as
computers, monitors, and other sensitive equipment, which by their nature
are subject to theft, loss, or conversion to personal use, are not
inventoried or tracked. Of the 184 items that were neither found nor had
plausible explanations for not being found, over half (95) were sensitive
assets. Table 2 shows the nature of these 95 sensitive items categorized
as personal computers, laptop computers, scanners, printers, monitors,
facsimile or copier machines, and videocassette recorders.
Table 2: Categories of Sensitive Assets Not Located by Property Officials
Atlanta Houston Los San Tampa Washington, Total
Angeles Francisco D.C.
Fax machines - - 1 - - 1
or copiers
VCRs - - 1 - - -
Computer - 3 3 6 2 3
printers
Computer 3 11 - 2 1 11
monitors
Laptop - 2 - 2 - 1
computers
Scanners 1 - - 1 1 2
Personal - 11 11 6 2 7
computers
Total number 4 27 16 17 6 25
of assets
Total
acquisition
cost $1,354 $35,896 $26,195 $27,589 $5,978 $21,677 $118,689
Source: GAO analysis of test findings.
The Information Resources Management department (IRM) at the six medical
centers we visited had developed alternative procedures to maintain
accountability for computer equipment that cost less than $5,000. However,
we found many instances in which these procedures were not used
effectively. For example, a separate listing prepared by the Los Angeles
center's IRM was not used to update the property location information in
the property control record, which showed the initial IRM storage room
instead of the final location to which computer equipment
was assigned. Further, the IRM record was not kept up to date, a factor in
IRM personnel being unable to locate 22 of the 30 IRM items we selected
for observation.
Our standards for internal control require that key duties be divided or
segregated among different people to reduce the risk of error or fraud.
However, one of the methods for taking physical inventory of property
established in VA's handbook provides that each party responsible for
property items will (1) receive a listing of accountable property items
charged to him or her according to the property management system; (2)
conduct a physical count; and (3) sign and date the listing, certifying
the existence of and continuing need for the property for which he or she
was responsible. Allowing the party responsible for the custody of
property assets to attest to the existence of those same assets is
contrary to the segregation of duties standard and compromises the control
provided by taking an independent physical inventory. To illustrate the
minimal value of such procedures, property officials at two medical
centers told us that some service line managers just sign the inventory
list without verifying the existence of the equipment. These practices
would result in creating or perpetuating property control record errors if
listed items had been lost, stolen, loaned, transferred, or otherwise
disposed of. VA's handbook also requires the involvement of A&MM officials
in quarterly spot checks to verify inventory accuracy, but A&MM officials
at only two of the locations we visited indicated they perform regular
spot checks.
A&MM staff at the Atlanta medical center told us they conducted periodic
inventories of personal property rather than delegating that control
function to parties responsible for the property. They also told us that
the Atlanta facility considers computer equipment to be sensitive and,
therefore, accountable. At this location, we observed 62 of 100 test items
compared to from 13 to 39 of the 100 items at each of the other five
locations we visited, all of which performed physical inventories
primarily by using equipment lists certified by property custodians.
Subsequent to our visit, property officials from the San Francisco medical
center told us that they had located all equipment items with an
acquisition cost of $5,000 or more that we had selected for testing, and
officials from the Washington medical center told us they had located 10
additional items that we selected for observation, one of which was over
$5,000. However, because we were no longer on site and could not verify
the existence of these items, the additional found items are not
incorporated in the statistics we present.
Agency officials provided us with a copy of proposed revisions to VA's
property policy guidance that address some of the weaknesses we
identified. While the draft policy adds 27 specific categories of
equipment that would require accountability regardless of cost, including
computer equipment, it reduces the frequency of spot checks from quarterly
to semiannually and addresses the physical inventory segregation of duties
issue only minimally by requiring that 5 percent of inventory be verified
by disinterested parties.
