Department of Veterans Affairs 

Office of Inspector General 

Audit of 

Veterans Health Administration’s 

Management of Non-Controlled Drugs 

Report No. 08-01322-114 June 23, 2009

VA Office of Inspector General 

Washington, DC 20420 
 

To Report Suspected Wrongdoing in VA Programs and Operations 

Telephone: 1-800-488-8244 between 8:30 AM and 4 PM Eastern Time, 

Monday through Friday, excluding Federal Holidays 

E-Mail: vaoighotline@va.gov
Audit of Veterans Health Administration’s Management of Non-Controlled Drugs 

Contents 

Page 

Executive Summary ....................................................................................................i-iv

Introduction

Purpose............................................................................................................................. 1

Background...................................................................................................................... 1

Scope and Methodology .................................................................................................. 3

Results and Conclusions

Accountability for Non-Controlled Drugs Needs to Improve......................................... 4 

Appendixes 

A. Additional Information on Audit Scope and Methodology...................................... 12 

B. Acting Under Secretary for Health Comments......................................................... 16 

C. OIG Contact and Staff Acknowledgements ............................................................. 20 

D. Report Distribution ................................................................................................... 21 
Audit of Veterans Health Administration’s Management of Non-Controlled Drugs 

Abbreviations 

AR/WS Automatic Replenishment/Ward Stock Dispensing 

CMOP Consolidated Mail Outpatient Pharmacy 

DEA Drug Enforcement Administration 

GAO Government Accountability Office 

IV Intravenous Dispensing 

NABP National Association of Boards of Pharmacy 

NADDI National Association of Drug Diversion Investigators 

OIG Office of Inspector General 

OP Outpatient Dispensing 

PBM Pharmacy Benefits Management Service 

SMO Supply Management On-Line 

UD Unit Dose 

VHA Veterans Health Administration 

VistA Veterans Health Information System and Technology Architecture 

VISN Veterans Integrated Service Network 

VA Office of Inspector General 
Audit of Veterans Health Administration’s Management of Non-Controlled Drugs 

Executive Summary 

Results in Brief 

The Office of Inspector General (OIG) conducted an audit to determine how accurately 

the Veterans Health Administration (VHA) could account for inventories of noncontrolled drugs at increased risk for waste and diversion in its health care facilities 

(facilities). VHA needs to improve its ability to account for non-controlled drugs to 

reduce the risk of waste and diversion. VHA cannot accurately account for its noncontrolled drug inventories because it has neither implemented nor enforced sufficient 

controls to ensure pharmacy inventory practices are standardized and pharmacy data is 

accurate. 

Pharmacy managers from VA health care facilities included in our inventory analysis 

reported a range of local practices that affect the completeness and accuracy of pharmacy 

data captured in VHA’s Veterans Health Information System and Technology 

Architecture (VistA), as well as the accuracy of annual physical inventory data. Local 

pharmacy personnel are not consistently recording information on transactions in VistA, 

such as pharmacy stock transfers, drug dispensing, and drug returns. Furthermore, VistA 

lacks the capability to account for drugs that are dispensed by a VHA Consolidated Mail 

Outpatient Pharmacy (CMOP) but are returned to and restocked by a facility because the 

drugs cannot be delivered to the veteran. Pharmacy managers told us that this VistA 

limitation can contribute to their facility’s positive inventory discrepancy. A positive 

inventory discrepancy occurs when a facility’s ending inventory is higher than it should 

have been given the quantities of drugs purchased and dispensed. We found that 24 of 

the 31 facilities we reviewed had a positive inventory discrepancy for at least one of the 

five drugs we reviewed. This condition is a major concern since drug losses associated 

with diversion could go undetected. 

VHA has not instituted adequate controls to ensure that pharmacy personnel accurately 

and consistently record drug transactions in VistA. VHA has not developed procedures 

to monitor drugs that are at higher risk for diversion. VHA needs to develop procedures 

to capture information in its inventory records on returned quantities of CMOP dispensed 

drugs that are restocked by facilities. While VHA requires its facilities to conduct annual 

physical inventories of non-controlled drugs, it neither ensures inventory data is accurate 

nor uses the data as a tool to identify drug loss or possible drug diversion. 

VHA has also not taken steps to require that non-controlled drugs are monitored. 

Further, VHA has not maximized the use of existing inventory data to increase 

accountability over non-controlled drugs. However, some facilities are taking actions 

and using various tools to improve accountability over selected non-controlled drugs. To 

increase accountability, VHA needs to improve the completeness of its pharmacy data 

and its annual physical inventory reports. In addition, VHA needs to provide its facilities 

VA Office of Inspector General i 
Audit of Veterans Health Administration’s Management of Non-Controlled Drugs 

VA Office of Inspector General ii 

with guidance on how to develop procedures to monitor non-controlled drugs. Without 

improved accountability, non-controlled drugs are at increased risk for waste and 

diversion. 

Background 

Prescription drugs are generally categorized as controlled or non-controlled. Noncontrolled drugs make up the bulk of VHA facility-level spending on pharmaceuticals 

and accounted for about $1.3 billion in fiscal year (FY) 2008 compared to $67 million 

facilities spent on controlled drugs. Non-controlled drugs are not subject to stringent 

inventory and oversight controls despite the fact that some are expensive while others 

contain active ingredients that can be used to manufacture illicit drugs. In contrast, 

controlled drugs, which include painkillers such as oxycodone, are identified as such by 

the Drug Enforcement Administration and are tightly regulated under the Controlled 

Substances Act of 1970. VHA requires its facilities to store controlled substances in 

separate secure vaults and to conduct routine physical counts of each drug to reduce the 

risk for diversion. 

Prescription medications are dispensed directly to veterans by facility inpatient and 

outpatient pharmacies. Veterans may also receive their medications in the mail either 

from a facility or from a CMOP. Information on facility-level drug dispensing, as well as 

the transfer of drug stocks, is captured in VistA. Data on facility-level drug purchases is 

captured in the pharmaceutical prime vendor Supply Management On-line (SMO) 

database. 

We selected five drugs for review. Four of these drugs—Sustiva, Zyprexa, Ultram, and 

Levitra—are considered at increased risk for diversion. We also included the anticlotting drug Plavix in our analysis because it is the drug most frequently purchased by 

VHA. To determine to what extent VHA could account for the total inventory available 

for each of these drugs from 2007 to 2008, we calculated an inventory discrepancy for 

each drug at 31 randomly selected facilities. These facilities were selected from the 

157 facilities that provide both inpatient and outpatient pharmacy services. We also 

conducted site visits to 6 of the 31 facilities and surveyed pharmacy managers from these 

facilities. We suspended our inventory analysis after determining pharmacy data was 

incomplete and therefore, not reliable. We also determined that annual physical 

inventory reports were not accurate because some drugs were not included in the 

inventory count at some facilities. Further, data is not available to measure the accuracy 

of physical inventory reports. While the results of our inventory analysis cannot be 

extrapolated to all facilities, our findings related to internal control weaknesses affecting 

the reliability of VistA data on pharmacy transactions and facility-level annual pharmacy 

inventory reports are system-wide. 
Audit of Veterans Health Administration’s Management of Non-Controlled Drugs 

Findings 

Drug Transactions Not Accurately and Consistently Recorded. VistA does not have 

the capability to capture all information on pharmacy transactions automatically. 

