Kaieteur News news item, Tuesday 23 June 2009
Cabinet breached the law- Parliamentary Committee
June 23, 2009 | By knews | Filed Under News
Permanent Secretary of the Ministry of Health, Hydar Ally, along with a team of officials from that Ministry yesterday appeared before the Parliamentary Public Accounts Committee to submit to scrutiny and to offer explanations for discrepancies highlighted in the 2006 Auditor General’s report.
One of the issues that featured prominently was the way in which the Ministry purchased its drugs, which according to Shadow Finance Minister, was in violation of the Procurement Laws of Guyana.
Ally told the House that the Ministry was not in violation of the procurement and provided the PAC with three letters from the National Procurement and Tender Administration which stated, “Please be advised that Cabinet has given no objection for the contract, ‘Purchase of Drugs and Medical Supplies for the Ministry of Health’ to be awarded to the New GPC Inc.
The letters indicated approval for the purchase of drugs from New GPC for as much as US$2.6M.
This, he said, was evidence of the Tender Board waiving the need to go through the tender process.
According to Murray, Cabinet did not have the authority to waive the tender process that is outlined in the law.
He noted that further directing the Ministry to purchase from New GPC was a vexed issue.
According to Murray, public tendering is mandatory under the law and for such tendering an invitation to tender must be had.
Murray also said that a provision in the law for selective tendering, given complexity or specialised nature, is available only from a limited number of suppliers, but he emphasised that such suppliers shall be invited to submit.
He added that in any case there must be a competitive process before arriving at a supplier.
Chief Executive Officer of the Georgetown Public Hospital Corporation, Michael Khan, also appeared before the committee and was questioned about the hospital’s drug purchasing policy.
Khan told the members of the Committee that purchases below $6M would be done through the hospital tender board and invitations for bids would be made public.
He noted however, that purchases above that limit would see the Ministry’s Procurement Department identifying a supplier.
When the issue was first raised by this newspaper in August last year, Health Minister, Dr. Leslie Ramsammy, had admitted that his Ministry made a mistake as it relates to the procurement process in purchasing drugs and medical supplies.
The recent Auditor General’s report in question, stated that the Georgetown Public Hospital Corporation (GPHC), which is now a separate entity from the Ministry of Health, continued to use the Ministry’s Cabinet approval to purchase drugs and medical supplies from specialised agencies, both locally and overseas.
It was explained that before the Procurement Bill was passed in Parliament in 2004, the Health Ministry would seek Cabinet’s approval for the purchase of the drugs and medical supplies, which, according to Dr Ramsammy, was legal.
However, when the Procurement Bill was enacted into law in 2004, the Ministry had to receive the approval from the tender board.
This was not done, as the Ministry continued to seek Cabinet’s consent. In essence, the Health Ministry kept breaking the law when it did not seek the tender board’s approval for the purchase of drugs and medical supplies totalling hundreds of millions of dollars.
The Auditor General report stated that the Health Ministry spent $608.4 million on drugs and medical supplies and could not “totally account for (these) drugs and medical supplies.” According to Minister Ramsammy, this has now been corrected.
“The Procurement Act says that the tender board approves and that Cabinet has its chance to give no objection. So we can’t change the recommendation; we can tell them that we don’t like the recommendation,” Minister Ramsammy noted.
He added, “The Auditor General is not saying it is corruption; the Auditor General is saying that it is the process, but people are making a big deal as if some hanky panky has happened, but it’ s nothing like that,” Dr Ramsammy stressed.
The Auditor General’s report had also stated that, during 2006, amounts totalling $608.4 million was expended on drugs and medical supplies, for which the corporation could not give total accountability.
Minister Ramsammy explained that when the supplies were purchased, the corporation did not have the storage space for them. In this regard, the GPHC asked the supplier to release the supplies over time.
“So, if I have ordered 100 crates and I have space for only five, I would take the five and collect the rest later. So we took possession of the 100, but we only have five with us, and then as we move on, we take the rest. We have always accounted for our supplies,” Dr Ramsammy said. He said that some of the drugs would be stored at a small GPHC bond and the remainder at the Health Ministry bond. When the Auditor General checked, he could not find all the drugs at the GPHC.
Dr Ramsammy said his Ministry sent an explanation to the Auditor General but it would seem that the response was ignored.