Vets’ Biennial Inventory Blunders —And How to Avoid Them

TITAN Group’s DEA compliance experts – former DEA Diversion Investigators – saw countless violations of the Controlled Substance Act (CSA) during their many years of registrant inspections. By far, one of the mandatory records with the most frequent mistakes was the biennial inventory.

For veterinarians juggling the demands of running a practice while fulfilling the recordkeeping obligations of a DEA registrant, the DEA biennial inventory may seem like just another routine administrative task—something to complete quickly and file away.

But that’s risky thinking. In fact, the biennial inventory is a visible indicator of a registrant’s compliance with the CSA. When done incorrectly, it’s a signal to investigators that there are likely other issues in a vet’s handling of controlled substances – issues that could be even more serious.

Inventories in the CSA

Title 21 Code of Federal Regulations §1304.11 has three inventory “must know” components. Here’s a selection of key elements:

§1304.11(a) General requirements.

“Each inventory shall contain a complete and accurate record of all controlled substances on hand on the date the inventory is taken, and shall be maintained in written, typewritten, or printed form at the registered location.”

…” Controlled substances shall be deemed to be “on hand” if they are in the possession of or under the control of the registrant, including substances returned by a customer, ordered by a customer but not yet invoiced, stored in a warehouse on behalf of the registrant, and substances in the possession of employees of the registrant and intended for distribution as complimentary samples.”

…” The inventory may be taken either as of opening of business or as of the close of business on the inventory date and it shall be indicated on the inventory.”

§1304.11(b) Initial inventory date.

“Every person required to keep records shall take an inventory of all stocks of controlled substances on hand on the date he/she first engages in the manufacture, distribution, or dispensing of controlled substances…”

…” In the event a person commences business with no controlled substances on hand, he/she shall record this fact as the initial inventory.”

§1304.11(c) Biennial inventory date.

“After the initial inventory is taken, the registrant shall take a new inventory of all stocks of controlled substances on hand at least every two years. The biennial inventory may be taken on any date which is within two years of the previous biennial inventory date.”

Mistakes in the Biennial

So where do vets mess up the most?

1. Failing to Take the Initial. The biennial’s due date is tied to the date the initial inventory was taken, so failing to take an initial inventory can throw everything else off. As the regulation states, even if no controlled substances are on hand when a vet’s practice opens its doors, an initial inventory with zeroes must be completed.
2. Missing the Inventory Date. The biennial inventory must be taken every two years since the previous inventory. It can be taken any time within those two years, but the two-year deadline must be met. The smart move: set a calendar reminder at least one month before the inventory’s deadline.
3. Failing to Document “Open of Business” vs. “Close of Business”. A small detail, yet one that is required to be included. A quick fix: create a biennial inventory template that has a space at the top of the page designating when the inventory is taken.
4. Estimating Schedule 2 Counts. While not stated in the CFR citations above, all Schedule 2 substances in inventories must undergo an exact count. This means, for example, pouring out the contents of a pill bottle and hand counting the amount. Even if you track the bottle’s contents and all dispensing in a perpetual inventory, the biennial requires a new, exact count.
5. Misapplying Estimation Rules. The CFR allows a registrant to make estimated counts or measurements of Schedule 3-5 drugs. THE EXCEPTION: if the item’s container holds more than 1,000 tablets or capsules an exact count must be completed. If unsure, do the smart thing: do exact counts on all controlled substances.
6. Missing Required Elements. The list of an inventory’s required content is fairly basic, yet many registrants forget one of more of these:

• Date of inventory and when taken (“Open of Business” vs. “Close of Business”)
• Name of the controlled substance
• Finished form of each substance (e.g., 20mg tablet)
• Number of dosage units or volume of each finished form in each commercial container (e.g., 30 tablet bottle or 3 ml vial)
• Number of commercial containers of each finished form (e.g., four 30-tablet bottles or six 3ml vials)

The smart approach: find or develop a template that has all required content categories clearly designated.

1. Overlooking Drugs. The biennial (as with all inventories) is a count of EVERY controlled substance at the vet’s practice. Typically, registrants overlook drugs awaiting disposal, stored in surgical suites, locked in mobile units, or placed in other locations. The fix: when taking an inventory, walk through every area of the practice and double check for the presence of controlled substances. Also, consider centralizing secure storage of controlled substances.
2. Poor Record Condition and Availability. Records that are illegible, contain math errors, torn pages, and crossed out figures are just a few of the poor practices the Titan team has seen. Similarly, lack of easily available “readily retrievable” records – all required records should be available upon DEA’s request. (Be sure to ask Titan about SageComply’s automated recordkeeping system as a solution.)
3. Lack of Staff Training or Oversight. Train staff and implement an education review process. Staff should be trained regarding required recordkeeping and the importance of complete, accurate, and readily retrievable records. They should understand that everyone is responsible for proper recordkeeping.
4. Failing to Have a Witness. Every biennial inventory should be taken by two people: the DEA registrant and a witness to the counts. Both should sign the inventory when complete.

And if nothing else motivates vets to take a serious approach to the biennial inventory (and other recordkeeping) remember this: current fines for incomplete and inaccurate records start at $19,246 per violation. At that rate, mistakes can quickly reach eye-popping totals.

Turn to the TITAN Group

Whether it’s the biennial inventory or total recordkeeping solutions, the TITAN Group’s skilled team of DEA compliance experts have the answers every vet needs. Facing other compliance challenges? TITAN handles the full spectrum of veterinary controlled substance issues – from security, to staff training, to internal investigations of drug diversion.

TITAN is the reliable solution vets turn to most. Contact TITAN Group today to handle your toughest DEA compliance challenges.