CONEY ISLAND HOSPITAL: WHAT HAPPENED TO THE DRUGS?

THOMPSON AUDIT: CONEY ISLAND HOSPITAL HAD LITTLE CONTROL OVER DRUG INVENTORY

-More than $3 million in unsubstantiated reductions in noncontrolled drugs-

New York City Comptroller William C. Thompson, Jr. issued an audit today finding that Coney Island Hospital had such a severe lack of controls over its pharmacy stockroom that more than $3 million worth of noncontrolled drugs could not be accounted for from a review of inventory records.

Thompson's audit, which can be found at www.comptroller.nyc.gov , discovered serious deficiencies in Coney Island Hospital's ability during Fiscal Year 2007 to keep accurate records of its noncontrolled drug inventory, such as Vytorin and Zocor.

"Coney Island Hospital could not prove where more than $3 million in drugs went. For all officials there knew, the drugs were either stolen, doled out to various hospital units without being recorded, or flushed down the toilet. This is a severe lapse in oversight and represents a compelling need for change at the facility," Thompson said.

Health and Hospitals Corporation (HHC) Hospitals, including Coney Island, require substantial amounts of drugs and must, therefore, ensure that items are in stock when needed. Drugs are classified as either controlled or noncontrolled.  Controlled drugs are regulated and audited by the DEA and consist of drugs that contain narcotics, such as Percocet and Valium.  Noncontrolled drugs are not regulated by the DEA and consist of drugs such as Vytorin and Zocor.

At Coney Island Hospital, noncontrolled drugs are stored in secure areas and are monitored 24 hours a day by security cameras. Drugs are ordered by pharmacy managers and delivered by vendors, along with invoices, directly to the pharmacy's stockroom. Invoices are entered into the HHC Other Than Personal Services (OTPS) management system to make payments and update inventory records.

During the course of the audit it was uncovered that pharmacy staff made unsubstantiated changes to inventory numbers on several occasions, essentially changing the numbers in the computer to reflect the physical numbers of drugs at the pharmacy.  This gap in unidentified drugs totaled $3.75 million; nearly one-third of the hospital's total spending on drugs for FY 2007 ($13 million).

Thompson's auditors also found discrepancies in the counts for 50 percent of the noncontrolled drugs at the end of the fiscal year.  This came after the hospital had already made adjustments to the records to better reflect physical inventory balances at the pharmacy. 

"The large number and size of discrepancies lead us to conclude that limited reliance could be placed on the hospital's inventory records," Thompson said.

The Comptroller also found that the Coney Island Hospital did not obtain an independent review of the transactions entered into OTPS and did not take corrective actions or document explanations of discrepancies between what inventory was entered into the system and what actually existed on site.

"By not having an independent review take place on a timely basis, Coney Island is disregarding the checks and balances system put in place to ensure that this does not happen," Thompson said.  "At the very least, the hospital should have ensured that there was an explanation for the gross difference in the listed and actual inventory of drugs.  This flies in the face of common sense."

Thompson noted that the hospital showed a significant improvement in the areas of concern during the time his auditors reviewed the hospital in Fiscal Year 2008.

"Once my auditors pointed out the operational discrepancies in FY 2007, Coney Island was quick to ensure that there was not a repeat of this behavior in FY 2008.  However, one cannot place a band aid on a cut requiring stitches.  I sincerely hope that the hospital implements all my recommendations to ensure that this never happens again," Thompson said.

Comptroller Thompson made four recommendations to Coney Island Hospital to correct the problems in the oversight and documentation of drugs, of which they generally agreed with all.

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