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Department of Veterans Affairs

Office of Inspector General

Issues at VA Medical Center Bay Pines, Florida and Procurement and

Deployment of the Core Financial and Logistics System (CoreFLS)

Report No. 04-01371-177

VA Office of Inspector General Washington, DC 20420

August 11, 2004

Contents

Page

Executive Summary ............................................................................................. ii Introduction ..........................................................................................................1

Purpose............................................................................................................................. 1 Background...................................................................................................................... 1 Scope and Methodology .................................................................................................. 8 Results and Conclusions ..................................................................................10 Issue 1: Clinical Management and Administration .................................................. 10 Issue 2: Care in Selected Clinical Services .............................................................. 27 Issue 3: Contracting Procedures and Related Issues ................................................ 45 Issue 4: Deployment of CoreFLS ............................................................................. 77 Issue 5: CoreFLS Security Controls ......................................................................... 86 Issue 6: Management of Supply, Processing, and Distribution Activities ............... 92 Appendix A - Background Leading up to Selection of the CoreFLS Integrator......... 108 Appendix B - CoreFLS Phases and Milestones........................................................... 112 Appendix C - BearingPoint Task Order Matrix .......................................................... 121 Appendix D - OIG October 2, 2003 Memorandum..................................................... 125 Appendix E - OIG November 12, 2003 Memorandum ............................................... 127 Appendix F - OIG December 23, 2003 Memorandum................................................ 130 Appendix G - Acting Under Secretary for Health Comments..................................... 133 Appendix H - Acting Assistant Secretary for Management Comments...................... 158 Appendix I - Assistant Secretary for Information and Technology Comments .......... 173 Appendix J - Acting Assistant Secretary for Policy, Planning, and Preparedness...... 178 Appendix K - OIG Contact and Staff Acknowledgments ........................................... 180 Appendix L - Report Distribution.............................................................181

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Executive Summary

Introduction

The Department of Veterans Affairs (VA) Office of Inspector General (OIG) conducted an evaluation of selected patient care and administrative issues at the Bay Pines VA Medical Center (BPVAMC), Bay Pines, Florida. The evaluation also included reviews of VA Central Office contract procedures and the deployment of the Core Financial and Logistics System (CoreFLS).

The VA Secretary, Members of Congress, and other stakeholders requested that the OIG review reported delays in elective surgeries, major shortages of surgical supplies, and other allegations concerning BPVAMC activities; and whether the deployment of CoreFLS contributed to these reported problems. The VA Secretary also requested a private contractor to determine the viability of the CoreFLS software package to accomplish expected goals.

On March 19, 2004, the OIG issued, Interim Report ? Patient Care and Administrative Issues at VA Medical Center Bay Pines, FL (Report Number 04-01371-108), which addressed cancelled and delayed surgeries; Supply, Processing, and Distribution (SPD) deficiencies; deployment of CoreFLS; and CoreFLS contract procedures and security controls. To view this report, click on the following website link:



The purpose of this review was to further address the concerns identified in the OIG Interim Report, as well as to review additional issues brought to our attention.

Results

We confirmed reports of substandard patient care and services at the BPVAMC, and found that many of the conditions existed prior to the deployment of CoreFLS. We concluded that the contracting and monitoring of the CoreFLS project was not adequate, and the deployment of CoreFLS encountered multiple problems. Even though VA has obligated $249 million of the $472 million budgeted for CoreFLS, it has not been successfully deployed at a VA medical facility.

The success of CoreFLS is highly dependent on the ability of the software to integrate with existing VA legacy systems. Therefore, it is essential that existing VA legacy systems and associated applications, such as the Veterans Health Information Systems and Technology Architecture (VistA) and the Generic Inventory Package (GIP), are properly implemented and maintained at all VA medical facilities. We found that most

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of the VA legacy systems at BPVAMC contained inaccurate data because they had not been used properly, and that this may be a systemic problem throughout the Veterans Health Administration (VHA). The effect of transferring inaccurate data to CoreFLS interrupted patient care and medical center operations. We are concerned that similar conversion problems will occur at other VA facilities if the conditions identified at the BPVAMC are not addressed and resolved nationwide. The following conditions were identified during the evaluation.

Issue 1: Inadequate BPVAMC Management Resulted in Dysfunctional Clinical and Administrative Operations

? Turnover in key leadership positions was excessive, lack of trust in senior leadership led to low physician and employee morale, management failed to take the steps required to lead BPVAMC through the challenges of an increasing workload over the past 5 years, and the former Chief, Medicine Service created a hostile work environment and misused funds.

? In many areas of BPVAMC, a culture-of-safety and accountability was not evident. Communication that was important for patient safety was not discussed out of fear of adverse consequences. Management did not have in place a formal Administrative Executive Board for raising and resolving problems.

