THE Ministry of Health (MOH) and its agencies cost taxpayers $76.4 million in overpayments, improper payments and unsubstantiated transactions the last financial year.
This is according to the Auditor General’s March 2011 annual report.
In this report, tabled in Parliament last Tuesday, Auditor General Pamela Monroe Ellis said that audits of the Ministry of Health and its entities revealed weaknesses in the internal controls governing the management of cash, fixed assets, stores, contracts and emoluments.
This, she said, contributed to the $36 million in overpayments, the $39.6 million in improper payments and the $883,322 in unsubstantiated transactions recorded.
Monroe Ellis blamed the four regional health authorities whose responsibility it is to manage the state’s medical facilities and services for the poor accounting. However, she pointed fingers directly at the Ministry itself for poor management, particularly when it came to managing the supply of prescription drugs in the public health sector.
“We found that the MOH did not provide adequate oversight to encourage formal networking and partnership between public pharmacies to facilitate better service to patients.
“This resulted in uneconomical purchasing decisions and failure to realise potential savings of $202 million,” the Auditor General said.
She noted that this “also contributed to a fall in basic storage standards which threatened the potency and efficacy of prescription drugs”. To make things worse, she pointed out, there was no formal system in place to track drug-usage patterns to aid in effective decision-making.
It is not the first time Monroe Ellis has had to rap health ministry officials’ knuckles over poor accounting.
“We have reported similar weaknesses in previous years. However, we found that despite the Ministry resolving the specific breaches in preparation for the Public Accounts Committee (PAC), there was no effort to address the systemic concerns and therefore many of the issues resurfaced in subsequent audits.
“This is an indication that the Ministry has not been effective in implementing preventative measures,” the Auditor General said in her report.
Monroe Ellis found that the Bellevue Hospital in Kingston, which falls under the administration of the South East Regional Health Authority, paid a total of $31million to two companies for the provision of security services without formal contracts being in place. In addition, she said no written contract was in place for a contractor who was engaged to carry out electrical repairs; a breach of government procurement guidelines.
At the Western Regional Health Authority, inadequacies in the controls of the maintenance of furniture inventory records, management of the motor vehicle fleet and cash management were identified. Here, Monroe Ellis said, the negligence of two officers resulted in the loss of $1.2 million in cash and cheques from the St James Health Department. In addition, she said store records were not faithfully maintained, which resulted in differences between the physical stock and balances compared to the stock records. The audit also found that the storage facilities in one location were inadequate and posed a health risk to employees.
The picture was not much different at the North Eastern Regional Health Authority where the Auditor General found “deficiencies in control systems such as the absence of supporting documents for expenditure, updating of motor vehicle inventory records and management of accounts payables”, among other things.
In fact, that Authority owed statutory deductions totalling $39.2 million which included employees’ National Insurance Scheme (NIS) and National Housing Trust (NHT) contributions. In addition, Monroe Ellis said insufficient checks and balances resulted in overpayments of salaries to employees totalling $2.8 million. The regional oversight body has since recovered $1.5 million.
She, however, noted that despite being the subject of a previous audit query, the Authority has failed to regularise its security arrangements and went ahead and paid $34.2 million to a security company without a formal contract.
Things were found to be no better at the South East Regional Health Authority, where “there was a lack of adequate control and monitoring, including the absence of inventory records, reconciliation of accounts payable, updating of stores records and documentation to support contract payments”.
Furthermore, the Ministry’s indebtedness to the Health Corporation Limited, which totalled $1.1 billion as at December 2010, was causing significant cash flow problems to the entity, she said.
