Audit: When it comes to the procurement of drugs and medicines, absence of policy guidelines and poor enforcement of rules and regulations lead to problems of financial irregularities.

The Public Accounts Committee (PAC) of Parliament, in its first public hearing conducted with the Ministry of Health, questioned the ministry on the unresolved audit irregularities.

It is one of the resolutions of the sixth session of the Parliament  to resolve all unsolved irregularities pending between 2009 and 2013 before March 30 this year. Irregularities unresolved in 2014 will have to be addressed by September this year.

According to the annual audit report 2014, health ministry has irregularities amounting to Nu 9.3 million on account of inadequacies in the procurement system and weak internal controls and monitoring.

One of the audit findings was that the Department of Medical Services had made excess payment of Nu 1.14 million for purchase of 10,300 vials of Neostogmine from Karma Tshongkhang on 2011-12 at Nu 115 per vial. The lowest evaluated bidder KSD medical, while quoting a rate of Nu 3.74 per vial failed to supply the medicine.

MP Karma Tenzin, a member of PAC questioned as to why the Karma Tshongkhang was given the tender when the firm was the fourth lowest evaluated bidder. He said the price difference was more than 500 percent.

The health secretary, Dr. Ugyen Dophu, said that all the three bidders who quoted the lowest rates were not registered with Drug Regulatory Authority (DRA).

The supplier who won the bid had failed to supply the drug even after three months of issue of supply order. He said that not many firms are interested to register with DRA because the market in Bhutan is too small.

While the RAA insisted on reimbursement of the fund, health ministry responded that penalty of Nu 4 million has already been imposed on KSD medical and that the firm has closed its business, making additional recovery difficult.

However, the health secretary said those drugs which are urgently required but not registered with DRA are being procured with approval from the DRA and the ministry taking the responsibility to ensure quality.

In case the lowest bidder fails to supply the items and the price difference from that of next lowest bidder is more than Nu 100,000, Dr Ugyen Dophu said a team from health and ministry of finance is sent to Kolkota for direct purchase.

He said that the evaluation team has to sometimes add or remove the specifications, and that even the procurement rules gives them an opportunity to add clauses.

For instance, doctors may suggest different medicines in place of another. He said changes had also been made to the suturing equipment because doctors suggested its use based on international practice.

In some case, he said that the quantity of drugs has to altered from that prescribed in the BOQ because the excess of medicines from the national referral hospital could be supplied to other heath facilities.

As of now, the health secretary said that 98 percent of essential drugs are available in any health facilities at any point of time.

“But whether medicines are there or not, due process must be followed,” a member of the PAC said after the hearing.

There were also six issues between 2009 and 2013 pertaining to health ministry, of which four has been resolved.

Non-deposit of revenue collection by one of its employees in 2012 and the outstanding advances of Nu 31.449 million against its officials in 2010 is still not resolved.

However, an official from the ministry responded that one of the employees has passed away and the other is serving a prison term, impeding the recovery process. Even the provident fund of the employee who passed away was withheld because he has outstanding loans with National Pension and Provident fund.

The chairperson of the PAC, Dophu Drukpa, said the committee is satisfied with the follow up actions the ministry has taken and will expedite the process to solve other pending issues at the earliest.

Should the matter be unresolved, he said it would be put up in the next sitting of Parliament and that it is left to the wisdom of the Parliament. The agencies concerned also have the option to put it up to the audit and finance committee of the government to close the issue.

The PAC meanwhile will conduct similar public hearings for all the agencies and ministries that have audit observations not resolved.

Tshering Dorji