A state audit of the University of Connecticut Health Center has uncovered fiscal inattentiveness in some areas, potential overspending and other problems, some of which were cited in a previous audit.
The audit revealed that the center may have overpaid for medical equipment and other services in some cases because center personnel couldn’t produce paperwork showing that they’d sought out the best possible price.
The report cites three instances in which the center purchased items totaling nearly $2 million with no evidence that competitive prices were sought. As of August, the center implemented a policy requiring documentation of price shopping in instances where the goods cost $500,000 or more.
The center also failed to produce documentation related to bids that resulted in the purchase of a nearly $880,000 laser scanning microscope and a multi-year vendor contract worth up to $7.5 million.
That violated the center’s existing policy, which requires copies of bid responses to be kept and scanned.
The center may also have overspent on intellectual property attorneys, the audit said. Legal fees from outside counsel in 2011 and 2012 were $747,000 and $1.2 million, respectively. Auditors said the center should look into using internal staff to perform more of its IP work.
Though the center argued in the report that it would still need outside expertise even if it increased internal resources, it said it recently changed its policies to use its legal budget more strategically, including holding off on investing in patent development in cases where an inventor hasn’t made progress or a target market isn’t clear.
State Auditor Robert Ward recused himself from the audit because he served on UConn’s board of trustees from July 2010 to January 2011.
The center said in a statement Wednesday evening that it has carefully reviewed the audit and put action plans in place for many of the findings.
“While we do not agree with every finding raised in the report, we take it very seriously and have used the report to direct changes within the health center where appropriate,” the statement said.
Other problems identified in the audit include:
- The center didn’t track closely enough a $16 million multi-year contract with variable pricing closely enough, which drove up the price in the first year.
- An employee on a six-month sabbatical was paid $77,000 in salary and never returned to the center, which is required.
- More than a third of the items on the center’s $60 million property inventory had not been inspected and located in over two years.
- The center didn’t use the State Tax Intercept Program as an avenue for recovering past-due patient account receivables, which average $4 million annually.
