Federal Health-Care Agency That Won $85 Million Earmark for IT Program Had 10 Pieces of IT Equipment Per Worker in Its Headquarters

By Monica Gabriel | June 15, 2009 | 7:46 PM EDT

People sit in the waiting room of the Indian Health Service clinic in Crow Agency, Mont., Oct. 16, 2008. The Indian Health Service system serves almost 2 million American Indians in 35 states. (AP Photo/Mary Clare Jalonick)

(CNSNews.com) - The $787 billion stimulus bill that President Obama signed in February awarded the Indian Health Service with an earmark for $500 million in new funding, including $85 million specifically set aside for “health information technology activities,” even though a Government Accountability Office audit released the previous June concluded that mismanagement of the IHS had allowed $15.8 million worth of equipment to be lost or stolen between 2004 and 2007.

The GAO report released in June 2008 also concluded that wasteful spending by the Indian Health Service had resulted in the service’s headquarters possessing 10 pieces of IT equipment for every employee who worked there.

The report was entitled: "IHS Mismanagment Led to Millions of Dollars in Lost or Stolen Property."

This June, a year after publication of the original GAO report, and four months after the stimulus bill earmarked $500 million in new funding for the Indian Health Service, a new GAO report revealed that the IHS was continuing to lose government property.

The new report was entitled: "Indian Health Service--Millions of Dollars in Property and Equipment Continue to be Lost or Stolen."

“We found that property continues to be lost or stolen at IHS at an alarming rate,” the GAO reported this month. “From October 2007 through January 2009, IHS identified about 1,400 items with an acquisition value of about $3.5 million that were lost or stolen agencywide. These property losses are in addition to what we identified in our June 2008 report.

“Our full headquarters inventory testing and our random sample testing of six field offices estimated that over a million dollars worth of IT equipment was lost, stolen, or unaccounted for, confirming that property management weaknesses continue at IHS,” said the new report.

This 2009 report was a follow-up to last year’s report on property losses due to mismanagement of the Indian Health Service.

The Indian Health Service is a government-run health-care agency that is a division of the Department of Health and Human Services. It provides health-care services to American Indians and Alaskan natives, and operates over 100 health facilities around the country. Its 2007 budget was $3.2 billion.

After a whistleblower alleged “gross mismanagement of property” at the IHS in 2007, GAO conducted an audit of the service between September 2007 and June 2008.

“We analyzed IHS reports from fiscal year 2004 through fiscal year 2007 and identified over 5,000 lost or stolen property items, worth approximately $15.8 million,” GAO revealed in a June 2008 report presented to Congress. “These items included all-terrain vehicles, tractors, and pickup trucks worth around $6 million; and 'Jaws of Life' equipment worth over $20,000.”

The GAO found that the service purchased a great deal of IT equipment and had a difficult time keeping track of it both at their headquarters and at field offices.

“Of the 3,155 pieces of IT equipment that were on the books at IHS headquarters in 2007, 1,140 items, or about 36 percent, were lost, stolen, or unaccounted for,” said GAO’s June 2008 report. “These missing items, valued at about $2 million, include computers, computer servers, video projectors, and digital cameras. According to IHS records, 64 of the items we identified as lost or stolen during our physical inventory were ‘new’ in April 2007.”

The IHS appeared to do no better holding on to IT equipment in its field offices, although the GAO was only able to test a random sample of the agency’s facilities.

“Based on our random sample of IT equipment at the 7 selected IHS field locations, we estimate that about 1,200 items worth approximately $2.6million were lost, stolen, or unaccounted for at these locations,” said the GAO report. “This represents about 17 percent of all IT equipment at the 7 field locations we visited. Because we only looked at 7 of the 163 IHS locations, the number and value of lost or stolen equipment is likely much higher. The missing equipment we identified included IHS hospital laptops, which may contain patients’ social security numbers and medical histories.”

