Audit of the Federal Bureau of Prisons Pharmacy Services
Audit Report 06-03
Office of the Inspector General
The OIG has identified several issues in the BOP response to our draft report (see Appendix III) that we believe should be addressed. Before addressing each response to the OIG recommendations in turn, we are providing the following comments on the BOP response to the draft report.
In Appendix III, page 69, the BOP provided the following general statement in response to the audit:
The OIG disagrees with the BOP suggestion that selection bias may have a role in the findings. We solicited the BOP's input when selecting the 12 BOP institutions for on-site visits. In addition, we provided pharmacists at all BOP facilities with the opportunity to complete an anonymous questionnaire that included questions about many of the issues addressed in the OIG recommendations. We received responses from 84 percent of the BOP pharmacists (106 responses out of 126 questionnaires sent), which, in our judgment, is a fair representation of all BOP institutions.
In Appendix III, page 70, the BOP provided the following general statement in response to the audit:
OIG assessed the pharmaceutical per capita cost increase from 2000 to 2002 which BOP agrees is the most appropriate means to evaluate trends related to pharmaceutical expenditures. . . However, we do not concur with the appropriateness of the comparison between BOP prescription drug costs and the change in Consumer Prescription Drug Costs represented in Figure 2, page iii, and Figure 5, page 7. . . As such, this comparison may graphically inflate any differences between BOP purchases and Consumer Prescription Drug Costs.
It should be noted that the information referred to by the BOP was included in the report as background information to help provide context to understand the report. These facts were not used to develop a finding or recommendation related to the BOP's prescription medication costs. Rather, the information was intended to demonstrate that prescription medication costs were not only increasing within the BOP, but throughout the entire United States, and that those increases can be partially explained by some of the factors we detailed in the background section of the report. We agree that these are not the only factors found explaining the increases.
In Appendix III, pages 70 and 71, the BOP provided the following general statement in response to the audit:
Again, the information referred to by the BOP was cited by the OIG for background purposes to provide basic information regarding some of the major initiatives that may have a direct impact on BOP pharmacy services. On page 53 of the report, the OIG refers to the National Formulary and states that “The BOP National Formulary (formulary) is a list of all prescription medications recommended as essential for inmate care and is used to help provide clinically appropriate, safe, and cost-effective prescription medications.” In regards to the BOP Clinical Practice Guidelines, the BOP did not provide any documentation to demonstrate how it impacted the overall health care costs or the BOP pharmacy services. Lastly, the Inmate Copayment Program Policy was not implemented at the time of our field work so we were not able to review its impact on BOP pharmacy services, and thus it was not included in our report.
In Appendix III, page 71, the BOP provided the following statement in response to recommendation 1:
We agree with your recommendation. As pointed out in your cost adjustments, many of which were based upon differing assumptions between BOP and OIG, we realize that there will always be some variables. Taking into consideration your cost adjustments in relation to the BOP analysis and how Central Fill is inextricably linked to an overall pharmacy transformation. . . I have made the decision to move forward with our plans to implement Central Fill. . .
Although the BOP stated that it agrees with the recommendation, it nevertheless states that it decided to move ahead with the implementation of the Central Fill proposal without conducting a complete and accurate cost-benefit analysis. The OIG report sites several concerns with the BOP's existing cost-benefit analysis that can only be resolved by conducting a new analysis prior to deciding whether to proceed with the implementation of the Central Fill proposal. The concerns related to the BOP's cost-benefit analysis identified in the report include:
In Appendix III, page 73, the BOP provided the following statement in response to recommendation 7:
We understand OIG is evaluating us based on our own policy; however, the acceptable compliance rate or threshold of OIG is unclear. . . Pages iii and 40 of the report refer to 402 unaccounted for doses, which represents less than a 1 percent error rate.
Documentation and accountability of controlled substances within an institution are thoroughly reviewed through the BOP Program Review Process.
The OIG believes that in the secured environment provided by BOP facilities, that it is important that all controlled substances are properly accounted for and documented. In addition, the OIG disagrees with the BOP assertion that documentation of controlled substances is thoroughly reviewed through the BOP Program Review process to ensure that records are accurate and complete. The report refers to numerous recordkeeping errors in addition to the 402 unaccounted for doses that show the need for the BOP to ensure all documentation related to controlled substances is accurate and complete. Page 42 of the report states that “Specifically, we identified approximately 400 recordkeeping errors on the controlled substances inventories that appeared to result in unaccounted-for controlled substances.” As stated in the report, the OIG had to use supplemental documentation to account for these controlled substances that appeared to be missing. In addition, page 44 of the report states that “We also identified approximately 800 instances for which required information was not entered in the mainstock and substock inventory records.” As a result, we found at least 1,600 doses for which the information on the controlled substances records was not complete or accurate.
It should also be noted that the BOP Program Review Process does not include any steps that require individuals conducting the review to check the accuracy of the data entered into the controlled substances inventory. Further, these same review processes were in place during the time of our audit; however, the Program Reviews at the sites we visited did not find the errors related to controlled substances documentation we identified during our audit. Therefore, we believe the BOP needs to develop and implement additional procedures to ensure the accuracy and completeness of the controlled substances records.
In Appendix III, page 75, the BOP provided the following statement in response to recommendation 10:
We disagree with this recommendation. This recommendation is in essence a redundancy of recommendation #9. If a new procedure is appropriately found and implemented, this recommendation will not be necessary.
The OIG agrees with the BOP assertion that this recommendation may be addressed by developing new procedures in response to recommendation 9. However, we disagree with the BOP conclusion that the recommendation is not necessary or that it is a redundancy of recommendation 9. Recommendation 10 addresses the broader issue of segregation of duties compared to recommendation 9 which looks only at the approval process for purchasing and receiving. Page 48 of the report states that “During our audit, we identified inadequate internal controls related to purchasing, ordering, receiving, and paying for prescription medications. At each institution included in our audit, we found that there was no evidence of any segregation of duties related to purchasing of prescription medications.” In addition, on page 48 the report provides an example of how inadequate segregation of duties provided a pharmacist with the opportunity for theft from a BOP pharmacy. Specifically, “The lack of internal controls over the purchasing of prescription medications at BOP institutions allowed a Chief Pharmacist at the El Reno FCI to illegally purchase four different brands of non formulary prescription medications. An OIG investigation found that he stole a total of 30,600 doses between July 2002 and February 2004, for his personal consumption.”