Information on quantities of transferred drugs and returned drugs, for example, must be 

manually entered into VistA. Pharmacy managers told us that pharmacy personnel do not 

always enter information into VistA on quantities of drugs transferred to secondary 

locations, such as an inpatient ward. Unless pharmacy personnel consistently and 

accurately enter information on transferred drugs and adjust the quantity of medications 

that were previously recorded as being dispensed, a facility’s dispensing data will be 

inaccurate. 

Pharmacy managers also reported that pharmacy personnel return drugs to inventory 

without entering the information in VistA, despite VHA guidance to do so. In addition, 

we confirmed VistA does not have the capability to account for CMOP dispensed drugs 

that are returned to and restocked by a facility. Pharmacy Benefits Management (PBM) 

Service officials, however, told us that they have concerns about the use of drugs returned 

in the mail because conditions such as extreme heat or cold can affect a drug’s integrity. 

VHA needs to issue a policy on facilities’ use of drugs returned in the mail, and if 

facilities restock returned drugs, VHA needs to develop standardized procedures to 

capture information in its inventory records on restocked CMOP dispensed drugs. 

Inaccurate inventory data limits VHA’s ability to detect losses due to diversion. 

Pharmacy dispensing data is also incomplete because some pharmacy personnel may be 

inappropriately using the prescription label reprint function in VistA to dispense drugs. 

The quantity of drugs dispensed using the reprint function is only captured if the original 

prescription was never released to the patient. According PBM officials, pharmacy 

personnel should not use the VistA reprint function to dispense drugs. Pharmacy 

managers from the six facilities we visited told us that pharmacy personnel are using the 

reprint function to dispense drugs to patients, which can affect the accuracy of outpatient 

dispensing data captured in VistA. There are no controls in VistA, such as an electronic 

sign off by a pharmacy supervisor, to track why a reprint label is being initiated and to 

ensure that the function is not being inappropriately used to dispense drugs. VHA needs 

to establish procedures to monitor and control the use of the reprint function. 

Lack of Policy to Monitor High-Risk Non-Controlled Drugs. VHA policy requiring its 

facilities to monitor at least 20 non-controlled drugs for diversion expired in 2003. VHA 

has not established standardized monitoring requirements for non-controlled drugs or 

provided guidance to its facilities on which non-controlled drugs are at increased risk for 

diversion. In response to our questionnaire, 36 percent of pharmacy managers from 

facilities providing inpatient and outpatient pharmacy services reported that they lack 

adequate information on how to develop processes to monitor non-controlled drugs for 

diversion. However, some pharmacy managers are taking steps to monitor noncontrolled drugs in the absence of a VHA policy. Eighty percent of pharmacy managers 

VA Office of Inspector General iii
Audit of Veterans Health Administration’s Management of Non-Controlled Drugs 

reported that they monitor at least one non-controlled drug for diversion and the majority 

of these pharmacy managers (63 percent) reported that they monitor one to five drugs. 

Almost half of the pharmacy managers who reported monitoring non-controlled drugs for 

diversion used inventories as a way to monitor these drugs. According to questionnaire 

responses, most of these inventories are conducted at least quarterly. 

Physical Inventories Not Fully Utilized to Account for Non-Controlled Drugs. VHA 

is also not fully utilizing annual physical inventories to account for non-controlled drugs, 

and we found that physical inventory data for some facilities is not accurate. According 

to PBM officials, the purpose of the annual physical pharmacy inventory is not to account 

for inventories of specific drugs, but to measure how efficiently facilities are managing 

inventory turnover, an indicator of whether a facility has too much or too little on-hand 

inventory. None of the pharmacy managers at the six sites we visited were able to 

provide us with documentation demonstrating their compliance with VHA’s requirement 

to ensure that annual physical inventories are accurate. Pharmacy managers at 11 of 

31 facilities reported that their inventory discrepancies may be the result of inaccurate 

physical inventory data. 

In 2007, VHA did not ensure that three of its facilities conducted annual physical 

inventories. Also, VHA does not require its facilities to maintain their annual physical 

inventory reports for a period of time, nor does it require them to record inventory results 

in a standardized electronic format. Thirty-five facilities were either unable to provide us 

with their inventory reports or the reports were only available in hardcopy format. 

Retaining standardized electronic inventory data would allow VHA to develop reports to 

monitor the inventories of specific non-controlled drugs nationally or regionally. 

Complete and standardized annual physical inventory data is needed to help VHA 

establish accountability over its non-controlled drug inventories. 

Conclusion 

VHA cannot accurately account for its non-controlled drug inventories because it lacks 

effective controls and reliable information to do so. The accurate and complete data 

needed to account for these drugs is not available, and VistA lacks the capability to 

capture information on some drugs that are returned to a facility and restocked. VHA’s 

information limitations negatively impact its ability to accurately account for and monitor 

its inventories of non-controlled drugs and impair its ability to identify instances of drug 

waste and diversion. Without accurate and complete information, VHA cannot ensure its 

non-controlled drug inventories are appropriately safeguarded, increasing the risk of 

waste and diversion. The implementation and enforcement of sufficient controls to 

ensure accurate and complete information is imperative to VHA’s ability to account for 

and safeguard non-controlled drug inventories. 

VA Office of Inspector General iv
Audit of Veterans Health Administration’s Management of Non-Controlled Drugs 

Recommendations 

1. We recommend the Under Secretary for Health develop procedures to identify high 

risk non-controlled drugs and require pharmacy managers to monitor those drugs by 

establishing standardized inventory discrepancy rates that if exceeded require further 

investigation. 

2. We recommend the Under Secretary for Health develop appropriate internal controls 

to ensure pharmacy managers and staff accurately and consistently record drugdispensing activity in VistA. 

3. We recommend the Under Secretary for Health require that information on drug 

stocks transferred within a VA health care facility and drugs dispensed by and 

returned to a facility’s stock is accurately and consistently recorded in VistA. 

4. We recommend the Under Secretary for Health establish a policy on VA health care 

facilities’ use of drugs returned in the mail; and if returned drugs are restocked by 

facilities, develop procedures to ensure information on returned quantities of CMOP 

dispensed drugs that are restocked is consistently captured in inventory records using 

standardized procedures. 

5. We recommend the Under Secretary for Health develop policy to limit access to the 

VistA label reprint function to appropriate pharmacy personnel and develop standard 

procedures to capture information on drugs dispensed using the reprint function. 

