Ineffective Governance – Chronicling the VA

I-CareIn a scheme fit to fully infuriate patients and pad wallets, the VA providers prescribe medications; generally, the medication provided is a cheap knock-off, a generic mixture, or drugs with rebate incentives where the hospital providers are “encouraged” to use one drug more than another and the “higher cost” is rebated back the hospital in a profit-sharing scheme.  All these schemes and more play out at your local hospital and VA facilities, so please do not think this is industry-specific to the government.  However, as proved by the Department of Veteran Affairs (VA) – Office of Inspector General (VA-OIG) reports, t improper controls and governance wastes the rebates, harms patients, and still cannot get the programs correct.

Angry Wet ChickenI have three prescriptions hindered by the pharmacy practices of the VA, where the knock-off drug is useless, the mixture of the medication does not do as well as the original medicines prescribed, and where the cost of an ingredient has changed one medication to another and made the prescription less effective to the point where more medication is required for less overall effectiveness.  If the patient has to take more medication, does that mean that the cost savings never happened or that the cost savings were pushed down to the customer?  Does the patient even have a voice in the pharmaceutical decisions?  Why?

We begin the VA-OIG reports with a New Jersey man, who from 2017 thru 2020 stole more than $8.2 million in HIV medication from the VA.  Where were the supervisors when procurement officers for the VA over-ordered medication, stole the excess, sold the stolen goods, and pocketed the profits?  Where were the oversight accountants?  Where were the hospital directors?  People had to know, yet somehow the scheme could exist and thrive; this is as much a failure of leadership as it is ineffective governance, poor inventory control, and useless organizational controls.  Truly a pathetic example of VA leadership!VA 3

On the topic of ineffective governance of pharmaceutical contracts, and diversions of drugs, the VA-OIG report the following:

The Veterans Health Administration (VHA) spent about $6.6 billion on prescription drugs in fiscal year (FY) 2019. Most were dispensed to veterans by medical facility pharmacies. VHA pharmacies can return drugs that become damaged or expire before use through a reverse distributor for credit or destruction. In FY 2019, VHA expected to receive about $52 million from drug returns.  The VA-OIG found VHA pharmacy chiefs did not effectively implement the program and did not follow requirements in VA’s contract with the reverse distributor, Pharma Logistics. These issues increased the risk of drug diversion and ultimately put about $18.1 million at risk. Pharmacy chiefs did not always secure, and track drugs held for return or complete required analyses to maximize returns. They also failed to meet contract requirements to return for credit-only drugs due to expire within 120 days. VA’s National Contract Service and network contracting officers needed to do more to ensure contract terms were met. The Office of the Deputy Under Secretary for Health for Policy and Services and the Office of the Deputy Under Secretary for Health for Operations and Management did not effectively govern the program or communicate requirements to medical facilities” [emphasis mine].

VA 3Someone help me out, for I cannot understand how incompetence can be designed into these systems, policies, procedures, and responsible parties retain their positions of power.  What happened in 2018, 2017, 2016, and earlier?  We have a single fiscal year (FY) snapshot at a program that is an absolute failure.  By any measurable standard, that should have ignited a full audit of previous years until finding a successful year when the program worked.  Will there be a follow-up to this investigation to see if the VA-OIG’s recommendations are followed and implemented?  The VA-OIG has the leadership caught dead to rights on ineffective governance of a program worth $6.6 Billion to the American Taxpayer, and no accountability or responsibility of personnel is to be found anywhere.  Why?

Plato 2In a separate investigation, the VA-OIG found:

In October 2020, VA ended its contract with Pharma Logistics.  The vendor continues to process and issue final invoices to facilities as the returned drugs become eligible for and receive manufacturer credit. The final invoice process will continue until at least April 2022.  VHA medical facility pharmacies lost at least an estimated $2.1 million worth of drug return credits because pharmacy chiefs did not always effectively monitor or review job settlement statements before Pharma Logistics issued final invoices.  In addition, although the vendor established a dashboard that provided information on the status of drug return credits at the facility level, it cannot provide a national report on all outstanding credits.  This hurt VHA’s ability to maximize potential drug return credits and minimize the risk of lost credits.  VHA will continue to be unable to ensure it is receiving all credits for drugs returned by medical facilities if pharmacy chiefs do not routinely monitor preliminary invoices, reconcile job settlement statements to identify outstanding credits, and request extensions to final invoices to allow additional time for credit processing. This risk will persist for any future drug return contract(s)—whether awarded nationally or locally—if the reimbursement structure remains the same” [emphasis mine].VA 3

Did you catch that; the vendor created software to help track medications, making it easier to return medicines, and the VA pharmacy chiefs could not follow the dashboard and increased the risk of losing money for the VHA.  You were hired to perform a job; a collateral duty of your job is inventory management, tools are provided and supported to aid you in making decisions, and you refuse to use these tools.  How is this the vendor’s fault?  Why do you still retain your position?  Ineffective governance is barely the tip of the VA’s problematic iceberg created the good ship America has hit!

