Indian Health Service: IHS Mismanagement Led to Millions of Dollars in Lost or Stolen Property

In response to this recommendation, IHS indicated it has updated property management policies relative to our findings. Key areas addressed in updated policies include outlining and enhancing overall personal and supervisory responsibilities to account for, secure, and protect Government property; expanding the hand receipt requirement to include all accountable property issued to IHS employees; improving the handling of sensitive equipment; and upgrading procedures to account for IHS Headquarters? receipt, inspection, and disposal of property. To ensure implementation of these revised policies, beginning in FY 2009, IHS Area Managers were specifically evaluated on property management performance factors .

IHS has reported progress in addressing inventory shortages and indicated that accountability improvements have been made (i.e., use of hand receipts for individual accountability, involvement by Area Directors in approving all Reports of Survey in their respective Areas, and centralizing all HQ offices' property management responsibilities into a single property office for improved accountability.) In 2010, IHS updated its Indian Health Manual with a complete revision of its property management policies, procedures, and responsibilities. This update provides specific requirements and procedures to investigate instances of loss (including theft and inventory shortages), damage, destruction, and deterioration of government personal property, and to determine responsibility and establish the extent of financial liability of employees, if appropriate.

IHS management instructed Area Property Management Officers to conduct the 2008 physical inventory utilizing the Property Management Information System. IHS headquarters, National Programs, and the 12 regions conducted all physical inventories of accountable personal property by September 2008.

In October 2010, IHS updated its Indian Health Manual and revised its property management policies, procedures, and responsibilities. The property management directive requires designated property management officers (PMOs) and asset center representatives (ACRs) to oversee all property management functions at the various IHS locations and have overall responsibility for proper use, maintenance, and protection of property. Receiving agents are tasked to physically receive, inspect, and accept Government property in established receiving areas. The designated receiving agents will be the only individuals allowed to physically receive Government property, and are responsible for inspecting the property shipment to identify possible discrepancies and damage, tagging the property with a barcode, and notifying the ordering office that the property has arrived.

In accordance with the revised property management directive issued in 2010, the receiving agent, or other property official, will place an IHS barcode tag number on all accountable property after accessing the Property Management Information System catalog to determine what property items require tagging. For additional control and accountability, the tag number will be annotated on the receiving report for each respective property item.

IHS has indicated that all accountable property is tracked and controlled through the use of hand receipts, and that all Area Directors are evaluated on use of this accountability measure in their performance plans. Specifically, employees will account for personal property assets issued to them at the time of transfer, separation, change in duties, physical inventory, or on demand by the proper authority. Updating or reissuing of hand receipts is required to document any change in accountability. IHS reported that enforcement of the hand receipt system is tied to the performance requirements of all IHS Area Directors. In 2010, IHS placed a performance requirement in all twelve Area Directors' Senior Executive Service performance plans to issue hand receipts to all employees, thereby ensuring responsibility at the highest level of management.

As required by the 2010 IHS property management directive, the Property Management Information System (PMIS) must be continuously updated in order to reflect the current user and location of all accountable and sensitive property. For example, when personal property is relocated (i.e., between buildings, departments, etc.), the authorized property manager will update the location record in PMIS to reflect the change and maintain accountability over the asset. The user and location updates to PMIS are required for all personal property transfers both within and outside IHS.

Property management policy, effective as of October 2010, requires that (1) all IHS controlled facilities, including warehouses and equipment yards, will be fenced or otherwise protected to ensure that materials are safeguarded against theft, pilferage, or unauthorized withdrawals, (2) all areas designated for the receiving and storage of personal property will have their access limited to authorized personnel only, (3) IHS facilities will maintain physical access control in accordance with applicable federal standards, and (4) all excess sensitive property will be locked in a cage, cabinet, or other secure location. Security and related support to protect property and equipment is provided by the IHS security component and/or the Federal Protective Service. IHS has reported that access to its facilities is limited to those who have the proper security clearances for each office and/or storage location, and that perimeter security is in place at all IHS locations.

IHS has indicated that all IHS Areas have fully implemented the use of PMIS. IHS Headquarters has placed an emphasis on PMIS training for all IHS property staff-- training was conducted at all IHS Areas in 2009 and 2010 and is an ongoing priority to ensure that staff have the information and skills necessary to effectively use the system. IHS's property management policy, updated in 2010, specifies that PMIS is the IHS system of record for the management of personal property and that all legacy systems used for tracking accountable property will be decommissioned and are not to be used to track accountable property.

On January 12, 2009, the Department of Health and Human Services (HHS) updated its policy on handling sensitive equipment, and IHS, in line with our recommendation, implemented the HHS policy change by adding blackberries to its definition of sensitive equipment. These devices are now to be entered and tracked in Property Management Information System, regardless of acquisition cost.