Thursday, July 26, 2007 Bedsheets set off scrutiny on rules
WHITE bed sheets triggered the Commission on Audit’s (COA) investigation on alleged procurement anomalies at the Vicente Sotto Memorial Medical Center (VSMMC).
During its special audit inquiry for 2006, COA investigators learned that the hospital spent P708,750 on 1,050 pieces of bed sheets earlier that year.
The purchase, the investigation uncovered, was made “without solid proof “that the items procured were of better quality than what the hospital seamstress could have made for P450,000 less.”
The investigation’s findings were contained in a report sent to the Office of the Health Secretary last Feb. 21.
According to the investigation, even the hospital’s Internal Control Unit head pointed out the savings that could be made if the hospital only buys linen for the seamstress to work on, instead of buying ready made bed sheets.
The official’s advice, however, was ignored by the medical chief in favor of the recommendation by laundry worker Felix Tek-in that ready-made bed sheets were better and would last longer.
But during an interview for the inquiry, Tek-ing reportedly couldn’t explain to auditors how the bed sheets were better than the ones commercially available nor recall the specifications of sheets he wanted the hospital to procure.
Auditors traced the purchased bed sheets back to the supplier – a firm named Golden Tops. But further verification showed that the sheets were merely bought from another company and resold to VSMMC.
Purchases backed merely by the say-so of certain officials at the government-run VSMMC weren’t limited to bed sheets, the COA investigation report indicated. Even medicines were sometimes procured that way.
Certain medicines, including a bulk purchase worth over P13 million from a single pharmaceutical company, were bought without public bidding because they were “preferred” over other brands.
“Majority of doctors’ and other end-users’ justification merely stated that their preferences...were based on previous experience. Such statements were not supported by any scientific research or study,” the report read.
The COA report cited how the government, through the Department of Health, has been “bending over backwards” to respond to the problem of expensive medicines.
“Hence it is sad to note that the officials...(have been) rationalizing the procurement of drugs and medicines from multi-national companies and procuring other items through modes that are not sectioned...by laws, rules and regulations,” it read.
The report warned that those responsible for the questioned purchases “would be facing formidable foes,” particularly the Health Secretary, who has described current medicine pricing as unreasonable and who has lobbied the passage of a bill facilitating cheap medicines.
The audit, conducted immediately after the assumption of Dr. Gerardo Aquino as the new VSMMC medical chief, uncovered how the hospital lost an estimated P100 million through various graft and corrupt practices. Among these practices is the referral of patients to private diagnostic laboratories instead of its own laboratory. This single practice alone caused over P40 million in unrealized projected income.
The audit also uncovered how the hospital spent almost P80 million in public funds for various procurements in 2006 but only held public bidding for less than P13 million’s worth.
Most of the procurements – P38,341,815.26 – were made through canvass. The rest - P27,954,256.31 - were direct purchases from “exclusive distributors.”
“This is a gross deviation from the provisions of the law, which aims to obtain prices of goods at the lowest cost to the government,” the COA’s audit findings said.
COA and procurement rules allow purchases through canvassing, instead of the mandatory public bidding, but only when it is as a contingency measure and provided that the amount doesn’t go beyond P50,000.
Procurement of ordinary or office supplies and equipment, those that are not available in the procurement service, can also be done through canvassing instead of bidding so long as the amount involved does not go beyond P250,000.
According to COA, while some of the VSMMC’s purchases did not go beyond the P250,000 ceiling, this was because the figures were purposely adjusted to escape the rule. This, according to investigators, was done by splitting one contract into many and with each contract worth less than P250,000.
Auditors poured over the hospital’s procurement records and identified a total of 107 companies supplying the hospital with different items and at least 12 of them were not familiar to the auditors.
Of the 12, three – New Life Med. Dist., Cebu Star Sales and Ace Deal Corp. – do not have business permits filed with the hospital. Still, the three firms were able to each win contracts with VSMMC worth P767,454, P1,961,408 and P1,562,400 respectively.
“This is an indication that contracts were awarded to some favored suppliers, dispensing with documentary requirement,” the COA report read. (KNR)
