Something stinks in the Public Hospitals Authority (PHA), concludes a report by a forensic auditor.
While we have in recent weeks focused on poor leadership at the political and national level, it is also important to place the spotlight on the alleged waste of public funds.
Of course, leadership has a tangible connection to the functioning of government agencies, the expenditure of our tax dollars and the lack

of accountability on multiple levels.
We should all care about this.
We are being asked to stomach a bitter rise in the cost of living come January, when value-added tax (VAT) is introduced.
But we must also demand of our leaders greater focus on plugging financial leakages in public agencies.
We must demand accountability in the expenditure of public funds.
There must be consequences for corruption and slackness where they are proven.
The report of the forensic audit into the supply of pharmaceutical drugs and medical supplies which we revealed on today's front page, is actually dated March 31.
But Minister of Health Dr. Perry Gomez has not tabled it in Parliament.
We have not heard of any official being held accountable for what the auditor has concluded were serious breaches of procedures.
Thank the Lord for whistleblowers, whose role is especially crucial in an environment where there is no freedom of information law and public officials still foster a culture that says we do not have the right to know how our money is being spent.
Over the past 14 years, the PHA spent $1.8 billion, with $334 million going for pharmaceutical drugs and medical supplies.
The PHA spent $30 million in the years 2000 and 2001.
This amount increased to $65 million by 2011-2012, representing an increase of 44 percent.
During the recent period, the majority of operational cash outflows, other that staff costs, were cash expended by the PHA to a selected group of wholesalers for the purchase of pharmaceutical drugs and medical supplies, according to the audit.
The majority of funds spent came under the authorization of a rigid tendering process, but the PHA spent significant funds on emergency supplies, the audit said.
The rate of growth and expenditure for these supplies was greatest for Princess Margaret Hospital.
PMH's expenditure leveled between 2010 and 2012, and then sharply rose in 2013 and 2014, the audit shows.
The PHA's Managing Director is Herbert Brown. Its Chairman is Frank Smith.
Last night, Smith said he had no comment.
Not since the great debate on the state of our social security agency, the National Insurance Board, more than a year ago have we been so stunned by revelations on alleged mismanagement of public funds.
It is indeed alarming that $10 million in pharmaceutical supplies could go unaccounted for.
Someone should provide the public with answers in the wake of the findings of John Bain, the auditor.

Cartel
The report concludes that the PHA operates a "defective system of procurement" that allows for the "continued control of the market by a cartel of pharmaceutical suppliers and suppliers of medical and surgical supplies, using a theory called selective tendering".
"The process of selective tendering effectively excludes new entrants into the marketplace and introduces extreme risk of bid rigging, collusion, kickbacks and corruption," it says.
It adds that best practices and effective inventory management were not enforced for the inventory process that expended approximately $30 million per year.
The report also says the computer system that controls the process is inadequate, lacks proper design and its use is ineffective.
The auditor says "key personnel" were not trained to use the system, and so this allows "for possible fraud and corruption by employees and officers of the PHA".
The report reveals that some of the locations falling under the control of the PHA do not have any computers and use manual systems to record the receipt and distribution of pharmaceutical drugs instead.
Due to use of outdated technology and insecure operating systems, there are "challenging reconciliations, lack of sufficient audit trails, non-input of necessary data and storage of information on personal computers".
"These actions enable possible fraud, enable theft of PHA assets and encourage corruption."
The audit just seems more shocking the more of it that is read.
While the lack of accountability in administering public funds is certainly cause for alarm, the auditor's statement in relation to how doses are allegedly administered to patients in some cases is more disturbing.
The report said, "Although some controls exist at the procurements and storage levels for the securing of pharmaceutical drugs, little control continues through to the ward level for the distribution of pharmaceutical drugs and medical supplies.
"A substantial amount of those persons interviewed opined that drug and supplies shortages are intensified at the ward level, pointing to nurses who do not record dispensed drugs, disobey the directive of physicians and provide different doses to patients, and horde drugs and supplies.
"One interviewee described the ward level as a 'black hole' for pharmaceutical drugs. This increased the risks to patients, and wasted PHA's assets."
There is a "systemic culture of wastage and refusal to conform to the established procedures and policies that exist, without recrimination or consequences for their breach".

Responsibility
The auditor says, "While there is no direct evidence of complicity or fraudulent occurrences, the management of the PHA must accept responsibility for allowing controls to be circumvented, while not holding people responsible for their actions.
"This bred a culture of slackness and corruption. Incidents where key employees circumvented internal controls to give certain vendors a competitive advantage and to assist with their cash flows at the ultimate expense of the government of The Bahamas should not have been condoned.
"The tone at the top was allowed to contaminate an entire department, which was evident during our investigations.
"As a result, lower level staff members see nothing wrong with soliciting Christmas gifts and donations from companies doing business to the tune of millions of dollars with their employer.
"Were these gifts and donations a form of bribery to secure and maintain lucrative contracts with the authority? If they were bribery, how far up the management chain did the flow of funds go?"
The audit reveals that the group of vendors supplying the PHA with over 80 percent of its pharmaceutical drugs and medical supplies is concentrated among a selected group of closely-held family entities, including some well-known and influential families in Bahamian society.
"Because of the concentration, a risk of non-supply exists in a healthcare environment where the non-supply of a lifesaving drug is critical to life itself," the auditor said.
"Having a small, highly concentrated group of suppliers means that 80 percent of $334 million was transacted with these companies.
"While the PHA may have obtained some value for the funds expended, the risk of the vendor groups establishing a cartel to control the price and supply of necessary supplies exists at an unacceptable level."
The report adds, "Having a small concentrated group of vendors and the same persons managing PHA with a significant amount of never-ending funds to the tune of hundreds of millions for years lends a significant risk of bid rigging and corruption.
"By its sheer nature, bid-rigging fraud is very difficult to uncover without the cooperation of some of those who may be involved."
The auditor says that unless authorities, including law enforcement, conduct "lifestyle" investigations that will examine the cost of a lifestyle and trace it back to the person's annual earnings, undisclosed earnings may remain hidden.
"Vendors willingly pay and include the amounts paid in the price of their product, and see the entire exercise as a cost of doing business," the report said.
The auditors say it is common to find purchase orders, a financial instrument that indebted the PHA, issued to vendors, without the required authorization.
The auditors also said they found evidence that one company issued one purchase order number over 100 times.
We should all be chilled by this report.
There are multiple questions on our minds; chief among them is how this reported culture of slackness and alleged corruption was allowed to carry on.
We are not satisfied that the problems raised by the auditor are being addressed. This is because we have had no reporting from our officials on the findings, and no reporting on any action being taken to clean up the apparent mess.
What we have revealed are only portions of a very detailed audit.
There are other startling revelations contained in the 92-page report.
We hope what we have put into the public domain will at least start a national discussion on the operations of the PHA and spark demands that our officials be answerable for these alleged abuses.
Given the tidbits of information already leaked to us from at least one other government agency, not related to healthcare, we fear there may be even deeper troubles unreported when it comes to the expenditure of public money across the board.
Again, thank the Lord for whistleblowers.

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