The IHS had so many pieces of IT equipment—10 per employee at its headquarters—that some new computers it purchased were stored away unused.
“IHS’s ineffective management over IT equipment has also led to wasteful spending,” said GAO. “Our analysis of IHS records indicates that there are approximately 10 pieces of IT equipment for every one employee at HIS headquarters.

“We also found numerous pieces of recent-model equipment at IHS headquarters, including 25 brand new computers—with a combined value of about $30,000—that were not issued to any employees and were collecting dust in a store room,” said GAO. “The lost or stolen property and waste we detected at IHS can be attributed to the agency’s weak internal control environment and its ineffective implementation of numerous property policies.”

The GAO discovered that some of the redundant IT equipment in IHS’s possession was old machinery that had not been gotten rid of. Other equipment, however, included multiple laptops assigned to individual employees who did not use them all.

“Approximately 10 pieces of IT equipment, on average, are issued for every one employee at IHS headquarters,” said the GAO report. “Although some of these may be older items that were not properly disposed, we did find that many employees, including administrative assistants, were assigned two computer monitors, a printer and scanner, a blackberry, subwoofer speakers, and multiple computer laptops in addition to their computer desktop. Many of these employees said they rarely used all of this equipment and some could not even remember the passwords for some of their multiple laptops.”

The 2008 GAO report said it could not determine the total number or dollar value of IHS property that was lost or stolen because HIS “did not consistently document lost or stolen property.”

The GAO did report, however, that IHS threw away $700,000 worth of equipment because it was “infested with bat dung.”

It also said that IHS staff in Nevada advertised a “yard sale” in which 17 computers and other items that worth $16,600 was to be given away for free.

In the 2009 follow up report, which investigated fiscal year 2008 and part of 2009, the GAO said it especially concentrated on tracking pieces of IT equipment “which are highly pilferable or can easily be converted to personal use.” Such items included laptops, desktop computers, digital cameras, and personal data assistants (PDA).

In between the June 2008 GAO report detailing lost or stolen property from the IHS and the June 2009 GAO report detailing continuing losses of property, Congress passed and President Obama signed the $787 billion American Recovery and Reinvestment Act of 2009.

This law was particularly generous to the Indian Health Service, despite its reported mismanagement of property and IT equipment. It was especially generous in providing IHS with new funding for IT expenditures.

Page 57 of the final print of the law includes two specific earmarks for the Indian Health Service.

“For an additional amount for ‘Indian Health Services,’ for health information technology activities, $85,000,000,” says the first earmark, “Provided, That such funds may be used for both telehealth services development and related infrastructure requirements that are typically funded through the ‘Indian Health Facilities’ account: Provided further, That notwithstanding any other provision of law, health information technology funds provided within this title shall be allocated at the discretion of the Director of the Indian Health Service.”

The second earmark was for multiple activities including “the purchase of new equipment.”

“For an additional amount for ‘Indian Health Facilities,’ for facilities construction projects, deferred maintenance and improvement projects, the backlog of sanitation projects and the purchase of equipment, $415,000,000, of which $227,000,000 is provided within the health facilities construction activity for the completion of up to two facilities from the current priority list for which work has already been initiated,” says the second earmark.

Dr. Yvette Roubideaux, newly appointed director of the Indian Health Service, has not commented on the lost property reported by the GAO.  She has said, however, that she is optimistic about the $500 million increase in funding coming from the Recovery Act.

“These funds will help improve health care, create jobs and make our native communities stronger,” she in news release on May 15.

Neither Roubideaux nor the Indian Health Service returned phone calls from CNSNews.com in connection with the GAO report.

The Senate Select Committee on Indian Affairs, which has congressional jurisdiction for the program, also declined to comment about Indian Health Service funding.
But in a June press statement, Sen. Byron Dorgan (D-ND), chairman of the committee, made note of the GAO report.

“(The) report is evidence that the Indian Health Service has still not fixed these problems. The taxpayers deserve better,” Dorgan said.

Dorgan said he was looking to Roubidoux to clean up the agency.

“I hope she will give prompt attention to the need to protect IHS equipment that is so urgently required to provide health care to Native Americans,” Dorgan said in a news release.