The NEW GPC INC has perused the “Report of the Auditor General” for 2012. Because of the repeated media circuses that have been created in some previous reports in terms of the pharmaceuticals the corporation provides to the Georgetown Public Hospital Corporation (GPHC) and the Ministry of Health (MoH), the NEW GPC would like to clarify a number of completely erroneous statements contained in the report, especially as it relates to lack of documentation or deliveries.
We believe that this is due to sloppy fieldwork by junior officials in the Office of the Auditor General.
The chairman of NEW GPC is particularly disappointed that these statements, which once again tend to paint the corporation in a negative light, have been repeated after similar previous assertions were corrected to the satisfaction of the Office of the Auditor General.
In the course of providing information to a team from the Office of the Auditor General, the NEW GPC chairman had pointed out that if audit checks at the MoH and GPHC found gaps in the latter’s documentation as it relates to transactions with the NEW GPC, the auditors could contact NEW GPC officials to fill the lacuna, as we have done in the past.
Sadly, this was not done, and the corporation is willing to provide the missing documentation once again.
The NEW GPC would like to state that the auditor general’s report, as it concerns the corporation, appears to have been compiled on the basis of simplistic interactions with junior and non-technical personnel within the MoH and GPHC administrations and does not take full cognisance of the nature of the supply chain process for pharmaceuticals and related products and the environment in which we operate.
The NEW GPC is also concerned that there is still the lingering suggestion that the company has somehow not delivered items ordered several years back, when documentation was provided directly to the Office of the Auditor General to clarify this matter.
The following points appear to have escaped the auditors from the Office of the Auditor General: (1) Contracts, particularly the larger orders, sometimes overlap from a consumption point of view into the following financial year and, hence, it is not unusual that some items are not collected by the MoH at the end of the fiscal year.
(2) National budgets are approved sometime between March and July and hence the quantities being ordered sometimes cater for this overlap.
(3) The MoH takes in or receives goods based on their own predetermined consumption pattern and that means deliveries are staggered throughout the year.
(4) Staggering or phased delivery is also important and specifically sought when items carry short shelf life. So, for example, if an item has less than a year’s shelf life, such as diagnostic test kits, it is counterproductive to deliver all of it in one batch unless it can be utilised within that limited timeframe.
(5) Contracts are signed at different times during the year, and so for those signed in the later months, deliveries are actually intended to roll over into the following year.
(6) Bank guarantees are not meant to be valid for the original sum throughout the life of the contract. As deliveries are made, the risk is obviously decreasing and hence a bank guarantee can be, and is, often renewed for a lesser amount.
And with the added emphasis on bank guarantees these days, the NEW GPC sometimes has to provide bank guarantees for stocks that were already delivered or are on hand and cannot be taken in due to space and other limitations at the MoH. The NEW GPC has never defaulted on any of its contracts to the MoH and GPHC.
(7) As a large supplier, there is always some amount of inventory on hand that is pending receipt by MoH personnel.
The media often misinterprets and sometimes deliberately misrepresents the auditor general’s statements and the NEW GPC gets condemnation while the stocks are sitting in the warehouse.
(8) The auditor general seems unaware that the MoH has written to the NEW GPC in the past to cease or delay deliveries on account of their Diamond warehouse transition.
On that score, the NEW GPC is still currently storing a very large volume of items for the MoH and GPHC which have been recorded as delivered based on the previous regime where the NEW GPC stored pharmaceuticals for them. These should have been removed, and several requests have been made, since the MoH constructed its new warehouse at Diamond.
Despite what was claimed by some, the NEW GPC never received rental for this service.
With this in mind, it is again calling on the MoH and GPHC to remove its goods from the corporation’s warehouses as soon as possible.
There are many instances when the NEW GPC gets paid long after delivery. Curiously, the auditor general’s reports never seems to mention this aspect. There have also been many cases whereby signed contracts are truncated due to lack of funds and the corporation is left holding the stocks.
The NEW GPC would like to reiterate that, if the Office of the Auditor General has concerns now or in the future, the corporation stands ready to provide whatever documentation or explanation is needed to bring clarity to the matter.
And it would appreciate if such clarification could be sought before the annual reports are produced. This is important from the corporation’s perspective given that the media’s concerns are primarily with the NEW GPC contracts.