? Audiology appointments were manipulated by management to meet performance goals, resulting in waiting lists being understated by more than 1,000 veterans. Service-connected veterans were not receiving appointments within the 30-day requirement, and nonservice-connected veterans had their appointments cancelled, with some waiting in excess of 800 days.

? A loss-of-oxygen incident at the facility raised management, safety, contracting, and compliance concerns.

Issue 2: Medical Care in Selected Clinical Services was not Adequate

? The Radiology Service was not able to schedule or interpret x-ray images within acceptable time frames. On February 24, 2004, there were 1,099 unread x-rays, over 750 of which were Computerized Tomography scans and Magnetic Resonance Imaging (MRI) films. These delays contributed to delays in diagnosing patients with lung cancer. We cite an additional case where the delay in MRI interpretation and the diagnosis of a tumor, contributed to a veteran's spinal cord injury.

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? The absence of an established, workable system to obtain medical services not available at BPVAMC, such as neurosurgery services, contributed to unacceptable delays in transferring patients for needed services. For example, we document that eight physicians were called in an attempt to transfer one patient from the BPVAMC emergency room to a Neurosurgery Service at another facility.

? Pulmonary Service patients incurred unexplained appointment cancellations, and there was insufficient medical input into referral of patients for sleep studies. The Dermatology Service procedure room did not meet environmental standards, and Medicine Service did not have a peer review process to monitor patient care.

Issue 3: VA's Management of the CoreFLS Project did not Protect the Interests of the Government

? In 1999 BearingPoint was competitively awarded the CoreFLS project for $750,165, even though the budgeted project cost was $372 million. Since then, VA non-competitively awarded BearingPoint 22 task orders through March 2004, totaling $116.5 million. The budgeted project cost has escalated to $472 million.

? A major concern with the sole-source award of the 22 task orders was that BearingPoint developed the statements of work and cost estimates that were accepted by VA without any independent evaluation of need or reasonableness, which was tantamount to issuing BearingPoint a blank check.

? Volume purchase discounts valued at $19.1 million were not pursued by the contracting officer due to confusion on the part of VA concerning the project phase. Also, BearingPoint was paid an award fee of $227,620, even though they did not successfully implement CoreFLS at BPVAMC.

? Task orders and modifications were routinely awarded and funded by VA without sufficient justification and required documentation. BearingPoint was allowed to perform work and purchase software without prior approval for which they were later fully compensated. In one instance, software totaling $627,000 was purchased without a proper task order or approved modification.

? Contractor travel costs totaling about $4.2 million were not adequately monitored or reviewed for compliance with task order provisions and Federal travel regulations. Planning was not adequate to control costs. Travel vouchers lacked justification for excessive airfares for frequent repetitive trips. Vouchers usually did not indicate the purpose and necessity of travel.

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? The lack of background investigations for BearingPoint employees after 4 years into the CoreFLS project increased VA's risk that computer systems and sensitive data could have been compromised.

Issue 4: BPVAMC was not Adequately Prepared for CoreFLS Deployment

? CoreFLS was deployed for testing at BPVAMC on October 6, 2003, without sufficiently resolving numerous OIG reported risks, including inadequate training to prepare hospital employees on how to use CoreFLS, and concerns related to not using a parallel processing system when several risks still remained.

? Failure to run a parallel system, as recommended by the OIG prior to deployment, resulted in unnecessary risk to patient care and the inability to monitor fiscal and acquisition operations. As a result, BPVAMC could not reconcile accounts.

? VA CoreFLS project management also failed to address additional concerns reported by the OIG on November 12, 2003, involving data conversion and system interfacing issues. For example, VA project management responsible for converting CoreFLS related data did not confirm the accuracy of the applicable legacy system data prior to testing, resulting in failed conversion tests and higher costs associated with reconciling problems.

? While some legacy systems that CoreFLS is designed to interface with did not contain accurate data, some applications such as GIP were not in use prior to testing. CoreFLS cannot be tested adequately until all systems and applications that interface with CoreFLS are properly implemented and accurately maintained.

Issue 5: CoreFLS Security Weaknesses Placed Programs and Data at Risk

? Duties and responsibilities of CoreFLS administrators were not segregated, thereby creating a control weakness that would allow administrators to create, process, and erase transactions. Without segregating system administrator rights, individuals also could disable audit trails and purge information from the database.

? Employees were not assigned access to CoreFLS programs consistent with their responsibilities. Strengthening employee access controls is needed to prevent deliberate misuse, fraudulent use, improper disclosure, or destruction of data.

? Because CoreFLS managers did not have an effective contingency plan to protect CoreFLS assets and functionality, they may not be able to recover CoreFLS operational capability in a timely, orderly manner or perform essential functions during an emergency or other event that may disrupt normal operations.

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