Audit of VHA’s Prosthetics Supply Inventory Management

Report Information

Issue Date
Closure Date
Report Number
11-00312-127
VA Office
Veterans Health Administration (VHA)
Acquisitions, Logistics, and Construction (OALC)
Information and Technology (OIT)
Report Author
Office of Audits and Evaluations
Report Type
Audit
Recommendations
10
Questioned Costs
$0
Better Use of Funds
$0
Congressionally Mandated
No

Summary

Summary
We conducted this audit to evaluate VA’s medical centers’ (VAMC) prosthetic inventory management. We found VHA cannot accurately account for prosthetic inventories. VAMC inventories exceeded current needs for almost 47 percent of approximately 93,000 specific prosthetic items and inventories were too low for nearly 11 percent of the items. As a result, VAMCs spent about $35.5 million buying prosthetics in excess of current needs – increasing the risks of supply expiration. Inaccurate inventories disrupt patient care due to shortages and lead to losses associated with diversion. We recommended the Under Secretary for Health develop plans to implement an improved inventory system and develop a training-to-certification program for prosthetic inventory managers. The Under Secretary for Health concurred with our findings.

Open Recommendation Image, SquareOpenClosed and Implemented Recommendation Image, CheckmarkClosed-ImplementedNot Implemented Recommendation Image, X character'Closed-Not Implemented
No. 1
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
Closure Date: 3/25/2013
We recommended the Under Secretary for Health require VA medical centers to conduct comprehensive physical inventories of stocked prosthetic supplies, adjust Prosthetics Inventory Package and Generic Inventory Package quantities on hand to match physical inventory quantities, and begin eliminating identified excess inventories and purchasing supplies to avoid identified shortages.
No. 2
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
Closure Date: 12/11/2013
We recommended the Under Secretary for Health collaborate with the VA Office of Information and Technology to develop a detailed plan of the steps needed to replace Prosthetics Inventory Package and Generic Inventory Package with a comprehensive modern inventory system, including milestones for deliverables and a methodology for tracking progress.
No. 3
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
Closure Date: 8/5/2013
We recommended the Under Secretary for Health establish a mechanism to ensure VA medical center prosthetic supply inventory managers receive the training required by the Veterans Health Administration's Inventory Management Handbook.
No. 4
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
Closure Date: 1/13/2014
We recommended the Under Secretary for Health collaborate with the Executive Director, Office of Acquisition, Logistics, and Construction, to develop a VA Acquisition Academy curriculum and certification program for prosthetic supply inventory managers that includes training on the inventory management practices and techniques discussed in this report.
No. 5
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
Closure Date: 12/19/2016
We recommended the Under Secretary for Health revise the Veterans Health Administration's Inventory Management Handbook to require at least one prosthetic supply inventory manager from each VA medical center to attend VA's Acquisition Academy's Supply Chain Management School and become Certified VA Supply Chain Managers.
No. 6
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
Closure Date: 10/1/2014
We recommended the Under Secretary for Health establish a mechanism to identify surgical device implants stored in VA medical center inventories, perform cost/benefit analyses of using consignment agreements to procure identified surgical device implants, and when determined to be cost effective, establish surgical device implant consignment agreements.
No. 7
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
Closure Date: 12/11/2013
We recommended the Under Secretary for Health discontinue using the metric of comparing prosthetic excess supply inventory and budgets and establish a mechanism to ensure VA medical centers submit the prosthetic inventory performance metrics required by the Veterans Health Administration's Inventory Management Handbook.
No. 8
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
Closure Date: 11/30/2012
We recommend the Under Secretary for Health include performance measurement information on VA medical centers' management of prosthetic supplies in the monthly compliance report and distribute the reports in accordance with Inventory Management Handbook requirements.
No. 9
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
Closure Date: 12/11/2013
We recommended the Under Secretary for Health establish policies and procedures requiring Veterans Integrated Service Network Prosthetic Representatives to conduct cyclical reviews at VA medical centers within their jurisdiction to evaluate prosthetic supply inventory management practices and provide a comprehensive written report detailing the evaluation results to the Prosthetic and Sensory Aids Service Central Office and Veterans Integrated Service Network and VA medical center directors.
No. 10
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
Closure Date: 11/30/2012
We recommended the Under Secretary for Health revise the Veterans Health Administration's Inventory Management Handbook to address inadequacies related to exempting Prosthetic and Sensory Aids Service; complying with maximum stock level requirements; establishing normal, reorder, and emergency stock levels; and recording supply receipt and usage in automated inventory systems timely.
Total Monetary Impact of All Recommendations
Open: $ 0.00
Closed: $ 35,500,000.00