VHA Controls over Process for Returning Drugs for Credit Was Weak
Internal control over drugs held for return credit, which according to VHA
officials is left to the discretion of medical center management, provided
no assurance that the six pharmacies we visited were receiving the proper
amount of credits for returned drugs. All six of the pharmacies used
contractors to return the drugs, and agency officials said that using
contractors had increased the amount of credits VA received for returned
drugs. However, all six locations lacked information about which drugs
qualified for credit, and only one pharmacy inventoried nonnarcotic drugs
before they were turned over to the contractor. Accordingly, none of the
pharmacies had the basic information needed to verify that credits
received were correct and complete. We also found that no analytical
review of credits for returned drugs, focused on maximizing the amount of
credits received, was performed at the location, network, or agency level.
In addition, we identified security weaknesses. Nonnarcotic drugs held for
return without a control listing were stored in unsecured open bins
readily accessible to anyone within the pharmacy at each facility except
the San Francisco and Tampa medical centers.
VHA Relies on Others to Determine the Amount of Credits for Returned Drugs
Standards for Internal Control in the Federal Government10 states that
internal control should provide reasonable assurance that effective and
efficient use of the entity's resources is achieved. VHA officials told us
that controls over returned drugs and related credits were left up to
pharmacy managers at individual medical centers. However, we found that
each of the six medical centers we visited essentially used an honor
system for returning drugs to manufacturers for credit, relying on
contractors that collected and processed recalled, expired, or
deteriorated drugs. The contractors packaged the drugs at the medical
centers and shipped them
10 GAO/AIMD0021.3.1.
either to the contractors' processing facilities or, if required by the
manufacturers, to the manufacturers' processing facilities. For drugs
shipped to the contractors' facilities, the contractors (1) determined
which drugs were returnable; (2) returned drugs qualified for credit to
the manufacturers and destroyed the nonreturnable drugs; and (3) provided
the pharmacy an itemized list of drugs collected, and their disposition,
and an itemized estimate of credits to be received. The drug manufacturers
determined the final amount of credits issued. While reviewing
documentation for drugs that were returned by the six medical centers in
September 2002, we found none of the pharmacies had determined if they
received appropriate credit for the drugs they turned over to the
contractor. Further, none of the pharmacies could determine if the credits
received were complete or correct because all lacked detailed information
about which drugs the manufacturers accepted for credit. In addition, none
of the medical centers except Tampa maintained lists of nonnarcotic drugs
turned over to the return drug contractor.
Medical center pharmacy staff told us there are over 1,000 drug
manufacturers, each with its own policies for returning drugs for credit.
For example, one drug manufacturer might require that a drug be returned
30 days prior to its expiration to qualify for credit, another drug
manufacturer might allow a credit for a drug 30 days past its expiration,
and another might not allow credits at all. Furthermore, a VA
pharmaceutical return contractor informed us that the manufacturers
frequently change their policies. Consequently, medical center pharmacy
managers lacked information that would enable them to determine whether
the credits they received for returned drugs were correct. As a result,
the pharmacies relied on the contractors' determination of the type and
quantity of drugs that were returnable and relied solely on the drug
manufacturers' determination of the final amount of credits issued for
returned drugs.
In addition to establishing a return policy for drugs, each drug
manufacturer set its own requirements for the process of returning the
drugs and issuing credits. Some drug manufacturers allowed the pharmacy's
contractor to process returned drugs and issued a credit through the
pharmacy's prime vendor. 11 Other manufacturers would only
11 The Pharmaceutical Prime Vendor Program provides VA and other federal
medical facilities a timely and economical method of acquiring
pharmaceutical products through use of contracted distributors, or
wholesalers, known as "prime vendors."
accept returned drugs directly from VHA. Our review of the estimated
credits for nonnarcotic drugs returned in September 2002 showed most were
processed through each pharmacy's prime vendor. Table 3 shows the
contractors' estimated value of credits to be received by the six medical
center pharmacies we visited for nonnarcotic drugs returned during
September 2002.
Table 3: Estimated Credits for Non-Narcotic Drugs Returned September 2002
Atlanta Houston Los San Tampa Washington,
Angeles Francisco D.C.
