Indian Health Service:

Millions of Dollars in Property and Equipment Continue to Be Lost or Stolen

GAO-09-450: Published: Jun 2, 2009. Publicly Released: Jun 2, 2009.

Additional Materials:

Contact:

Gregory D. Kutz
(202) 512-9505
contact@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

In 2008, GAO issued a report and testimony revealing gross mismanagement of property at the Indian Health Service (IHS). GAO found that 5,000 items with an acquisition value of $15.8 million were reported lost or stolen for fiscal years 2004 through 2007. GAO attributed the property mismanagement and waste to weak internal controls. GAO made 10 recommendations to IHS. IHS ultimately agreed to implement all 10 recommendations. Given the extent and seriousness of the property management problems at IHS, GAO was asked to determine (1) whether property loss, property theft, and wasteful spending continue at IHS; and (2) to what extent IHS made progress in implementing GAO's prior recommendations. GAO analyzed IHS property records from fiscal year 2008 through January 2009, conducted a full physical inventory at IHS headquarters, and performed a probability sample of information technology equipment inventory at six IHS field locations. GAO also examined IHS policies, analyzed documents, and conducted interviews with IHS officials.

IHS continues to lose property at an alarming rate, reporting lost or stolen property with an acquisition value of about $3.5 million dollars in little over a year, including new medical equipment. IHS management's failure to implement most of our June 2008 recommendations and hold staff accountable for losses contributes significantly to ongoing property problems. These property losses at IHS are in addition to what GAO identified in its June 2008 report. GAO completed a full audit of IHS headquarters and found that 126 items worth $216,000 (or 8 percent of the items tested) had been lost, stolen, or were otherwise unaccounted for. GAO also estimates that about 800 equipment items at six field locations with an acquisition value of about $1.7 million were lost, stolen, or unaccounted for. Furthermore, although IHS performed an annual inventory as GAO recommended, as of March 2009, it had not finished reconciling the inventory and cannot locate many items, including medical equipment. These items include a 2002 ultrasound unit valued at $170,000; a 2003 X-ray mammography machine valued at $100,795; dental chairs, cardiac and vital sign monitors; and a pharmacy tablet counter machine. Aside from issuing a memorandum from the IHS Director that restated and refined existing policies, IHS has taken little action to ensure that employees are aware of and complying with property policies. One way to enforce policies involves holding individuals accountable; however, GAO found that the Senior Service Executive in charge of the IHS property group and other areas was given a $13,000 bonus after GAO's report exposed mismanagement of property under the executive's purview. Furthermore, IHS could only provide one example of an individual held financially liable for lost or stolen property over a 1-year period; but at the time of our audit, the individual still had not reimbursed the government for the loss. GAO also identified the following examples where IHS investigated the loss of property but did not hold anyone accountable.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: The Director of IHS should strengthen IHS's overall control environment and "tone at the top" by fully implementing our prior recommendations and enforcing and updating its property management policies and procedures. As part of this effort, the Director of IHS should direct IHS property officials to work with Program Support Center (PSC) to develop procedures to remove disposed items from inventory records in a timely manner.

    Agency Affected: Department of Health and Human Services: Health Services Administration: Indian Health Service

    Status: Closed - Implemented

    Comments: In October 2010, IHS issued its revised personal property management policy, which included property disposal requirements and procedures to assist IHS property managers. The disposal policy states that general property will be removed from the asset accounts during the period of disposal, retirement, or removal from service, and IHS property managers will ensure that all disposal documentation is completed and forwarded to PSC, per the established disposal procedures, in order to remove the asset record from PMIS in a timely manner. As of July 2012, IHS reported there is no document processing backlog of property disposal actions at PSC.

    Recommendation: The Director of IHS should strengthen IHS's overall control environment and "tone at the top" by fully implementing our prior recommendations and enforcing and updating its property management policies and procedures. As part of this effort, the Director of IHS should direct IHS property officials to establish an approach to stop loss of property to include addressing region-specific inventory shortages.

    Agency Affected: Department of Health and Human Services: Health Services Administration: Indian Health Service

    Status: Closed - Implemented

    Comments: At an overall level, the IHS property management program is now subject to an annual OMB Circular A-123 risk assessment and was included in a Program Integrity Risk Assessment in 2011. Property management policy established in October 2010 requires that property inventories conducted by IHS Headquarters and Area offices must be completed no later than June 30th in any given year, and all reconciliation procedures, including Reports of Survey, are to be completed by September 30th of that year. Reports of Survey have received increased management attention since they are now required to be reviewed by Area Directors in the field and provided to IHS HQ for additional oversight. During 2010 and 2011, IHS indicated that 29 determinations of employee financial liability for property loss or damage came from Results of Survey investigations.

