Since mid-year, we've been reporting on the questionable circumstances surrounding the acquisition of two X-Ray units at the KHMH. The Board of Directors called in the Office of the Auditor General to perform a special audit. This was finalized in late October and tonight, 7News has obtained a copy of the 77page document. It's quite comprehensive and covers a number of irregularities - so tonight we will be covering just the first part of it - dealing with the X-Ray units. Jules Vasquez has been reviewing the audit:..
Jules Vasquez reporting
The special audit report covers the year from July 2013 to July 2014. 49 of the 77 pages deal with the acquisition of a Siemens Luminos RF Classic X Ray Machine. We got this picture from the internet - because - as the time of the audit - the one at KHMH is still in eight boxes.
And why is that? Well, the audit found that even though it was acquired in May - the boxes were simply unloaded into a room and left there.
In an internal audit in July of 2014, the auditor found that the units had been parked for ten weeks because there were no official documents from SP Group and no verification of the parts shipped are accurate…"
They were also shipped without proper documentation, without warranty, and without a list of specifications. So who is this SP Group? Well, it is an importer out of Orange Walk - known for selling furniture and other household items. But in this case the company came into harness as an agent for the foreign seller and financier for over half a million dollars.
The auditor had doubts about the interest rate charged and concluded that quote, "the KHMH did not properly negotiate the financing of the X-Ray machines…it appears that other options were never visited such as lower financing rate from a local banking institution"
More than that, the auditor found that the KHMH may have paid SP surplus financing charges. The auditor concludes "it would appear that the KHMH pad financing charges on the advance payments of $150,000."
This wasn't the deal and the auditor recommends that the hospital try and recover payments that were not due. But why this convoluted arrangement - where no contract was ever properly signed - and why didn't they just go to a bank?
CEO Gary Longsworth said it was negotiated by the Director of Finance Carlos Perera. And was it a loan? The DFS told the auditor it wasn't while the CEO said it was. If so it would have had to be approved by the Board of Directors and the Minister of Finance, but it wasn't.
Only some of the major irregularities with this half a million dollar purchase.
And tomorrow we'll continue to look at those irregularities - including the mystery Hong Kong based company that the KHMH sourced the X-Ray Units from as well as other supplies. We say mystery because the auditor says they couldn't contact the company and when we checked the Hong Kong Address on the internet it was the same as Astra Defence Limited, a Swiss company that sells weapons. More on that tomorrow.
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