VHA Audits

Audit of Procurements Using Prior-Year Funds To Maintain VA Healthcare Facilities 10/01/08. The audit identified unapproved and improper use of expired funds in at least 80 percent of Veterans Integrated Service Network (VISN) contracting activities nationwide amounting to a total of $16.4 million during fiscal year (FY) 2007. This widespread improper use of expired funds occurred primarily because of a lack of policy clarity and other weaknesses in internal controls. While VHA has taken steps to centralize the process to track and approve the use of prior-year funds, it needs to clarify relevant policies and further strengthen controls over these funds. In addition, appropriate administrative action is needed to address personnel who improperly awarded new contracts using expired appropriations. U.S. Department of Veterans Affairs, Office of Inspector General (VAOIG).

Audit of Veterans Health Administration Noncompetitive Clinical Sharing Agreements 09/30/08. VHA lacks reasonable assurance it received the services it paid for because performance monitoring controls over noncompetitive clinical sharing agreements are not effective. Strengthening controls over performance monitoring of noncompetitive clinical sharing agreements could save VHA about $9.5 million annually or $47.4 million over 5 years. Of the estimated savings, only about $96,000 in charges resulting from calculation errors may be recoverable because the terms of most of the sharing agreements we reviewed did not include provisions for adjusting payments. We found performance monitoring weaknesses for all 58 surgical and anesthesiology sharing agreements we reviewed at the 8 VAMCs. As a result, for 30 (52 percent) of the 58 agreements, VAMCs overpaid contractors because COTRs did not verify that VAMCs received the services required at the prices specified.

In addition to performance monitoring issues, we also found that during negotiations of per-procedure sharing agreements, VISN contracting officers agreed to pay at least full Medicare rates. However, the full Medicare rates include a practice component for overhead charges that contractors do not incur when they provide services at VAMCs. Excluding the Medicare practice component, as required by VA policy, could have saved VHA about $2.5 million annually or $12.4 million over 5 years.

U.S. Department of Veterans Affairs, Office of Inspector General (VAOIG).