THE PARLIAMENTARY Public Accounts Committee yesterday heard that the Ministry of Health has so far accrued K2.4 billion COVID-19 related debt.
And Ministry of Health permanent secretary in charge of technical services Dr Kennedy Malama had a tough time providing satisfactory answers to various queries regarding the irregular awarding of supply contracts, telling the committee that one of the officers who was responsible for that had since been demoted and transferred to another ministry.
Meanwhile, PAC also learnt how one of the suppliers delivered KN95 masks rather than N95 masks which were stipulated in the contract, resulting in a loss of millions of Kwacha which has not yet been recovered.
Speaking when he appeared before the Public Accounts Committee to answer queries on the utilisation of COVID-19 resources, Monday, Dr Malama said the ministry had accrued K2.4 billion debt since the COVID-19 pandemic began.
Dr Malama was responding to a question from Kantanshi Independent member of parliament Anthony Mumba who wanted to know how much debt had been accrued and what the ministry would do about those suppliers who connived to unfairly win tenders.
“The debt under COVID currently it is about K 2.4 billion. For us as an emergency is to ensure that the COVID-19 multi sectoral contingency plan is approved because chair, it’s clear that these procurements that have been done they were very necessary because we had the COVID-19 and no one knew where the situation was going even today where we are,” Dr Malama said.
“The issue of all those vendors who were found to have connived and submitted documents which were not sitting well, number one of course is what we reported that they have been reported to ZPPA and administratively, we will be engaging the necessary government institutions to see how we can be on firm ground to ensure that we get the exactly legal guidance as we move forward. One of the measures which the ministry has taken administratively is to see that all contracts, including those which are signed, are reviewed. There are some which may have lapsed by virtue of time, there are some which may have fallen off because they never adhered to what was provided for in the contract. So that is being concluded and some decisions will be made in line with what is being presented. It is important chair to reemphasise that some of the contracts entered into are by a number of people who may not have met what they had committed to deliver and when you are fighting a situation like COVID-19 you need to ensure that commodities are coming as expected.”
When asked the ministry planned to offset that debt, Dr Malama said there was currently an evaluation process going on to ascertain which suppliers honoured their contracts so that some of them could be cancelled if need be.
“The team has been sitting to review all the contracts under the COVID-19 and this exercise is almost complete. So it is looking at each and every contract in its individual capacity, is it still standing, and it is clear some of them have lapsed, there are some which partial deliveries were made, others full deliveries but it’s is as government who have not paid them, so chair, just to agree with your committee that that action is almost being concluded and it will be be taken case by case and appropriate action will be taken,” Dr Malama said.
When asked by Chavuma member of parliament Victor Lumayi how the ministry engaged a vendor from rural Chipata to supply items worth K11,000,218 despite lacking capacity to deliver, Dr Malama said he needed to check how it happened.
“The question on the vendor from Chipata this is very particular question on this particular vendor I may not have the information on how this vendor came but suffice to say that when the need for all these commodities came up people were being given enquiries and they were bringing in their bids at various points. Unless we go back to check how exactly this particular vendor received this particular contract,” he replied.
But Chinsali member of parliament Kalalwe Mukosa wondered how the Chipata vendor from won the tender if there was an emergency; jumping all the suppliers in Lusaka to go to Chipata.
In response, Dr Malama said he did not have the details and the officer who had coordinated the tenders had since been demoted and moved to another ministry.
“On this particular vendor I would have loved my head of procurement to come and substantiate. To say the truth I don’t have the details to inform the committee on how this particular vendor all the way from Chipata came to know about the opportunities and we gave him this particular contract,” he replied.
“The officer who was coordinating the evaluation for all this is one of those who have been demoted and being transferred out of the ministry. Unless we had to go to this particular MPC paper and check the other officers who might have taken part in the submission.”
When Mukosa further asked how a company which was formed within 72 days won a contract worth K48 million without subjecting it to a competitive procurement process, Dr Malama said he needed to refer back to the documents on how that decision was made.
“Again, in the procurement process the criteria is clear when awarding this contract you need to look at the capacity of this contractors whether they have the capacity to fulfil what they are committing to supply and chair as your rightly pointed out there is need for advance payment which is supposed to be paid but of course there has to be bones to protect government from that. But obviously as you do that, the capacity is very important with that particular supplier which also looks at experience. So ultimately as the decision is being made the evaluation committee should have gone all through this. So for someone to pass the commercial part it means they are fairing good standing. So it is an issue of looking at this particular vendor. If everything was water tight as expected,” Dr Malama said.
When asked what would be done to the erring officers involved, Dr Malama said appropriate action was being undertaken.
Meanwhile, PAC learnt that MoH accepted and consumed KN95 face masks instead of the N95 face masks which one of the suppliers was supposed to deliver.
“On the delivery of KN95 face masks instead of the N95 face masks. In your submission PS you indicated that you will follow up on the price variations and demand recoveries. Now why have not followed up over 6 months after delivery. Who made the decision to accept products that were not an agreed brand? How do you intend to proceed with recoveries when you have already accepted and consumed the products because in so many of these responses you have stated that you will pursue recoveries but you have already consumed and you accepted?” one of the PAC members asked Dr Malama and PAC chairperson Howard Kunda added; “On the same PS. We are aware that on the market, the N95 is costing K45 the KN95 is costing K15 but the quotation was for the N95. Looking at the differences and how much government has lost, its in millions. It is colossal sums of money that government has lost how do you reconcile these issues in terms of you now saying that you would want to go and recover. Isn’t this fraud? Isn’t this something that would have reported to the law enforcement agencies?”
In response, Dr Malama said the ministry erred by allowing such an anomaly to remain unresolved for six months.
“Indeed, KN95 was accepted instead of N95 as we alluded to and it has taken long to follow up this matter. Chair, these were administrative issues within the ministry and we can only promise that we will take up this to see how it can be concluded. Definitely we didn’t do a good job because to let it for six months without taking action that is why in our submission chair we agreed that we should have gone for the substitution by going back to the ministerial committee, we didn’t do that. And that is failure and weakness on our part. Chair, these are some of the issues in our submission we referred to that definitely it will not end on the submission to the committee there are some follow up actions that need to be taken. And chair, these are some of the disciplinary issues I mentioned. We regret the lapses,” he said.
At the end of the sitting, PAC chairperson Howard Kunda recommended a forensic audit, to which Auditor General Dick Sichembe said his office would begin planning in that direction.