Health Ministry answers to PAC for overpayments

Permanent Secretary Leslie Cadogan was on Monday called to explain overpayments by the Health Ministry as the Public Accounts Committee (PAC) continued to probe findings of the 2010 Auditor General’s report.

The report cited the ministry’s fuel purchases, noting that there were overpayments to GuyOil totalling $3.176 million, which resulted in an overstatement of the Appropriation Account.  Cadogan, however, explained that though the delivery was not made in 2010, the sum was utilised to cover the cost of fuel for the period January to March, 2011.

Overpayments are among the frequent findings in the report and those for fuel are especially common. The Ministry of Home Affairs (MOHA), during a previous PAC hearing, was cited for making payments to GuyOil for fuel that it had not received.

Auditor General Deodat Sharma had stated that the MOHA paid for fuel which it did not have in its possession or use at the time the audit was carried out.

Angela Johnson, the Ministry’s Permanent Secretary, however, explained that what the Auditor General was treating as overpayments were actually advance payments made by the agency to secure its fuel supply. Johnson said that this was done because the ministry did not possess the necessary storage to hold the fuel it required. As a result, the fuel was paid for but kept by GuyOil until the ministry was ready to uplift it.

The Health Ministry was also cited in the Auditor General’s report for overpayments in excess of $400,000 to the National Insurance Scheme (NIS).

Responding to the report, the ministry said that it had written to the NIS, which only responded saying that it was addressing the matter. Cadogan stated that the ministry is currently undertaking follow-up actions to recover the outstanding sum. He added that since this inefficiency was discovered in the 2010 report, “there has been no overpayment to any deduction agencies.”

The Auditor General’s report also raised alarms about the utilisation of the current appropriation fund towards the Linden Hospital Complex due to the fact that funding for the entity was included under a programme in the budget of the ministry, as though it was a department, while funding was disbursed as if it was a subvention agency under the ministry. In its response, the ministry stated that $179.480 million had been transferred to the Linden Hospital Complex to cover its operational costs. It further explained that the Linden Hospital Complex is listed as an “Activity” and therefore receives funding under Programme 474: Regional Health Services.

APNU MP Jaipaul Sharma, therefore, concluded that the Auditor General came to an incorrect conclusion about the transaction.

He stated that the transfers made were by cheque order to cover the complex’s operational costs and not a subvention as claimed by the Auditor General. “The Auditor General confused it,” he said.

The Auditor General’s report also highlighted instances where unspent balances of $28.789 million and $4.234 million in revenues were retained by the complex, instead of being deposited into the Consolidated Fund.

The ministry admitted that it was at fault for not making the transfer when it was supposed to, but said that the funds remained in their accounts until March 15, 2012, when they were refunded to the Consolidated Fund.

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