Audit uncovers financial irregularities in building a department in IGMH

An audit conducted on Indhira Gandhi Memorial Hospital (IGMH) – the main government hospital - has uncovered irregularities in spending on building and procuring equipment for the respiratory department of the hospital.

The 2018 audit report of IGMH released by the Auditor General’s Office shows the project was awarded to Sifainge Welfare Company (SIWEC) and carried out in contravention of the quotation.

Auditors found that the quotation approved by Finance Ministry was replaced with a new quotation which included additional work and increased the value of the project by MVR 1.2 million.

The audit reports states that IGMH therefore spent an additional MVR 1.2 million without approval from Finance Ministry to construct and procure equipment for its respiratory department.

Auditors also found the contract between IGMH and SIWEC for the project does not declare details of equipment, machinery and furniture, and they were unable to verify whether the equipment, machinery and furniture IGMH received under the contract meet the standards required for the commission of the hospital’s services.

MVR 25.3 million was spent on procuring the equipment, machinery and furniture for the respiratory department. Auditors found that equipment needed to operate some of the items have yet to be procured, leading to them remaining unused.

Auditors also found the project to procure the medical equipment was awarded to SIWEC in violation of regulations.

The report highlights that Public Finance Regulation mandates that pricey products such as equipment and machinery must be procured from designated importers and distributors of such products, but IGMH failed to abide by the provision.

Auditors found that while SIWEC was contracted to procure medical equipment and machinery for IGMH’s respiratory department, the company has neither experience in import of such products nor issues warranties or guarantees for such products.

SIWEC had outsourced the procurement of the equipment to the NU Hospital of India, and the audit report notes that given the NU Hospital runs the urology department of IGMH, the hospital would have saved MVR 2.6 million if they had directly contracted NU Hospital to procure the equipment instead of going through SIWEC.

The audit report also states that while IGMH paid SIWEC MVR 38 million to construct and procure equipment for the respiratory department, IGMH failed to submit papers confirming the receipt of equipment worth MVR 2.3 million, leaving auditors unable to verify whether the hospital received the equipment in question.

Auditors also found that the payment for MVR 1.3 million worth of equipment was made without checking whether the agreed number of equipment was received or whether they were functional – which too is a violation of Public Finance Regulation.