6. We recommend the Under Secretary for Health develop standardized electronic 

annual physical inventory reporting formats; develop standards to ensure that annual 

physical inventory reports are reasonably accurate; and establish a procedure to hold 

VA health care facility pharmacy managers accountable for the accuracy of annual 

physical inventory reports. 

Management Comments and OIG Response 

The Acting Under Secretary for Health agreed with the findings and recommendations in 

the report and provided acceptable implementation plans (see Appendix B for the full text 

of comments). VHA will develop processes that identify and monitor high-risk noncontrolled drug inventories including the designation of universal inventory discrepancy 

rates that, if exceeded, will require follow-up investigation. VHA will also emphasize the 

importance of accurately and consistently recording drug dispensing activity in VistA, 

and will identify internal monitoring controls to ensure that facilities are complying with 

documentation requirements. 

VHA will reinforce the importance of fully utilizing existing capabilities in VistA to 

record and monitor the transfer of drug stocks within a facility and also issue guidance 

that drugs returned to the pharmacy after leaving VA custody must not be returned to 

stock and should be destroyed. VHA will develop procedures for returning and disposing 

VA Office of Inspector General v
Audit of Veterans Health Administration’s Management of Non-Controlled Drugs 

VA Office of Inspector General vi

of CMOP dispensed drugs and will reiterate the importance of adjusting inventory data to 

account for drugs returned in the mail as undeliverable and destroyed. 

VHA will develop a policy to limit access to the VistA label reprint function, standard 

procedures to capture information on drugs dispensed using the reprint function, and 

standardized electronic formats to ensure that annual physical inventory reports are 

reasonably accurate. VHA will also establish procedures to hold health care facility 

managers accountable for report accuracy. 

We consider these planned actions acceptable, and we will follow up on their 

implementation until all proposed actions are completed. 

 (original signed by:)

 BELINDA J. FINN 

Assistant Inspector General 

for Auditing 
Audit of Veterans Health Administration’s Management of Non-Controlled Drugs 

Introduction 

Purpose 

The Office of Inspector General (OIG) conducted an audit to determine how accurately 

the Veterans Health Administration (VHA) could account for inventories of noncontrolled drugs at increased risk for waste and diversion in its health care facilities. 

Background 

VHA Pharmacy Workload and Prescription Drug Spending. In fiscal year (FY) 

2008, VA health care facilities (facilities) filled about 141 million prescriptions. Noncontrolled drugs make up the bulk of VHA’s facility-level drug expenditures. During 

FY 2008, facilities spent about $1.3 billion on non-controlled drugs compared to 

$67 million on controlled drugs. Some non-controlled drugs have an increased risk for 

diversion because of their high cost or street value. VHA purchases most of its noncontrolled drugs through a national contract awarded in 2004 to the McKesson 

Corporation, the pharmaceutical prime vendor. 

Controlled vs. Non-Controlled Drugs. Prescription drugs are generally categorized as 

controlled or non-controlled. Non-controlled drugs are not subject to stringent inventory 

and oversight controls despite the fact that some are expensive while others contain 

active ingredients that can be used to manufacture illicit drugs. In contrast, controlled 

drugs, which include painkillers such as oxycodone, are identified as such by the Drug 

Enforcement Administration (DEA) and are tightly regulated under the Controlled 

Substances Act of 1970. VHA requires its facilities to store controlled substances in 

separate secure vaults and to conduct routine physical counts of each drug to reduce the 

risk for abuse and diversion. 

Prior Reviews. From 2005 to 2008, the VA OIG’s Office of Investigations investigated 

32 allegations of facility-level non-controlled drug diversions. About half of these 

investigations are now closed, and some of them resulted in convictions. For example, 

over a 6-month period in FY 2006, a VA employee diverted about $51,000 worth of noncontrolled drugs including Zyprexa, used to treat mental health conditions such as 

schizophrenia, and the cholesterol treating drug Lipitor. 

The need for increased oversight of non-controlled drugs was discussed in the OIG 

report, Review of VA Medical Facility Compliance with Controls over Prescription Drugs 

(Report 05-00877-17, November 1, 2006). According to this report, inventory 

management needed improvement at 16 facilities, and it was recommended that VHA 

make better use of automated inventory management systems to account for noncontrolled drugs. The report also noted that compliance with accountability controls can 

potentially decrease a facility’s risk of drug diversion. 

VA Office of Inspector General 1 
Audit of Veterans Health Administration’s Management of Non-Controlled Drugs 

VA Office of Inspector General 2 

Program Office Responsibilities. VHA’s Pharmacy Benefits Management (PBM) 

Services is responsible for developing policies to improve the safety and efficiency of 

facility inpatient and outpatient pharmacies. VHA’s Chief Logistics Office provides 

guidance on pharmacy inventory management to local and regional pharmacy managers 

across VHA’s Veterans Integrated Service Networks (VISN). According to VHA 

Handbook 1761.2, VHA Inventory Management, the Chief Logistics Office is responsible 

for providing guidance on monitoring compliance with pharmacy policies and 

procedures. The Chief Network Office is responsible for enforcing pharmacy inventory 

management policy. 

Requirements for Monitoring Facility Pharmacy Inventories. VHA’s Chief Logistics 

Office requires facilities to conduct annual physical inventories of all pharmaceutical 

items, including non-controlled drugs. According to VHA Handbook 1761.2, facilities 

must complete physical inventories and submit the total dollar value of these inventories 

to PBM by February 28 of each year. PBM aggregates inventory data regionally and 

forwards the data to VISN pharmacy managers. PBM also forwards nationally 

aggregated data to the Chief Logistics Office for monitoring purposes. 

PBM’s Guidelines for Conducting Annual Inventories require facility pharmacy 

managers to complete physical inventories of their pharmacies within a 24-hour period 

and conduct a random check of at least 25 inventory items for completeness and 

accuracy. According to PBM’s guidelines, facility pharmacy managers can use physical 

inventory data to manage their stocks of drugs by using the data to identify inventory 

shortages and overages. 

Drug Dispensing Process and Information Systems. Prescription medications are 

dispensed directly to veterans through a facility’s inpatient or outpatient pharmacy. As 

outpatients, veterans may pick up filled prescriptions from a facility’s outpatient 

pharmacy or the facility may mail the filled prescription directly to the veteran. Veterans 

may also have their medications mailed directly to them from a VHA Consolidated Mail 

Outpatient Pharmacy (CMOP). 

