Health Ministry still to recover $9.7M paid for breast milk substitute

An advance payment of $9.7M was made by the Ministry of Health for the supply of breast milk but it never received it and neither was the money returned.

The 2011 report of the Office of the Auditor General on the Public Accounts of Guyana said that it was learnt that $9.7M was paid to B&N Export for the supply of breast milk substitute upon receipt of an advance payment guarantee from an insurance company. The Auditor General’s report did not state when the advance was paid or when the advance payment guarantee was obtained from the insurance company.

It said however that the guarantee expired on July 18, 2012 without the supplier fulfilling its contractual obligation. The Ministry told the auditors that it had written to the insurance company on the 17th of July, 2012 to levy on the guarantee but that the matter was still pending.

The audit office recommended that the ministry aggressively follow-up the matter to recover the sum paid to the supplier. There was no discussion in the report of the basis on which the supplier was chosen and whether it had previously conducted business with the Ministry of Health.

The Audit Office report also pointed out that $9M worth of reagents which was to be supplied to the Ministry of Health remains outstanding.

The audit office report said that a similar observation had been made in the 2010 report.  The ministry’s response was that the sum of $9M had been paid to the Pan American Health Organization (PAHO) for the supply of reagents and that PAHO was still in the process of procuring the reagents to complete the order.

It was also pointed out in the 2011 audit report that an examination of 110 payment vouchers for acquisitions under current and capital provisions of the ministry showed that 29 vouchers totalling $161.6M  had no evidence of delivery or stores received notes  attached as evidence of the receipt of goods and in some cases there was no acknowledgement of the amounts paid. By the time of reporting in September 2012, three vouchers totaling $16.8M were still to be presented with the necessary supporting documents.

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