Official: VA wastes $5 billion a year in improper purchases
MATTHEW
DALYMay
14th 2015 6:21PM
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WASHINGTON,
DC - MARCH 04: Appropriations Committee Chairman Hal Rogers (R-KY) (L) and
Military Construction, Veterans Affairs, and Related Agencies Subcommittee
Chairman Charlie Dent (R-PA) conduct a hearing about the Veterans Affiars
Department's budget March 4, 2015 in Washington, DC. VA Secretary Robert
McDonald faced questions from the subcommittee about the Veterans Choice
Program, which is supposed to expedite access to private care if vets have been
waiting longer than 30 days or live farther than 40 miles away from a VA
hospital. (Photo by Chip Somodevilla/Getty
Images)
WASHINGTON (AP) — The Department of Veterans Affairs is improperly spending at least $5 billion a year for medical care and supplies being purchased in violation of required practices for competitive bidding and written contracts, a senior VA official said Thursday.
"Gross
mismanagement" by senior agency leaders has wasted billions of dollars and made
a "mockery" of federal laws regarding purchasing of goods and services, said Jan
Frye, deputy assistant secretary for acquisition and logistics.
Illegal
purchases have been made for pharmaceutical drugs and medical supplies, putting
veterans at risk and exposing the agency to widespread "fraud, waste and abuse,"
Frye said.
"I
can state without reservation that VA has and continues to waste millions of
dollars by paying excessive prices for goods and services due to breaches of
federal laws," Frye told the House Veterans Affairs subcommittee on oversight
and investigations.
Rep.
Mike Coffman, R-Colo., chairman of the oversight panel, said "weak internal
controls" at the VA have resulted in "serious violations of procurement laws,"
mostly through a purchase-card program intended as a convenience for minor
purchases of up to $3,000. Instead, VA employees have used the cards to buy
billions of dollars' worth of medical supplies and drugs without contracts.
In
one example cited by Frye, about $1.2 billion in prosthetics were bought using
purchase cards without contracts during an 18-month period that ended last
year.
In
all, VA has understated its annual acquisition totals by at least $5 billion in
each of the past five years, "due to our inexcusable failure to acquire a
substantial quantity of goods and services in accordance with federal laws and
regulations," Frye said.
Coffman
called that total "a truly staggering amount," adding that the problem goes far
beyond "paying a little more for needed supplies and services, as some
apologists for VA have asserted."
Among
other things, "purchase card abuse invites cronyism and the directing of
business to favored vendors, including those who may employ former VA
officials," Coffman said. In addition, buying drugs and medical supplies without
proper contracts "imperils patient safety" and exposes VA to legal
liability.
Edward
Murray, acting assistant secretary for management and the VA's top financial
officer, said the agency has more than 25,000 purchase cards that were used 6.1
million times to make $3.7 billion in purchases last year. The purchase cards
help the VA acquire needed supplies and drugs more quickly than through usual
government procedures, Murray said.
Murray
conceded that the program has "experienced challenges" but said the quicker
delivery of prosthetics, hearing aids and other needed supplies outweigh those
concerns. In response to concerns by Congress and the internal watchdogs, the VA
reduced the number of purchase cards from 37,000 in 2011 to 25,515 last year,
Murray said. About 23,000 VA employees use purchase cards.
Rep.
Kathleen Rice, D-N.Y., called those totals "just enormous" and served as an
invitation to abuse. Rice, one of 10 children, said she and her siblings "never
would have attended college" if her parents had given each child a credit
card.
The
VA has tightened controls over use of the cards in recent years and instituted
mandatory training, Murray said.
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