The Compliance Audit Report from the Auditor General's (AG) Office has revealed that equipment for Addu Equatorial Hospital (AEH) was bought at much higher market rate prices and transactions took place in violation of the Public Finance Act, which resulted in losses in the millions.
According to AEH's 2022, 2023 and 2024 audit reports, the hospital failed to check market prices in their financial transactions and procured equipment and services at much higher prices.
Key issues highlighted in the audit report:
- Buying laboratory consumables at a higher price: A laboratory consumables item was bought for MVR 1,765,800 without checking market prices, which could have been at a market price of just MVR 34,000.
- Van procurement: The initial agreement to procure a new van was cancelled after the company awarded the contract failed to fulfil the agreement. The procurement was not subsequently announced and was instead awarded to another company at a price MVR583,000 higher than the initial bid.
- Rent payment for unused rooms: A total of MVR 165,000 was paid in rent even though the hospital did not make any use of three rooms they had leased.
- Expenditure without any work having started: MVR 827,860 was spent for the designs of the hospital's extension building and waste management center. However, the liquidated damages were not omitted even though the practical work for the projects had not started and the work had not been completed by the deadlines.
- Did not get permission from the Tender Board: Permission from the Tender Board was not acquired in the acquisition of four dialysis machines for the hospital on a rental basis and in giving air conditioning repair work.
- Seeking donations from suppliers: Donations were solicited from suppliers for training and other activities, while certain funds were established in violation of regulations and money was spent through those funds.
Additionally, the audit noted there were actions taken where certain parties received undue benefits. The report reads that in procuring the printer roll for the queue system, the hospital bought it from a previously used supplier at a much higher price in comparison to another.
AG office informed the hospital to abide by the Public Finance Act and to take corrective steps in strengthening the hospital's financial system so that such issues do not repeat themselves.
