Federal Reports

VHA staff use nonexpendable equipment—durable items that can be continuously used for two years or more—to deliver patient care and operate medical facilities. This equipment must be inventoried annually if it is valued at $5,000 or more, sensitive in nature, or capitalized property. These inventories minimize the risk of mismanaged or lost property and help ensure items are adequate for patient use. The OIG conducted this audit to determine whether VHA managed accountable nonexpendable equipment in accordance with policy.

Overall, the OIG found VHA’s management of nonexpendable inventory can be improved. The OIG estimated that VHA medical facilities could not account for at least 75,500 items (5 percent). These items had a collective value of at least $210.9 million, which the OIG considered as funds VA could have better used. During site visits, the audit team searched for equipment and did not find an estimated 537,000 items (33 percent) at their last inventoried location. Finally, the audit team found an estimated 62,500 items that facilities may not need.

These concerns were created, in some cases, by staff’s use of the “inventory by exception” process. This means that if an item was accounted for since the last annual inventory—because it needed maintenance, for example—it does not need to be included in the next scheduled annual inventory. However, this process weakens facilities’ assurance that the equipment is accounted for and in good condition because it extends the interval between physical inventories. The OIG also found that the reports of survey processes for missing or damaged items have not been conducted as required, and general oversight of inventories could be strengthened.

The acting under secretary for health concurred with the OIG’s six recommendations to improve the nonexpendable equipment inventory process and related oversight.

We audited New York State’s Hurricane Sandy disaster procurement processes.  Our audit objective was to determine whether the State conducted its Hurricane Sandy-funded disaster recovery procurements using full, fair, and open competition methods.  By continuing to use a November 2012 Governor-issued temporary waiver, the State did not foster open competition and ensure that it obtained the best services at the best prices.  Our testing found that the State used the Governor’s waiver to explain why it did not follow its contracting requirements when it (1) allowed six contracts to extend beyond 5 years, (2) did not follow its mini bid process for two contracts, and (3) entered into four contracts with initial terms of more than 1 year.  During our work, the State indicated the waiver was not expired or explicitly superseded and was still in effect.  Further, the U.S. Department of Housing and Urban Development (HUD) has not instructed disaster recovery grantees to limit the use of waivers.  Although a waiver of requirements, including those for procurement, might be needed immediately following a disaster, the State’s continued use of a waiver 5 or more years later does not appear to be reasonable or cost effective.  The State’s repeated use of the waiver led to numerous contract extensions that cost more than $99 million and other contract changes that increased those contracts’ costs by $103 million.

In addition, the State can improve its disaster recovery procurement processes by addressing its policy’s weaknesses.  Our review of 14 contracts found that the State’s policies (1) allowed agreements to lapse or be backdated and (2) did not fully address potential conflict-of-interest issues.  These issues occurred because Federal regulations required the State to adopt and follow its own procurement requirements, and the State lacked key internal controls.  Further, the Housing Trust Fund Corporation (Corporation), which had oversight authority, gave the State authority to enter into contracts on its behalf.  Improvement in the State’s procurement processes for its remaining disaster recovery funds should ensure that the State (1) limits its potential liability for contractors’ actions and costs, (2) provides full, fair and open treatment to prospective contractors, and (3) obtains the contracted services at the best value, all of which could result in improved program delivery to disaster impacted communities.

We recommend that the Office of Community Planning and Development’s Office of Disaster Recovery issue guidance to all disaster recovery grantees that waivers of requirements related to a disaster’s impact should be for reasonable and limited time periods after a disaster occurs.  Further, the State should revise its policies and procedures to improve its procurement processes and address the identified issues.

This report presents the results of our audits of delivery operations and property conditions in the North Carolina District in the Atlantic Area. 

This report presents a summary of the results of our self-initiated audits of delivery operations and property conditions at three delivery units, as well as district-wide delivery operations in the North Carolina District in the Atlantic Area (Project Number 25-080). The delivery units included the Airport Station in Charlotte, NC, as well as Concord Main Post Office (MPO) and Concord Parkway Station, both in Concord, NC.

We previously issued interim reports to district management for each of the three delivery units regarding the conditions we identified. In addition, we issued a report on the efficiency of operations at the Charlotte Regional Processing and Delivery Center (RPDC), which services these delivery units. judgmentally selected the three delivery units based on the number of Customer 360 (C360) inquiries related to delivery, Informed Delivery5 contacts associated with the unit, and stop-the-clock (STC) scans performed away from the delivery point and compared them to the district average. The units were also chosen based on first and last mile failures and undelivered routes.