The Auditor-General of Pakistan has detected financial irregularities of more than Rs 370 million in the Ministry of Health. According to the audit report on the accounts of Federal Government (Civil) Audit Year 2003-04, the government hospitals are charging 106 percent higher drug prices than those at which these are being supplied to hospitals.
The report says that the Drug Wing of Health Division did not maintain the cash book of government receipts and did not reconcile government receipts deposited by pharmaceutical firms through treasury challans in SBP/NBP throughout Pakistan in the shape of Drug Manufacture Licence Fee, Licence Renewal Fee, Site Verification and Layout Plan Fee, Repacking Fee, Drug Registering Fee and Advertisement Fee, causing a loss of Rs 81.71 million.
The government sustained a loss of Rs 5.55 million due to less deposit of 1 percent contribution towards Central Research Fund in case of 10 pharmaceutical firms.
According to Drug Rules, 1976, the drug licensee shall contribute 1 percent of his gross profit before deduction of income tax towards Central Research Fund to be maintained by the federal government and utilise it in accordance with Drug (Research) Rules, 1978.
Scrutiny of the profit and loss statements of 10 pharmaceutical firms revealed that the firms deposited a sum of Rs 5,550,802 less than actual payable amount while the profit and loss statements of other 296 firms were not produced to audit.
On the direction of Public Accounts Committee, Research and Development Section was established by Health Ministry to monitor and streamline the collection of CRF who declared 196 firms as defaulter but the management renewed drug licences without obtaining certificate from Research and Development Section regarding deposit of 1 percent of Rs 5.55 million.
It was noticed that as against the rates fixed by Health Ministry, the manufacturers/suppliers are supplying various medicines at much lower rates to government hospitals, such as PIMS and FGSH.
But the prices being charged to the consumers are higher up to 106 percent than those at which these are being supplied to the hospitals.
Some appointments were made by the management of National Institute of Health (NIH) on ad hoc basis without advertising the posts in the press and in violation of Employees Service Regulations, 1989. Expenditure of Rs 2.35 million incurred on this account was considered as irregular.
Irregular appointments of staff on daily basis was also reported which incurred irregular expenditure of Rs 0.59 million. The government faced another loss of Rs 5.45 million through local purchase of medicines instead of bulk purchase.
Despite non-provision for local purchase of medicines, hospital wing of NIH made local purchases of medicines worth Rs 5,452,656 out of total expenditure of Rs 5,594,000 during 2000-01 and 2001-02.
NIH management incurred expenditure of Rs 1.39 million out of welfare fund on construction of shops and shopping center, POL and repair of some vehicles and salary of daily wages staff and overtime.
The institute also charged 40 percent of laboratory test fee from entitled patients in violation of the provisions of Federal Services Medical Attendance Rules, 1990.
It was noted that Blood Bank Officer of Federal Government Service Hospital, Islamabad, conducted tests of Hepatitis-C (HCV), AIDS (HIV) and Hepatitis-B (HbsAg) and collected a sum of Rs 5,517,500 during January 2001 to June 2003 from entitled/non-entitled patients.
The amount was neither entered in the cash book as government receipt nor was deposited into government treasury.
In addition, the management unauthorizedly made informal agreement for provision of kits for conducting tests.
In FGSH, work orders of bills amounting to Rs 1,805,786 were found missing and the management could not take appropriate action against an official who indulged in tampering with official record which caused irregular expenditure.
The audit report highlights that the management of the hospital irregularly made an expenditure of Rs 9.93 million on repair of buildings beyond delegated powers.
The management of Federal Government Services Hospital also incurred a wasteful expenditure of Rs 8.75 million on the construction of a building for Burns Care Unit which could not be established with the assistance of French government because of poor quality of construction. The hospital also purchased drugs worth Rs 1.16 million in violation of rules.
Moreover, the management purchased X-rays films of different sizes during financial years 1999-2000 and 2001-02 non-transparently on expenditure of Rs 4.39 million.
The hospital purchased 10,840,000 tablets during 1999-00 to 2001-02 in violation of rules and uneconomical due to which total loss of Rs 1.08 million was caused to government exchequer.
During the audit, it was also revealed that 90 pieces of machinery and equipment costing Rs 26.54 million were lying unserviceable for the last many years which were neither got repaired nor auctioned as required under the rules.
The management of the Pakistan Institute of Medical Sciences (PIMS) caused a loss of Rs 1.35 million to the public exchequer due to local purchase of X-ray/CT-Scan films and surgical disposables from the local market at much higher rates than the approved tender rates.
According to the report, the management of Jinnah Postgraduate Medical Centre, Karachi made wasteful expenditure of Rs 104.42 million because of lack of proper planning.
Moreover, Jinnah Postgraduate Medical Centre, Karachi was provided medical equipment during February 1996 for Rs 45 million. Similar equipment was also provided to PIMS, Islamabad.
It was noted that the said equipment was not functional in JPMC since December 10, 1998 as the same is out of order. The equipment was also non-functional at PIMS.
The investment of public funds to the tune of Rs 90 million is thus going waste due to non-repair of equipment. The report also highlights the expenditure of Rs 3.72 million by JPMC incurred on the repair and maintenance of the residential buildings without delegation of any financial power.
In National Institute of Cardio-Vascular Diseases, Karachi, an amount of Rs 1.39 million was irregularly paid to the employees on account of various allowances in disregard of government rules.
Contrary to the rules, the management of National Institute of Cardio-Vascular Diseases, Karachi also irregularly paid medical allowances to doctors and other officers amounting to Rs 4.61 million.
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