By RASHAD ROLLE
Tribune Staff Reporter
rrolle@tribunemedia.net
ACCOUNTANT John Bain yesterday dismissed the Public Hospital Authority and Bahamas National Drug Agency’s attempts to “discredit” his firm’s forensic audit of PHA’s supply of pharmaceutical drugs and medical supplies, accusing officials of raising a red herring and “attacking the messenger.”
Mr Bain is managing partner of UHY Bain & Associates. His company completed an audit into the PHA in March, which raised a litany of concerns about its management and practices.
Last Friday, The Tribune reported that according to documents obtained by this newspaper PHA’s management claimed that the forensic audit did not follow best practice industry standards and exposed the agency to civil litigations.
As he lamented being criticised for doing his job, Mr Bain claimed that a culture of “fright” exists at PHA, one where “people brought (me) documents at night with a hoodie over their head, people terrified at the state of governance but who don’t want to talk in a public way.”
Mr Bain’s investigation found that among other things, there was a $10 million difference in pharmaceutical inventory between the physical count and what is reflected in the computer system of the Princess Margaret Hospital.
As reported by The Tribune last week, PHA officials blamed this discrepancy on a clerical error.
According to documents obtained by this newspaper PHA Finance Director Daniel Knowles responded to this criticism by saying he found it “difficult to believe” that internal auditors, on whose work Mr Bain’s auditing partly relied, did not recognise the errors in their report given that PHA’s total yearly inventory never exceeded $4m.
The official said the errors existed because the unit values for two drugs were incorrectly entered into the PHA’s inventory system, and that the pharmacy inventory for PMH had not exceeded $1.5m for 2012 or 2013.
However, stressing that he never suggested there was a $10m shortage of anything, Mr Bain dismissed this defence as a red herring.
“He says inventory hasn’t exceeded $1.5m and makes it seems like I don’t know what I’m doing,” Mr Bain said. “He’s just trying to discredit me – the fact is that $1.5m reflects what existed at the end of a (yearly) period. The $10m the report speaks about means someone wasn’t doing their jobs in updating their records. I saw a problem whereby drugs were being taken out, but not being cashed. They were distributing the inventory, but someone was not putting it in the computer. It’s the fact that for so long no one paid attention to this problem, which amounted to a $10m difference, that was being pointed out.”
Mr Bain added that PHA only corrected this error last week Thursday, following media reports about the discrepancy highlighted in his audit.
Mr Bain had also criticised the PHA’s procurement process in his report, characterising it as having weaknesses that could be exploited and used to facilitate corruption.
In response, management of PHA said the forensic audit had “obviously been confused” in its attempt to understand or explain the PHA’s tender process.
Hitting back yesterday, Mr Bain highlighted concerns raised even by international experts over the procurement process used in various government agencies.
“Crown agent experts came in and did work with PHA, BEC…and concluded that as far as the selective tendering process is concerned, unless there is a cost-benefit analysis on this process, one will never know its value.
“This process gives enormous power to certain people and opens up the possibilities of bid rigging and corruption,” he said.
As for criticism that auditors failed to conduct interviews with PHA staff in accordance with “best industry standards,” Mr Bain said: “Interviews are only one part of an interrogation process. Most information I got came from other parties. I used lawful and generally approved forensic and fraud examination techniques approved by international professional bodies.”
PHA Chairman Frank Smith has said Mr Bain’s audit is one of several ordered by the authority and is under review.
Comments
GrassRoot 9 years, 6 months ago
If they only try to discredit him, he is lucky. I would wear a bullet proof vest. This is a rough crowd you are dealing with.
GrassRoot 9 years, 6 months ago
BTW I congratulate you Mr. Bain, you have guts because you are doing whats right irrespective who and what may be at fault here. You are one upright Bahamian. Thank you.
Stapedius 9 years, 6 months ago
Whats the fuss about? A blind man can see that there is perpetual waste of resources in our public service. The PHA is a chip off of a larger iceberg of unchecked waste in our system of governance. I really don't get why these managers are trying to discredit him. This audit doesn't point blame at one individual or group it simply says that we have a systemic problem within the PHA. There has been a lot of waste or mismanagement of resources. That could be from the executive level down to ancillary services. There is simply too much waste and that is what the report highlights. There is no need to take it personally. Thats our issue in this country, we take everything to heart.
John 9 years, 6 months ago
John Bain was the first to fire a shot across the head of Dr. Hubert Minnis. When Dr. Minnis reflected that there were clerical errors in the report that may have contributed to the $10 million difference in the physical inventory count and that which was on record, John Bain was less than professional and said if the good doctor could find mistakes in a report 'that dozens of accountants missed", then he could fix the numerous problems at PHA. Furthermore the idea that $10 million worth of drugs were missing from the PHA hung in the air for days, maybe weeks and John Bain never came forward to explain that part of the shortfall was due to mismanagement and failure of PHA's staff to follow proper accounting practices and yes part was due to clerical errors on the report. Or was it? John Bain has yet to acknowledge or deny that the errors exist, but only to express surprise that someone could find them. This is the first time he is acknowledging that a full $10 million worth of drugs is not missing! Maybe it was John Bain's intention to blow his own whistle by claiming (or at least giving the impression) that there was millions of dollars in inventory missing from the PHA and his company uncovered it, not realizing that his report would be subject to microscopic scrutiny.
BahamaPundit 9 years, 6 months ago
Please explain. Has 10 million dollars of Government money been stollen or hasn't it? I could care less about who feels slighted or made a clerical error etc. At the end of the day, all I want to know is if real money (10 mill cash) has been taken.
CatIslandBoy 9 years, 6 months ago
I am getting the impression that John Bain was selected to do a specific job, producing a specific political result. Now, it seems that not only is $10 million not missing, but there are no shell companies as he reported. I'm wondering when the good minister of health will table this audit for debate in the House?
John 9 years, 6 months ago
NO $10 million in drugs and supplies is not missing!! Most of it was used but not properly recorded..and most of the the rest was clerical errors. ***
John 9 years, 6 months ago
So what was all the hoopla about? find out whilst I sleep! And if you need to hire an accounting firm to help :hey John!" (Bain that is!) he ainn ger be too busy after this episode
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