Polio victims the casualties of untreated corruption

How does Polio remerge in a country like Papua New Guinea? One word – corruption. In today’s Tokaut Blog we show in granular detail how scamsters are looting our health system and the direct toll it has taken on immunisation programs essential to the life of our children.  

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Twelve children across Papua New Guinea have been diagnosed with the crippling disease polio since the virus was rediscovered during July. Currently there are confirmed cases of the disease in five provinces, including the capital Port Moresby.

Once one of the most feared diseases in the world, the incurable and debilitating polio virus has nearly been eradicated from the planet. In 2017, only 22 cases of polio were reported worldwide. It is only endemic in three countries.

Twelve new PNG cases have sparked international panic. Aid organisations and foreign donors are scrambling to contain the outbreaks.

But how could polio remerge in a country where international agencies like the World Health Organisation, United Nations Children’s Fund and Care International, have been working for years and donors, like AusAID, and the Global Fund, have pumped in hundreds of millions of dollars?

Since 2000 the global vaccine alliance, GAVI, has alone provided more than $35 million to PNG, of which 84% is for vaccine support.

A recently released GAVI investigation report graphically shows though how corruption and mismanagement is undermining vaccination and immunisation programs in PNG. It also points again to the widespread culture of corruption in the National Department of Health (NDoH).

The audit investigation focuses on the Expanded Programme on Immunisation unit (EPI), which is part of the Health Department. GAVI claims funding for the EPI was systematically stolen by Health Department staff using a variety of different criminal ploys.

These included forging quotations, colluding with suppliers to overcharge for purchases, awarding contracts for supplies that were not needed or never delivered, and making duplicate payments.

Over a two year period, the audit found that 42% of all procurement spending in the immunisation program, well over K1 million in total, was likely to have involved some sort of fraud. That 42% of procurement represents EVERYTHING purchased by the unit except airfares and local hotel accommodation.

Image: Funding for immunisation was lost to rigged tenders, inflated contracts, misappropriation and fraud.

The report recommends certain individuals ‘should be referred for further action by appropriate national authorities’. However, GAVI warns ‘NDoH has not responded to the findings or recommendations in this report’. This repeats a pattern which PNGi noted in other investigations involving the Department – see Government Stalling on Medicine Supply Reform as Death Toll Rises.

The audit includes a forensic examination of computers used in the immunisation programme. Auditors discovered stored on those computers quotation templates and supplier company letterheads that were being used by staff to forge documents.

An example from the audit report of a forged quotation

As well as forged documents being used to fix tenders and overcharge for supplies, the audit found evidence of collusion amongst suppliers. It evidences:

1. Rigged tenders where ostensibly independent companies competing for work were in fact owned by a single individual;
2. Contracts being awarded to companies owned by a departmental staff member; and,
3. The use of quotes from overseas firms in order to make local supplier’s inflated bids look reasonable.

Where contracts were awarded to favoured suppliers the audit found a wide range of irregularities in the documentation. Favoured suppliers are firms which received favourable treatment from the EPI team. Payments to these vendors, the audit notes, ‘form the majority of expenses questioned by GAVI in this report’.

Key irregularities uncovered include, missing quotations, invoices and delivery notes; purchase orders submitted after supply had taken place; missing inventory records, and; forged documents.

In one case involving a ‘favoured supplier’, plastic biro pens that had previously been purchased for 80t were purchased for K9 each. USB drives that retail for K30 were purchased for K180.

To hide these inflated prices, two methods were used, forgery and bribery. The forgery involved EPI staff creating false quotations from different companies based on inflated prices. On the other hand, bribery involved paying supplier companies to submit bogus quotations.

In this instance the total contract was falsely overpriced by K19,000.

Another case involved a contract to print temperature monitoring charts and vaccine order forms. The purchases were supported by fabricated quotations and the prices paid were inflated, some by over 1000%. To compound the fraud, the audit found no evidence the charts and forms were actually needed and no proof they were ever delivered.

The total value of these printing contracts was over K470,000.

Table: Five rigged printing tenders and the cost to the public.

A similar factual scenario was uncovered in relation to a contract for the printing of vaccine temperature management forms. Again, supplier quotations were fabricated by staff wanting to give the impression that the contract was competitive. In fact it was being given to a favoured supplier, and one who had previously failed to deliver on similar contracts.

