The Veterans Health Administration needs to improve the design of controls over its miscellaneous obligations, which it has used for over 60 years to record estimates of obligations to be incurred at a later time, GAO has said.
It said the large percentage of procurements recorded as miscellaneous obligations in fiscal 2007 raised questions about whether proper controls were in place over the authorization and use of billions of dollars.
VHA recorded over $6.9 billion of miscellaneous obligations for the procurement of mission-related goods and services in fiscal 2007, according to GAO-08-976.
VHA officials say miscellaneous obligations were used to facilitate payment for goods and services when the quantities and delivery dates are not known and according to agency data, nearly $3.8 billion, over half, of VHA’s miscellaneous obligations was for fee-based medical services for veterans and another $1.4 billion was for drugs and medicines.
The remainder funded, among other things, state homes for the care of disabled veterans, transportation of veterans to and from medical centers for treatment, and logistical support and facility maintenance for VHA medical centers nationwide, GAO said.
It said agency management is responsible for developing detailed policies and procedures for internal control suitable for their agency’s operations, but that VA policies and procedures were not designed to provide adequate controls over the authorization and use of miscellaneous obligations with respect to oversight by contracting officials, segregation of duties, and supporting documentation for the obligation of funds.
Collectively, these control design flaws increase the risk of fraud, waste, and abuse, the report said.
