Follow-Up Financial Efficiency Inspection of the Southeast Louisiana Veterans Health Care System in New Orleans

Report Information

Issue Date
Report Number
23-02907-216
VISN
16
State
Louisiana
District
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
11
Questioned Costs
$14,980,000
Better Use of Funds
$0
Congressionally Mandated
No

Summary

Summary

The VA Office of Inspector General (OIG) inspected the Southeast Louisiana Veterans Health Care System in New Orleans, Louisiana, in 2021 and made six recommendations. This follow-up inspection found that issues had not been fully resolved in response to those recommendations. The follow-up inspection reassessed the same financial activities and administrative processes: Medical/Surgical Prime Vendor program use, purchase card use, administrative staffing levels, and pharmacy operations.

The inspection team visited the Southeast Louisiana Veterans Health Care System in August 2023; interviewed healthcare system leaders and staff; and reviewed data, supporting documents, and processes related to the healthcare system’s financial efficiency.

The OIG identified issues with Medical/Surgical Prime Vendor program use, purchase card use, and pharmacy operations. In each area, the healthcare system made limited progress improving issues identified in the OIG’s 2021 report. The inspection team found that the healthcare system improved administrative staffing efficiency, but more opportunities for improvement exist.

The OIG reiterated four recommendations from the 2021 inspection where the plans to address the recommendations had not been fully implemented. The OIG also added seven new recommendations to the healthcare system director designed to help officials improve performance. The intent is for system leaders to use these recommendations as a road map to improve financial operations. 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: 4/21/2025

Establish internal controls to help ensure the healthcare system monitors the Medical/Surgical Prime Vendor product list for updates and completes the item conversion process

No. 2
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
Closure Date: 2/6/2025

Ensure that prime vendor contract performance issues are routinely reported to the Medical Supplies Program Office and the Strategic Acquisition Center using established Veterans Health Administration reporting tools.

No. 3
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
Closure Date: 7/21/2025

In coordination with the Strategic Acquisition Center, submit ratifications for any unauthorized commitments following the Federal Acquisition Regulation.

No. 4
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
Closure Date: 2/6/2025

Ensure that the facility-level contracting officer’s representative and ordering officers are appointed and delegated properly and perform all required duties according to the scope and limitation of the designee’s authority.

No. 5
Open Recommendation Image, Square
to Veterans Health Administration (VHA)

Establish internal controls to help ensure the healthcare system submits national contract requests for waiver and justifications prior to purchasing available product list items from nonmandatory procurement instruments.

No. 6
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
Closure Date: 4/21/2025

Ensure cardholders obtain a proper prior approval and maintain segregation of duties, and ensure that cardholders and approving officials perform prompt purchase card reconciliations as required by VA financial policy.

No. 7
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
Closure Date: 4/21/2025

Develop formalized processes and controls to ensure approving officials, cardholders, and the agency contracting office review repetitive open market purchases of goods and services and obtain contracts when it is determined to be in the best interest of the government.

No. 8
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
Closure Date: 7/21/2025

In coordination with the Strategic Acquisition Center, submit a ratification for an unauthorized commitment following the Federal Acquisition Regulation.

No. 9
Open Recommendation Image, Square
to Veterans Health Administration (VHA)

Develop formalized processes for monitoring and achieving efficiency targets and using available pharmacy data to make business decisions.

No. 10
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
Closure Date: 4/21/2025

Develop and implement a plan to increase inventory turnover to meet or exceed the VHA-recommended level, and complete monthly B09 reconciliations consistently to ensure discrepancies are corrected in a timely manner.

No. 11
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
Closure Date: 4/21/2025

Establish measures to improve compliance with the VA directive to avoid end-of-year pharmaceutical purchases.

Total Monetary Impact of All Recommendations
Open: $ 0.00
Closed: $ 14,980,000.00