GRAHAMSTOWN – The Public Service Accountability Monitor yesterday blamed medicines fraud in the province’s Health Department on the poor state of financial management in the department.
The Scorpions recently raided the department’s Bisho offices in connection with an investigation into R10 million allegedly paid to a pharmaceutical company for medicines that were never supplied. PSAM researcher Unathi Millie yesterday said this single allegedly fraudulent transaction had the effect of reducing the stock of pharmaceutical supplies available to clinics and hospitals in the province by a “staggering 42 percent”. She pointed out that the total stock of medicines for the province in 2002 amounted to approximately R24m.
The PSAM yesterday called on the Interim Management Team (IMT) currently in the province to follow-up these raids by taking steps to improve the state of financial management within the Department of Health. “The IMT should also take steps to ensure that proper financial controls are put in place within pharmaceutical depots.”
Millie said that for the past nine financial years the Eastern Cape Auditor-General’s office had pointed to the existence of serious financial management problems within pharmaceutical depots run by the provincial Department of Health.
“The Auditor-General has drawn attention to the failure of these depots to submit their financial statements for auditing since 1994. “Effectively, this means that neither the Department of Health nor depot managers can properly account for transactions involving the purchase of medicines in the province for the past nine years.” Despite recommendations by the AG that the department adopt the nationally-approved medical accounting system and procedure manual, it had still not ensured proper financial reporting by pharmaceutical depots by 2002.
The state of financial mismanagement in these depots had led to a “situation of extremes” where clinics and hospitals across the province had reportedly run out of supplies while, at the same time, medicines had been left to expire in the Port Elizabeth depot. “The fact that the provincial Health Department has only now recognised these depots as potential ‘red flags’ for the presence of corruption and bribery, demonstrates the department’s failure to take the Auditor-General’s recommendations seriously.
“If these recommendations had been taken seriously the department would have been in a position to implement preventative measures, including an early warning system, that would enable it to identify opportunities for fraud before they occurred.
By Adrienne Carlisle for The Daily Dispatch (www.dispatchlive.co.za).