Review of Alleged Use of Wrong VA Funds To Purchase IT Equipment

In November 2015, Congress referred to OIG an allegation that Veterans Integrated Service Network (VISN) 23 may have misused medical funding when procuring information technology (IT) equipment and that purchase orders and contracts appeared to bundle IT hardware and software together with medical equipment while classifying them exclusively as medical equipment. We sought to determine whether appropriate funds were used and procedures were followed for 30 purchase orders and associated contracts. We did not substantiate the allegation and determined the 30 orders (about $57.9 million) and contracts were for IT hardware, software, and services dedicated to patient care. We found all 30 purchase orders were appropriately funded with medical appropriations but that VISN 23 improperly funded 1 purchase for patient WiFi and cable television services (about $245,000) by using the wrong type of medical appropriation. VISN 23 used Medical Support and Compliance funds instead of Medical Services funds because VA’s Office of Information Technology (OIT) guidance on what VISN 23 was allowed to fund with IT appropriations was outdated, unclear, and incomplete. The Office of General Counsel’s (OGC’s) determination that funding patient WiFi using Medical Services funds was acceptable was not communicated to the Veterans Health Administration’s Chief Financial Officer (CFO). We recommended the VISN 23 Director consult with OGC and take corrective actions and also ensure that appropriate funds are used for future IT procurements following the most recent VA policy and OGC guidance. The Director should work with the CFO to determine if an Antideficiency Act violation occurred and take appropriate action. We recommended the Acting Assistant Secretary for OIT update the 2016 IT/Non-IT Policy to address the dissemination of decisions and issues that may be systemic across VA. The Director concurred with Recommendations 1 and 2 and reported corrective actions were completed. We will close them once documentation is received. The Acting Assistant Secretary concurred with Recommendation 3. The corrective action plan is acceptable and we will follow up on its implementation.