Summary
In June 2007, GAO received information from a whistleblower through GAO's FraudNET hotline alleging millions of dollars in lost and stolen property and gross mismanagement of property at Indian Health Service (IHS), an operating division of the Department of Health and Human Services (HHS). GAO was asked to conduct a forensic audit and related investigations to (1) determine whether GAO could substantiate the allegation of lost and stolen property at IHS and identify examples of wasteful purchases and (2) identify the key causes of any loss, theft, or waste. GAO analyzed IHS property records from fiscal years 2004- 2007, conducted a full physical inventory at IHS headquarters, and statistically tested inventory of information technology (IT) equipment at 7 IHS field locations in 2007 and 2008. GAO also examined IHS policies, conducted interviews with IHS officials, and assessed the security of property.
Millions of dollars worth of IHS property has been lost or stolen over the past several years. Specifically, (1) IHS identified over 5,000 lost or stolen property items, worth about $15.8 million, from fiscal years 2004 through 2007. These missing items included all-terrain vehicles and tractors; Jaws of Life equipment; and a computer containing sensitive data, including social security numbers. (2) GAO's physical inventory identified that over 1,100 IT items, worth about $2 million, were missing from IHS headquarters. These items represented about 36 percent of all IT equipment on the books at headquarters in 2007 and included laptops and digital cameras. Further, IHS staff attempted to obstruct GAO's investigation by fabricating hundreds of documents. (3) GAO also estimates that IHS had about 1,200 missing IT equipment items at seven field office locations worth approximately $2.6 million. This represented about 17 percent of all IT equipment at these locations. However, the dollar value of lost or stolen items and the extent of compromised data are unknown because IHS does not consistently document lost or stolen property and GAO only tested a limited number of IHS locations. Information related to cases where GAO identified fabrication of documents and potential release of sensitive data is being referred to the HHS Inspector General for further investigation. GAO also found evidence of wasteful spending, including identifying that there are about 10 pieces of IT equipment for every one employee at headquarters. GAO's investigation also found computers and other IT equipment were often assigned to vacant offices. GAO identified that the loss, theft, and waste can be attributed to IHS's weak internal control environment. IHS management has failed to establish a strong "tone at the top," allowing property management problems to continue for more than a decade with little or no improvement or accountability for lost and stolen property and compromise of sensitive personal data. In addition, IHS has not effectively implemented numerous property policies, including the proper safeguards for its expensive IT equipment. For example, IHS disposed over $700,000 worth of equipment because it was "infested with bat dung."
Recommendations
Our recommendations from this work are listed below with a Contact for more information. Status will change
from "In process" to "Implemented" or "Not implemented" based on our follow up work.
Director:
Team:
Phone:
Gregory D. Kutz
Government Accountability Office: Financial Management and Assurance
(202) 512-9505
Recommendations for Executive Action
Recommendation: The Director of IHS should strengthen IHS's overall control environment and "tone at the top" by updating and enforcing its policies and procedures for property management. As part of this effort, the Director of IHS should direct IHS property officials to update IHS personal property management policies to reflect any policy changes that have occurred since the last update in 1992.
Agency Affected: Department of Health and Human Services: Public Health Service: Indian Health Service
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: The Director of IHS should strengthen IHS's overall control environment and "tone at the top" by updating and enforcing its policies and procedures for property management. As part of this effort, the Director of IHS should direct IHS property officials to investigate circumstances surrounding missing or stolen property instead of writing off losses without holding anyone accountable.
Agency Affected: Department of Health and Human Services: Public Health Service: Indian Health Service
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: The Director of IHS should strengthen IHS's overall control environment and "tone at the top" by updating and enforcing its policies and procedures for property management. As part of this effort, the Director of IHS should direct IHS property officials to enforce policy to conduct annual inventories of accountable personal property at headquarters and all field locations.
Agency Affected: Department of Health and Human Services: Public Health Service: Indian Health Service
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: The Director of IHS should strengthen IHS's overall control environment and "tone at the top" by updating and enforcing its policies and procedures for property management. As part of this effort, the Director of IHS should direct IHS property officials to enforce policy to use receiving agents to document the receipt of property and distribute the property to its intended user and to designate property custodial officers in writing to be responsible for the proper use, maintenance, and protection of property.
Agency Affected: Department of Health and Human Services: Public Health Service: Indian Health Service
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: The Director of IHS should strengthen IHS's overall control environment and "tone at the top" by updating and enforcing its policies and procedures for property management. As part of this effort, the Director of IHS should direct IHS property officials to enforce policy to place bar codes on all accountable property.
Agency Affected: Department of Health and Human Services: Public Health Service: Indian Health Service
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: The Director of IHS should strengthen IHS's overall control environment and "tone at the top" by updating and enforcing its policies and procedures for property management. As part of this effort, the Director of IHS should direct IHS property officials to enforce policy to document the issuance of property using hand receipts and make sure that employees account for property at the time of transfer, separation, change in duties, or on demand by the proper authority.
Agency Affected: Department of Health and Human Services: Public Health Service: Indian Health Service
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: The Director of IHS should strengthen IHS's overall control environment and "tone at the top" by updating and enforcing its policies and procedures for property management. As part of this effort, the Director of IHS should direct IHS property officials to maintain information on users of all accountable property, including their buildings and room numbers, so that property can easily be located.
Agency Affected: Department of Health and Human Services: Public Health Service: Indian Health Service
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: The Director of IHS should strengthen IHS's overall control environment and "tone at the top" by updating and enforcing its policies and procedures for property management. As part of this effort, the Director of IHS should direct IHS property officials to physically secure and protect property to guard against loss and theft of equipment.
Agency Affected: Department of Health and Human Services: Public Health Service: Indian Health Service
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: The Director of IHS should strengthen IHS's overall control environment and "tone at the top" by updating and enforcing its policies and procedures for property management. As part of this effort, the Director of IHS should direct IHS property officials to enforce the use of the Property Management Information System property management database to create reliable inventory records.
Agency Affected: Department of Health and Human Services: Public Health Service: Indian Health Service
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: The Director of IHS should strengthen IHS's overall control environment and "tone at the top" by updating and enforcing its policies and procedures for property management. As part of this effort, the Director of IHS should direct IHS property officials to establish procedures to track all sensitive equipment such as blackberries and cell phones even if they fall under the accountable dollar threshold criteria.
Agency Affected: Department of Health and Human Services: Public Health Service: Indian Health Service
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
