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House panel rips buying practices at VA

| Thursday, May 14, 2015, 8:45 p.m.

WASHINGTON — Lawmakers in both parties were incensed Thursday over allegations of widespread use of purchase cards at the Department of Veterans Affairs in violation of federal regulations, and they faulted high-level agency officials for failing to take the longstanding complaints seriously.

In a tense hearing before the House Veterans' Affairs Committee, Democrats and Republicans demanded to know why VA officials did little to stop their health system from buying more than $1 billion in prosthetics and other medical supplies without competitive bidding and proper contracts. Some of the improper spending was done by employees who were not authorized to use the cards.

“To let this continue and not be furious about it defies anybody's rational thinking,” Chairman Jeff Miller, R-Fla., said at a two-hour hearing held by the committee's investigations panel.

It was the first of three hearings scheduled for this spring to address concerns flagged by Jan Frye, VA's deputy assistant secretary for acquisition and logistics, about improper contracting practices. The Washington Post reported Thursday that Frye had sent a 35-page memo to VA Secretary Robert McDonald in March accusing agency leaders of making a “mockery” of federal acquisition laws and spending at least $6 billion a year in violation of contracting rules.

Hours after the hearing, McDonald issued a written statement acknowledging the letter, which Frye said had received no response.

“It is clear that serious allegations have been made regarding VA's purchase authorities and we are working diligently to review them,” McDonald wrote.

“VA appreciates the issues Mr. Frye has brought to light, and as he has made clear, there are many acquisition paths within VHA,” McDonald wrote, referring to the Veterans Health Administration. He said the “vast majority of the funding identified in the memo went to provide Veterans needed care in the community.”

McDonald said he has asked the inspector general's office to review the letter. “Any findings of wrongdoing or evidence of harm to Veterans” will be referred to the Department of Justice, he wrote.

At the hearing, top agency officials said that in response to concerns from the VA's inspector general's office, which flagged improper purchase card practices last fall, oversight has improved, card spending limits have declined, and purchases by unauthorized employees have stopped.

“As with many large programs, we have experienced challenges,” said Edward Murray, VA's acting assistant secretary for management and interim chief financial officer. “I can tell you we have stringent controls over our card program.”

But his defense provoked more anger from lawmakers, who said he had not convinced them the improper practices had stopped.

“Didn't you have a gut check when these allegations came up?” Rep. Jackie Walorski, R-Ind., asked Murray, seething. “That we have to stop this, this is wrong. It's illegal activity. Did that never dawn on you, Mr. Murray?”

Walorksi pressed him repeatedly. Finally, Murray said, “There are different views” within VA on Frye's allegations. “There's ambiguity” about the law, he said. “There are differences of opinion.”

Rep. Tim Walz, D-Minn., reflecting a sense among lawmakers that VA, even under new leadership since a scandal over waiting times for medical appointments, has a long way to go to earn public trust.

Walz said he is skeptical that McDonald is changing what the White House called a “corrosive culture” inside VA. “I don't for a second believe there's an attempt to make that change.”

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