Board says GPHC breached law in $632m ‘emergency’ purchases, former CEO acted ‘recklessly’

-found no evidence that Minister instructed bypassing of procedures

After months of reports in this newspaper about illegal purchases by the GPHC totalling $632m, the board of the hospital yesterday said that its former Chief Executive Officer, Allan Johnson had acted “recklessly” in the matter but said that there was no information that Minister of Public Health, Volda Lawrence had instructed that procurement procedures be bypassed.

The Georgetown Public Hospital Corporation (GPHC) came under intense scrutiny when Stabroek News reported on March 8th this year that the institution had sought approval for an “emergency” purchase of $605m in items from Trinidadian conglomerate ANSA McAl. It turned out that the purchase was not in compliance with the procurement law and that a number of items sought from ANSA could not be deemed emergency supplies. It was later revealed that three other “emergency” purchases were made by GPHC in breach of the procurement law from New GPC to the value of $20.8m, Health2000 for $2.9m and Chirsosyn Discovery for $2.1m.

Volda Lawrence
Allan Johnson

Further questions were raised when the Ministry of Public Health said that Lawrence had fast-tracked the purchases but had no input in the procurement process.

Following the reports in this newspaper, it was announced that both the board of the GPHC and the Public Procurement Commission (PPC) would conduct probes of the purchases. Yesterday’s statement by the GPHC was the first on the board’s findings. It didn’t address what steps would be taken following the illegal purchases but said it would defer to the PPC in this matter. Stabroek News has been told that the PPC report is being finalised.

The admission by the GPHC board will be seen as a huge embarrassment for the government which had made strict adherence to procurement laws  a key plank of its governance. It was also this government which had installed Johnson as acting CEO of the GPHC in September 2015 after the previous CEO was sent off on leave.  Johnson was dismissed as CEO of the GPHC on June 9th this year. Among the reasons cited by a Ministry of Public Health release were poor judgement and an appearance before the Public Accounts Committee of Parliament which was acrimonious and left many questions unanswered. The dismissal was also seem in some quarters as paving the way for Johnson to be blamed for the $632m purchases.

 

Underestimation

In its statement yesterday, the GPHC said that the Board of Directors in its probe found that at the beginning of the year, GPHC was facing a critical shortage of drugs. It said that hospital authorities cited a number of reasons for the shortage including the underestimation and late quantification of drugs; the annulment of a tender because a GPHC Finance Department employee had fiddled with a tender document; and the failure of some local suppliers to honour their 2016 contracts.

It said that on 3rd February, 2017, Minister Lawrence, held a meeting with then CEO (Ag) Johnson and senior staff of the Finance and Pharmacy Departments of GPHC and instructed them to immediately draw up a plan of action to alleviate the drug shortage as quickly as possible.

The staff of GPHC, the statement said,  reported that Lawrence requested that the hospital take into consideration Pan American Health Organisation’s (PAHO) emergency mechanism to supply pharmaceuticals, and also confirm with the Materials Management Unit (MMU) of the Ministry of Public Health  whether they had any of the required drugs in stock. Thereafter, a determination could be made about which drugs the hospital would need to purchase from suppliers. At a subsequent meeting that day, the statement said that the Minister of Public Health “reportedly listened to a plan of action developed and presented by the GPHC Finance Director which included determining availability of drugs from PAHO, MMU and local suppliers; obtaining quotations from suppliers; sending an evaluation report to National Procurement and Tender Administration (NPTAB) for approval, then followed by the award of tender. However, GPHC did not follow its stated plan of action”.

The statement noted that the Procurement Act provides that any contract beyond the sum of $15 million must go through NPTAB which then directs  it to Cabinet for review and approval. The statement added that Johnson wrote NPTAB seeking approval for the contracts after GPHC had begun to receive pharmaceuticals from the four suppliers.

“None of the information received by the Board revealed that the Honourable Minister ever gave instructions to GPHC officials to bypass any procurement procedures or laws.

“The Board was shocked and disappointed to learn that GPHC had breached the law. New GPC supplied $20,888,610, Health2000 supplied $2,923,920, and Chirosyn Discovery supplied $2,138,925 worth of pharmaceuticals under the same flawed procurement process”, the statement said. The statement did not mention ANSA McAl at all.

The statement added that the Board believes that the senior staff of the Finance Department had an “ethical and professional duty to properly advise Mr. Johnson since this matter was within their realm of expertise. Mr. Johnson had been known to trust and depend on his officers to do the right thing and it is regrettable that they failed him in this instance. However, ultimately the power was within Mr. Johnson’s judgement and signature, and he acted recklessly. It is also unacceptable that when the Board was installed and held its first meeting on 22nd February, 2017, Mr. Johnson failed to disclose this serious matter to the newly-installed members”.

The statement said that the Board, Management and staff of GPHC have been fully co-operating with the PPC in their ongoing investigation.

“We wish to defer to the report of the PPC in relation to this matter since that body has the remit and required expertise to conduct a thorough investigation.  Further, the PPC has wider jurisdiction to interview all parties involved”, the GPHC statement said.

 

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