Through prime $28,213 $30,678 $64,957 $13,511 $31,861 $65,710
vendor
Direct from 6,353 N/Aa 16,609 2,747 4,595 4,111
manufacturers
Total $34,566 $30,678 $81,566 $16,258 $36,456 $69,821
Source: GAO analysis of pharmaceutical returns contractors' data
(unaudited).
aThe Houston medical center's pharmaceutical returns contractor did not
distinguish between credits received from the prime vendor and from
manufacturers.
The return contractor informed us that if pharmacies requested, it could
provide a report on the actual credits issued through the prime vendor for
specific returned drugs. None of the pharmacies we visited indicated they
were aware of this capability. Using these reports might facilitate the
pharmacies' reconciliation of credits received with drugs returned. As
shown in table 3, analyzing the credits processed through the prime vendor
could account for 80 percent or more of estimated credits.
Pharmacies and VHA Managers Performed No Analysis of Drugs Returned for
Credit
Standards for Internal Control in the Federal Government12 calls for
establishing performance measures that facilitate analysis so appropriate
actions are taken. None of the six medical centers had established
performance measures or any kind of mechanism to oversee credits received
for returned drugs. For example, medical center pharmacy managers we
interviewed did not review the lists of drugs processed for credit
provided by the pharmaceutical return contractor to determine if unusual
trends occurred that might indicate an opportunity to increase credits
received. Periodic analysis of drugs turned in throughout the year could
reveal whether specific drugs were not accepted for credit on a recurring
basis. For instance, drugs being consistently turned in too late to
12 GAO/AIMD0021.3.1.
receive credit would indicate a need to process the drugs differently. If
pharmacy managers reviewed actual returned drugs and credit data and took
necessary corrective action to optimize returns, the net cost of
pharmaceutical operations might be reduced. For example, at the Los
Angeles pharmacy we found that 23 percent, or more than $60,000, of the
$274,000 estimated value of drugs returned in September 2002 did not
receive a credit because the drug expiration dates exceeded the
manufacturers' requirements.
Medical center pharmacy officials stated that it was not cost effective to
perform any of these control activities for returned drugs. However, the
pharmacies had done no studies or analyses to document this conclusion. In
fact, at one pharmacy, we noted that the chief pharmacist was not aware of
the value of his pharmacy's yearly credits from returned drugs. Having
initially told us that his pharmacy's yearly credits from returned drugs
were only about $10,000, he subsequently reviewed the return documentation
and told us his pharmacy received over $124,000 in returned drug credits
for fiscal year 2003.
We inquired of VA's Pharmacy Benefit Management staff whether any
agencywide analysis or study had been done to determine the reasons why
more returned drugs had not qualified for credit. They stated that they
had not undertaken such an analysis but believed credits had greatly
increased through the use of a contractor to return drugs to
manufacturers. They also told us that under their previous system, the
material management staff of each medical center returned the drugs to the
manufacturers and credits received for returned drugs had been minimal.
Guaranteed Returns, contractor for five of the six medical centers we
visited, reported that of the $21.5 million estimated return value of
drugs it processed for VHA in fiscal year 2003, VHA received $5.7 million
in credits for returned drugs.
Without review and analysis of return drug documentation, the pharmacies
cannot determine what control procedures would be cost effective. Further,
despite the improved results obtained from using pharmaceutical return
contractors, without agency oversight of returned drugs and related
credits based on established performance measures as called for in our
standards for internal control, VHA cannot be reasonably assured that
stewardship of agency resources is effective.
Lack of Security Made NonNarcotic Drugs Held for Return Vulnerable to
Fraud
Standards for Internal Control in the Federal Government13 states that
access to resources should be limited to authorized individuals. We found
that at four of the six pharmacies visited, physical control over
nonnarcotic drugs held for return was lacking. The San Francisco pharmacy
stored such drugs in a locked bin and the Tampa facility limited access to
a secured area, but the other four locations used open, unsecured bins.
