A National Audit Office report suggests the Central Procurement and Supplies Unit is failing to keep a handle on money owed to it for medicines and medical supplies by entities falling outside of the Health Ministry – including over €16 million owed by Steward Healthcare as of last December.
The matter was flagged by the National Audit Office in a report published this week, which followed up on a number of audits it had carried in previous years. One of the entities covered is the CPSU, which handles the procurement of medicines and medical supplies within the Health Ministry.
Though the CPSU did register significant progress in a number of areas – not least when it came to security controls and stock taking – its operations still left a lot to be desired, the NAO concluded.
Arrears balloon from €2.4m to €24 million
The NAO’s original audit of the CPSU took place in 2016, and back then it found that the St Vincent de Paul Residence – which stopped being the ministry’s responsibility a year earlier – owed the unit just over €2.4 million.
The entities concerned, the office had found, were not being allocated a budget to manage and assume responsibility for, leaving the CPSU to bear the brunt of any variations in demand for supplies.
The situation remained unaddressed as of December 2019, however, with the outstanding payments owed to CPSU increasing tenfold.
The Ageing and Community Care Department, which is responsible for homes for the elderly – ended up owing €7.43 million, while Steward Healthcare – who operate three public hospitals through a controversial concession – were yet to pay for €16.6 million in medicines and supplies.
No progress on accountability
Invoices sampled during the NAO’s audit had revealed various discrepancies between the quantities recorded on the computer system and in bin cards, among other accounting errors.
On this occasion, however, the office noted that its recommendations were not implemented at all, flagging similar accountability issues in its review.
No unique identification number was included in the confirmation of orders, with the receiving section not always in a position to pair the goods received note with a specific order. And while separate files were maintained for each stock item, the relevant documentation was not always filed.
The NAO also flagged the procurement process of a “particular item” which it left unnamed, noting that this item was being orders by various sites and locations directly from the supplier, under the same contract, without the CPSU’s knowledge.
Wide security gaps fully addressed
Security controls were found to be broadly inadequate in 2016.
Though access to medications classified as dangerous drugs – which could thus have a considerable street value – was subject to strict access controls, staff had free rein throughout the remaining area of the CPSU’s main stores in the San Ġwann industrial estate. Additionally, even outsiders could access the receiving and dispatch areas through front and back entries, while CCTV coverage was inadequate.
This is no longer the case, with access controls now being installed throughout, while CCTV now covers all areas. The CPSU has also set up four teams of security personnel assigned to different areas within the stores, though the unit itself claimed that more staff were required.
Amount of expired medication unknown
In its original report, the NAO had found €861,860 in expired medication – some of which expired for over five years – that had not been marked as such.
The stock control system has since been upgraded, allowing expired stock to be removed from stock lists through an inbuilt routine. The necessary approvals to write off the stock are then obtained.
The NAO thus registered an improvement, since no expired stock is to be found in the CPSU’s latest stock lists: records on expired medicine are held separately.
However, the CPSU did not provide any records on expired stock or on write-off approvals, leaving the NAO unable to assess the situation in full. The unit, however, said that it was working on compiling records when the pandemic struck, forcing it to redirect its limited resources elsewhere.