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Comptroller William C. Thompson, Jr. today issued an audit that found that Harlem Hospital Center’s Pharmacy Department has maintained strong inventory controls over noncontrolled drugs, including receiving drugs from vendors, ordering from the stockroom by inpatient pharmacies and Out-Patient Pharmacy (OPD), and stockroom security.

“I am very pleased with these findings,” Thompson said. “My auditors found that adequate inventory controls are in place, helping to ensure that access to the areas where noncontrolled drugs are maintained is restricted to specific employees, and that drugs are accounted for and are therefore less vulnerable to theft or misappropriation.”

Harlem Hospital Center has approximately 400 beds and is the largest health facility in Harlem.  It is a teaching institution affiliated with the College of Physicians and Surgeons at Columbia University.  During Fiscal Year 2005, the total cost of drugs, controlled and noncontrolled, purchased by the Pharmacy Department at Harlem Hospital Center was approximately $8.4 million, and the value of the inventory of all drugs in the Pharmacy Department stockroom at the end of FY 2005 was reported to be $240,957.

The audit, which covered FY 2005 and the first three months of FY 2006, reviewed inventory controls put in place by the New York City Health and Hospitals Corporation (HHC) and Harlem Hospital, one of HHC’s 11 acute-care hospitals. 

The positive findings in the audit were in stark contrast to findings in previous audits of Bellevue Hospital Center and Kings County Hospital of Brooklyn released last April 2005 and July 2003, respectively.  The Comptroller’s audit of Bellevue cited significant flaws in the hospital’s $4.8 million inventory of noncontrolled drugs and medical and surgical supplies in its stockrooms, in which the items were left vulnerable to theft and misappropriation, while the Kings County audit drew attention to the hospital’s inadequate controls over its inventory of noncontrolled drugs, including insulin, hepatitis vaccines, penicillin, and birth control pills, and medical and surgical supplies. 

At Harlem Hospital, auditors found that:

• Access to the Main Pharmacy, stockroom, satellites, and Out-Patient Pharmacy (OPD) was restricted to specific employees who must use an electronic card or a key to get into these areas.  In addition, non-stockroom employees were prevented from entering or leaving the stock room without an authorized person opening the door.

• Cameras were installed in all areas of the Pharmacy to observe and record all activities.  The Director of the Pharmacy maintains the monitors in his office.



• Vendors delivered noncontrolled drugs directly to the stockroom where an employee counted and signed for the number of cases received.  The quantity, lot number, and expiration date for each noncontrolled drug was recorded on the invoice. The employee then updated the information on the appropriate inventory stock card and the quantity of noncontrolled drugs received was also updated in the computerized Other Than Personal Services (OTPS).

• Noncontrolled drugs were delivered to OPD and the four satellites in locked containers.

• Documentation for noncontrolled drugs that were issued from the stockroom was maintained in the stockroom files: The audit found 255 of the 256 (99.6%) sampled issue sheets in the files kept in the stockroom.  These issue sheets are important since they are the only source documents that indicate where and to whom the noncontrolled drugs were delivered.  These documents can be used by Pharmacy employees to investigate discrepancies found in OTPS.

• Inventory had only minor inaccuracies: Based on a physical count, the audit found that 319 of the 345 (92.5%) noncontrolled drugs in the sample matched the balances recorded in OTPS. 

Auditors identified several issues at the Harlem Hospital Pharmacy Department that must be addressed, among them that Pharmacy officials should remind all Pharmacy personnel that they are required to prepare an issue sheet for all noncontrolled drugs removed from the stockroom, ensure that all count sheets used for the year-end inventory do not have balances listed on them, investigate and document all adjustments made to correct inventory balances in OTPS, ensure adequate segregation of duties, adhere to their own purchasing procedures and ensure that all purchase orders are prepared, approved, and authorized before drugs are ordered from vendors, and perform reconciliations to ensure that they receive all credits and moneys to which they are entitled.

In response to the Comptroller’s recommendations, Harlem Hospital put together a corrective action plan and issued the following statement:

“The Harlem Hospital Center Finance and Pharmacy Department will work collaboratively to ensure each inventory control corrective action measure is implemented and maintained.  Moreover, immediate action is underway to separate routine employee access to uncontrolled pharmaceuticals inventory during routine database management activities b relocating the existing OTPS System portal to another area within the Pharmacy Department.  During the upcoming year-end closing exercises this fiscal year, hospital finance staff will also review Pharmacy Department inventory controls and assess the effectiveness of corrective actions implemented.”

You can view the audit at the Comptroller’s web site: www.comptroller.nyc.gov