– Auditor General’s report
Health sector purchases came in for unflattering comments by the 2006 Auditor General report which found among other things that 12 contracts entered into by the George-town Public Hospital (GPHC) with the New Guyana Pharmaceutical Corporation (NGPC) showed no evidence of tender board procedures being adhered to.
State purchases from NGPC have raised eyebrows since the Public Accounts Committee (PAC) of Parlia-ment raised concerns in June about the continuing acquisitions from the company without tendering and on the strength of a Cabinet edict. The PAC argued that the purchases should have been on the basis of competitive tendering.
Following the PAC’s complaints – particularly by its former Chairman Winston Murray – the government said that it would make these particular purchases from several international organizations in addition to NGPC. Murray has since said even this would be illegal as there are specific procurement laws governing these purchases.
The Auditor General’s report pointed out that even though the GPHC is a separate entity it continued to receive appropriations instead of a subvention from the government and continued to utilize Cabinet’s approval dated November 25, 2003 to purchase drugs and medical supplies from agencies both local and overseas. “It did not re-tender or obtain a new `no-objection’ from Cabinet for the purchases of drugs and medical supplies. It should be noted that this situation continued in 2006”.
For 2006, the report pointed out that amounts totaling $608M were spent by GPHC on drugs and medical supplies but that it could not completely account for these purchases since there was no central point of accountability.
“Drugs and medical supplies purchased were delivered to the Central Stores and the Pharmacy Bond for which records for the receipt of items were maintained. However, with regards to those delivered to the Materials Management Unit, no records were kept for the receipt or delivery of drugs and medical supplies. In the circumstances it was difficult to ascertain whether the corporation had received full value for money expended.”
The response of the GPHC, according to the report, was that the corporation had no control over the Materials Management Unit staff since they came directly under the Ministry of Health. The audit office report then pointed out that contracts worth $430M were entered into with NGPC “However, there was no evidence to indicate that tender board procedures were adhered to”.
The dealings with NGPC have attracted renewed attention as its parent company QA11 recently entered a series of controversial agreements with the government which necessitated changes to the law to facilitate tax concessions which would have been illegal if granted. Questions have since arisen over the practice of the drug purchases from NGPC without adherence to tender procedures. Critics argued that this was a sign of a too-cozy relationship between the government and QA11.
Following the disclosures emanating from the PAC, Health Minister Dr Leslie Ramsammy defended the purchases from NGPC on a number of grounds but added that “Still, in order to avoid the perception of non-response by the Ministry of Health, we have requested a renewal of the (Cabinet) decision permitting the Ministry of Health to procure medicine and commodities from IDA (Inter-national Dispensary Agency, Holland), PAHO/WHO, UNICEF and NGPC”. He also later emphasized that over the period from 2003, the ministry had also continued making purchases from overseas in addition to its NGPC acquisitions.
Murray’s rebuttal to this was “The Procurement Act is superior to any decision of the Cabinet. The Cabinet may take a decision to change the law and bring it to the National Assembly and the National Assembly may change the law but until the law is changed the Cabinet of this country is also subject to the law.
That law explicitly states that before a public sector agency can go out on its own to purchase drugs using a mechanism of its own, it has to get a waiver from the National Procurement and Tender Administration Board (NPTAB). That board now oversees the procurement system until such time that a Public Procurement Commis-sion is constituted,” he said.
The Auditor General’s report made mention of this when considering the Minis-try of Health. The report, presented to parliament almost a year late, said the ministry continued to rely on the Cabinet approval of “2003 to purchase drugs in 2005 and 2006 although this approval may have lapsed in that year. It did not re-tender or obtain a new `no objection’ from Cabinet for the purchase of drugs. Approvals should not have been sought in compliance with the Procurement Act of 2003 and the related regulations”.
At this press conference preceding the report, Ramsammy had said that his ministry did not interpret Cabinet’s decision to be time-bound.
The Auditor General’s report also noted that for 2006, $837M was expended by the ministry on materials, equipment and supplies. Included in this figure was the sum of $603M on drugs and medical supplies procured locally.
“…Tender procedures were not followed for 54 purchases exceeding $600,000 which totaled $590.478M. Included in the 54 purchases were 8 which should have received Cabinet’s `no objection’ as set out in Section 54(1) of the Procurement Act of 2003”. According to the Auditor General’s report, the ministry’s response to this quandary was “The Head of the Budgeting Agency acknowledged this finding”.
The Audit Office’s recommendation was that the ministry put systems in place to ensure that all purchases comply with the Procurement Act.
