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Report File
Date Issued
Submitting OIG
Department of Veterans Affairs OIG
Other Participating OIGs
Department of Veterans Affairs OIG
Agencies Reviewed/Investigated
Department of Veterans Affairs
Components
Office of Acquisitions, Logistics, and Construction
Report Number
22-02739-210
Report Description

VA’s Denver Logistics Center (DLC) manages millions of dollars of supplies intended for Veterans Health Administration (VHA) facilities and patients. According to VA policy, VA staff who use, supervise, or control VA-owned goods are accountable for those goods from acquisition to disposition.The VA Office of Inspector General (OIG) audited to determine whether the DLC maintained accurate inventories of VA-owned goods and identified significant deficiencies in inventory management operations and systems. Specifically, the DLC’s inventory records did not align with on-hand supplies or include all goods, and the DLC lacked an effective internal control system. Inaccurate inventories, weak internal controls, and lack of reporting outside of the DLC created the risk of misleading financial reporting and increased costs to VHA. Further, supplies and veteran information kept at DLC warehouses were not physically secured.The audit also revealed the DLC did not have appropriate system controls to protect inventory data. The DLC’s inventory management system software has access and security vulnerabilities and lacked transparency. Like the VA-owned supplies on hand, the DLC system hardware was also vulnerable to physical access and security risks. Overall, the DLC’s inventory ordering system is becoming unsustainable.The DLC has largely operated under minimal oversight of its inventory operations, and the OIG found that oversight to be ineffective at ensuring VA policies were followed and VA-owned goods protected. The independent nature of DLC operations, along with the deficiencies identified in this audit, impedes the DLC from effectively fulfilling its mission and creates a heightened risk of fraud, waste, and abuse.VA concurred with the OIG’s 11 recommendations to improve the inventory management operations and oversight of the DLC and with another eight recommendations that address information system deficiencies.

Report Type
Audit
Location

CO
United States

Number of Recommendations
14
Questioned Costs
$0
Funds for Better Use
$0

Open Recommendations

This report has 10 open recommendations.
Recommendation Number Significant Recommendation Recommended Questioned Costs Recommended Funds for Better Use Additional Details
07 No $0 $0

Develop and deliver formal training to logistics and warehouse staff on inventory management policies, procedures, and tools.

09 No $0 $0

Ensure the Denver Logistics Center staff complete reports of survey for adjustments to inventory in accordance with VA logistics management policy, and communicate such information to the National Acquisition Center.

11 No $0 $0

Conduct an independent, comprehensive, and multiyear financial audit that includes wall-to-wall inventory assessments of the Denver Logistics Center.

12 No $0 $0

Transfer the stewardship and responsibility for Denver Logistics Center systems to the Office of Information and Technology.

13 No $0 $0

In collaboration with the Office of Information and Technology, establish information system controls for user access, segregation of duties designations, permission access, and privilege access for the inventory management systems and data.

14 No $0 $0

Establish and perform routine reviews of the access levels for users with direct access to the inventory management systems and ensure that access is limited to those who have a defined business purpose.

15 No $0 $0

In collaboration with the Office of Information and Technology, ensure the Denver Logistics Center meets physical access, security, and contingency planning requirements for its information management systems.

16 No $0 $0

Establish a connection for Denver Logistics Center inventory data to VA’s Corporate Data Warehouse.

18 No $0 $0

Ensure the Denver Logistics Center develops and maintains comprehensive documentation of the information system to support operations and train information resource management staff.

19 No $0 $0

Ensure security documentation accurately supports the proper controls are implemented, tested, and representative of the system security.

Department of Veterans Affairs OIG

United States