Information on facility-level drug dispensing as well as the transfer of drug stocks is 

captured in VHA’s Veterans Health Information System and Technology Architecture 

(VistA). Information on outpatient and inpatient drug dispensing and the transfer of 

drugs is captured in four VistA databases—Outpatient Dispensing (OP), Unit Dose (UD), 

Intravenous Dispensing (IV), and Automatic Replenishment/Ward Stock Dispensing 

(AR/WS). Data on facility-level drug purchases is captured in the pharmaceutical prime 

vendor’s Supply Management On-Line (SMO) database. Some information from 

SMO—such as information on drug prices and drug names—can be uploaded to VistA 

using VHA’s Drug Accountability Software. 
Audit of Veterans Health Administration’s Management of Non-Controlled Drugs 

Scope and Methodology 

To determine how accurately VHA can account for non-controlled drugs, we selected 

five drugs for review. We selected Sustiva, Zyprexa, Ultram, and Levitra because these 

drugs are considered to be at increased risk for diversion. We also included the anticlotting drug Plavix in our review because it is the drug most frequently purchased by 

VHA. 

To determine to what extent VHA could account for the total inventories available for 

each of the five reviewed drugs from 2007 to 2008, we calculated an inventory 

discrepancy for each drug at 31 randomly selected facilities. These facilities were 

selected from the 157 facilities that provide both inpatient and outpatient pharmacy 

services. We suspended our inventory analysis after determining the pharmacy data was 

incomplete and therefore, not reliable. 

We also determined that annual pharmacy inventory reports were not accurate because 

some drugs were not included in the inventory count at some facilities. Although the 

results of our inventory discrepancy analysis cannot be extrapolated to all facilities, our 

findings related to internal control weaknesses affecting the reliability of VistA data on 

pharmacy transactions and facility-level annual pharmacy inventory reports are systemwide. When this data is viewed in context with other available evidence, we believe the 

opinions, conclusions, and recommendations in this report are valid. 

To identify non-controlled drugs that are considered at high risk for diversion, we 

interviewed Federal and private drug diversion experts. We analyzed VHA national and 

local pharmacy management policies and used an on-line questionnaire to survey 

pharmacy managers from the 157 facilities. The questionnaire was designed to obtain 

information on how many facilities are monitoring non-controlled drugs, actions local 

pharmacy managers are taking to monitor non-controlled drugs, and factors that affect 

pharmacy managers’ ability to monitor inventories of non-controlled drugs. 

We obtained a 100 percent response rate. We also conducted site visits to six 

geographically diverse facilities where we interviewed local pharmacy managers and 

observed pharmacy procedures. These facilities were located in Fayetteville, NC; New 

York, NY; Long Beach, CA; Wichita, KS; Seattle, WA; and Spokane, WA. We 

interviewed representatives from a national health maintenance organization (HMO) and 

a large national retail pharmacy chain to learn about private sector efforts to monitor noncontrolled drugs for waste and diversion. 

We conducted this performance audit from April 2008 to February 2009, in accordance 

with generally accepted government auditing standards. We believe the evidence 

obtained provides a reasonable basis for our findings and conclusions based on our audit 

objective (see Appendix A for a more detailed discussion of our scope and methodology 

including our data reliability assessments). 

VA Office of Inspector General 3 
Audit of Veterans Health Administration’s Management of Non-Controlled Drugs 

Results and Conclusions 

Accountability for Non-Controlled Drugs Needs to Improve 

VHA cannot accurately account for its non-controlled drug inventories, because it has 

neither implemented nor enforced sufficient controls to ensure pharmacy inventory 

practices are standardized and pharmacy data is accurate. Pharmacy managers from 

facilities included in our inventory analysis reported a range of local practices that affect 

the completeness of pharmacy data captured in VistA, as well as the accuracy of annual 

physical inventory data. VHA has not instituted adequate controls to ensure that 

pharmacy personnel accurately and consistently record drug transactions in VistA. Also, 

VHA has not developed procedures to monitor drugs that may be at higher risk for waste 

and diversion. While VHA requires its facilities to conduct annual physical inventories 

of non-controlled drugs, it neither ensures inventory data is accurate nor uses the data as a 

tool to identify drug loss or possible drug diversion. Without improved accountability, 

non-controlled drugs are at increased risk for waste and diversion. 

Public Law 97-255, the Federal Managers Financial Integrity Act of 1982, requires 

Federal agencies to establish internal controls to provide reasonable assurance that 

Federal property such as non-controlled drug inventories are appropriately safeguarded. 

According to the Government Accountability Office’s (GAO) Standards for Internal 

Control in the Federal Government (GAO/AMID-00-21.3.1, November 1999), strong 

internal controls are the first line of defense in ensuring that agency assets are 

safeguarded. Agency management is responsible for developing suitable policies and 

procedures for internal controls. 

According to VHA officials, the current VistA system cannot provide information to 

account for a facility’s on-hand inventory accurately, because it does not have the 

capability to maintain a perpetual inventory. A perpetual pharmacy inventory system 

provides real-time information by accounting for current stock balances, all drug 

purchases, and all drug dispensing. In response to our questionnaire, 67 percent of 

pharmacy managers, from facilities providing inpatient and outpatient pharmacy services, 

reported VHA’s pharmacy information system does not have the capability to monitor the 

non-controlled drug inventories closely enough to detect diversion. Non-controlled 

drugs, particularly those that are high cost or have a high street value, may be more 

vulnerable to diversion because of the broad awareness that VHA’s pharmacy 

information system lacks the capability to track non-controlled drug inventories in detail. 

In 2003, VHA launched the Pharmacy Re-Engineering project to make improvements to 

VistA. While we did not evaluate the design of the re-engineered system or results of 

system tests, PBM officials told us that this new system is expected to address 

deficiencies in VistA. Originally slated for completion in 2005, the project’s timeline has 

been extended to 2011. However, PBM officials told us the project may not be 

completed until 2014. 

VA Office of Inspector General 4 
Audit of Veterans Health Administration’s Management of Non-Controlled Drugs 

While awaiting implementation of the Pharmacy Re-Engineering project, VHA needs to 

take immediate action to address limitations in its current inventory management system 

to improve its ability to account for and monitor non-controlled drug inventories. VHA 

should coordinate with VA’s Office of Information and Technology to ensure that the 

Pharmacy Re-Engineering project will address the internal control weaknesses and data 

inaccuracies we discuss in this report and that the project timeline is met. 

Drug Transactions Not Accurately and Consistently Recorded. Although VHA has 

established some procedures in its user manuals regarding the use of VistA to record 

pharmacy transactions, controls are not in place to ensure that accurate and complete 

information on drug transactions is captured. Information on transferred stocks of drugs 

and drug returns must be manually entered into VistA. We found that local pharmacy 

personnel are not consistently recording information in VistA on transactions such as 

pharmacy stock transfers and drug returns. Also, some dispensing data may be 

incomplete because some pharmacy personnel are inappropriately using the prescription 

label reprint function in VistA to dispense drugs. These factors impacted the 

completeness of the data used to conduct our analyses and may account for the inventory 

discrepancies we calculated. As a result, facilities’ actual inventory discrepancies may be 

higher or lower. 