Anyone with access to the pharmacy also had access to the drugs. Thefts
would be very difficult, if not impossible, to detect because the
pharmacies did not maintain lists of the nonnarcotic drugs held for
return. The drugs were simply deposited in the bin. The lack of physical
control over nonnarcotic drugs held for return represents a potential lost
opportunity to maximize return credits and to reduce the risk of theft or
misuse of these drugs. During our review, lapses in security at two of the
pharmacies we visited were reported. The VA OIG reported that three
employees of the Houston medical center were convicted of conspiring to
steal large amounts of nonnarcotic pharmaceutical drugs from the pharmacy.
These employees had stolen over $1.3 million of drugs over 3 years. At the
Washington, D.C., medical center, as discussed in our recent report on VHA
personnel screening procedures,14 we found that one employee of the
pharmacy had been convicted for possession of illegal drugs prior to VHA
employment. While these incidents may not relate directly to drugs held
for return to manufacturers, they indicate the risks involved and
underscore the clear need for effective control over these drugs. The
combination of weaknesses in record keeping and physical controls over
nonnarcotic drugs held for return exposed them to potential loss, theft,
or unauthorized use.
13 GAO/AIMD0021.3.1.
14 U.S. General Accounting Office, VA Health Care: Improved Screening of
Practitioners Would Reduce Risk to Veterans, GAO04566 (Washington, D.C.:
Mar. 31, 2004).
Controls over Parttime Physician Time and Attendance Could Be Strengthened
Further
Our review of parttime physician time and attendance documentation for the
two pay periods ending in September 2003 showed that scheduled and actual
hours worked were not always documented according to policy at the six
medical centers we visited. Also, specific hours worked recorded by
physicians on their time and attendance reports sometimes differed from
information entered in the payroll system. We also found that latitude
provided in VHA's Directive 2003-001,15 issued in January 2003, on time
and attendance of parttime physicians was a factor in the various ways the
six locations carried out parttime physician attendance monitoring
responsibilities. While newly emphasized policies stressed the importance
of this matter, compliance in some cases had been slow to develop and
oversight processes varied and were not fully effective.
Scheduled and Actual Hours Worked Were Not Always Documented in Accordance
with Policy
Our standards for internal control state that control activities, such as
approvals and authorizations, are integral to an entity's accountability
for stewardship of resources. Consistent with that management control
objective, VHA's January 2003 directive called for specifying work
schedules in writing in advance of the biweekly pay period, showing the
specific days and hours that parttime physicians were to work, including
core hours when employees working adjustable shifts must be present. Our
review showed that schedules were not always established in advance of the
pay period as required by VHA. For the two pay periods ending in September
2003, our review of records for 10 parttime physicians at each of the six
locations we visited revealed that only the Houston medical center had
documented preapproved schedules for all physicians whose records we
tested. A contributing factor for this weakness was that an official at
one location told us parttime physicians with fixed schedules did not
require a documented preapproved schedule. Almost onethird of the parttime
physician records that we reviewed did not include the required documented
schedule. However, all those who had documented schedules also had core
hours established as required. Table 4 summarizes the results of our work
regarding parttime physician policies and their schedules at the centers
we visited.
15 U.S. Department of Veterans Affairs, "Time and Attendance for Parttime
Physicians," VHA Directive 2003-001.
Table 4: Part-time Physician Schedule Documentation
Atlanta Houston Los San Tampa Washington,
Angeles Francisco D.C.
Part-time policy Yes Yes Yes Yes Yes Yes
established
Number of part-time 9a 10 10 10 10
physicians reviewed
Work schedules and
core hours
established 7 10 5 6 9
Core hours equal 25 7 10 5 6 9
percent or more
Source: GAO analysis of VA medical center data.
aOne of the 10 physicians selected for testing worked full time during the
test period.
Failure to document schedules can lead to confusion about when a physician
should be at work. The VA OIG's February 2004 report on VA medical center
parttime physician time and attendance stated that 15 of 58 parttime
physicians who were not present when scheduled during a 1day test said
they had changed their hours without getting written approval.
