Corruption costs EC health R45m

Corruption costs EC health R45m
Advocacy groups urge prosecutions, adherence to rules
Mar 7, 2011 9:27 PM | By Brian Hayward and SAPA

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Watchdog groups have cautiously welcomed the Eastern Cape health department's handing over to police a forensic report detailing fraud and corruption to the tune of at least R45-million by officials and service providers.

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SICK HOSPITALS: Eastern Cape health MEC Phumulo Masualle addresses the media in Bhisho in the Eastern Cape yesterday about the 181 baby deaths in the neonatal unit of Mthatha's Nelson Mandela Academic hospital. Nurses say they are on the verge of quitting
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Department spokesman Sizwe Kupelo yesterday said a forensic investigation by PricewaterhouseCoopers had revealed that the fraud and corruption was related to contracts and tenders, implicating as many as 35 companies.

The investigation started last year and covered activities spanning the last three financial years.

"The investigation revealed that there was fraud and corruption totalling R13-million for an air ambulance contract. We also have an amount of R18-million related to tender procurement, where at least eight officials would allegedly award tenders to their own companies," he said.

An amount of R14-million meant for the maintenance of medical facilities and new building activities was also "lost".

"All cases have been referred to the police and the officials involved have either been suspended or have resigned," said Kupelo.

Eastern Cape Health MEC Sicelo Gqobana had also ordered an investigation of the Port Elizabeth medical depot responsible for the distribution of drugs to the province's health facilities.

"Courier companies contracted to distribute medication were responsible . as they would collect deliveries or orders from the depot and keep the orders in their own depots," Kupelo said.

Derek Luyt, media and advocacy head of the Rhodes University Public Service Accountability Monitor, welcomed the move, but called for the police investigation to be "speedily concluded" and for the prosecution of officials involved in fraud and corruption - "including those who have already resigned".

"In too many cases officials escape further investigation and prosecution by resigning. I believe that nothing sets a better example for corrupt officials than a successful prosecution," he said.

"The provincial treasury has a comprehensive set of policies, regulations and practice notes . If they are adhered to, there should be a significant reduction in the space in which corrupt officials can operate," said Luyt.

Health researcher Daygan Eagar, of advocacy group Section27, said there had been a "shift in the way [the department] is dealing with instances of fraud and corruption".

"Little over two years ago we would have heard virtually nothing about what was happening with these cases and those involved would have got off lightly, if the cases were pursued at all," he said.

Eagar cautioned: "If the department's financial management system was functioning properly and in accordance with the Public Finance Management Act there would be far fewer instances of fraud and corruption and when they do occur they would be resolved long before the department suffered significant financial loss."