Indian Health Service: Mismanagement Led to Millions of Dollars in Lost or Stolen Property and Wasteful Spending Page: 3 of 14
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Mr. Chairman and Members of the Committee:
Thank you for the opportunity to discuss the results of our investigation of
lost or stolen property at the Indian Health Service (IHS). In June 2007, we
received information from a whistleblower through GAO's FraudNET
hotline alleging gross mismanagement of property at IHS and wasteful
spending. Specifically, the whistleblower, who was a cognizant property
official, alleged that IHS could not locate 1,180 pieces of accountable
personal property valued at over $1.8 million. The lost or stolen equipment
included computers and other potentially sensitive information technology
(IT) equipment at IHS headquarters. The whistleblower also claimed that
officials at IHS headquarters wrote off millions of dollars worth of missing
inventory without holding anyone financially liable. Based on the
significance of these claims, we conducted an investigation to determine
whether the whistleblower's allegations were valid. We described the
results of the investigation in a recent report that was issued last month.'
Today, our testimony will summarize the results of our investigation and
will describe the (1) substantiation of the allegation of lost or stolen
property at IHS, (2) identification of examples of wasteful purchases and
(3) identification of the key causes of any loss, theft, or waste that we
As detailed in our recent report, to substantiate the allegation of lost or
stolen property at IHS, we analyzed IHS property documents that
identified lost or stolen property from fiscal year 2004 through fiscal year
2007. We conducted a full physical inventory of property at IHS
headquarters2 and performed random sample testing of IT equipment
inventory at seven IHS field locations3 that we selected based on book
value of inventory and geographic proximity.4 We did not attempt to
'GAO, IHS Mismanagement Led to Millions of Dollars in Lost or Stolen Property,
GAO-08-727 (Washington, D.C.: June 18, 2008).
2IHS headquarters property consists mostly of IT equipment.
3We considered equipment to be lost or stolen in our physical inventory testing and random
sample testing of seven field locations if we could not observe the item to confirm bar code
and serial number, or if IHS could not provide us with adequate documentation to support
the disposal of the equipment.
4The seven sites we selected account for 35 percent of the IT equipment items or 40 percent
of the value of IT equipment. The seven locations we tested included both IHS area offices
and service units such as hospitals and supply centers.
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United States. Government Accountability Office. Indian Health Service: Mismanagement Led to Millions of Dollars in Lost or Stolen Property and Wasteful Spending, text, July 31, 2008; Washington D.C.. (digital.library.unt.edu/ark:/67531/metadc295034/m1/3/: accessed December 16, 2018), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.