–locating ‘shell’ American pharmaceutical company

THE Public Accounts Committee (PAC) on Monday urged the Georgetown Public Hospital Corporation (GPHC) to seek U.S. help in recovering the $1.883M spent on procuring 68 X-ray cassettes.
The advice was directed to the Corporation’s newly-appointed Acting Chief Executive Officer (CEO), Brigadier George Lewis, based on PAC’s discovery during the perusal of the Auditor General’s Report of the GPHC for 2015 that the cassettes were unaccounted for.
The finding has prompted PAC Chairman, Mr Irfaan Ali to warn against relying on foreign companies that continue to be awarded contracts for the procurement of items but fail to deliver.
It has also caused a written request to be sent Finance Secretary, Dr. Hector Butts and Cabinet, through the Minister of Public Health, for a write-off of the $1.883M as the GPHC, despite the best efforts of the police here, has been unable to locate the principals of the company.
The company at reference, AJ Med X-ray, which ostensibly operates out of Florida, USA, reportedly received payment, via wire transfer, through the Guyana Bank for Trade and Industry (GBTI) for the procurement of the cassettes. The transaction was reportedly done on November 22, 2010.
Brigadier Lewis, in response to a number of questions posed by PAC member, Bishop Juan Edghill, disclosed Monday that the hospital is yet to receive a refund of the money, some six-and-a-half years after payment would have been made.
“This company no longer exists, and was a ‘shell’ company,” Lewis told the PAC, adding that the GPHC was advised to seek a write-off for the amount expended.
Edghill then asked if the contract for the procurement of the cassettes was sole-sourced, to which Lewis replied that he was advised that the contractor was selected through the quotation system.
That response prompted PAC member, Mr Charrandas Persaud to question who signed the agreement on behalf of the company.
“We need to do something about these American companies; seek the assistance of the embassy… We need to pursue it from that angle,” Ali suggested.
In response to a query from PAC Coalition member, Ms Valerie Patterson as to why it has taken so long for the purchase to be written off, Lewis explained that it was the police who suggested that the GPHC do so. “I don’t think for the next period under review we would have this item reflected in the report,” Lewis said.
He disclosed that the police became involved with the matter on January 27, 2015; he also committed to being more diligent in the selection of companies which provide services to the Hospital.
Similarly, the PAC Chair reiterated the need for Lewis to find out who the principals of the company are, and whether they are associated with any other company currently supplying services and products to the Guyana Government. He said those recommendations must be heeded before the GPHC approaches the Finance Secretary for a write-off.

AN OLD ISSUE
Meanwhile, Brigadier Lewis was asked to tell the Committee of the impact the non-delivery of the cassettes have on the operation of the GPHC. In his explanation, Lewis, who recently took charge of the GPHC following the sacking of former CEO Allan Johnson, said: “It is an old issue; it has no impact on the organisation in terms of performance; in terms of value for money. “Yes, we have acquired other cassettes, and that department continues to function.”
The issue of overpayment of salaries totalling $1.368M for 2012 to 2015 and related deductions totalling $84,252 not being recovered also formed part of the discussion during Monday’s hearing.
The Audit Office has recommended that GPHC continues to follow up on the matter, with a view to recovering the overpaid amounts, as well as engage the deduction agencies towards retrieving same.
It was noted that for the Year 2012, $59,217 was recovered, leaving a balance of $514,993, and that for 2015, the sum of $91, 668 was recovered, leaving $756, 773 outstanding. Notices have since been sent to former employees, and legal advice sought.
Lewis explained that the overpayment was as a result of employees abandoning their posts without informing the Hospital. He accepted during questioning that there is a time-frame of three days without notification, which indicates abandonment of post. This prompted Edghill to query: “Could I conclude that these overpayments made are no more than one or two days per person?”
In responding, Lewis said: “Sir, that conclusion I don’t support, because, when salaries are paid, they are done in its entirety; not in parts… Once the money gets into the Bank, it is challenging to prevent the employees from accessing it.”
Ii was also disclosed that in 2013, there was a misappropriation of $5.115M by a cashier, who has since been fired. That matter was reportedly placed before the Director of Public Prosecutions (DPP), and the Audit Office has since requested that a follow-up be done.
Following the disclosure, PAC member Jermaine Figueira asked: “What systems have been put in place to prevent this from recurring?”
At this, Lewis reminded Figueira that he recently assumed duty at the GPHC.
“I have not concluded my review of operations of GPHC as yet, and, by extension, I was unable to properly review the system to see if there is need for improvement along the way,” he said, adding:
“The DPP and Police are involved in the operation… The Force is in contact with us and the Auditor General’s Office on this matter.”
It was on this note that PAC member, Mr Persaud requested that a letter be sent to the DPP, enquiring what the decision on the matter is.
In the 2015 audit report, it was also found that 31 payment vouchers for 2014, valued at $66.169M, could not be located. As such, the Audit Office has recommended that the GPHC properly secure its records and present same for audit when requested.
However, Lewis disclosed that all outstanding vouchers were presented to the Audit Office and the matter has been concluded.

OTHER DISCOVERIES
It was also discovered that there was a quantity of expired drugs located at the Pharmacy Bond, Central Stores and the New Guyana Pharmaceutical Corporation (GPC) bond at Ruimveldt in July 2016. PAC Chairman Ali requested to know the value of the expired drugs that were disposed of on November 22, 2016.
The Acting CEO told the Committee that the drugs fall under two categories–namely donations and procurement, and noted that most of the expired drugs were drugs received from donors. Lewis disclosed that the GPHC is working with donor agencies to encourage them to donate drugs that at the very least have a minimum shelf life.
“Secondly, our policy, in terms of purchasing drugs, was to ensure we have an 18 months period shelf life, and we are looking at the computerisation of the system…to ensure we get alarms,” added Lewis. There are currently three functional bonds and Lewis told the Committee that at this point it would be difficult for him to foresee the need for privately managed bonds.
“Are you preparing for a centralised bond?” asked Ali to which Lewis replied, “We are prepared to operate within the system the parent ministry introduced; at this time we have not received any policy directions on the matter.”
Lewis disclosed that the GPHC has not yet cleared debts owed to the New GPC but noted that the entity is in the process of doing same.
Meanwhile, the Auditor-General has noted in his report that the staff of the Pharmacy Bond was reluctant to identify drugs that had a short shelf life. When asked what may have been responsible for the reluctance, by Edghill, Lewis said he too finds the action of the staff surprising.
“I am worried as to why the staff wasn’t cooperative. They should have been…” he said. His response prompted Edghill to ask whether it “Would it be safe to conclude that there is no system in place to monitor drugs with short shelf life.”
Lewis noted that a number of systems have to be put in place to correct the situation and among those systems includes the monitoring of the shelf life of the drugs that have been supplied through donation or purchases.
The acting CEO said too that there were monthly checks in place but noted when the computerised system takes effect it would be much easier to monitor the drugs.
The issue of non-observation of the Stores Regulations of 1993 relative to log books not being written up in a continuous manner, was also raised by the PAC. Log books for fifteen vehicles were not presented for audit examination. However, Lewis explained that there was a case where log books were allocated to drivers and not to vehicles. “That has been changed; that was an unhealthy system. It has been corrected,” he said, adding that there is currently a transport officer who monitors the log books, and ensures they are properly filled out.
It was however noted that some drivers are challenged. “We are working with them to ensure they are properly filled out,” Lewis said.