Papua New Guinea health department accused of ‘irregular’ procurement

Gurjit Degun
1 May 2014

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1 May 2014 | Gurjit Degun

The National Department of Health (NDoH) in Papua New Guinea has been accused of using irregular procurement procedures and mismanaging cash advances.

An inspection by the Global Fund’s Office of the Inspector General found the department failed to comply with government procedures and Global Fund grant agreement requirements, resulting in $1.35 million (£804,991) of “non-compliant expenditure”.

“The investigation revealed between 2007 and 2009 staff at the NDoH chose higher bidders over more competitive bidders and acquired pharmaceuticals and health products from a single source,” the report said. “Single source procurement is considered uncompetitive as it leads to higher prices. As a result, there were unnecessary extra costs of $468,340 (£278,717).”

This practice goes against the Papua New Guinea government’s procurement procedures. The Global Fund’s grant agreement requirements note that funds should be “managed carefully and that a reasonable price is paid for goods and services”.

The report also found the NDoH mismanaged cash advances of $884,356 (£525,941) in 2009 and 2010. “Staff with outstanding non-reimbursed cash advances were given further funds,” it said. The report added that some of the money was also used to pay for accommodation and training at hotels and other venues, which goes against government policy.

The financing organisation said: “The Global Fund is seeking to recover the misspent funds as soon as possible. It has also suspended all local procurement and disbursement to the Department of Health except for life-saving and other critical activities.”

The NDoH has not responded to SM's request for comment.

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