The VA Office of Inspector General (OIG) assessed the oversight and stewardship of funds by the VA Northeast Ohio Healthcare System and sought to identify potential cost efficiencies. This inspection examined four financial activities and administrative processes to determine whether appropriate controls and oversight were in place: use of managerial cost accounting information, open obligations oversight, purchase card use, and supply chain management operations.The inspection team found that the healthcare system’s use of managerial cost accounting information did not fully align with federal financial accounting standard practices regarding performance measurement, budgeting, cost control, and making economic decisions. The healthcare system also did not always comply with policy to review open obligations and deobligate funds no longer needed. As a result of the healthcare system’s lack of follow up and reconciliations, the team estimated at least $5.5 million in open obligations were invalid, should have been deobligated, and could have been put to better use.Further, the OIG found that 18 of 52 sampled purchase card transactions did not comply with VA policy. Violations included lack of supporting documentation and untimely approvals of reconciliations. The team estimated 100 transactions totaling about $561,000 were modified into smaller parts. And, the healthcare system could benefit from improving the efficiency of inventory oversight by ensuring inventory values are recorded correctly in the Generic Inventory Package. Establishing local processes and procedures for the timely review of data to detect and correct errors would increase the reliability of inventory data and could help ensure metrics are met.The OIG made 10 recommendations for improvement. The recommendations address issues that, if left unattended, may eventually interfere with financial efficiency practices and the strong stewardship of VA resources.
Open Recommendations
| Recommendation Number | Significant Recommendation | Recommended Questioned Costs | Recommended Funds for Better Use | Additional Details | |
|---|---|---|---|---|---|
| 04 | No | $0 | $4,400,000 | ||
| Ensure that healthcare system staff follow policy requirements; and that fiscal staff conduct reviews on all open obligations as required by VA Financial Policy, vol. 2, chap. 5, “Obligations” (2020), updated May 2023. | |||||
| 05 | No | $0 | $0 | ||
| Ensure that healthcare contracting staff follow federal acquisition regulations when terminating contracts for convenience to the government. | |||||
| 06 | No | $0 | $0 | ||
| Establish controls to ensure cardholders comply with record retention requirements, confirm approving officials and cardholders review purchases for VA policy compliance, and ensure contracting is used when it is in the best interest of the government. | |||||
| 07 | No | $0 | $0 | ||
| Require cardholders to submit a request for ratification for any unauthorized commitments identified. | |||||
| 08 | No | $0 | $0 | ||
| Develop and implement a plan to ensure data accuracy and reliability in the Generic Inventory Package. | |||||
| 09 | No | $0 | $0 | ||
| Develop and maintain a standardized training program for logistics and clinical staff on the proper recording of items as they are removed from primary and secondary inventory points. | |||||
| 10 | No | $0 | $0 | ||
| Ensure that MSPV facility-level contracting officers representatives are appointed and designated properly and perform all required duties according to the scope and limitation of the designees authority. | |||||
