Funds for procurement at Covid hospitals misappropriated

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Prothom Alo illustration

Authorities of some public hospitals dedicated for Covid-19 treatment in Dhaka have misappropriated taxpayers’ money while purchasing medical equipment and medicines as well as preparing bills for food and accommodation of medical staff during Covid management in 2020.

In fiscal 2019-20, Covid hospitals spent Tk 3.2 billion (Tk 320 crore) in total from the allocated Tk 4.17 billion (Tk 417 crore).

Due to the misappropriation, the government lost around Tk 300 million (Tk 30 crore), Office of the Controller General of Accounts (CGA) summed up the financial losses after conducting a compliance audit on 15 Covid-dedicated hospitals during September-October last year.

The audit report was submitted to the president's office two months ago.

The CGA’s audit held eight prominent hospitals: Dhaka Medical College Hospital, Kuwait Bangladesh Friendship Hospital, Kurmitola General Hospital, Mugda Medical College Hospital, Shaheed Suhrawardy Medical College Hospital, Dhaka Dental College Hospital, and Sir Salimullah Medical College (Mitford Hospital), responsible for misappropriating public funds in favour of vested interest groups.

Talking about the issue, Bangladesh Medical Association (BMA) secretary general Md. Ehteshamul Huq Choudhury told Prothom Alo, “Some unscrupulous people still carry out corruption even in the pandemic as there is no practice of accountability. The authorities are only brushing aside the matter saying ‘investigations are underway’, but I have not yet seen punishment of any corrupt people.”

The health ministry allocated Tk 90 million (Tk nine crore) to Kuwait Bangladesh Friendship Hospital (KBFH) to manage quarantine-time accommodation for medical staff.

From the amount, Tk 22.7 million (Tk 2.27 crore) was paid to Regent Discovery Tours and Travels, instead of Hotel Milina, for accommodation and food services. The establishment is owned by Md Shahed, now behind the bars in several corruption cases including the Regent Hospital controversy. Regent Discovery Tours and Travels neither operated a hotel, nor was enlisted as KBFH’s quarantine-time accommodation facility.

CGA audit says Md Shahed extorted the money through false billing. He did not even submit a photocopy of the cheque he received from the treasury.

Sarwar ul Alam was the director of KBFH at the time. He refused to reply to Prothom Alo’s inquiries while in-charge of KBFH. Shihab Uddin said the health service directorate dealt with Md Shahed.

The CGA audit team did not find medical equipment – X-Ray films and injections worth Tk 24 million (Tk 2.40 crore) and dengue NSI devices worth Tk 2.2 million (Tk 22 lakh) – meant to be stored at Mugda Medical College and Hospital’s (MMCH) possession. Authorities of the hospital failed to explain the reason. A private venture Lexicon Merchandise supplied the equipment to the MMCH.

MMCH principal Professor Ahmedul Kabir did not respond to requests for comment.

The CGA audit team found that Lexicon Merchandise got work orders to supply medical equipment worth Tk 21.1 million (Tk 2.11 crore) without prior agreement.

Kurmitola General Hospital (KGH) paid Meditech Imaging Limited Tk 33.2 million (Tk 3.32 crore) against a supply order for 5,277 pieces of dengue testing devices, despite receiving supply of only 100 devices. The work order was issued on 30 May 2020.

KGH director Brigadier General Jamilur Reza told Prothom Alo that Meditech was paid in advance so that the allocated money did not go back to the treasury. “The ordered products would have expired within six months if supplied earlier. KGH received the supply later when it was needed. An advance cheque with security money was taken from Meditech before the bill payment,” he gave an explanation.

A senior officer at CGA, however, said there is no scope for advance payment before receiving the services. Advance payment is usually made to facilitate corruption, he opined.

Kuwait Bangladesh Friendship Hospital (KBFH) paid Clear Edge Technologies Tk 1.1 million (Tk 11 lakh) against an order for medicines and injections, despite receiving none of the products.

On 13 April last year, KBFH made a deal with Hotel Blue Bird to get food and accommodation services for 30 staff at Tk 4,000 per head daily. Later the deal was revised according to a downgraded charge Tk 3,000 for each person. However, KBFH paid the hotel as per the initial deal, and for 60 persons instead of 30, causing Tk 8 million (Tk 80 lakh) extra expenses from the treasury. CGA found mismatching signature of Hotel Blue Bird chairman on the two agreements.

Apart from this case, Dhaka Medical College and Hospital (DMCH) paid Tk 1.3 million (Tk 13 lakh) extra to Hotel New York and Hotel Osmani, and Mugda General Hospital paid Asia Hotel and Resorts Tk 1.6 million (Tk 16 lakh) extra for food and accommodation services.

According to instructions by the health ministry as well as the public procurement rules (PPR), payment against a product purchase should not exceed the maximum retail price (MRP). However, CGA audit team found at least eight hospitals violated the rules while procuring Covid-19 medical equipment, causing Tk 75 million (Tk 7.50 crore) financial loss for the government.

KBFH was compelled to procure products at higher price as the suppliers delayed services because of Covid-19 restrictions, the hospital authorities made an excuse to the CGA team, while DMCH and MGH did not respond immediately.

Officials of KGH and SSMCH told CGA team that they procured products as per the PPR.

According to the CGA audit report, SM Trading signed a contract to supply surgical gloves at Tk 5.99 per pair. However, DMCH, following direct procurement method, purchased these gloves at Tk 18.60 and Tk 18 per pair from Basitu Medical Technology and JMI Marketing respectively. With the purchase, the government had lost Tk 4.3 million (Tk 43 lakh).

Besides, Hamida Enterprise supplied 340gm-surgical gauze sheet, instead of 500gm sheet to Dhaka Dental College and Hospital, causing Tk 1.8 million (Tk 18 lakh) financial loss for the government.

While commenting on the overall situation, former controller general of accounts Ahmed Ataul Hakim told Prothom Alo, “Corruption has turned into a pandemic like coronavirus. The concerned House committee now can evaluate the CGA audit report. Actually, the concerned minister and secretary can take action. We, the common people, can only wait for a remedy."

* This report appeared in the print and online editions of Prothom Alo, has been rewritten in English by Sadiqur Rahman.