Audit exposes alleged SKMTH rot
Innocent Selatlhwa | Monday December 6, 2021 06:00
The newly released report highlights concerns including amongst others lack of segregation of duties, irregularities in the selection of suppliers as well as conflicts of interest implicating management of the teaching hospital. Ditlhogo has since denied any wrongdoing as he claims to have parted ways with the hospital amicably.
“We noted a lack of segregation of duties within the procurement activity of the department. This is a violation of best practice as delineated in the SKMTH Procurement and Asset Disposal Policy. Currently, officers who make purchase requisitions are allowed to issue purchase orders and subsequently receive ordered stock physically on delivery. The SKMTH Procurement and Asset Disposal Policy provides in Section 76.1 and states that, “no one individual shall control consecutive stages of the procurement cycle and as such the authorities related to the purchasing process should be segregated between stages,” reads the audit report. This practice, the auditors believe creates opportunity for fraud, theft and mismanagement of inventory and funds.
“The audit also noted irregularities in the manner in which suppliers are selected for the purpose of providing quotations,” stated the report. In certain instances, some suppliers were selected directly, without adhering to the three quotations requirement, and without any objective justification provided thereto.
An example is a purchase order awarded to company (name withheld), dated January 15, 202. In his explanation Ditlhogo said the finding was noted and he had in fact, already discussed the matter at length with the procurement manager on strengthening the pharmacy procurement processes, which is work in progress.
In yet another instance, a purchase order was generated after delivery of goods by the supplier. The transaction involved a company (name withheld) delivery date being 22nd January 2021. The pharmacy department, in a memo to the Finance Department cited “urgency” as justification for its override of internal controls and procurement policy.
The audit also noted key instances of conflict of interest, where such conflicts have either not been declared or have been declared inadequately.
Pharmacy manager who was also acting CM, Ditlhogo is a shareholder/director of Fine Pharmaceuticals (Pty) Ltd. He joined the company in February 2021. Fine Pharmaceuticals engages in considerable business with SKMTH. In his position as Acting CM, Ditlhogo directly approved transactions/payments relating to the company in excess of P100, 000.
“In questioning Ditlhogo regarding his alleged conflicted position, he advised that he had notified the former Human Resources Manager, Mereenayotlhe Molonda, of his position. He further advised that he had also informed the former Board Chairman, Dr. Goabamang Tsie, of the matter. Ditlhogo stated that he had completed the SKMTH declaration of interest form, which had been filed with the HR Department. In response, Internal Audit highlighted that the declaration made was not sufficient and needed to meet the standard of the Corruption and Economic Crime Act,”
In considering the above, Internal audit is of the view that the Board had no knowledge of the extent of transactions being executed between Fine Pharmaceuticals and SKMTH, and therefore, the fullest disclosure has not been made by Ditlhogo. The Board had also not provided written permission for this business relationship to proceed. From June 2020 to August 2021, the company got P1,213,802.33 worth of tenders from the Hospital.
One Pharmacy technician, responsible for Pharmacy procurement was found to be a shareholder of two pharmacies. These interests were not allegedly declared to SKMTH since the time of joining the organisation through the University of Botswana platform, over a year and a half ago.
Since January 2021, only one inventory count was performed and the Pharmacy Department could not provide final reports thereof, referring Internal Audit rather to the Procurement Department. This implies that no value or learnings were drawn from the exercise as the reports were never finalised and reviewed to identify and investigate any inefficiencies and variances (potential loss/theft, damages) as well as identifying ways to improve, said the report.
The auditors' analysis of issued purchase orders relating to PPE revealed that certain companies seem to be preferred or favored over others in light of the disproportionately high frequency with which they are requested to provide quotations as well as the number of orders they receive for PPE supply, it was alleged.
Another company– a fully foreign owned received P1,019,646.00 between August 2020 and June 2021. Yet another citizen fully-owned company received P1,431,989.50 between July 2020 and June 2021.
Mmegi has also seen comments by management led by Ditlhogo on the issues. It is stated that Ditlhogo is the one who recommended the audit after a whistleblower had called to say they had identified a problem within the unit.
The management wrote that Ditlhogo had already discussed at length with the procurement manager on strengthening the pharmacy procurement processes and the work had already started.
On issues of conflict of interest, management stated that Ditlhogo had sought counsel from the then legal and corporate secretary (CLS) Tiny Ogotseng on whether to proceed prior to him attaining shares in Fine Pharmaceuticals. “The CLS advised that the SKMTH conditions of service did not forbid this considered investment but did not advise Ditlhong to declare the shareholding in writing and in the prescribed format,” Ditlhogo wrote.
Ditlhogo further stated that the then finance manager, Kutlwano Mswela provided him with the same information. He further stated that upon assuming position of CM, he disclosed his 10% non- executive director interest and shareholding in the company referred to. He would then disinvest from the company after interview with the Internal Auditor where he was advised that declaration itself was not enough.
He further stated that although Fine Pharmaceuticals had been put on the spotlight, similar trajectories or patterns in supply of medicines existed with other suppliers due to changing trajectory of the COVID-19 pandemic. He went on to list companies that had transacted just like Fine Pharmaceuticals.
Ditlhogo said he was not dismissed from work but rather his contract ended. “Please note that i had a two year fixed term contract with SKMTH. My contract came to an end on 19th November. I have since left to pursue other interests. All other issues are internal to SKMTH and i cannot comment on them. I would advise you to please contact SKMTH,” he said.
Contacted for a comment, SKMTH Board chairperson Basimane Bogopa said he would not respond as the issues were internal between employer and employees.
He however, assured the nation that the hospital is functioning well. “We are well and currently working hard to prepare for the fourth wave by fixing machinery and disinfecting the hospital,” Bogopa was adamant.
For his part, SKMTH PR and Communications manager, Motabaseyo Nameela said: “Please note that internal audits are an ongoing part of the governance processes of the hospital. They are intended to identify areas of weakness and opportunities for improvement within hospital operations in line with best corporate governance practices.” He stressed that employer relations are contractual and confidential matters which may not be discussed with third parties.