Our internal control standard regarding accurate recording of transactions
and events applies to the entire process or life cycle of a transaction or
event from initiation and authorization through its final classification
in summary records. Our comparison of manually prepared time and
attendance records with computerized payroll system timecards indicated no
differences between total hours worked and total hours entered in the
payroll system for the cases we tested. However, we found that when
parttime physicians temporarily modified their approved work schedules,
the changes they noted on their forms 45631a, used to document, review,
and approve actual hours worked, were sometimes not entered in the
computerized payroll system. At five of the six medical centers,16 we
compared information shown on the payroll system timecards to the forms
45631a that were signed by the parttime physicians, timekeepers, and the
physicians' supervisors. At four of those five medical centers, we noted
at least one instance of a difference between the specific days and hours
worked shown on a parttime physician's form 45631a and that information
shown on the corresponding payroll system timecard.
Timekeepers and other medical center officials told us that recording
temporary changes for actual time worked in VHA's computerized payroll
16 At the Washington, D.C., medical center, all parttime physicians were
on fixed schedules and did not prepare time and attendance form 45631a for
the pay periods we tested.
system is difficult because the system is inflexible. As a result, if
total hours that a parttime physician actually worked during a pay period
equaled the total hours scheduled, timekeepers often entered the
physician's scheduled hours into the computerized payroll system rather
than the actual hours worked. However, accurate payroll system information
about specific hours worked is important to satisfy VHA's need to document
whether parttime physicians fulfill their core hour requirements.
Monitoring Parttime Physician Attendance Varied by Location and Service
Our standards for internal control17 state that an entity's documentation
of transactions and other significant events must be complete and
accurate. At the six medical centers we visited, we found variation in the
design and effectiveness of medical center procedures concerning the way
supervisors and timekeepers checked and documented daily employee
attendance and how facility management periodically monitored employee
compliance with time and attendance requirements.
VHA's January 2003 directive on parttime physician time and attendance
referred to VA's underlying policy manual that established requirements
for supervisors or timekeepers to have personal knowledge that parttime
physicians worked the hours or days shown on their time and attendance
forms. Timekeeping procedures that included keeping a record of each
physician's daily attendance throughout a pay period provided greater
reliability than those that relied on the physicians', their timekeepers',
or their supervisors' memories. With working arrangements of parttime
physicians, their supervisors, and timekeepers that vary among the service
centers within a medical center, we found that the timekeepers at the
medical centers we visited accounted for daily attendance of physicians
using a wide variety of procedures. While the Houston medical center
established a signin procedure for all parttime physicians, the other five
medical centers relied primarily on the timekeepers' observation of
physicians' daily attendance. At those facilities, the procedures often
differed among service centers and included activities such as timekeepers
making informal notes on their personal calendars or preparing
calendarlike worksheets to check off the names of each parttime physician
when he or she was observed at the center during a scheduled workday.
While each process offered a level of control over time and attendance,
they all
17 GAO/AIMD0021.3.1.
had limitations and none provided assurance that parttime physicians were
on duty during their core hours.
For example, on the surface, a signin procedure would seem to offer more
definitive assurance; however, effectiveness depends on how well the
procedure is implemented. On the day we reviewed parttime physician signin
sheets at the Houston medical center, we noted that only 2 of 15
physicians scheduled to work had signed in. Timekeepers told us they
observed 5 other physicians in the facility and 1 had advance approval to
attend a lecture. However, the timekeepers also told us 2 other parttime
physicians scheduled to work had called in and stated that they were
"accounted for," and the remaining 5 had not reported in or otherwise
confirmed their attendance. Houston's failure to enforce its signin
procedures for its parttime physicians is an example of compromised
control effectiveness that impaired medical center management's ability to
know if parttime physicians worked when scheduled.
