Financial Efficiency Review of the Marion VA Healthcare System in Illinois

The OIG assessed the oversight and stewardship of funds and identified opportunities for cost efficiency at the Marion VA Healthcare System in Illinois. The review focused on four areas:1. Use of the Medical/Surgical Prime Vendor-Next Generation program. The program is a collection of contracts that streamlines purchasing and distribution for certain supplies. The team found that the system was unable to fully achieve the program’s cost savings, in part because some items were in short supply during the pandemic or on back order with the prime vendor.2. Purchase card use. The team did not find staff were improperly splitting purchases to stay below the card purchase limits. Moreover, system staff properly maintained supporting documentation for the sampled transactions and considered contracts instead of purchase cards when appropriate. However, the purchase card program coordinator did not always perform required quarterly audits, and oversight on training for cardholders could be strengthened.3. Open obligations. The team found that the system’s fiscal staff did not always review open obligations for goods and services to determine if they were still valid and necessary. This leaves the system vulnerable to the risk that those funds will be not used in the year they were appropriated, as required.4. Pharmacy operations and cost-savings efforts. The review team found the system had a significant gap between actual and expected drug costs when compared with like facilities. However, it achieved a higher inventory turnover rate than VA’s target rate, which helps reduce the cost of storing inventory.The OIG made eight recommendations for improving cost efficiency. The number of recommendations should not be used, however, to gauge the system’s overall financial health. The intent is for system leaders to use these recommendations as a road map for improvement in the areas reviewed.