Liars, Thieves, and Fraud Artists Beware

GavelA Norwood, Massachusetts woman has been indicted, remains presumed innocent until proven guilty in a court of law, by a jury of her peers, for stealing social security and workman’s compensation benefits.  The Norwood woman’s actions are continuing to support the claim that complexity breeds criminal abuse.  Unfortunately, also proving that the government is not doing their jobs in checking tax records before providing benefits.

A man from Georgia has pled guilty to running a Ponzi scheme and defraud the American government during the COVID pandemic.  Frankly, I am thrilled to see another fraudster being stopped before his crimes become astronomical in scale.  I remain convinced that the government procurement system is wide open to abuse, and the complexity of the procurement system is too costly, cumbersome, and risk inviting.  The criminals see too much opportunity in the government procurement system, and the complexity breeds the ability to lie, steal, cheat the American taxpayer.

QuestionThe following remains a case where there are too many lawyers and not enough truth to ascertain what in the world is going on.  If you have further insight, please weigh in.  “Sunrhys LLC, a landlord and property management company, headquartered in Tacoma, Washington, agreed to pay $16,618 to resolve allegations that it violated the False Claims Act by overcharging a tenant and by fraudulently obtaining federal funds from a federal program designed to provide housing to homeless Veterans. The United States alleged that Sunrhys violated the agreement and the HUD-VA Support Housing program requirements by fraudulently overcharging a veteran for monthly rent between July 2019 and April 2020.”

Highlights, Audits, and Inspections

July 2021 – Highlights:

Each month, the Office of Inspector General (OIG) publishes highlights of our investigative work, congressional testimony, and oversight reports. Each month’s highlights are meant to provide a brief overview of the most significant OIG work conducted in that period.”

blue-money-burningThe VA-OIG conducted a financial efficiency review of the Miami VAHCS.  From the findings, the VHA, VBA, National Cemeteries, specifically, and the VA generally, could learn much about fiscal responsibility.  But this was already well documented!  The VA has never successfully passed an audit with transparency, accountability, and responsibility; why am I the only person demanding to know why?  Want to laugh; the VA-OIG recommends “more scrutiny” for financial transactions to the VA as a recommendation.  Like the current system for scrutiny is working, and just a bit more effort will help.  Go ahead and read the report for more specifics; my stomach cannot handle writing about the gross inefficiencies, the actual harm, and out-of-control governance failures.  Fiscal insanity is one thing; what is occurring at the Miami VAHCS is beyond insane and bordering on the unbelievable!  Almost the beginning of the Twilight Zone.

Survived the VAThe Sheridan VAMC in Wyoming continues to be performing well and deserves hearty congratulations for the results of their latest comprehensive healthcare inspection.  I prefer to issue congratulations than butt-kickings, and the congratulations are well deserved.  Keep up the good work moving forward.

© 2021 M. Dave Salisbury
All Rights Reserved
The images used herein were obtained in the public domain; this author holds no copyright to the images displayed.

Gasoline Taxes – The Epitome of Forced Taxation and Government’s Broken Promises

Exclamation MarkI do not care that Alaska has not increased its gasoline taxes in 50-years.  Frankly, the fact that the Federal Government has gone 27.4 years without increasing the Federal Fuel Taxes is not a problem.  Nor that the Federal Government has to either get the current taxes renewed, or the Federal Gas Tax goes to $0.042 a gallon is not a tragedy, but a good thing.  Gas taxes are not the problem; the problem is that the fuel taxes, excise taxes, surcharges, and fees built into a gallon of gas that equals more than $1.00 per gallon, are never prioritized to the infrastructure projects the tax was collected initially to pay for!