Data on Transferred Non-Controlled Drug Inventories Not Consistently Captured. 

Pharmacy managers from 9 of the 31 facilities included in our analysis reported that 

pharmacy personnel do not always enter information on quantities of drugs transferred to 

secondary locations into the VistA AR/WS database. They stated that this incomplete or 

missing data may account for the negative inventory discrepancies we calculated for their 

facilities. Information on transferred stocks of drugs must be manually entered into the 

AR/WS database. VHA Handbook 1108.6, Inpatient Pharmacy Services–Administration 

of Medication Management Systems, provides guidance to pharmacy personnel on using 

the AR/WS database to record information on quantities of medications transferred to 

secondary locations, such as an emergency room or inpatient ward. 

At one of the sites we visited, the facility pharmacy manager told us that AR/WS is not 

used at all to capture information on stocks of drugs transferred to a State Veterans 

Home. Rather than using AR/WS, pharmacy personnel at this site captured information 

on medications transferred to the State Veterans Home in a database that did not interface 

with VistA. Based on data provided by the facility, we estimate about 18 percent of the 

facility’s total available inventory of Zyprexa was not accounted for in VistA. 

Dispensing data on non-controlled drug inventories will be understated at facilities where 

pharmacy personnel are not consistently and accurately entering information on 

transferred stocks of medications in the AR/WS database. 

Label Reprint Function Inappropriately Used to Dispense Drugs. VistA has the 

capability to reprint prescription labels, which is appropriately used in cases when the 

original label is damaged. According to PBM officials, pharmacy personnel generally 

should not use the VistA reprint function to dispense drugs. However, pharmacy 

VA Office of Inspector General 5 
Audit of Veterans Health Administration’s Management of Non-Controlled Drugs 

managers from the six facilities we visited told us that pharmacy personnel are using the 

reprint function to dispense drugs to patients, which can affect the accuracy of outpatient 

dispensing data captured in VistA. 

VistA does not have any controls in place, such as an electronic sign off by a pharmacy 

supervisor, to track why a reprint label is being initiated and to ensure that the function is 

not being inappropriately used to dispense drugs. The quantity of drugs dispensed using 

the reprint function is not always captured in the VistA OP database. In fact, the quantity 

of drugs dispensed using the reprint function is only captured in the VistA OP database if 

the original prescription was not released to the patient. This can occur when a 

prescription cannot be filled by a CMOP because the drug is not available and the facility 

fills the prescription instead. In such cases, facility pharmacy personnel could use the 

reprint function to print another prescription label to fill the patient’s prescription rejected 

by the CMOP. VHA needs to establish procedures to monitor and appropriately control 

reprint activity. 

We calculated a negative inventory discrepancy for at least one of the five selected drugs 

at 31 facilities, meaning the ending inventory was lower than it should have been given 

the quantities of drugs purchased and dispensed by the facility. These inventory 

discrepancies may be caused by local practices related to how information is captured on 

pharmacy stock transfers and the use of the prescription label reprint function. We 

estimated from our review of five non-controlled drugs that 31 facilities were unable to 

account for a total of 379,339 units, valued at about $700,000, or 8 percent of their total 

available inventory of 4.9 million units, valued at about $6 million. Considered in terms 

of individual drugs, facilities included in our analysis experienced average negative 

inventory discrepancies ranging from about 6 percent for Plavix to 15 percent for 

Zyprexa. Exhibit 1 shows the range of average negative inventory discrepancies for the 

reviewed drugs. 

Exhibit 1. Average Negative Inventory Discrepancies for Five Non-Controlled Drugs 

5.8

6.7

7.1

9.8

14.9

0 2 4 6 8 10 12 14 16

Plavix

Sustiva

Ultram

Levitra

Zyprexa

Selected 

Drugs

Negative Inventory Discrepancy Percentage

VA Office of Inspector General 6 
Audit of Veterans Health Administration’s Management of Non-Controlled Drugs 

VA Office of Inspector General 7 

Data on Drugs Returned to Stock Not Consistently Captured. We also found that 

facilities are not consistently capturing information on quantities of drugs originally 

dispensed by the facility and returned to the same facility’s pharmacy inventory for reuse. 

Pharmacy managers from seven facilities included in our analysis told us that some 

pharmacy personnel may be returning drugs to inventory without adjusting balances in 

VistA. VHA’s Outpatient Pharmacy Managers User Manual, states pharmacy personnel 

should manually enter information into VistA on the quantity of non-controlled 

medications returned to the pharmacy’s stock for future dispensing. This return to stock 

function corrects VistA data on the quantity of a given drug dispensed to date. Unless 

pharmacy personnel adjust the quantity of medications that were previously recorded as 

being dispensed, a facility’s dispensing data will be inflated. 

We calculated a positive inventory discrepancy for at least one of the five selected drugs 

at 24 facilities, meaning the ending inventory was higher than it should have been given 

the quantities of drugs purchased and dispensed by the facility. We estimated from our 

review that these facilities had 876,555 units available for dispensing, yet records showed 

these facilities dispensed 909,785 units and had 53,696 units in ending inventory. This 

represents an excess of 86,926 units, which was 10 percent more of the five drugs than 

the facilities should have had available to dispense. 

We calculated average positive inventory discrepancies for each drug that ranged from 6 

percent for Ultram to as high as 31 percent for Zyprexa. Positive inventory discrepancies 

are a major concern since drug losses associated with diversion could go undetected and 

be attributed to poor inventory recordkeeping practices. Exhibit 2 shows the range of 

average positive inventory discrepancies for the reviewed drug. 

Exhibit 2. Average Positive Inventory Discrepancies for Five Non-Controlled Drugs 

These positive inventory discrepancies may be a result of not capturing information on 

returned drugs in VistA. While the return to stock function in VistA corrects the 

inventory count for medications dispensed and returned to stock by the same facility, 

5.5

5.8

7.7

26.1

30.6

0 5 10 15 20 25 30 35

Ultram

Sustiva

Plavix

Levitra

Zyprexa

Selected

Drugs

Positive Inventory Discrepancy Percentage
Audit of Veterans Health Administration’s Management of Non-Controlled Drugs 

VistA does not have the capability to account for CMOP dispensed drugs that are 

restocked by a facility. Pharmacy managers told us that it is a local decision whether to 

restock returned drugs originally dispensed by a CMOP, and managers at two sites we 

visited reported routinely restocking returned drugs dispensed by a CMOP. Pharmacy 

managers from both of these sites told us their positive inventory discrepancies were 

caused by not being able to capture information in VistA on drugs returned to stock that 

were originally dispensed by a CMOP. 

We confirmed that the VistA system does not have the capability to account for returned 

quantities of these non-controlled drugs. PBM officials, however, told us that they have 

concerns about the use of drugs returned in the mail because conditions such as extreme 

heat or cold that these drugs may be exposed to during shipment can affect a drug’s 

integrity. VHA needs to issue a policy on facilities’ use of drugs returned in the mail, 

and if facilities restock returned drugs, VHA needs to develop standardized procedures to 

capture information in its inventory records on restocked CMOP dispensed drugs. 

