Financial Efficiency Inspection of the VA Milwaukee Healthcare System

Report Information

Issue Date
Closure Date
Report Number
22-03768-156
VISN
1
State
District
Continental
VA Office
Veterans Health Administration (VHA)
Report Author
Office of Audits and Evaluations
Report Type
Financial Inspection
Report Topic
Financial Management
Major Management Challenges
Stewardship of Taxpayer Dollars
Recommendations
9
Questioned Costs
$0
Better Use of Funds
$0
Congressionally Mandated
No

Summary

Summary

The VA Office of Inspector General (OIG) conducted this inspection to assess the VA Milwaukee Healthcare System’s oversight and stewardship of funds and to identify potential cost efficiencies. The review assessed the following financial activities and administrative processes to determine whether the healthcare system had appropriate oversight and controls in place: use of managerial cost accounting information, accrued expense oversight, purchase card use, and inventory and supply management. The OIG found that the healthcare system could improve the following: • Use of management cost accounting information. The healthcare system did not always use that information to enhance efficiency, help reduce costs, or inform business decisions. • Accrued expense oversight. The number of invalid open obligations grew from 23 in fiscal year 2021 to 43 in fiscal year 2022. Because Veterans Integrated Service Network (VISN) 12 and the local contracting office have not worked together, the list of invalid obligations remaining open has continued to grow, leaving about $1.9 million in funds attached to orders that could be used for other purposes. • Purchase card use. Cardholders and approving officials did not always work together to ensure compliance with VA policy. The team also determined that contracts could have been considered for an estimated 6,300 transactions totaling at least $6.7 million. • Inventory and supply management. Information in the Supply Chain Common Operating Picture were not being used to monitor stock levels or meet the required accuracy rate for inventory as required by VHA policy. The healthcare system could improve effectiveness and efficiency by ensuring inventory values are correctly recorded in the Generic Inventory Package. OIG made eight recommendations to the healthcare system director and one to the VISN 12 director. The recommendations address issues that, if left unattended, may eventually interfere with effective financial efficiency practices and the strong stewardship of VA resources.

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: 4/24/2024

The VA Milwaukee Healthcare System director to establish a plan to use VA’s cost accounting system information for the development of relevant, detailed cost information and to identify alternative ways to reduce costs and enhance efficiency as identified by VA financial policy.

No. 2
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
Closure Date: 4/24/2024

The VA Milwaukee Healthcare System director to consider a plan to align VA Milwaukee Healthcare System financial management practices with federal financial accounting standard practices. This could include using cost information for performance measurement, budgeting and cost control, and making economic choices.

No. 3
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
Closure Date: 4/24/2024

The VA Milwaukee Healthcare System director to ensure initiating services communicate status of delivered orders in a timely manner so healthcare system finance staff can comply with VA Financial Policy, vol. 2, chap. 5, “Obligations Policy,” by ensuring monthly that proper accruals have occurred.

No. 4
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
Closure Date: 4/24/2024

The VA Milwaukee Healthcare System director to collaborate with the Veterans Integrated Service Network chief financial officer and network contracting office to establish a monthly prioritized listing of contract modifications and canceled orders for goods or services that have not been addressed by contracting officers to ensure modification actions are completed.

No. 5
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
Closure Date: 4/24/2024

The Veterans Integrated Service Network 12 director to work with the network contracting office to amend the current contract or establish a new contract to include all needed laboratory tests.

No. 6
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
Closure Date: 1/17/2024

The VA Milwaukee Healthcare System director to establish controls to confirm approving officials and purchase cardholders review purchases for VA policy compliance and ensure contracting is used when it is in the best interest of the government.

No. 7
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
Closure Date: 1/17/2024

The VA Milwaukee Healthcare System director to require purchase cardholders to submit a request for ratification for any unauthorized commitments identified.

No. 8
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
Closure Date: 7/17/2024

The VA Milwaukee Healthcare System director to develop and implement a plan to ensure data accuracy and reliability in the Generic Inventory Package per Veterans Health Administration policy.

No. 9
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
Closure Date: 7/17/2024

The VA Milwaukee Healthcare System director to develop better access controls over the contingency space, to ensure less accessibility to reduce missing inventory.

Total Monetary Impact of All Recommendations
Open: $ 0.00
Closed: $ 8,800,000.00