While VHA's January 2003 directive identified medical center management's
responsibility for monitoring compliance with parttime physician time and
attendance policy, the methodology for implementing that responsibility
was left to the discretion of facility management. Some of the
methodologies adopted were less effective than others. For example, while
the Atlanta medical center service areas checked attendance for 5 percent
of parttime physicians one day each month, at the San Francisco center
service areas checked attendance of all parttime physicians at least one
day per quarter, and its Office of Human Resource Management made random
spot checks. In addition to physical observation, other methods used for
making these periodic surveys of attendance at the six locations included
monitoring doctors logging into the facility's computer network,
monitoring doctors' notes entered into VHA's patient records system, and
paging doctors to determine if physicians used medical center telephones
to respond.
The wide variety of parttime physician time and attendance procedures that
have been developed by the medical centers we visited reduces VHA
management's level of assurance that controls are effective and agency
objectives are being achieved. We believe an opportunity exists for the
agency to study the various medical center and service area procedures so
that VHA can provide more specific direction about the most effective ways
to improve control over parttime physician time and attendance agencywide.
Conclusions The weaknesses in internal control that we identified at the
six VA medical centers we visited leave the agency vulnerable to waste,
fraud, and abuse. Improving the design and implementation of policies
regarding personal property will help improve accountability for agency
assets, especially sensitive property. VHA managers performed no
analytical oversight of credits for returned drugs, and the six medical
centers had no effective control over the amount of credits for drugs
returned to manufacturers. Some analysis of drug return transactions would
provide management with a basis to determine what control activities would
provide an appropriate cost/benefit ratio. Current policies and procedures
for monitoring parttime physician time and attendance, if implemented more
effectively, may provide reasonable assurance that management's objectives
will be met. In addition, the wide range of physician attendance
monitoring procedures developed by the various medical centers and service
areas provides an opportunity to improve controls agencywide if their
relative effectiveness is studied. While some medical centers have already
taken positive steps to improve controls over these areas, appropriate
direction from management will spur action agencywide and help reduce
vulnerability to waste, fraud, and abuse.
Recommendations for Executive Action
We are making the following 17 recommendations to improve the internal
controls over the operating areas that were the subject of our work. Some
of these recommendations require attention of VA management at the
department level, others VHA, and still others VA medical center
management. We recommend that the Secretary of Veterans Affairs direct the
Assistant Secretary for Management to
o clarify existing guidance and establish consistent parameters for
personal property that is required to be accounted for in the property
control records and that is subject to physical inventory to include
sensitive property,
o provide a more comprehensive list of the type of personal property
assets that are considered sensitive for accountability purposes,
o direct that physical inventories of personal property be performed by
the A&MM staff or other parties who are independent of those with property
custodian responsibilities, and
o reinforce VA's requirement to attach bar code labels to agency
personal property.
To improve accuracy of VA's time and attendance records for parttime
physicians, we recommend that the Secretary of Veterans Affairs direct the
Assistant Secretary for Management to coordinate all time and attendance
system changes with VHA, in order to ensure that the time and attendance
system facilitates entry of actual hours and days worked by parttime
physicians into VA's permanent electronic time and attendance record.
To improve oversight of medical center operations, we recommend that the
Acting Under Secretary for Health
o designate a headquarterslevel staff office to monitor medical
facilities' credits for returned drugs;
o review returned drug credits and related pertinent information for VA
medical facilities and determine, especially for those with unusual
performance patterns, whether there might be additional opportunities for
credits;
o develop procedures to periodically test whether the amount of credits
received for returned drugs is correct;
o implement procedures to periodically test whether the amount of
credits that medical centers received for returned drugs is correct;
o conduct a best practices review of procedures implemented by VA
medical centers and service areas to identify those most effective in
documenting daily attendance of parttime physicians and periodically
monitoring employee compliance with time and attendance requirements; and
o use the results of the best practices review to provide more
definitive policy guidance to improve control effectiveness over parttime
physician attendance monitoring.
