The Veterans Health Administration has inadequate controls over its miscellaneous obligations, increasing risk in procurement transactions, GAO has said.
It reported in September 2008 that the VHA recorded over $6.9 billion of miscellaneous obligations for the procurement of mission-related goods and services in fiscal 2007.
According to the VHA, miscellaneous obligations are used to facilitate payment for goods and services when quantities and delivery dates are not known.
The agency’s data indicates that almost $3.8 billion – a little over half – of those obligations are for fee-based medical services for veterans and another 20 percent is for drugs and medicines.
GAO said in 2008 that department 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 increased the risk of fraud, waste, and abuse, said GAO, adding that it confirmed the existence of those flaws through GAO case studies at VHA medical centers in Pittsburgh, Cheyenne, Wyo., and Kansas City.