IronyI find the following ironic; the Federal Gasoline Excise Tax is actually two taxes combined.  $0.01 per gallon is paid as the Leaking Underground Storage Tank (LUST) fee.  Why is this ironic; because the government LUSTs after all types of money to misappropriate.  Before creating acronyms, one would think that the government would consider how much of a joke those acronyms will make.  One of the seven deadly sins that are constantly causing scandals for politicians, LUST!  Yes, I find this tax acronym very ironic and applicable to the discussion on why the roads and other infrastructure is rated as a C- and falling.  I find LUST very appropriate to the discussion on the misappropriation of funds and how the government wants to increase taxes to pay for something already well funded but where the money is consistently diverted.

QuestionPlease note that each state will have additional taxes, fees, surcharges, and tax projects built into the cost of a gallon of gas or diesel, aviation, or propane.  Fuel taxes are a tax scheme that seems to always pay for anything but roads, bridges, and infrastructure.  Some basic facts regarding gas taxes:

      1. The average state gas tax is $0.3006 per gallon of gas.
      2. The Federal Government gets $0.184 per gallon of gas.
      3. States have added other fees to a gallon of gas, including:
          • Environmental
          • Underground storage (payable even if the tanks are above ground)
          • Inspection fees
          • Certification and other weights and measurement fees
      4. If your state taxes Ethanol, your gas taxes include the Ethanol tax, as well as a fuel tax.
      5. All fuels are hit with taxes, and some of those taxes are disproportionately assigned to heavier vehicles. For example, diesel has a different formula for taxes due to the trucking industry using roads and bridges more; at least, this is the excuse used to tax diesel differently.

Gas Tax Revenue – Poor Roads and Infrastructure

Since I was a kid in Maine, who closely observed the gas tax debate, I have wondered the same question.  “Why are the roads so poor if the government is collecting all these taxes on gasoline?”  Now, keep in mind the words of Justice Oliver Wendell Holmes Jr. “Taxes are the price of civilization.”  Meaning that to “enjoy” the pleasure of a free society, the government will levy taxes.  But, the money collected does not have to go for what the tax was intended to pay.  Hence the broken promises of gasoline taxes.

Plato 2Fuel taxes are used for a myriad of uses, and the priority is all confused about how to spend fuel taxes:

        1. Schools
        2. Pay down the National Debt
        3. Mass Transit
        4. Cleaning up underground fuel leaks
        5. Law Enforcement
        6. Environmental Protection
        7. Pension Shortfalls
        8. State Debts
        9. Federal Highway Trust Fund Deficits of all types
        10. Enforcement Costs, including weights and measurement certification
        11. Roads
        12. Bridges

Now, do not forget the other obstacle in fixing roads and bridges, the labor costs, especially if the workers are unionized.  The government bidding processes for projects, especially in all forms of construction, are obscenely complicated, which increases costs long before a shovel hits the dirt.  If unions are involved, the time for the project and expenses will, at a minimum, double before the project completes, creating deficit spending.  I am not cynical here; I have witnessed this occur too often not to admit the truth.

Working DollarChris LeDoux sings a song, “Working Man’s Dollar,” which tells the story and details the difference between a working man’s dollar and the dollar in other places.  The fuel tax was first adopted in Oregon, and the proceeds were earmarked only for fixing, maintaining, and building roads, bridges, and other travel infrastructures, like tunnels.  Except, the money never is prioritized to the failing roads, bridges, and infrastructure costs.  The working man’s dollar, collected through forced taxation, is not respected by the government authorized through the ballot box to allocate spending.

I was in Maricopa County when a stadium was pitched to the residents to be located in Scottsdale.  A gas tax hike was proposed as part of an overall tax plan to pay for the stadium.  I asked, “If the stadium was worth the investment, why not just sell bonds?”  I never got an answer.  Not every citizen was interested in the stadium, not all citizens were going to benefit from the stadium, but every citizen was being asked to help pay for a stadium.  The stadium in that election failed, but the ideas did not die; a new location was proposed, and the voters there accepted the stadium’s tax hikes.  Want a surprising non-surprise, the stadium is built, but the taxes have never gone away, including property, sales, and fuel taxes!  Where is that money going?

Bait & SwitchNow, the Federal Government has a bunch of fuel taxes and surcharges (taxes called a fee) about to expire.  The question every voter in America needs to ask themselves is this, “Did the government properly use the funds dedicated to infrastructure?”  If so, then the fuel taxes should continue at the Federal level.  If not, then the fuel taxes should cease, for the government refuses to spend money according to the purpose it was collected.  Every single state in the union should be asking the same question and answering accordingly.

