County Acts to Fix Medical Supply Computer Problem

County health officials “generally concur” with a controversial audit that uncovered serious problems in the operation of a sophisticated computer system designed to track the flow of tens of millions of dollars in medical supplies at four large county hospitals.

Among the audit’s key findings, reported first in The Times last month, was that lax security and major inventory discrepancies have resulted in millions of dollars in medical supplies either being unaccounted for or lost.

The audit found, for example, that ex-employees could gain access to the computer’s records and that transactions performed on one hospital’s computer terminal could be “imitated” on other terminals at another facility. These flaws in the system, the audit said, raised possibilities ranging from incorrect inventories to theft of hospital supplies, as well as lost opportunities for discounts on purchases because of late payments.

County Health Director Robert C. Gates, in a report to the Board of Supervisors, said that “detailed action plans” are being prepared to “correct deficiencies” identified by the county auditor-controller’s office. He said his department and the county Data Processing Department “generally concur with the actions recommended by the auditor.”

Chief Administrative Officer Richard B. Dixon, who signed off on the memo with Gates, said in an interview that county officials will focus primarily on “improvements in internal controls.” Training workers in the proper use of the computer system will also be stressed, Dixon said.

Until Gates’ report, health officials had refused to publicly address the auditor-controller’s critical audit findings. Gates’ staff had contended when the audit findings were first divulged that they were “preliminary” in nature, had been drafted without the department’s participation and should not have been made public.

In his report, Gates said that one “significant” finding in the audit was not the problem it appeared to be. A fivefold increase in the cost of running the computer, from $200,000 to nearly $1.1 million a year, was not due to cost overruns but rather to a Board of Supervisors-approved expansion of the computer system, he said.