Lack of Policy to Monitor High-Risk Non-Controlled Drugs. VHA does not currently 

require its facilities to monitor any non-controlled drugs. VHA Directive 98-020, Drug 

Accountability Software Version 3.0, which required facilities to monitor at least 20 noncontrolled drugs for possible diversion, expired in 2003. VHA does not currently provide 

facilities with technical guidance on how to monitor non-controlled drugs to detect 

diversion, and VHA has not taken steps to improve the usefulness of its annual physical 

inventory information to improve accountability over non-controlled drugs. 

Some Facilities Taking Steps to Monitor Non-Controlled Drugs. In response to our 

questionnaire, 36 percent of pharmacy managers reported that they lack adequate 

information on how to develop processes to monitor non-controlled drugs for diversion. 

Pharmacy managers at some facilities are taking steps to monitor non-controlled drugs in 

the absence of a comprehensive VHA policy. Eighty percent of pharmacy managers 

reported that they monitor at least one non-controlled drug for diversion and the majority 

of these pharmacy managers (63 percent) reported that they monitor one to five drugs. 

Almost half of the pharmacy managers, who reported monitoring non-controlled drugs 

for diversion, used inventories as a way to monitor these drugs. According to 

questionnaire responses, most facilities conduct inventories of some drugs at least 

quarterly. 

Other actions pharmacy managers frequently reported taking to monitor non-controlled 

drugs for diversion included comparing data on drug purchasing and dispensing to 

identify unaccounted for drugs and tracking selected non-controlled drugs through VistA 

software that was designed to perpetually track inventories of controlled substances. To 

increase accountability over non-controlled drugs at increased risk for diversion, VHA 

needs to identify and monitor these drugs. 

During our site visits, we observed and learned about actions pharmacy managers were 

taking to increase monitoring of non-controlled drugs. For example, pharmacy managers 

at one facility we visited started using the VistA Drug Accountability Software in 

VA Office of Inspector General 8 
Audit of Veterans Health Administration’s Management of Non-Controlled Drugs 

May 2008 to monitor the same five drugs we analyzed. At another facility we visited, 

pharmacy managers issued a local policy in August 2008 to increase monitoring of noncontrolled drugs. They would, for example, select five non-controlled drugs to monitor 

closely each year. This facility also stores non-controlled drugs at increased risk for 

diversion in a secure storage area, such as a locked vault. Efforts were being taken at the 

other four facilities we visited to increase monitoring of some non-controlled drugs. For 

example, at three facilities we observed that some non-controlled drugs considered at 

higher risk for diversion were stored in a vault or secured room. At another facility, 

pharmacy managers reported that they monitor some non-controlled drugs by periodically 

comparing purchasing records against dispensing reports to identify any abnormalities. 

Private Sector Actions to Monitor Non-Controlled Drugs. We interviewed 

representatives from a national HMO and large national retail pharmacy chain to identify 

current private sector policies and procedures used to monitor inventories of high-risk 

non-controlled drugs. Both monitor some non-controlled drugs for diversion. For 

example, the HMO tracks high cost drugs, while the national retail pharmacy tracks drugs 

at high risk for diversion, based on a listing of high risk drugs developed by the National 

Association of Drug Diversion Investigators (NADDI). Both compare purchasing and 

dispensing data to calculate inventory discrepancies every month. Representatives told 

us that when purchases for a drug exceed drug-dispensing rates in consecutive months an 

investigation may be initiated. However, representatives stated they take into account the 

size of a pharmacy; the volume of the drug being dispensed; as well as the timing of the 

purchases to determine if drug diversion is in fact occurring. They reported that they do 

not use a standard inventory shrinkage rate, which would account for losses such as waste 

caused by the accidental spilling of bottles of medications and theft. We were unable to 

identify an industry-wide standard inventory shrinkage rate for non-controlled drugs. 

Physical Inventories Not Fully Utilized to Account for Non-Controlled Drugs. VHA has 

not taken steps to improve the usefulness of its annual physical inventory information to 

improve accountability over non-controlled drugs. According to PBM officials, the 

purpose of the annual physical inventory is not to account for inventories of specific 

drugs, but to measure how efficiently facilities are managing inventory turnover, an 

indicator of whether a facility has too much or too little on-hand inventory. However, 

according to VHA’s guidance, an annual physical inventory may be used to identify 

missing inventory or potential drug diversion. While physical inventory data could be a 

useful tool for VHA to monitor selected non-controlled drugs nationally or regionally, 

VHA needs to take steps to improve the accuracy of this information. 

VHA requires pharmacy managers to verify that physical inventories are conducted 

completely and accurately by conducting random checks of at least 25 items. None of the 

pharmacy managers at the six sites we visited were able to provide us with 

documentation demonstrating their compliance with VHA’s requirement to ensure that 

annual physical inventories are accurate. Furthermore, pharmacy managers from 11 of 

31 facilities told us that their inventory discrepancies may be the result of inaccurate 

physical inventory data. VHA does not require its facilities to maintain their annual 

VA Office of Inspector General 9 
Audit of Veterans Health Administration’s Management of Non-Controlled Drugs 

physical inventory reports for a period of time, nor does it require its facilities to record 

inventory results in a standardized electronic format. Thirty-five facilities were unable to 

provide us with their inventory reports or the inventory reports were only available in 

hardcopy format. 

We determined the risk for error was too high to rely on these manual reports for 

purposes of this analysis. Retaining standardized electronic inventory data would allow 

VHA to develop reports to monitor the inventories of specific drugs nationally or 

regionally. Complete and standardized annual physical inventory data is needed to help 

VHA establish accountability over its non-controlled drug inventories. 

Conclusion 

VHA cannot accurately account for its non-controlled drug inventories because it lacks 

effective controls and reliable information to do so. The accurate and complete data 

needed to account for these drugs is not available, and VistA lacks the capability to 

capture information on some drugs that are returned to a facility and restocked. VHA’s 

information limitations negatively impact its ability to accurately account for and monitor 

its inventories of non-controlled drugs and impair its ability to identify instances of drug 

waste and diversion. Without accurate and complete information, VHA cannot ensure its 

non-controlled drug inventories are appropriately safeguarded, increasing the risk of 

waste and diversion. The implementation and enforcement of sufficient controls to 

ensure accurate and complete information is imperative to VHA’s ability to account for 

and safeguard non-controlled drug inventories. 

Recommendations 

1. We recommend the Under Secretary for Health develop procedures to identify high 

risk non-controlled drugs and require pharmacy managers to monitor those drugs by 

establishing standardized inventory discrepancy rates that if exceeded require further 

investigation. 

