The Department of Veterans Affairs (VA) spends at least $6 billion each year on medical supplies and outside care, often ignoring competitive bidding requirements and opening the program up to widespread fraud, waste and abuse, according to an internal memo obtained by The Washington Post.
In a memo addressed to VA Secretary Robert McDonald, Jan R. Frye, deputy secretary for acquisition and logistics, blasts the VA's organizational mismanagement. He wrote that the agency "continues to waste millions of dollars by paying excessive prices for goods and services due to breaches of Federal laws," adding that a culture of "lawlessness and chaos" has allowed inappropriate and often illegal spending practices to take place.
Frye pointed specifically to the purchase card program, which allows VA officials to make urgent, minor purchases up to $3,000. Instead, the cards are being used to purchase billions of dollars of medical equipment without a contract and avoiding the competitive billing process.
Frye cited one instance in which purchase cards were used to buy $1.2 billion worth of prosthetics over the course of 18 months. In another instance, a VA administrator in New York bought $50 million in prosthetics through successive charges of $24,999 just under the $25,000 limit on the cards, according to the Post. (Purchases can exceed the $3,000 limit if accompanied by an certified invoice linked to a contract.)
After the memo became public, Frye testified before the House Veterans' Affairs Commitee in front of lawmakers incensed by the lack of organizational oversight, according to The Post. Senior VA officials countered that the agency has improved purchase card oversight since the VA's inspector called for better managment of purchase cards last fall. Edward Murray, VA's acting assistant secretary for management and interim chief financial officer, testified that the number of employees with purchase cards has declined from 37,000 in 2011 to 23,000, according to the Post.
Amid publicized concerns over patient wait times throughout the VA, the agency has routinely dealt with criticisms surrounding spending and waste prevention. In December, a report showed the VA wasted billions on projects while patients waited for care, and in February, the Government Accountability Office added the VA health system to its list of federal programs that are susceptible to fraud, waste and abuse.