Financial Efficiency Inspection of the VA Augusta Health Care System in Georgia

The VA Office of Inspector General (OIG) conducts financial efficiency inspections to assess the VA healthcare systems’ oversight and stewardship of funds and to identify opportunities for achieving cost efficiencies. The OIG identified several opportunities for improvement in four areas: accrued expense oversight, purchase card use, inventory and supply chain management, and pharmacy operations. The team reviewed a sample of outstanding accrued expenses for goods or services ordered, obligated, and received but not paid for and due in the current accounting period. Following the review, the team projected that 57 percent of outstanding accruals amounting to an estimated $4.6 million were not supported by documentation such as an invoice and should have been used for other purposes to benefit veterans. Regarding purchase card use, the inspection team projected the healthcare system had noncompliance errors in at least 6,800 purchase card transactions, totaling at least $6.7 million. These errors frequently lead to improper payments. The team identified discrepancies in three inventory storage areas between what was reported in the inventory system and what was physically present. For items reviewed by the team, the system records were overstated by almost 38,800 items (about 99 percent) totaling over $2.1 million. Errors could diminish the healthcare system’s ability to effectively budget for the purchase of supplies to meet patient care needs. Finally, the team observed a growing gap between observed and expected drug costs. In FY 2020 observed drug costs were almost $2.8 million more than expected; in FY 2021, about $3.8 million; and in FY 2022, over $5 million. Anticipating drug costs and knowing when to restock helps a healthcare system maintain needed supplies and make the best use of appropriated funds. The team made nine recommendations to improve oversight.