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Billing scandal hits Mpilo Hospital

By Tinomuda Chakanyuka

The country’s second largest medical centre, Mpilo Central Hospital in Bulawayo has been overbilling patients by margins as high as $6 000, creating fictitious debts at the same time unleashing debt collectors to pounce on the helpless patients, it has emerged.

Mpilo Central Hospital

The revelations come at a time when the institution is plagued by a number of maladministration practices among them failing to pay withholding tax on allowances, failing to account and record donated goods while even their inventory is in tatters.

This is contained in report on State Enterprises and Parastatals for the year ending December 2016 prepared by Auditor General Mrs Mildred Chiri.

In the report, Mrs Chiri pointed out that a number of patients were overbilled and the situation was made worse by failure by senior officials to verify authenticity of the bills.

In the report, she cited five patients who were over billed by $6 422, $ 4 455, $4 004, $3 970 and $2 406 as examples on how the system was lax.

She pointed out that this was not only impacting on patients but the hospital’s financial statements which could not be authenticated as they carry wrong information.

“I noted some weaknesses in the hospital’s billing system and I could not satisfy myself as to the accuracy, valuation and completeness of revenues and trade receivables. As such revenues and trade receivables may be materially misstated in the financial statement,” she said.

The hospital has since dollarisation in 2009 regularly engaged debt collectors to pounce on patients with outstanding bills.

Worryingly, the report noted the hospital had not insured its property, plant and equipment, and that motor vehicles belonging to the hospital were not registered in the hospital’s name.

She noted that significant losses may be incurred in the event of insurable disasters occurring. On motor vehicles registration, Mrs Chiri said failure by the hospital to register its motor vehicles in its name may result in financial losses in the event of ownership disputes.

It also emerged, from the Auditor General’s findings, that some of the non-monetary donations made to the hospital could not be accounted for and recognised in the hospital’s financial books.

Mrs Chiri said this may have led to misappropriation of donations, as donations, inventories and equipment will not be recognised in the financial statement at year end. She also questioned the hospital’s inventory management system.

“I noted some weaknesses in the inventories management system. I could not therefore obtain audit evidence to ascertain the accuracy of inventories’ unit costs used to compile the stock valuation report as at December 31 2013.

I also could not obtain audit evidence to ascertain the accuracy of inventories’ unit costs used to compile the stock valuation report as at December 31 2014,” she said.

Mrs Chiri also noted that the hospital risked serious financial loss as it did not have comparative financial information.

“The hospital has not presented any comparative financial in the financial statements as is required by International Accounting Standard 1. The hospital has not presented a statement of cash flow as is required by IAS 1 due to the absence of information.

“Prior period financial statements were not audited. I was not able to ascertain if opening balance for 2013 were not materially misstated through alternative procedure,” she said.

Mrs Chiri also revealed that the hospital did not have a formalised credit management system resulting in significant debts outstanding dating back to 2009. She noted that the hospital was not regularly reconciling and following up on money received from medical aid societies. This, Mrs Chiri said, may result in the hospital failing to recover what it is owed by its clients.

“Recoverability of these debts may be doubtful. Errors, irregularities on the debtors’ records may not be detected and corrected on,” she noted.

The Auditor General also noted that there was no formal registers to record declaration of interests by members of the hospital board and committee members as well as other senior members of staff.

The audit report also reveals that the hospital had made payments to suppliers who never delivered the goods resulting in financial losses on the part of the health institution.

In October 2013, the report notes, the hospital contracted a company to improve the radiotherapy unit at a cost of $206 000 and a down payment of $35 000 was made. The company had not carried out any work on radiotherapy unit by the time the audit was done in 2016.

It was also revealed that the hospital paid $1 800 to a certain company for the supply of computers but by the end of 2016 at the time of the audit, the computers had not been delivered. The Auditor General could also not verify transaction relating to goods bought in 2014 amounting to $130 228 due to lack of supporting documents.

Mrs Chiri revealed that Mpilo Hospital was operating without adequate medical specialists in areas such as anesthetic, neurology, pathology and renal, with the optimum operating manpower for the hospital having been last determined in 1980.

She said this compromised the hospital’s ability provide service to clients and puts patients’ lives at risk.

She also said withholding tax was not being held on allowances paid to members of the Hospital Management Board and there was no evidence the hospital was withholding tax on payments made to suppliers without tax clearance certificates. As such Mpilo is not operating as a going concern, she added.

Contacted for comment, the hospital’s clinical director Dr Solwayo Ngwenya said he could not comment on the report.

“I think the CEO (chief executive officer Mr Leornard Mabandi) can only comment on that. Unfortunately he is out and will only be available next week (this week),” he said. Sunday News