Wider use of purchase cards could save the Veterans Health Administration $24 million annually, a report from the Veterans Affairs Department office of inspector general says.
Using purchase cards saves money because writing purchase orders is more time-consuming and complex. The banks that provide purchase cards also offer rebates, around 2 percent, for money spent on the cards, says the OIG report, dated Aug. 9. The VHA spent about $3 billion on purchases worth $3,000 or less in fiscal 2012, earning it more than $65 million in rebates.
From April 2011 through March 2012, VA medical facilities did not use purchase cards for $432 million worth of purchases under $3,000. For $244 million of that spending, the OIG found they had acceptable reasons not to use the cards. Some vendors don’t accept purchase cards, and the VA can’t use them to pay veterans for pharmacy copayments or tort claims.
For the remaining $188 million, spent on medical supplies, office equipment, patient transportation, employee training and more, the VA could have used purchase cards, the report says. The OIG estimated that it could’ve saved $20 million in processing costs and could’ve earned about $4 million in rebates.
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