Financial Efficiency Inspection of the VA Pittsburgh Healthcare System

The VA Office of Inspector General (OIG) conducted this inspection to assess the VA Pittsburgh Healthcare System’s stewardship and oversight of funds. This inspection assessed the following financial activities and administrative processes to determine whether appropriate controls and oversight were in place: managerial cost accounting information, open obligations oversight, purchase card use, and supply chain management operations.

The OIG found the healthcare system did not consistently use managerial cost accounting information to enhance efficiency, help reduce costs, and make business decisions, and the system’s use did not fully align with federal financial accounting practices.

The healthcare system did not fully comply with VA policies on obligations oversight, resulting in an estimated $87,000 that could have been put to better use and about $63,000 from accruals that were not reviewed and canceled in a timely manner. The system could improve management of open obligations by enhancing reviews of inactive obligations and creating an escalation process when services do not provide status of open orders.

Concerning purchase card transactions, the OIG estimated the healthcare system may have incurred about $403,000 in questioned costs because of split purchases. The system could improve efficiency by complying with VA policies on split purchases or by considering contracts.

Finally, the OIG found the healthcare system’s supply chain management did not ensure days-of-stock-on-hand metrics were met or that supply chain data were accurate. To improve inventory management, the system could strengthen processes and procedures to ensure stock data are recorded correctly and routinely monitored. Facility leaders reported that staffing shortages may have affected local oversight.

The OIG made six recommendations to the healthcare system director. The recommendations address issues that, if unattended, may eventually interfere with financial efficiency practices and the stewardship of VA resources.