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Millions lost in purchase of drugs, says AG
According to audit reports for the accounting year 2004 presented recently to parliament there appeared to be large scale irregularities in several institutions coming under the Health Ministry, particularly in those departments dealing with the purchase of drugs, medical, surgical and laboratory equipment.
The Auditor General’s Health Ministry report stated that where the purchase of drugs for government hospitals was concerned the state had incurred losses amounting to millions of rupees.

Among the cases highlighted by the AG includes the decision by the Medical Supplies Division to make emergency purchases locally saying the reason for not ordering drugs from the Sate Pharmaceuticals Corporation (SPC) was that the SPC had not delivered the items ordered on the contracted dates.

“The existence of an emergency situation which is a reason given for making local purchases cannot be accepted when considering a mere eight items of drugs purchased at a total cost of Rs. 5,746,932 whereas no order was placed with the SPC”, the AG’s report said.

The report said no member from outside the Ministry was appointed to the Tender Board in relation to the purchases. It said the minutes of Tender Board meetings were not recorded in the Tender Board register nor signed by the members in connection with the purchases amounting to Rs 35,942,489.

The Report speaks of an instance where Rs. 197,791,772 was paid to purchase 157 categories of drugs locally when these items could have been purchased from the SPC for Rs. 115,905,465 thereby unnecessarily incurring an extra expenditure of Rs 81,885,307.

Under the losses and damages category in the AG’s Report, even by the end of 2004 no action had been taken to investigate the reasons for stock shortfall amounting to Rs 179, 737,463 as revealed at the Annual Boards of Survey of three Medical Supplies Division and drug stores of certain hospitals for the period 1982-2004.

No efforts were made to recover the losses from the officers responsible.
The stock shortages reported by the Board of Survey for the year under review amounted to Rs. 232,730.

In addition the Audit Report said samples of drugs received by the SPC had not been sent to the National Drugs Quality Assurances Laboratory for testing for quality and there was no procedure in place for recovering the value of substandard drugs even when such tests were carried out.

The AG’s report also highlighted several instances of assets lying idle or being under utilised which includes ten items of surgical equipment valued at Rs 2,436,725 received by the stores at De Soysa Hospital for Women in November 2003 but retained in the stores and not issued to the respective divisions even as at May 31, 2004 the date of the audit.

In another instance Ward No. 3 of the Leprosy Hospital had been repaired on July 7, 2003 at a cost of Rs 1,586,225 but that ward had not been made use of even by July 20, 2004, on which date the audit was carried out.

The other case mentioned was where the Biomedical Engineering Services Division had purchased a screen laser machine for Rs 5,883,100 and supplied it to the National Hospital. According to the physical inspection carried out on May 21, 2004 the machine had been discarded after treating 20 patients as certain valuable parts of the machine had been allegedly removed by the supplier.

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