A sample of the forms that were being ordered was found attached to the payment paperwork. It was a freezer temperature chart indicating a storage range of -12 to -20c. However the relevant vaccines do not require freezer storage and should be kept at temperatures between +2 and +8c. So the forms ordered and paid for were, if ever delivered, completely unfit for their purpose anyway.

The contract value was K157,294.50.

The audit found numerous similar cases which are documented in the report.

These cases indicate that Health Department staff in the EPI team were systematically forging documentation and committing fraud on an on-going basis in collusion with outside parties. This was being facilitated, perhaps unwittingly but certainly negligently, by Finance Department staff who were failing to pick up on the errors and inconsistencies in the payment documentation submitted to them.

This criminal behaviour was not only depriving the immunisation program of desperately needed funds. The audit indicates that Department of Health staff were spending work hours forging documents and lining their own pockets rather than fulfilling their allocated duties.

In some cases the illicit purchases directly affected the delivery of the vaccination program.

For example, effective cold chain management is ‘fundamental to the success of any vaccination program’. Poor management of cold storage can lead to ruined vaccines. Yet the audit found K63,000 was spent on the purchase of two non-functioning refrigerated containers.

They were procured without assessing business needs or developing product specifications; they were unsuitable for vaccine storage; and, were not purchased transparently or with the proper authority

One of the containers was delivered to Port Moresby but was faulty and of the wrong specification. The second was delivered to Wewak but was never installed and never used.

The same supplier was contracted to provide repair and maintenance services for existing cold room facilities. Although UNICEF provides technical support to the EPI on cold change and vaccine management they were not consulted over the contract. The audit found the selection procedure for this contract was neither competitive nor transparent. There was no evidence found that any maintenance work was ever carried out despite K53,350 being paid.

The GAVI audit is particularly disturbing, not just for the crimes it reveals, but for the lack of response or action from NDoH.

Just as disturbing is  the fact that similar findings have been reported in other audits relating to completely separate and different functions and units within the Department of Health, as PNGi has previously reported.

To rub further salt into the wound, the government is being forced to repay to GAVI the $400,000+ stolen or misused by EPI staff. This means it is PNG taxpayers who are footing the bill for corruption, that has denied their children access to essential immunisation.

All the evidence collected from credible international and local sources – including USAID, Global Fund, Burnet Institute and the Prime Minister’s department – and exposed by PNGi over the past 12 months, points to the fact that theDepartment of Health is riddled from top to bottom with fraud, corruption and mismanagement.

The state of PNG’s health infrastructure, endemic medicine shortages, and the health outcomes being suffered by the population at large, clearly support such a conclusion.

One prominent commentator has recently accused the Australian government of being scared to use the ‘C word’ (corruption), in its recent assessment of the contribution made by foreign aid to PNG’s health system. This does a great disservice to the people of PNG.

Unless all parties national and international are prepared to label this activity for what it is – corruption – and use what leverage they have to compel remedial action, these abuses will never stop.

The National Government, the Minister for Health and the Health Secretary, for whatever reason have shown themselves to be unable or unwilling to even acknowledge the existence of the problem. Their failings make it even more imperative and incumbent upon outside agencies to start a public conversation that puts the ‘C word’ alongside ‘health’ on the front pages.

But the responsibility to condemn and confront corruption does not lie with institutions alone. Unless we see a truly mass movement mobilise for justice, that gets everyone involved, it is easy to placate criticisms with promises of reform tomorrow. Those in positions of respect and authority can help to inspire such a movement by taking a brave standard now to confront corruption head-on and in public.

The need to do this could not be more urgent. Until the corruption is confronted openly, transparently and vigorously not only will we see no improvements, things will likely get even worse for the 99% of Papua New Guinean’s who rely on the public health services here – and cannot fly to Singapore or Cairns as private patients – especially with a ‘worst on planet’ tuberculosis crisis now also looming.

See also:
Profiting from Sickness: The Dark Economy of Public Health in PNG Part 1
Profiting from Sickness: The Dark Economy of Public Health in PNG Part 2
Profiting from Sickness: The Dark Economy of Public Health in PNG Part 3
Profiting from Sickness Part 4: LD Logistics