I lived in Albuquerque, NM., for several years.  To get potholes fixed, you had to ruin your car in an accident involving the street, then sue the city, county, state, whatever for the insurance costs.  Only then was that particular patch of road deemed important enough to repair.  There are bone-jarring, teeth-rattling, car-destroying potholes all over Albuquerque.  These never get fixed because the city has been too busy dumping tax money into a rapid transit project that is barely used, overly expensive, and desperately not desired by the taxpaying citizens.  They had “ART” (Albuquerque Rapid Transit) crammed down their throats by a judge.  ART has been a disgrace from Day 1.  Yet, money keeps pouring into ART instead of the many roads, bridges, overpasses, and other infrastructure that desperately needs repair.  A friend of mine hit a pothole, doing 35mph, dented his rim almost 2”, ruined his front alignment, and cost him a considerable sum.  That pothole is still there, still causing dents, still eating tires, and the city cannot fix it, the state will not fix it, the county was supposed to fix it, the Indian reservation owns it, and the federal government makes the pothole worse every day by traffic of federal employees going to work.

Tax BurdenHence the reason why fuel taxes are considered a tax scheme!  If you pass the buck enough, nothing gets done, and the money collected can be used in other projects while responsibility is determined.  Except, there is no money to fix the problem when the responsibility is determined, and the wheel just keeps spinning around.  Are you sick and tired of the games politicians play, yet?  Now, imagine your electric bill going up to pay for the fuel taxes not paid for by electric car owners, and tell me about proper government action and accountability.  My friend could not sue because responsibility cannot be determined; his insurance would not pay for the damages because the road damaged his vehicle; guess who was out almost $10,000.

Tax Scheme 2Some states are changing how the gasoline and other fuel taxes, including electricity due to the rise in electric vehicles on the road, are being priced and collected.  However, the problem is not the tax; it’s the fact that the tax never pays for what it was intended to when collected.  Some states got an increase in fuel taxes through their state legislatures this year.  Other states and the Federal Government are taking fuel taxes up in the coming months or the next legislating session.  But, not a single politician, anywhere in America, has stepped up to state the obvious, the current taxes collected are sufficient to pay for roads and bridges; we have to allocate more of the current money collected to roads and bridges.

Broken Promises – Broken Roads and Bridges

Question 3Is the problem apparent?  How many of your state taxes, lotteries, and other fees are supposed to pay for education?  Yet, education always seems never to have enough money.  How many taxes and fees go into the Department of Motor Vehicles and Department of Transportation, all of which are supposed to pay for infrastructure, e.g., roads, tunnels, bridges, overpasses, highways, etc.?  How much is the pension crisis costing your state, driving taxes and fees upwards, but the money never is delivered to pay down and lessen the pension crisis?

I repeat, only for emphasis, “America does NOT have a cash collection problem; it has a spending problem.”  At all levels of government, the elected officials are acting worse than drunken sailors on a seven-day binge, and this behavior needs to cease!  We cannot spend our way out of the hole dug through deficit spending!  The answer is not allowing the government to steal more money from our pockets, but to demand the money taken is used for the purposes intended!

Tax SchemeWe must tie political decisions to misappropriate funds to the legislators and executives making the decisions.  Thus, holding accountable the people who are being poor managers of the people’s money.  More importantly, when re-election decisions are made, the media, the influencers, and the political parties need to report this information.  Being able to hide funding shenanigans and criminal activities should never occur; businesses cannot do this, the government should not be able to do this.  Audits, investigations, and transparency are critical to putting the right people out of office and into prison, and keeping the honest and faithful stewards in office and working.

Knowledge Check!The size of government must shrink to an affordable level, from the city to the Federal; every government body in America, including those non-Government agencies acting like government agencies (USPS), need to be forced onto a diet of less money!  There is no excuse for the government to be the size it has become.  There is no excuse why we, the owners of the government, cannot demand government shrink, become efficient, and keep the promises made regarding money collected, used appropriately, and ended at the time promised.

Angry Wet ChickenAs sure as carts to horses and ducks to water, a Federal tax, fee, or surcharge, will be found shortly on your electric bill to cover the costs of electric vehicles on the roads.  When the Federal government does this, the state, county, and city will jump in with both feet, claiming “fairness” and “equality” so everyone is “paying their fair share” of the costs for infrastructure.  It doesn’t matter that you do not own an electric vehicle; the government will help you finance one through increased taxes and misappropriated fees collected.  Just like the “Obama Phone” scheme being abused by many people and paid for by a small minority.  Broken promises indeed!

© 2021 M. Dave Salisbury
All Rights Reserved
The images used herein were obtained in the public domain; this author holds no copyright to the images displayed.