Rahael blames poor management for RHA $$ woes

While the Health Ministry was willing to accept responsibility for not monitoring the North West Regional Health Authority (NWRHA) more closely, Health Minister John Rahael yesterday said poor management and failure to follow proper procedures, caused the NWRHA’s debts, including the much publicised millions owed to the Board of Inland Revenue (BIR). “All previous boards did not take a strong position and a handle on this situation,” he said. Addressing a media briefing at the Ministry on the state of the NWRHA with specific focus on the monies not remitted to the BIR from workers’ salaries, Rahael made it clear that corruption was not involved. “No one benefitted personally from this situation for the past two years. Based on the information and figures showing where the money was spent, it was spent in the health institutions and spent so they could continue to provide the services they are to provide.”

Permanent Secretary in the Ministry, Reynold Cooper, maintained the Ministry was unaware taxes deducted were not being paid. He disclosed that from funds provided by the Ministry last October, $33 million was used for taxes. Rahael said no worker was harmed by the NWRHA’s failure to carry out proper procedure. He said all National Insurance payments had been made, so anyone who had to make claims should not have problems. Rahael said the NWHRA would not have found itself in its current predicament if they had followed “correct procedure.” He referred specifically to the NWRHA’s tardiness in making claims for reimbursement from the Ministry. “They have not submitted a claim for approximately $21 million they had paid in salaries and wages over the past year or two. Now they are in the process of providing full information to the Ministry of Health so we in turn can reimburse them.”

Cooper said the NWRHA sought to “beat the system” when it hired people without informing the Ministry. He said the RHA expected to get a refund from the Ministry after suppressing PAYE payments. Rahael said the NWRHA was also late in seeking reimbursement for payments made to the workers’ pension fund, the Cardiac assistance programme, and 15 percent salary increase, which the NWRHA began implementing earlier this year. He said suppliers have informed the Ministry that money was owed to them for the past five and six years. “We are telling them to provide all the documents to North West for verification.” Rahael said the last audited statement for the NWRHA was in 1998. Last year, the accounting firm Aegis Business Solutions Ltd was hired to do an audit for the years 1999-2001 and prepare monthly financial statements. The deadline to complete this exercise is December 31. He said the company has written to banks to get statements which were missing. Rahael said the NWRHA has indicated that from 2002 a system was in place for submitting monthly financial statements.

Last October, the NWRHA presented a list of liabilities to the ministry totalling $89 million. Rahael said “quite a number of items” were not listed as outstanding liabilities. “I don’t think even today they are aware of their total liabilities, because no proper accounting system was in place.” Rahael said Ernst and Young were hired last week to do a financial audit for 2003 to the present and provide recommendations to strengthen financial systems in the NWHRA. Asked if the ministry received monthly financial reports as required under the RHA Act, the Permanent Secretary said the NWRHA had been submitting monthly statements. However, he said they showed high “payables” and the ministry asked for information on money owed in excess of three months. While utility bills and other areas were presented, he said the NWRHA eventually wrote asking for $103 million. Cooper said the monthly statements only show what is owed to suppliers, not taxes.