According to VHA policy on the inspection of controlled substances, each VA medical facility must establish a controlled substance inspection program, which is to be overseen mainly by the facility’s director. VHA’s policy stipulates that the VA medical facility director must 1) ensure that the facility’s program complies with VHA’s requirements, 2) establish local medical facility procedures for the controlled substance inspection program that are consistent with VHA’s requirements, and 3) appoint a coordinator, who is responsible for managing the program and the inspectors who conduct the inspections. The coordinator is responsible for ensuring that inspections are conducted unannounced and monthly in each area of the VA medical facility that stores controlled substances. To assist the coordinator, a team of inspectors is to be assigned from various areas of the medical facility to conduct the actual inspections. The coordinator is responsible for ensuring that the inspectors have completed required training and must document annually an assessment of the inspectors’ competencies. The coordinator is also responsible for ensuring that the inspections include all of VHA’s policy requirements. VHA policy requires the coordinator to develop and submit two reports to the VA medical facility director—a monthly inspection report and a quarterly trend report. According to VHA policy, the monthly inspection report is to summarize the inspection findings. VHA also requires that these reports include information on missed inspections for each month and if missed inspections are identified, the medical facility director is expected to work with the coordinator to develop an action plan to improve performance and continue to monitor for additional missed inspections. The quarterly trend report is to summarize patterns in discrepancies identified through the inspection program—such as discrepancies between the physical count of controlled substances and their recorded inventory by patient care area—problematic trends, and potential areas for improvement in the program. VHA also requires that networks review the quarterly trend reports during an annual quality management visit to the medical facility. VHA’s policy establishes the requirements for the monthly inspection of controlled substances at VA medical facilities and the procedures that inspectors must follow to implement these requirements. There are different procedures for conducting inspections of pharmacies compared to patient care areas such as inpatient units and clinic areas. See table 1. VHA policy requires that facilities inspect multiple patient care areas and pharmacies on a monthly basis. These inspections are intended to help mitigate the risk of drug diversion. We found that from January 2015 through February 2016, one of the four selected facilities we reviewed missed 43 percent of the required monthly inspections, and another facility missed 17 percent of these inspections. The other two VA medical facilities we reviewed fully adhered to VHA’s requirement to conduct monthly inspections. At the VA medical facility that missed 43 percent (131 of 308) of the required monthly inspections, we found that most (about 95 percent) of the facility’s missed inspections were for the facility’s patient care areas, while the remaining 5 percent of missed inspections at this facility were for the pharmacy. For example, we found that inspectors missed monthly inspections in the facility’s patient care areas such as the operating room (all 14 inspections missed), bronchoscopy laboratory (all 14 inspections missed), and the intensive care units (7 of 14 inspections were missed). The facility’s coordinator told us that the operating room was not inspected at all during our review period because the inspectors assigned to inspect the operating room needed to arrive before or after normal operating room hours to obtain access to the controlled substances and were unable to conduct the inspections due to their conflicting work schedules. The bronchoscopy laboratory was not inspected at all during our review period because it was not identified by the coordinator as an area having controlled substances. Inspectors missed inspections in some patient care areas for 2 to 4 consecutive months. These areas included the intensive care units, cardiac catheter laboratory, and interventional radiology. Inspectors also missed inspections of the facility’s pharmacy for 3 consecutive months. At the VA medical facility that missed 17 percent (118 of 702) of the required monthly inspections, we found that most (about 95 percent) of the missed inspections were for the facility’s patient care areas, while the remaining 5 percent of missed inspections at this facility were for the pharmacy. For example, we found that inspectors missed monthly inspections in patient care areas such as the operating room (5 inspections missed), medical intensive care unit (4 inspections missed), and pain clinic (6 inspections missed). Inspectors missed inspections of some patient care areas for 2 or 3 consecutive months. These areas included the operating room, pain clinic and inpatient psychiatry. Inspectors also missed inspections of one of the facility’s four pharmacies for 2 consecutive months. We found one factor that contributed to the missed inspections at the two selected VA medical facilities was the lack of an additional control procedure to help prevent the medical facility from missing inspections, such as designating an alternate coordinator or appointing additional inspectors to fill in for the assigned inspector when needed. The coordinator and inspector roles are usually collateral duties. The coordinators and inspectors at the four VA facilities we selected told us that in addition to their inspection