Two X-ray machines purchased by the KHMH are the subject of a Special Audit, which focused on the nation’s largest referral hospital for the period July 2013 – July 2014.
The audit was commissioned through the Ministry of Finance and requested by the Board of Governors of the KHMH. In it the board says they were not consulted by the former Director of Financial Services, Carlos Perera when those purchases, for approximately $600,000 were made. In addition, the audit refers to almost $200,000 worth of medical supplies purchased, paid for in full, and not received by the hospital.
The document is 77 pages long, and chronicles serious irregularities in the sourcing, procurement and financing of the two X-ray units for the KHMH. All negotiations were conducted by former Director of Financial Services, Carlos Perera and former Chief Executive Officer of the KHMH, Gary Longsworth. Where the X-ray units are concerned, the hospital purchased them from a company based in Hong Kong, Spring Holdings. It was unable to purchase the machines outrightly, so financing arrangements were made with an Orange Walk based company, S.P. Group Limited. Between December 2013 and June 2014, the KHMH made payments of $336,346.26 to S.P. Group Limited for the machines, which were delivered in May 2014.
The audit found that neither the CEO nor the DFS has the authority to conduct the transaction, nor to make financing arrangements with a private company, without consultation with the Board of Governors. After a comprehensive audit, the team reported that, “as a result of the proceedings, we are of the opinion that the KHMH did not properly negotiate the financing of the X-ray machines.”
In addition, the audit found that the X-ray machines were delivered in May 2014 without documentation or warranty. Because of a lack of pertinent information, the team was unable to determine the physical specifications of the machines, and unable to determine if they were purchased at fair market price.
While that is troubling, the audit team also determined that there was a possible misallocation of funds to allow payment for the machines. The report states that in December 2014, the KHMH paid advance monies to the S.P. Group from funds allocated for the retrofitting and upgrading of the Intensive Care Unit, and for the paving of public park areas. In February 2014, the KHMH got another loan from the Social Security Board for the same purpose, and allegedly used it to repay the monies it had delivered to S.P. Group Limited.
There is a long list of irregularities, and there are few details which clarify the relationship between Spring Holdings, the S.P. Group and the KHMH. Contracts for the former CEO, Gary Longsworth and former DFS Carlos Perrera were not renewed by the Board of Governors, so it is likely that any accounting for the irregularities will be a difficult if not impossible undertaking.