To address the weaknesses noted during our visits to six VA medical
centers, we recommend that the Acting Under Secretary for Health require
the directors of those medical centers to
o determine the location or disposition of personal property items not
found during our site visits;
o review property records to identify and correct erroneous or
incomplete data fields;
o prepare a running list of all nonnarcotic drugs held for return in
facility pharmacies as they are removed from current supplies to compare
with contractorprepared lists of returned drugs;
o improve physical security over nonnarcotic drugs held for return in
facility pharmacies as they are removed from current supplies; and
o analyze information regarding drugs returned to manufacturers to
identify potential improvements that might increase the amount of credits
received, such as improving the timeliness of returning drugs consistently
turned in too late to qualify for credit.
We also recommend that the Acting Under Secretary for Health determine
whether the above recommendations pertaining to the facilities we visited
are applicable to all VA medical facilities.
Agency Comments VA provided written comments on a draft of this report.
In its response, VA agreed with our conclusions and recommendations and
reported that it is developing an action plan to implement them.
Additionally, VA's response stated that it is pursuing a number of
strategies to improve the processing of expired medications held for
credit, the monitoring of parttime physician time and attendance, and the
inventory records of all equipment. VA also provided technical
clarifications, which we incorporated where appropriate. VA's written
comments are reprinted in appendix II.
We are sending copies of this report to the Ranking Minority Member,
Subcommittee on Oversight and Investigations, House Committee on Veterans'
Affairs; the Chairman and Ranking Minority Member, House Committee on
Veterans' Affairs; the Chairman and Ranking Minority Member, Senate
Committee on Veterans' Affairs; the Secretary of Veterans Affairs; the
Acting Under Secretary for Health, Veterans Health Administration; and
other interested parties. We will also make copies
available to others upon request. In addition, the report will be
available at no charge on the GAO Web site at http://www.gao.gov.
Should you or your staff have any questions on matters discussed in this
report, please contact me at (202) 5126906 or by email at
[email protected] or Jack Warner, Assistant Director, at (202) 5124679 or
by email at [email protected]. Major contributors to this report are
acknowledged in appendix III.
Sincerely yours,
McCoy Williams Director Financial Management and Assurance
Appendix I
General Background Information for Selected VA Medical Centers, Fiscal
Year Ended September 30, 2003 (Unaudited)
Los San
VA medical Atlanta Houston Angeles Francisco Tampa Washington,
centers D.C.
Full-time 1,893 2,704 3,761 1,542 3,753 1,759
employees
Part-time 105 179 785 254 250
employees
Inpatient 6,447 10,744 8,421 2,669 10,901 6,412
admissions
Outpatient 498,511 651,203 921,778 357,833 592,117 455,308
visits
Operating 285 475 887 251 619
beds
Pharmacy
prescriptions
filled 1,152,121 1,947,149 1,268,535 647,887 N/Aa 761,224
Fiscal year $195,982,752 $350,126,771 $460,971,988 $228,717,772 $450,306,564 $210,143,108
2003 budget
Fiscal year
2003 drug
expenditures 37,317,098 52,747,012 47,594,623 23,600,000 78,049,310 26,200,000
Net estimated
value of
returned 131,965 154,178 211,302 106,026 131,647 141,975
drugs
Credits for
returned 105,364 100,134 140,901 60,593 74,903 104,863
drugs
Estimated
cost of
nonreturnable
drugs 57,277 154,432 260,140 60,299 41,380 76,348
Source: GAO presentation of VHA medical center data (unaudited).
aThe Tampa medical center tracks inpatient drugs on a unit dose basis
rather than a prescription basis. Therefore, this information was
unavailable.
Appendix II
Comments from the Department of Veterans Affairs
Appendix II
Comments from the Department of Veterans
Affairs
Appendix III
GAO Contacts and Staff Acknowledgments
GAO Contacts McCoy Williams, (202) 5126906 Jack Warner, (202) 5124679
Acknowledgments In addition to those named above, the following
individuals made important contributions to this report: Kwabena Ansong,
Sharon Byrd, Cary Chappell, Lisa Crye, Fred Evans, Lou Fernheimer, Jeff
Isaacs, Julia Matta, Bonnie McEwan, Christina Quattrociocchi, Donell Ries,
Alana Stanfield, and Jason Strange.
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