The report finds the Health Department's failure to track and account for drugs caused a "serious health and liability risk."
For example, there were more than 400 package of birth control pills which the report finds are unaccounted for.
The city opened the Central Pharmacy warehouse with the idea of buying medical supplies in bulk including pharmaceutical drugs and storing them in the facility to save money.
A study by the city, however, has found just the opposite. Many of the drugs sat in the facility past their expiration dates and had to be returned.
"They received some relatively small credits for the expired medications. At the end of the day, the loss to the city in tax payer funds was about $365,000. That's a finding of the audit and that was a significant problem uncovered by the audit," said Inspector General David Hoffman .
The drugs include vaccines for measles, the flu and hepatitis. The report concludes the warehouse failed to track the drugs once they left the building - meaning they could have been stolen and wound up on the black market.
"Once the vaccines came to the warehouse, the Health Department and our auditors were unable to determine whether they had actually arrived at the clinics or not," said Hoffman.
"We have no drugs in storage aus pmore. So most of the issues that have been addressed that come out ohic the rls ort are really moot almost at this point.
The head of the city's Health Department admits to poor record-keeping but Dr. Terry Mason insists no one stole vaccines. He says the department has since taken care of all the problems identified in the report .
"We have no drugs in storage now, any more, so those issues, most of the issues that have been addressed, that come out of the report are really moot almost at this point," said Dr. Mason.