The Commission on Audit has doubted the propriety and regularity of over P10 million in cash advances used by the Eastern Bicol Medical Center (EBMC) and district hospitals in the procurement of medicines, medical supplies and services in 2021.
Post-audit of the provincial government’s transactions for said year showed that the provincial government still granted various cash advances to disbursing officers of the EBMC, Gigmoyo District Hospital, Bato Maternity and Children’s Hospital (BMCH) and Caramoran Municipal Hospital (CMH) amounting to P9,509,500.00 for the acquisition of drugs/medicines and medical supplies from pharmacies located near the hospitals.
Cash advances totalling P720,000.00 were also granted to disbursing officers of EBMC and Juan M. Alberto Memorian District Hospitals (JMAMDH) for the payment of laboratory and medical examinations and services done by private hospitals as said services are not available in the two government hospitals.
The procurement of said expenses thru cash advance was in connection with the No Balance Billing policy of hospitals in which no other fees or expenses shall be charged or paid by indigent patients above and beyond the packaged rates of the Philippine Health Insurance Corporation (PhilHealth).
Under the NBB scheme, cash advances will be granted and intended solely for the procurement of drugs/medicines, medical supplies and laboratory services prescribed by government physicians that are not available in the pharmacy or hospital, ensuring the availability of drugs and medicines in the hospital at any time.
Upon issuance of the prescription by the EBMC physician, the guardian of the patient goes directly to the hospital pharmacy and presents the prescription.
If the prescribed drugs and medicines or services are not available in the EBMC, the guardian goes directly to the EBMC pharmacy and presents the prescription.
“If the prescribed drugs and medicines are not available in the EBMC, cash will be given to the guardian to buy the prescribed medicines/laboratory services at the pharmacies in the locality, including pharmacies of private hospitals,” the report said.
Certifications signed by the heads of the hospitals were attached justifying the necessity and urgency of purchasing the drugs/medicines, medical supplies and laboratory examinations, certifying further that drugs and medical supplies of the hospitals were not delivered on time.
The provincial government had been banking on the delay and incomplete delivery of drugs/medicines and medical supplies procured as the main reason in using cash advances for its procurement, the COA pointed out.
“Using cash advance to procure drugs/medicines and medical supplies will not solve the shortage of supplies in the hospitals, proper procurement planning and coordination among concerned offices and personnel will,” it stressed.
The audit team said that direct procurement from other pharmacies through cash advances rendered the controls inoperative, as the quality of medicines and price reasonableness was not assured.
“The intention of the NBB scheme of providing free drugs and medicines to indigent patients of the province is noble, but the system of giving cash amounts to guardians of patients for the procurement of drugs and medicines violates RA No. 9184 or the Government Procurement Reform Act,” it emphasized. “The procurement act prescribed several alternative modes of procurement and using cash advance is not one of them.”
On the other hand, it added, the procurement of drugs/medicines, medical supplies and services did not fall under any of the expenses listed under Item Nos. 3.1 and 3.2, Section 3 of COA Circular No. 97-002 to be paid thru cash advances and neither can they be considered as petty operating expenses.
“The procurement process as laid down in RA 9184 was not properly complied with by the agency, thus, the system of accountability, transparency and competitiveness in government procurement may not be promoted,” the COA stressed, adding that the continued procurement of such goods and services through cash advances affected the propriety and regularity of the disbursements made by the province.
In its comment, the Capitol management said that it has already initiated measures to expedite procurement of medicines and medical supplies.
“However, some of the procurements were delayed due to failure of bidding as there were no bidders, while some winning bidders failed to completely deliver the medicines and medical supplies,” it told the audit team, justifying the necessity of using cash advances to procure medicines to save lives and comply with the PHIC’s policy of No Balance Billing (NBB).