US$2,5m health scam exposed | The Herald

via US$2,5m health scam exposed | The Herald December 23, 2013 by Lloyd Gumbo

A special Ministry of Health and Child Care audit team has unearthed a scam at Chivhu General Hospital involving US$2,5 million, in which officials flouted tender procedures, inflated quotations and also created fictitious ones.

The matter has been handed over to the police and eight hospital employees are reportedly under investigation.

The scandal has sucked in Provincial Health Services administrator, Mr Tazwell Mwazungunya and could be the tip of an iceberg amid indications that most Government public health institutions have similar goings-on.

Some of the quotations at Chivhu General Hospital were inflated by more than 700 percent above average market prices.

The hospital received US$2,5 million from Treasury in 2011 for targeted rehabilitation that started in April 2011.

The audit report, seen by The Herald, indicates that the Provincial Medical Director’s (PMD) Office queried the high prices on the invoices before receiving an anonymous letter alleging breach of procurement regulations at the hospital.

To that end, the PMD requested an investigation.

“The CBU (Central Buying Unit) sourced quotations and audit follow-up with companies alleged to have produced the quotations revealed that some quotations used were fictitious as companies disowned the quotations,” reads part of the report.

The auditors found out that Markford Distributors, which won a tender to supply one digital BP test machine, charged US$700 for the item that costs as little as US$80 at Mycote Trading (Pvt) Ltd.

Markford Distributors also supplied a mercurial BP machine for US$520, which cost US$40 at Mycote Trading (Pvt) Ltd.

Another company, Dial Up Marketing, was awarded a tender for 30 B/1000 indomethacin for US$2 520 yet Leapmed Pharmaceuticals charged US$1 176 for the same. The same company supplied 40 B/500 methylopa 250mg for US$5 600 while Leapmed charged US$2 940.

Data Path Systems (Pvt) Ltd supplied 20 sickles with wooden handles for US$600 yet investigations by the auditors revealed that the same order cost US$80 at Fabs Hardware.

The same company was awarded a tender for the supply of 40 slashers steel with wooden handles for US$1 600 when Fabs Hardware charges US$140 for the same quantities.

Data Path Systems (Pvt) Ltd was awarded a tender to supply 10 steel rakes for US$600. The same order costs US$95 at Fabs Hardware.

In addition, Data Path Systems (Pvt) Ltd supplied eight picks for US$480 when the same quantity of implements costs US$140 at Fabs Hardware.

“On 10 February 2011, the PHSA (Mr Mwazungunya) held a meeting with Procurement Tender Committee (PTC) and Central Buying Unit (CBU) members on procurement procedures with regards to the targeted rehabilitation project. He (Mr Mwazungunya) declared himself the chairman of the Procurement Tender Committee while the District Health Services Director was relegated to the position of a secretary of the same committee.

“On 28 February 2011, the CBU members compiled a list of 128 suppliers from their traditional list and did not consider the State Procurement Board’s approved suppliers list.

“One of the companies, Acquitancy Enterprises (Pvt) Ltd that was awarded tender number 006 /11 was confirmed to be owned by Mr Mwazungunya’s brother. Mr Mwazungunya did not declare his interests.

“Mr Mwazungunya did not sign on any of the tender documents though he was the chairman of the PTC during adjudication,” reads the report.

Auditors found that some quotations had false addresses, creating suspicions that there was connivance with the Central Buying Unit.

The companies cited in this regard were Dime Suppliers, Enjectment Investments, Cursely Investments and Sanctified Holdings (Pvt) Ltd.

“The matter should be reported to the police for further investigation according to Treasury Instruction 0435.

“A board of investigation to look into the issue and conduct of the procurement tender committee and central buying unit members should be convened,” recommended the auditors.

Chivhu General Hospital acting medical superintendent, Dr Tasimbanashe Masamha, in September this year wrote to those implicated setting out charges against them.

Eight officials at the hospital were implicated.

“Your . . . actions led to the delivery of some of the goods to the hospital, their consumption and payment to the suppliers at above average market prices.

“In terms of Section 44 (2) (a) of the Health Services regulations 2006, you are called upon to submit a written reply to the allegation within 14 working days of receipt of this misconduct charge,” reads the letter dated September 26, 2013.

Mashonaland East Provincial Medical Director, Dr Simukai Zizhou, said the matter was in the hands of the police.

“The case is still being finalised through internal disciplinary proceedings. A report has also been made to the police,” he said.

Dr Zizhou said the delay in concluding the case that was unearthed in 2011 was as a result of the bureaucratic processes.

“We have to meet statutory requirements of the code of conduct, (Statutory Instrument) 117/ 2006 on Health Services Board. We have to follow the due legal provisions. So we cannot just cut the long process short.

“However, we are now at the final stages of the hearing,” he said.

Police in Mashonaland East could not be reached for comment at the time of writing.