Index

Combating Terrorism: Chemical and Biological Medical Supplies Are Poorly
Managed (Testimony, 03/08/2000, GAO/T-HEHS/AIMD-00-59).

Pursuant to a congressional request, GAO discussed its recent report on
the management of federal medical stockpiles that would be used to treat
civilians in a chemical or biological terrorist attack.

GAO noted that: (1) the Office of Emergency Preparedness (OEP), the
Department of Veterans Affairs (VA), and the Marine Corps Chemical and
biological Incident Response Force (CBIRF) did not have basic internal
controls to help them manage their stockpiles; (2) as a result, the
inventory GAO conducted identified a number of items; (3) in one
location, for example, GAO found 1,000 fewer diazepam injectors than
required; (4) this drug, commonly known as valium, would be administered
to calm victims and control their convulsions; (5) although VA contends
that it stockpiled a substitute, it could not provide written
documentation of OEP's approval at the time of the substitution; (6) at
another location, the entire supply of 2,000 vials of amyl nitrate--an
antidote for cyanide poisoning--had expired; (7) GAO also found
incorrectly recorded expiration dates and lot numbers, which are
necessary to keep supplies current and respond to potential manufacturer
recalls; (8) internal control is a major part of managing an
organization, and it comprises the plan, methods, and procedures used to
meet missions, goals, and objectives--in this case, protecting the
public health against the effects of chemical and biological attacks;
(9) internal control serves as the first line of defense in safeguarding
assets, like the stockpiles, and helps prevent and detect errors in
managing the medical supplies; (10) without internal control, these
agencies cannot provide reasonable assurance that all medical supplies
and pharmaceuticals required to be stockpiled are current, accounted
for, and available for use; (11) further, none of the agencies conducted
periodic inventories of the stocks they had on hand and compared the
results with their required levels; (12) in addition, security was lax
at some stockpile locations; (13) GAO found comingling of stockpiled
items with other VA medical center pharmaceuticals, sometimes in
unsecured refrigerators; (15) while CBIRF's overall security was much
better, it could not ensure that proper access was maintained because no
sign-in procedures of logs were kept for recording access to its
warehouse and trucks where medical supplies are stored; and (15) the
agencies also did not follow the standards for segregating duties among
different staff, which are intended to reduce the risk of error and
fraud.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  T-HEHS/AIMD-00-59
     TITLE:  Combating Terrorism: Chemical and Biological Medical
	     Supplies Are Poorly Managed
      DATE:  03/08/2000
   SUBJECT:  Internal controls
	     Noncompliance
	     Medical supplies
	     Inventory control systems
	     Terrorism
	     Chemical warfare
	     Biological warfare
	     Emergency preparedness

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Wednesday,

Mar. 8, 2000

GAO/T-HEHS/AIMD-00-59

COMBATING TERRORISM

Chemical and Biological Medical Supplies Are Poorly Managed

        Statement of Cynthia A. Bascetta, Associate Director

Veterans' Affairs and Military Health Care Issues

Health, Education, and Human Services Division

Testimony

Before the Subcommittee on National Security, Veterans Affairs, and
International Relations, Committee on Government Reform, House of
Representatives

United States General Accounting Office

GAO

Combating Terrorism: Chemical and Biological Medical Supplies Are Poorly
Managed

Mr. Chairman and Members of the Subcommittee:

We are pleased to be here to discuss our recent report on the management of
federal medical stockpiles that would be used to treat civilians in a
chemical or biological terrorist attack. Today I will highlight the problems
we identified with the management of the stockpiles, discuss the results of
our actual count of stockpiled supplies, and update you on progress since
our report was issued.

As we reported to you, the Office of Emergency Preparedness (OEP), the
Department of Veterans Affairs (VA), and the Marine Corps Chemical and
Biological Incident Response Force (CBIRF) did not have basic internal
controls to help them manage their stockpiles. As a result, the inventory we
conducted identified a number of items, such as antidotes and antibiotics,
that were stocked below required levels or had expired, as well as excesses
of other items like sterile gloves. In one location, for example, we found
1,000 fewer diazepam injectors than required. This drug, commonly known as
valium, would be administered to calm victims and control their convulsions.
Although VA contends that it stockpiled a substitute, it could not provide
written documentation of OEP's approval at the time of the substitution. At
another location, the entire supply of 2,000 vials of amyl nitrate-an
antidote for cyanide poisoning-had expired. We also found incorrectly
recorded expiration dates and lot numbers, which are necessary to keep
supplies current and respond to potential manufacturer recalls. At one
location, for example, this information was wrong for 250 doxycycline
tablets and 100 ciprofloxacin tablets; these antibiotics would be
administered to prevent the onset of symptoms in people exposed to anthrax.

To ensure that the stockpiles would be better managed, we made several
recommendations aimed at the root cause of these problems-the fundamental
lack of internal control. Internal control is a major part of managing an
organization, and it comprises the plan, methods, and procedures used to
meet missions, goals, and objectives-in this case, protecting the public
health against the effects of chemical and biological attacks. Internal
control serves as the first line of defense in safeguarding assets, like the
stockpiles, and helps prevent and detect errors in managing the medical
supplies.

Without internal control, these agencies cannot provide reasonable assurance
that all medical supplies and pharmaceuticals required to be stockpiled are
current, accounted for, and available for use. For example, at the time of
our review, their systems lacked basic information required for good
recordkeeping, such as documentation of back orders, replacements, and the
shipment and receipt of pharmaceutical and medical supplies. Further, none
of the agencies conducted periodic inventories of the stocks they had on
hand and compared the results with their required levels.

In addition, security was lax at some stockpile locations. We found
comingling of stockpiled items with other VA medical center pharmaceuticals,
sometimes in unsecured refrigerators. While CBIRF's overall security was
much better, it could not ensure that proper access was maintained because
no sign-in procedures or logs were kept for recording access to its
warehouse and trucks where medical supplies are stored. The agencies also
did not follow the standards for segregating duties among different staff,
which are intended to reduce the risk of error and fraud. For example, the
same individual who ordered OEP's supplies also replaced and disposed of
items and recorded all changes in the computerized tracking system.

OEP, VA and CBIRF concurred with our recommendations and have committed to
improving their internal controls. Our latest review of draft memoranda of
agreement between OEP, VA and the Centers for Disease Control (CDC), which
is responsible for a new biological stockpile, indicates that they have
incorporated much of our advice to improve stockpile management. For
example, CDC's agreement with VA includes provisions for unannounced
inspections and specific remedial actions with timeframes for completion.
OEP told us that it has moved quickly to correct security problems and is in
the final process of renegotiating its agreement with VA to strengthen
internal controls. VA told us it has prepared a plan indicating its
commitment to conduct risk assessment of its vulnerabilities, arrange for
annual inventories, implement a tracking system for the complete
documentation of transactions, and rotate supplies properly. CBIRF is
working on a list of required items but needs to expedite this because it is
central to its mission as well as implementation of our recommended actions.

In conclusion, we are encouraged by the actions being taken to address the
problems noted. The key now is to ensure that the actions are completed in a
timely manner and are implemented effectively. Better stewardship of public
resources and the need to mitigate as best as possible the potential
consequences of a terrorist attack demand such attention.

(406186)

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