2. We recommend the Under Secretary for Health develop appropriate internal controls 

to ensure pharmacy managers and staff accurately and consistently record drugdispensing activity in VistA. 

3. We recommend the Under Secretary for Health require that information on drug 

stocks transferred within a VA health care facility and drugs dispensed by and 

returned to a facility’s stock is accurately and consistently recorded in VistA. 

4. We recommend the Under Secretary for Health establish a policy on VA health care 

facilities’ use of drugs returned in the mail; and if returned drugs are restocked by 

facilities, develop procedures to ensure information on returned quantities of CMOP 

dispensed drugs that are restocked is consistently captured in inventory records using 

standardized procedures. 

VA Office of Inspector General 10 
Audit of Veterans Health Administration’s Management of Non-Controlled Drugs 

VA Office of Inspector General 11 

5. We recommended the Under Secretary for Health develop policy to limit access to the 

VistA label reprint function to appropriate pharmacy personnel and develop standard 

procedures to capture information on drugs dispensed using the reprint function. 

6. We recommended the Under Secretary for Health develop standardized electronic 

annual physical inventory reporting formats; develop standards to ensure that annual 

physical inventory reports are reasonably accurate; and establish a procedure to hold 

VA health care facility pharmacy managers accountable for the accuracy of annual 

physical inventory reports. 

Management Comments and OIG Response 

The Acting Under Secretary for Health agreed with the findings and recommendations in 

the report and provided acceptable implementation plans (see Appendix B for the full text 

of comments). VHA will develop processes that identify and monitor high-risk noncontrolled drug inventories including the designation of universal inventory discrepancy 

rates that, if exceeded, will require follow-up investigation. VHA will also emphasize the 

importance of accurately and consistently recording drug dispensing activity in VistA, 

and will identify internal monitoring controls to ensure that facilities are complying with 

documentation requirements. 

VHA will reinforce the importance of fully utilizing existing capabilities in VistA to 

record and monitor the transfer of drug stocks within a facility and also issue guidance 

that drugs returned to the pharmacy after leaving VA custody must not be returned to 

stock and should be destroyed. VHA will develop procedures for returning and disposing 

of CMOP dispensed drugs and will reiterate the importance of adjusting inventory data to 

account for drugs returned in the mail as undeliverable and destroyed. 

VHA will develop a policy to limit access to the VistA label reprint function, standard 

procedures to capture information on drugs dispensed using the reprint function, and 

standardized electronic formats to ensure that annual physical inventory reports are 

reasonably accurate. VHA will also establish procedures to hold health care facility 

managers accountable for report accuracy. 

We consider these planned actions acceptable, and we will follow up on their 

implementation until all proposed actions are completed. 
Audit of Veterans Health Administration’s Management of Non-Controlled Drugs 

 Appendix A 

Additional Information on Audit Scope and 

Methodology 

To identify non-controlled drugs at increased risk for diversion, we reviewed relevant 

studies published by Federal agencies such as DEA and private sector organizations such 

as the NADDI and the National Association of Boards of Pharmacy (NABP). We 

interviewed Federal drug diversion experts from DEA, the Food and Drug 

Administration, National Institute of Drug Abuse, and the Substance Abuse and Mental 

Health Services Administration. In addition, we interviewed experts from the private 

sector including representatives from NADDI and NABP. 

Based on our interviews and reviews of investigations and published research, we 

identified four drugs consistently cited as at increased risk for diversion: Sustiva, 

Zyprexa, Ultram, and Levitra. We also included the anti-clotting drug Plavix in our 

analysis because it is the drug most frequently purchased by VHA. Exhibit 3 provides 

further information on the drugs we included in our analysis. 

Exhibit 3. Non-Controlled Drugs Selected for Inventory Analysis 

Trade 

Name 

Generic 

Name 

Criteria for 

Selection 

Facility Total 

Purchases 

(Feb 2007 – Feb 2008) 

Therapeutic Use 

Zyprexa Olanzapine 

High risk for 

diversion and high 

unit cost 

$27.6 million 

Mental/mood conditions 

such as schizophrenia and 

bipolar mania 

Levitra Vardenafil High risk for 

diversion $673,000 Erectile dysfunction 

Ultram Tramadol High risk for 

diversion $862,000 Pain control 

Sustiva Efavirenz 

High risk for 

diversion and high 

unit cost 

$3.2 million HIV infection 

Plavix Clopidogrel Highest volume drug 

purchased by VHA $20 million 

Cardiac conditions such 

as heart attack, 

unpredictable severe 

constricting chest pain, 

and prevention of blood 

clots in the brain 

Source: Drug Manufacturer Information and OIG Analysis 

Inventory Analysis. VHA operates 157 facilities that offer both inpatient and outpatient 

pharmacy services. We requested 2007 and 2008 annual physical inventory data from 

each facility. Sixty-six facilities were not included in our analysis for a range of reasons. 

For example, 26 facilities could only provide us with inventory data in hardcopy format. 

We determined that manually entering large amounts of data into our data analysis 

software would introduce an unreasonable amount of error and did not include these 

facilities in our analysis. Furthermore, 27 facilities failed to comply with VHA’s 

VA Office of Inspector General 12 
Audit of Veterans Health Administration’s Management of Non-Controlled Drugs 

 Appendix A 

requirement to conduct their inventories within a 24-hour period. We did not include 

these facilities in our review because we were unable to reconcile beginning inventory 

data captured over multiple days with ending inventory data that was not captured over a 

similar period of time. Exhibit 4 provides further details on reasons why some facilities 

were excluded from our inventory discrepancy analysis based on their annual physical 

inventory reports. 

Exhibit 4. Annual Physical Inventory

Factors Excluding VA Health Care Facilities from Review Unique Facilities 

Facilities that did not conduct a 2007 inventory 3 

Facilities that could not provide a 2007 or 2008 inventory 9 

Facilities that did not conduct a 2008 inventory before the 

February 29 deadline 1 

Facilities conducted inventories over multiple dates 27 

Facilities that provided either a 2007 or 2008 hardcopy inventory 26 

Total number of facilities excluded from OIG review 66 

To calculate a total available inventory discrepancy percentage, we included in our 

analysis the total quantity of each of the five selected drugs available for dispensing 

during a 12-month period from 2007 to 2008. We calculated each facility’s total 

available inventory by taking the reported ending balance of each facility’s 2007 

inventory and adding the number of units purchased for each of the five selected drugs 

during the year. We then subtracted the number of units dispensed through the facility’s 

inpatient and outpatient pharmacies to determine an OIG calculated inventory. We 

compared our calculated inventory to the facility’s reported 2008 ending physical 

inventory and determined a total available inventory discrepancy for each drug at each 

facility. We then divided the facility’s inventory discrepancy by the total available 

facility inventory to calculate a total available inventory discrepancy percentage for each 

drug at each facility. 

