Official: VA improperly spends $5 billion a year on health

May 14, 2015, 3:12 PM

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.

VA Secretary Robert McDonald said in a statement Thursday that he appreciates the issues Frye brought to light. Frye first raised concerns in a 35-page memo to McDonald earlier this year.

As Frye made clear in his March memo and in testimony Thursday, “there are many acquisition paths within the Veterans Health Administration” to provide health care for veterans, McDonald said. “It is important to note that the vast majority of the funding identified in the memo went to provide veterans needed care in the community” and was not wasted, McDonald said.

McDonald said he has directed the VA’s inspector general to review Frye’s allegations. Any findings of wrongdoing or evidence of harm to veterans will be shared with the Justice Department for possible criminal prosecution, McDonald said.

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, Coffman said.

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 said they invited 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.

___

Follow Matthew Daly: https://twitter.com/MatthewDalyWDC

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

World News

Ukrainian servicemen carry the coffin with the remains of Army Col. Oleksander Makhachek during a f...
Associated Press

As Ukraine loses troops, how long can it keep up the fight?

ZHYTOMYR (AP) — As soon as they had finished burying a veteran colonel killed by Russian shelling, the cemetery workers readied the next hole. Inevitably, given how quickly death is felling Ukrainian troops on the front lines, the empty grave won’t stay that way for long. Col. Oleksandr Makhachek left behind a widow, Elena, and […]
29 days ago
(Instagram photo/@Clayton.Wolfe)...
Wills Rice

Arizona realtor announces new listing on ‘the top-floor’ of Mount Everest

Arizona realtor Clayton Wolfe scaled the treacherous 29,035-foot heights of Mount Everest in Nepal and announced a new listing at the summit.
1 month ago
(Photo by: Jonathan Wiggs/Boston Globe/Getty Images)...
Associated Press

‘Tiger King’ star ‘Doc’ Antle arrested for money laundering charges

“Tiger King” star “Doc” Antle was arrested by the FBI and expected to appear in court Monday to face federal money laundering charges.
1 month ago
(AP Photo/Ross D. Franklin)...
Associated Press

Arizona Gov. Doug Ducey in Israel for talks with political and business leaders

Arizona Gov. Doug Ducey is in Israel for five days of talks with political and business leaders of the Middle Eastern country.
1 month ago
A man rides a bicycle in front of a building ruined by shelling in Borodyanka, on the outskirts of ...
Associated Press

Russia takes steps to bolster army, tighten grip on Ukraine

KYIV, Ukraine (AP) — Russian President Vladimir Putin issued an order Wednesday to fast track Russian citizenship for residents of parts of southern Ukraine largely held by his forces, while lawmakers in Moscow passed a bill to strengthen the stretched Russian army. Putin’s decree applying to the Kherson and Zaporizhzhia regions could allow Russia to […]
1 month ago
FILE - McDonald's restaurant is seen in the center of Dmitrov, a Russian town 75 km., (47 miles) no...
Associated Press

De-Arching: McDonald’s to sell Russia business, exit country

McDonald’s is closing its doors in Russia, ending an era of optimism and increasing the country’s isolation over its war in Ukraine. The Chicago burger giant confirmed Monday that it is selling its 850 restaurants in Russia. McDonald’s said it will seek a buyer who will employ its 62,000 workers in Russia, and will continue […]
2 months ago

Sponsored Articles

...
Dr. Richard Carmona

Great news: Children under 5 can now get COVID-19 vaccine

After more than two years of battle with an invisible killer, we can now vaccinate the youngest among us against COVID-19. This is great news.
(Courtesy Condor)...
Condor Airlines

Condor Airlines shows passion for destinations from Sky Harbor with new-look aircraft

Condor Airlines brings passion to each flight and connects people to their dream destinations throughout the world.
...
Carla Berg, MHS, Deputy Director, Public Health Services, Arizona Department of Health Services

Update your child’s vaccines before kindergarten

So, your little one starts kindergarten soon. How exciting! You still have a few months before the school year starts, so now’s the time to make sure students-to-be have the vaccines needed to stay safe as they head into a new chapter of life.
Official: VA improperly spends $5 billion a year on health