    Recommendation: The Director of IHS should strengthen IHS's overall control environment and "tone at the top" by fully implementing our prior recommendations and enforcing and updating its property management policies and procedures. As part of this effort, the Director of IHS should direct IHS property officials to enforce policy to dispose of unused inventory in a timely manner.

    Agency Affected: Department of Health and Human Services: Health Services Administration: Indian Health Service

    Status: Closed - Implemented

    Comments: The October 2010 property management policy provides updated guidance on IHS property disposal. All IHS activities are required to survey personal property under their control to assure maximum use of all property and to identify any excess property. At a minimum, these utilization inspections will occur during annual physical inventories. IHS has a national interagency agreement with the Department of Defense in force that can be used by IHS headquarters and field offices to turn-in property that is no longer required or is in scrap condition. Other options include disposal through authorized recyclers, such as UNICOR, property donation/sale through GSA, and, when no other means for disposition are available, IHS will dispose of property through the federal abandonment and destruction process.

    Recommendation: The Director of IHS should strengthen IHS's overall control environment and "tone at the top" by fully implementing our prior recommendations and enforcing and updating its property management policies and procedures. As part of this effort, the Director of IHS should direct IHS property officials to establish specific deadlines and enforce them for finalizing a Report of Survey once an inventory has been completed so that research on missing items is completed expeditiously and does not continue indefinitely.

    Agency Affected: Department of Health and Human Services: Health Services Administration: Indian Health Service

    Status: Closed - Implemented

    Comments: The 2010 property management update provides specific requirements and procedures for IHS to investigate personal property losses due to theft and inventory shortages, as well as losses due to damage, destruction, and deterioration of government property. To better faciliate these investigations, IHS has incorporated a streamlined process to complete Reports of Survey (ROS) in 90 days from the ROS initiation date. Also, officials authorized to make final determinations based on the results of ROS investigations are limited to IHS Area Directors in the field and one senior official at HQ. To expedite cases where the value of property involved in any single ROS does not exceed $2,499 and there is no suspected theft or misappropriation, a single survey officer, in lieu of all participants in a board of survey, is permitted to investigate and provide the facts, conditions, findings, and recommendations to the determining official.

    Recommendation: The Director of IHS should strengthen IHS's overall control environment and "tone at the top" by fully implementing our prior recommendations and enforcing and updating its property management policies and procedures. As part of this effort, the Director of IHS should direct IHS property officials to develop and enforce procedures and deadlines to reconcile and update inventory records in a timely manner.

    Agency Affected: Department of Health and Human Services: Health Services Administration: Indian Health Service

    Status: Closed - Implemented

    Comments: IHS property management policy established in October 2010 requires that personal property inventories conducted by IHS Headquarters and Area offices must be completed no later than June 30th in any given year, and all reconciliation procedures, including Reports of Survey, are to be completed by September 30th. Inventories in 2010 and 2011 for IHS Area and HQ offices were reported to have been completed by the September 30th deadline; inventory adjustments have improved and property losses have been reduced each year through the use of the property hand receipt system and with the increased oversight and monitoring at the HQ level.

    Recommendation: The Director of IHS should strengthen IHS's overall control environment and "tone at the top" by fully implementing our prior recommendations and enforcing and updating its property management policies and procedures. As part of this effort, the Director of IHS should direct IHS property officials to work with PSC to develop procedures to enter overages in Property Management Information System (PMIS) in a timely manner.

    Agency Affected: Department of Health and Human Services: Health Services Administration: Indian Health Service

    Status: Closed - Implemented

    Comments: IHS indicated that, although some property assets must still be manually added to PMIS, an automated purchase order interface with PMIS, has reduced the number of property purchases that have to be manually recorded. From prior years and up through 2010, a backlog of about 12,000 property transactions existed that were not automatically entered into PMIS. IHS reported this number decreased to under 5,000 transactions in 2011, and is under 1,200 transactions as of July 2012.

    Apr 18, 2014

    Apr 8, 2014

    Apr 2, 2014

    Mar 26, 2014

    Mar 24, 2014

    Mar 10, 2014

    Mar 7, 2014

    Mar 6, 2014

    Looking for more? Browse all our products here