‘The Reward for Poor Performance’ at Federally Run Health-Care Provider ‘Was to Give Bonuses and Awards,’ Says Government Auditor

January 17, 2010 - 8:37 PM
Millions of dollars in missing government property continue to plague the government-run Indian Health Service, thanks to a "culture" of unaccountability. 

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 Indian Health Service, a government-run health agency for native Americans and Alaskan natives, has lost or had stolen millions of dollars worth of equipment over the last several years, but has yet to implement recommendations for improvement, according to the Government Accountability Office (GAO).
 
In fact, a top GAO official says that the “reward for poor performance” at this government-run health-care provider “was to give bonuses and awards.”

A June 2008 GAO report concluded that mismanagement of the IHS allowed $15.8 million worth of equipment to be lost or stolen, and a June 2009 report said over a million dollars worth of IT equipment was lost, stolen, or unaccounted for.
 
But Gregory Kutz, managing director of forensic audits and special investigations for the GAO, said the “work culture” at the government health service continues to be one of a lack of individual accountability.
 
“No one (at IHS) has ever been held accountable for anything,” Kutz said.
 
In fact, Kutz told CNSNews.com that GAO’s 2009 audit of the Indian Health Service found that “certain people that were responsible for (missing) property the first time received bonuses.”
 
“The reward for poor performance was to give bonuses and awards, and that’s not really the right incentive, necessarily,” he told CNSNews.com.
 
The June 2008 GAO report -- titled “IHS Mismanagement Led to Millions of Dollars in Lost or Stolen Property” -- found that IHS had permitted $15.8 million in equipment to be lost or stolen between 2004 and 2007. The report also concludes that wasteful spending by IHS resulted in the service’s headquarters owning 10 pieces of IT equipment per employee working there.
 
A year later, GAO released a report titled “Indian Health Service -- Millions of Dollars in Property and Equipment Continue to be Lost or Stolen.” It noted that “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.”
 
Implementing better inventory control, stricter accounting standards, tracking property better, finding missing items quicker after they are identified as missing and performance ratings that “affect salaries and bonuses” in order to boost work quality, are just some of the GAO’s recommendations. 
 
CNSNews.com, citing the GAO reports, asked Dr. Yvette Roubideaux, the director of the Indian Health Service, last week what measures have been taken to amend these problems and whether the agency has taken measures to ensure individual accountability.
 
Roubideaux’s response, which came during a telephone news conference on H1N1 flu: “We’ve done a lot to address the property issue, and I’d be happy to talk with you with an interview to address that issue.  I want to keep the focus today on H1N1 which is the most important thing that we have to talk about today.”
 
However, subsequent requests to the Indian Health Service for an interview – and for information – yielded only copies of correspondence Roubidoux sent to Congress.
 
Kutz said he does believe top-level bureaucrats at the Indian Health Service – the “senior folks,” he said – are taking GAO’s recommendations seriously.
 
But the “basic inability” of the health service to manage government property and a work culture devoid of individual accountability drive the millions of taxpayer dollars lost in missing and stolen property.
 
Essentially, IHS’ culture is marked by the absence of “effective management oversight and control,” Kutz said.
 
“If management is not going to make it important to people that you know what property you have, you know where it’s located, you put it in the system, you do your inventories periodically, and when you’re done with the property you probably dispose of it and take it off the records  – if no one’s held accountable for that and no one’s actually managing that effectively, you have what we found at the HIS, which was property that was not very well-controlled, and you find that items are walking out the door, you (find) compromise of data when certain computers and other things have been stolen.”
 
Kutz said the IHS has basic problems with inventory control.
 
“It was pretty basic property issues where you had items that never were bar-coded, and so they never made the system, so they really can’t be lost necessarily until you go do an inventory and then you find them. But some of those probably walked away based on what we saw,” Kutz said.
 
Another scenario of negligence in tracking property, Kutz noted, is in the case of items which were there but are not logged into the system.
 
“You had a combination of overstatements, understatements, items that were in different buildings or locations than they were thought to be,” Kutz said.
 
He gave an example: “Sometimes (GAO) would try to find something, and (HIS) would ultimately find it, but it could take a month or two, which means you really don’t know where it is, and you might actually be looking to buy more of it if you don’t really know what you’ve got.”
 
Kutz also said “excess property” is also an issue for the Indian Health Service.
 
“It appeared to us (they) bought more computers than they needed because they had new computers sitting in boxes for months and perhaps more than a year, Kutz said. “Well, if you buy a new computer and let it sit for long enough, it’s worthless.”
 
Kutz speculated as to what could explain IHS’ difficulty with tracking items “which gets into stuff more than ‘just can you find it.’”
 
For instance, he said, the government auditors discovered that the IHS had misplaced – and couldn’t find  –  “Jaws for Life” rescue equipment.
 
“I think it was there all along,” Kutz told CNSNews.com. “They just didn’t know where it was, and after we went back for a second or third visit, they finally were able to locate it.”
 
He added: “That’s not a small piece of equipment.”
 
Kutz said it is still too early to tell whether IHS will ultimately be successful in implementing the GAO’s recommendations.
 
“Whether they were able to make that stick throughout the organization and hold people accountable  – that really will be the test in whether they’re successful in making the scenario whether they have good controls over property in the future,” Kutz said.
 
Kutz also said that it is unrealistic to expect immediate results in adopting GAO recommendations, explaining the problems described in the report “certainly” spanned back to the 1990s and “probably since the inception of the organization.”
 
“It isn’t like you can immediately change the culture,” Kutz said.
 
Given that IHS has cutting-edge technology, .Kutz said two years would be a reasonable amount of time to wait for improvements to kick in.
 
“It should be something they could be able to, because they had a new system put in.  So, we didn’t necessarily believe that it was that they didn’t have proper automated systems.  They have pretty much the newest software to track and record property,” Kutz said. “It’s really the people and are they diligent in following the processes they have in place to put stuff in the books with serial number, the barcode, when they buy it to make sure the records reflect (the status of items).”
 
The $787 billion stimulus bill President Obama signed in February granted IHS $500 million in new funding and tacked on $85 million specifically for health information technology activities.
 
According to IHS’ Web site, the funding break down for the first $500 million received is “$227 million for health facilities construction, $100 million for maintenance and improvements, $85 million for health information technology, $68 million for sanitation facilities construction, and $20 million for health equipment that will help improve health care in Indian Country.”
 
In addition, IHS received $90 million of stimulus money from the Environmental Protection Agency (EPA) for more “Sanitation Facilities Construction projects.”
 
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Transcript of Exchange with Dr. Yvette Roubideaux:
 
CNSNews.com: A June 2008 report concluded that mismanagement of the IHS allowed $15.8 million worth of equipment to be lost or stolen, and a June 2009 report says over a million dollars worth of IT equipment was lost, stolen, or unaccounted for. So I was wondering what measures have been taken to amend these problems and have you taken measures to ensure individual accountability?
 
Dr. Yvette Roubideaux (IHS Director): Well, we certainly want the focus of today’s call to be on the H1N1 vaccination and the  – addressing the virus.  We’ve done a lot to address the property issue, and I’d be happy to talk with you with an interview to address that issue. I want to keep the focus today on H1N1 which is the most important thing that we have to talk about today.