We found both positive and negative inventory discrepancies. A negative inventory 

discrepancy was observed when a facility’s reported ending inventory was lower than our 

calculated ending inventory based on the quantity of drugs a facility purchased and 

dispensed. A positive inventory discrepancy was observed when a facility’s reported 

ending inventory was higher than our calculated ending inventory based on the quantity 

of drugs a facility purchased and dispensed. 

Data Reliability. We conducted tests to assess the reliability of data that we planned to 

use in our inventory discrepancy analysis. To test drug-purchasing data, we compared 

data provided by the OIG Austin Data Analysis Division with information from the prime 

vendor’s SMO database and found that facility level purchasing data was reliable for the 

purposes of our audit. We were unable to test the reliability of annual physical inventory 

data because VHA’s VistA information system does not have the capability to maintain 

VA Office of Inspector General 13 
Audit of Veterans Health Administration’s Management of Non-Controlled Drugs 

 Appendix A 

perpetual inventory information and as a result, we were not able to compare each 

facility’s annual physical inventory reports to another source of inventory data. We were 

not able to assess the reliability of dispensing data extracted from VistA because facilities 

do not keep hard paper logs of dispensed non-controlled drugs. Furthermore, pharmacy 

dispensing data is generated from prescriptions entered electronically by VHA clinicians 

into VHA’s Computerized Patient Record System that operates as part of the VistA 

information system. 

We took steps to assess the reliability of specific data we used in our inventory 

discrepancy analyses. We shared the results of our inventory analyses with pharmacy 

managers from each facility included in our analysis. We asked each facility pharmacy 

manager to review the data that we used to conduct our analysis for accuracy and 

completeness. Some of these pharmacy managers reported that limitations in the VistA 

information system, as well as local procedures, may affect the completeness and 

reliability of VistA generated dispensing information. We confirmed during our site 

visits that VistA limitations and local procedures were impacting the completeness and 

reliability of pharmacy information captured in VistA as well as annual physical 

inventory reports. We concluded that pharmacy dispensing data captured in VistA and 

annual physical inventory data were not reliable and suspended our inventory 

discrepancy analysis at 31 randomly chosen facilities. Exhibit 5 provides details on the 

facilities included in our analysis. 

Exhibit 5. VA Health Care Facilities Included in Inventory Analysis 

No. VA Health Care Facility Location Station VISN 

1 Edith Nourse Rogers Memorial Veterans 

Hospital 

Bedford, MA 518 1 

2 Manchester VA Medical Center (VAMC) Manchester, NH 608 1 

3 Manhattan Campus of the VA New York 

Harbor (Health Care System) HCS 

New York, NY 630 3 

4 Erie VAMC Erie, PA 562 4 

5 Philadelphia VAMC Philadelphia, PA 642 4 

6 Fayetteville VAMC Fayetteville, NC 565 6 

7 Salem VAMC Salem, VA 658 6 

8 Atlanta VAMC Decatur, GA 508 7 

9 Central Alabama Veterans HCS Montgomery, AL 619 7 

10 Carl Vinson VAMC Dublin, GA 557 7 

11 West Palm Beach VAMC West Palm Beach, FL 548 8 

12 Huntington VAMC Huntington, WV 581 9 

13 VA Ann Arbor HCS Ann Arbor, MI 506 11 

14 Robert J. Dole VAMC Wichita, KS 589A7 15 

VA Office of Inspector General 14 
Audit of Veterans Health Administration’s Management of Non-Controlled Drugs 

 Appendix A 

VA Office of Inspector General 15 

Exhibit 5. VA Health Care Facilities Included in Inventory Analysis (cont’d)

No. VA Health Care Facility Location Station VISN 

15 Jack C. Montgomery VAMC Muskogee, OK 623 16 

16 Overton Brooks VAMC Shreveport, LA 667 16 

17 New Mexico VA HCS Albuquerque, NM 501 18 

18 Northern Arizona VA HCS Prescott, AZ 649 18 

19 Cheyenne VAMC Cheyenne, WY 442 19 

20 Jonathan M. Wainwright Memorial VAMC Walla Walla, WA 687 20 

21 Spokane VAMC Spokane, WA 668 20 

22 VA Puget Sound HCS Seattle, WA 663 20 

23 VA Puget Sound HCS Tacoma, WA 663A4 20 

24 VA Palo Alto HCS Palo Alto, CA 640 21 

25 VA Palo Alto HCS Livermore, CA 640A4 21 

26 VA Sierra Nevada HCS Reno, NV 654 21 

27 VA Long Beach VAMC Long Beach, CA 600 22 

28 VA Southern Nevada HCS Las Vegas, NV 593 22 

29 VAMC Saint Cloud Saint Cloud, MN 656 23 

30 VA Black Hills HCS Fort Meade, SD 568 23 

31 VA Black Hills HCS Hot Springs, SD 568A4 23 

 
Audit of Veterans Health Administration’s Management of Non-Controlled Drugs 

 Appendix B 

Acting Under Secretary for Health Comments 

VA Office of Inspector General 16 
Audit of Veterans Health Administration’s Management of Non-Controlled Drugs 

 Appendix B 

VA Office of Inspector General 17 
Audit of Veterans Health Administration’s Management of Non-Controlled Drugs 

 Appendix B 

VA Office of Inspector General 18 
Audit of Veterans Health Administration’s Management of Non-Controlled Drugs 

 Appendix B 

VA Office of Inspector General 19 
Audit of Veterans Health Administration’s Management of Non-Controlled Drugs 

 Appendix C 

VA Office of Inspector General 20 

OIG Contact and Staff Acknowledgments 

OIG Contact Nick Dahl (781) 687-3120 

Acknowledgments Irene J. Barnett 

Michael Cannata 

John Cintolo 

Matthew Kidd 

Jennifer Leonard 

James McCarthy 

Steven Rosenthal 
Audit of Veterans Health Administration’s Management of Non-Controlled Drugs

 Appendix D 

VA Office of Inspector General 21 

Report Distribution 

VA Distribution

Office of the Secretary 

Veterans Health Administration 

Veterans Benefits Administration 

National Cemetery Administration 

Assistant Secretaries 

Office of General Counsel 

Non-VA Distribution

House Committee on Veterans’ Affairs 

House Appropriations Subcommittee on Military Construction, Veterans Affairs, 

 and Related Agencies 

House Committee on Oversight and Government Reform 

Senate Committee on Veterans’ Affairs 

Senate Appropriations Subcommittee on Military Construction, Veterans Affairs, 

 and Related Agencies 

Senate Committee on Homeland Security and Governmental Affairs 

National Veterans Service Organizations 

Government Accountability Office 

Office of Management and Budget 

This report will be available in the near future on the OIG’s Web site at 

http://www.va.gov/oig/publications/reports-list.asp. This report will remain on the OIG 

Web site for at least least two fiscal years after it is issued.