This information comes from sources familiar with an unpublished report from the US Center for Medicare and Medicaid Services (CMS). Over the course of six months, from April 1st 2015, through September 23rd, inspectors found that quality control tests returned "erratic" results for a particular blot clotting test, and on one day in particular there were seven failures. The test in question measures how quick it takes blood to clot and is very important for people taking medication like the blood thinner warfarin for reducing the risk of clots and strokes. If doctors adjusted the dosage based on faulty test results, it could potentially be dangerous.
The report also claims that the Theranos lab in CA sometimes used expired reagents and chemicals in their tests. Part of the problem was insufficient oversight by the lab's director, who was not responsible for the quality control program. Instead there was a quality control manager who was deemed unqualified by CMS.
In response to this the company hired Dr. Das to take over the facility. Theranos Vice President, Brooke Buchanan, said, "the new lab director approved enhanced reagent management procedures, as well as improved quality control procedures, to address issues raised by CMS." Dr. Das added that "the CMS report is about people and processes in one Theranos lab in the past, and does not reflect the current state of that lab."
Of course, that may not be enough to reverse what has been several months of prolonged PR nightmares for the startup. Its corporate benefactor, Walgreens, is currently investigating ways to end their partnership, which would likely spell the end for Theranos.