Tax $$ used to hire staff

The Health Ministry has read the riot act to the management of the North West Regional Health Authority (NWRHA) after the accumulation of another large debt — $107 million — this time because the Authority had not been remitting PAYE (Pay As You Earn) and Health Surcharge to the Board of Inland Revenue (BIR), although the deductions were made in workers’ salaries. The action was described by one Ministry official as “illegal.” At a media briefing to launch the teen pregnancy awareness campaign, “It Can’t Happen To Me” at the Ministry yesterday, Health Minister John Rahael said if the Ministry was not satisfied with the explanation given for the debt then it “will take whatever other action is necessary.” He said the Ministry was not prepared to write a cheque until the NWRHA provided a report on how it accumulated the debt. The Ministry expects the report tomorrow, but no later than Monday.

“You cannot deduct from people’s salary and not remit it where it is supposed to go. That is something that is not done and the people who have done that will be held responsible.” Permanent Secretary in the Ministry with responsibility for the Regional Health Authorities, Reynold Cooper, said last year the Ministry provided $89 million to the NWRHA to clear debts dating back to 2000. The debt included utility bills and taxes to the BIR. Rahael said earlier this week the NWRHA sent a letter to the Ministry, which indicated it had found itself in a similar position. He said preliminary information has indicated the NWRHA has taken on additional staff without notifying the Ministry.

“Instead of applying to the Ministry of Health for the funding for those staff to ensure the funding was increased before they employed those persons, they suppressed the (tax) payments and used part of that money to pay employees.” He said the situation reminded him of Caroni (1975) Ltd, which accumulated $2 billion in debts from 1994-2003 “from the same stupidness.” Rahael said the South West Authority also hired additional staff, including 55 nurses, but unlike the NWRHA, it notified the Ministry through the Permanent Secretary about the funding required. He said the Finance Ministry was subsequently approached for the financing. “Unfortunately, the NWRHA did not see it fit to do the same so it is a question of management.” Rahael said the Ministry would await the report before deciding on what disciplinary action will be taken.