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GAO: Indian Health Service concealed the loss of millions of dollars in missing IT equipment

The Indian Health Service attempted to obstruct an investigation into millions of dollars' worth of stolen or missing equipment, according to a report released on Monday by the Government Accountability Office.

Comment on this article in The Forum.The investigation was spurred by a whistleblower who alleged that IHS mismanaged its assets, which led to the loss or theft of millions of dollars in equipment, including laptops, trucks and medical devices. IHS officials attempted to thwart GAO's investigation to conceal the depth of the mismanagement, according to the audit.

"During our investigation of the whistleblower's complaint, IHS made a concerted effort to obstruct our work," the report stated. "IHS officials made misrepresentations and fabricated documents to impede our work."

The report noted that an IHS property specialist attempted to provide documentation claiming that 571 missing items were properly disposed of by the agency. When questioned by GAO as to why the documentation lacked dates and signatures, the official admitted he had fabricated the documents.

GAO also alleged that IHS forged receiving reports for three recent purchase orders for documents the investigator requested. Additionally, one IHS director claimed that he had found about 800 of the items mentioned in the whistleblower's complaint, but a physical inventory could not substantiate the claim.

"Based on our physical inventory at headquarters, we found that this statement was a misrepresentation and that only some of these items have been found," the report said. GAO has referred the officials' cases to the Health and Human Services Department's Office of the Inspector General.

GAO's audit documented wasteful and redundant spending on IT products, a lack of oversight and general absence of accountability and leadership. "IHS has exhibited a weak control environment and disregard for basic accountability over its inventory," the watchdog agency concluded. "As a result, IHS cannot account for its physical property and is vulnerable to the loss and theft of IT equipment and sensitive personal data."

The audit of seven IHS field locations reported that more than 5,000 items worth about $15.8 million were missing from fiscal 2004 to fiscal 2007. The items included all-terrain vehicles, pickup trucks and a Caterpillar tractor. The field locations also were missing an estimated $2.6 million in IT equipment, including IHS hospital laptops that could contain patients' personal information.

In addition, GAO said more than 1,100 IT items worth about $2 million were missing from IHS headquarters, representing 36 percent of the IT equipment on the books. Among the items not accounted for were digital cameras, laptops and a computer containing sensitive data including Social Security numbers and medical information. The report also detailed a "yard sale" by IHS officials of 17 computers that were not properly scrubbed for patient data. Those cases also have been referred to the inspector general.

GAO's findings most likely underestimated the problem of missing equipment at IHS. "The total dollar value of lost or stolen items and extent of compromised data are unknown, because IHS does not consistently document lost or stolen property," the agency stated.

The report also outlined a pattern of wasteful spending, including ordering as many as 10 pieces of IT equipment for every one employee at IHS headquarters. The report contained numerous photographs of brand-new computers and displays stacked on desks, computers assigned to empty offices and redundant equipment purchases.

GAO made 10 recommendations to HHS to improve asset management at Indian Health Service. HHS agreed with nine, but did not agree with the recommendation to track sensitive equipment such as BlackBerrys and cell phones. HHS avoided responding directly to GAO's allegations that officials fabricated documents.

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