N.H.S. staff colluding with suppliers: Auditor

A comprehensive Audit conducted at the National Health Services warehouse and pharmacy uncovered those suppliers that were alleged to be colluding with N.H.S. staff. 

This is according to the Audit report released by Controller and Auditor General, Fuimaono Afele Taimalelagi, for the fiscal year 2018-2019. 

“The Tenders Board decision to award the contracts to suppliers that were alleged to be colluding with N.H.S. staff was well informed by the due diligent work carried out by the Committee. The alleged collusion is part of a separate audit work carried out by the Audit Office.” 

Furthermore the Audit found that performance securities as required under the framework contract arrangements were not honoured in time.

“One of the reasons given by the N.H.S. was due to long outstanding invoices that were owed to these same suppliers. With the merge in place, these debts will now be addressed by the Ministry of Health. 

“Below is a list of issues that were noted in our report specifically with the operations of the Warehouse. Some of these issues have been addressed, others are still in progress and will be taken up by the Ministry of Health. Issues include: 

i. There is no overarching manual to explain and set forth not only the strategic significance of the Warehouse but also the procedures for the normal day to day management of its operations; ii. Proper surveillance cameras have now been installed; iii. Shortage of staff at warehouse due to unfilled positions as per Organisational Chart; and iv. Imprest forms for medicines were not completed properly.” 

Also noted by the Auditors was that the computer system currently used by the NHS requires attention to ensure it serves the purpose it was suppose to in terms of managing stock and assist with dispensary at the Pharmacy. 

“The following are some issues for management to consider and address going forward: The system only records 3 from the possible 20 locations that Warehouse stock is stored at any one time; - Stock Cards reconciling the LOTs system was not updated regularly: - Stock values recorded by LOTs cannot be relied upon; - A full reconciliation of the stock was not possible Management has taken these issues on board and will be implementing these controls together with the procurement of the new Pharmacy system; - not using the rolling stock feature in the system to update and count stock for reconciliation on a regular basis.” 

 

Below is the excerpted part of the Audit Report printed verbatim. 

 5.6 National Health Services Warehouse & Pharmacy Comprehensive Audit August 2018 

1. Efforts by the National Health of Samoa to implement the Framework Contract approach to procurement of pharmaceutical products did not create any differentials in rates between what was agreed with the supplier and what was paid for by the Government of Samoa. 

2. The Tenders Board decision to award the contracts to suppliers that were alleged to be colluding with NHS staff was well informed by the due diligent work carried out by the Committee. The alleged collusion is part of a separate audit work carried out by the Audit Office. 

3. Audit was unable to find evidence that would suggest the supplier contracts that were signed under the Framework Contract arrangement was beyond the General Manager’s delegated authority. 

4. Audit found that performance securities as required under the framework contract arrangements were not honoured in time. One of the reasons given by the NHS was due to long outstanding invoices that were owed to these same suppliers. With the merge in place, these debts will now be addressed by the Ministry of Health. 

5. Below is a list of issues that were noted in our report specifically with the operations of the Warehouse. Some of these issues have been addressed, others are still in progress and will be taken up by the Ministry of Health. Issues include: 

i. There is no overarching manual to explain and set forth not only the strategic significance of the Warehouse but also the procedures for the normal day to day management of its operations; 

ii. Proper surveillance cameras have now been installed; 

iii. Shortage of staff at warehouse due to unfilled positions as per Organisational Chart; and 

iv. Imprest forms for medicines were not completed properly. 

 The LOTs computer system currently used by the NHS requires attention to ensure it serves the purpose it was suppose to in terms of managing stock and assist with dispensary at the Pharmacy. The following are some issues for management to consider and address going forward: - The system only records 3 from the possible 20 locations that Warehouse stock is stored at any one time; - Stock Cards reconciling the LOTs system was not updated regularly: - Stock values recorded by LOTs cannot be relied upon; - A full reconciliation of the stock was not possible Management has taken these issues on board and will be implementing these controls together with the procurement of the new Pharmacy system; - not using the rolling stock feature in the system to update and count stock for reconciliation on a regular basis; and reports from LOTS also reveal a number of inconsistencies and integrity issues. 

6. It was noted from audit review of the tasks and roles of the Pharmacy Manager that he does not explicitly report on the performance of the warehouse and pharmacy in terms of the Stock levels and any foreseeable issues with shortages or expired products. Rather the focus is on KPIs. Management responded that the resignation and the termination of staff due to theft charges has led to challenges that will be addressed in the near future. 

7. There are areas also noted in our audit in regard to IT that needs to be addressed, such as: 

i. ICT Security Policy; 

ii. IT Disaster Recovery Plan; 

iii. Computer virus breach; and 

iv. Some users have not logged into the system for more than 90 days. 

 

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