program duties, they had substantive full-time responsibilities and scheduled their inspection work around their facility jobs. Both of the VA medical facilities that conducted all of the required monthly inspections had an alternate coordinator to assist the coordinator in managing the inspection program, including scheduling the inspections and following up with inspectors to ensure inspections are completed. At one of these facilities the alternate coordinator also conducted inspections when inspectors had unforeseen circumstances that prevented them from completing the assigned inspections. In contrast, the two medical facilities that missed inspections during our review did not have an additional control procedure, such as the use of an alternate coordinator. The coordinators at these two medical facilities told us that managing the inspection program was challenging given their other full-time duties, which included supervising the VA medical facility’s patient food service and conducting quality improvement activities. One of the coordinators told us that she had not been informed of the time commitment related to the coordinator position prior to being appointed. According to these two coordinators, it is a challenge to re-assign the inspections when the assigned inspectors cannot conduct the scheduled inspections due to unforeseen circumstances. For example, the coordinators at these two facilities explained that some inspectors waited until the end of the month to conduct their assigned monthly inspections, and because of competing priorities or unexpected health or personal issues, the inspections were sometimes not completed. In these cases, the coordinators told us inspectors may not notify the coordinator in time to find another inspector to complete the monthly inspections, and the coordinators may not have time to complete the inspections themselves. One of the coordinators at these facilities told us that she had requested an alternate coordinator be appointed to help ensure adherence to the monthly inspection requirement and that the request was approved for an alternate coordinator to begin in January 2017. In VHA’s November 28, 2016 update to its inspection policy, VHA added a responsibility related to the monthly inspection requirement and made recommendations regarding the appointment of more than one coordinator for certain purposes and regarding the coordinator’s time commitment. First, the update assigns the facility chief of pharmacy responsibility for ensuring that the coordinator has an accurate listing of all automated dispensing machines and controlled substance storage areas. If properly implemented, this update may help ensure that all areas requiring monthly inspections are identified. Second, the update recommends that facility directors (a) appoint more than one coordinator (e.g., an alternate) for the purpose of coverage, program continuity, and succession planning and (b) discuss the time commitment with the coordinator and the coordinator’s current supervisor and adjust other duties as necessary to provide adequate time for the coordinator to perform the inspection program duties. The update is likely an improvement as it raises awareness around the time commitment of the coordinator role and it also might address the identified risks of missing inspections by recommending the appointment of more than one coordinator if needed for coverage of program responsibilities. However, because the update does not make the appointment of an alternate coordinator mandatory or require another control activity to address its risk, VHA still might lack reasonable assurance that inspections occur when the primary inspector is unable to fulfill that responsibility. Federal internal control standards state that to achieve an entity’s objective, management should define responsibilities and assign them to key roles throughout the entity. Further, management should design control procedures to help fulfill the defined responsibilities and address any identified risk in not achieving the entity’s objective. If management learns that the existing control procedures are not operating as designed, management should review them and analyze and respond to any associated risks of not meeting the defined objective. The two facilities that did not adhere to VHA’s requirement to conduct monthly inspections did not have an additional control procedure in place, such as an alternate coordinator, to respond to the risk of missed monthly inspections, which is inconsistent with these internal control standards. Missed inspections increase the likelihood that VHA may not meet the objective of the program—to reduce the risk of diversion of controlled substances. In 2009 and 2014, the VA OIG also found that VA medical facilities did not always conduct required monthly inspections. For example, in 2014 the VA OIG reported that of the 58 VA medical facilities it reviewed, the facilities missed required monthly inspections in 20 percent of patient care areas with controlled substances. We found that three of the four selected VA medical facilities, when conducting inspections, did not include, or correctly follow, three or more of the nine VHA requirements we reviewed. The fourth VA medical facility we reviewed had implemented inspection procedures that followed these requirements. The following are examples of inspections not following VHA requirements at these three selected facilities. At three of the selected VA medical facilities, inspectors did not perform physical counts of pharmacy emergency caches of controlled substances as required. Inspectors at one selected facility did not perform the count at all and at a second facility, inspectors told us that they counted some, but not all, of the cache, as required.