$300M in medical supplies missing from MOPH

Jan 07, 2020 News

– Ministry failed to enforce delivery- schedule penalty for supplies

According to the Auditor General’s report of 2018, the Ministry of Public Health paid over $77 million for supplies which it did not receive up to the time of his report in 2019.

Ministry of Health

However, the Auditor General, Deodat Sharma, was keen to note that this malpractice has been something dating back to 2015.
The sum of $2.232 billion was allocated for the purchase of drugs and medical supplies for the period under review.
According to the Appropriation Account, amounts totalling $2.183 billion were expended for the period. As at 31st December 2018, thirty cheques totaling $215.118M were on hand, this resulted in the Appropriation Account being overstated by this amount.
However, at the time of reporting in September 2019, eleven cheques totaling $59.529M were still on hand.
Furthermore, items valued $77.499M were not delivered, even though payments were already made to the suppliers in respect of Ministries and Departments. Included in the sum were items valued $64.632M or approximately 83%, which were in relation to the non-delivery of furniture, office and medical equipment to the Ministry of Public Health.
At the time of reporting in September 2019, a supplier who received payment totaling $94.066M did not fully honour his obligations. Goods valued at $37.210M remained outstanding. In addition to the amounts outstanding for the year 2018, there were outstanding deliveries for the years 2015 to 2017 totaling $306.205M.
It was observed that suppliers did not comply with the conditions of the contracts, since deliveries were not made according to the contract specifications and delivery schedules.
In addition, the Ministry failed to enforce the penalty of 0.5% on the contract sum for each day of untimely execution of the contract. As a result, the suppliers were not penalised for the failure to adhere to the specifications of the contract. A similar observation was made in the previous year.
The Ministry’s response the Head of Budget Agency indicated that indeed no penalty was imposed due to the revised delivery schedules and space constraints faced the Ministry so the deliveries were staggered in order to avoid spoilage.
The Audit Office recommended that the Head of Budget Agency immediately undertake a full review of contractors’ obligations under the contracts to ensure that these, including applicable liquidated damages, are fully satisfied, without any overpayments.

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