The head of the Indian Health Service defended his agency on Thursday against accusations that it lost millions of dollars' worth of equipment and tried to cover it up.

A report released by congressional investigators last week charged that roughly $15.8 million worth of equipment vanished from the agency, which provides health care to American Indians, over a four-year period. Employees later falsified documents to cover up some of those losses, the investigators charged.

Robert McSwain, the head of the health service since April, told the Senate Indian Affairs Committee that the agency is updating policies and conducting investigations into the missing items. But he insisted the problem had been exaggerated by the Government Accountability Office, which issued the report.

"I believe I have a problem but not to the extent that it's being portrayed," McSwain said. He said the investigators overvalued many of the lost and stolen items and said the falsified documents were "borderline" fabrications.

Greg Kutz, managing director of forensic audits and special investigations at GAO, defended the report. It placed most of the blame on management for 5,000 pieces of lost or stolen equipment including vehicles and one computer that contained more than 800 Social Security numbers and sensitive health information.

Senators said the agency appears to be in chaos and suggested that the lost property is indicative of chronic management problems.

North Dakota Sen. Byron Dorgan, the Democratic chairman of the panel, called the report a "scathing indictment."

"Your testimony seems all too defensive of the existing system," Dorgan told McSwain. "I would be furious if I were you. I'd be furious if I had to answer for this staggering incompetence."

The GAO report was requested by two members of the U.S. House after a whistleblower identified in the report as a "cognizant property official" called a government fraud hot line.

That official alleged that IHS headquarters in Rockville, Md. could not locate almost 2,000 pieces of equipment worth more than $1.8 million, including computers and other potentially sensitive information. The official also said IHS employees were writing off millions of dollars of equipment without holding anyone financially liable.

The investigators confirmed that report and said the agency, which is part of the Department of Health and Human Services, "made a concerted effort" to obstruct their work, including misrepresentations of data and fabricated documents.

In one case, a person identified in the report as the IHS director responsible for property claimed the agency was able to find about 800 items thought to be missing. The GAO investigators later found this wasn't true. In another case, a property specialist acknowledged he fabricated documents saying hundreds of items were not missing and were properly disposed of.

Fernand Verrier, a former deputy director of the Office of Finance and Accounting at IHS headquarters in Rockville, said he found that his office was missing several computers and other electronic equipment, some of which had been taken home by employees.

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