Tue | Oct 23, 2018

PAC fumes at NHF $2b Government write-off; $130m currently owed

Published:Wednesday | November 29, 2017 | 12:00 AMErica Virtue
Bennett Templer

The Public Accounts Committee (PAC) of Parliament yesterday chided the operations of the National Health Fund (NHF) and fumed at its decision to write off $2 billion owed by the Ministry of Health, even while the ministry owed the entity $130 million for this year alone.

Members were of the view that the failure of the ministry to make timely payments to the NHF would cause a cash-flow problem and affect the entity's ability to carry out its mandate.

However, the health ministry said payments were made as soon as warrants were received from the finance ministry.

The NHF was called before the PAC following a performance audit by the Auditor General's Department (AGD) of its management of the supply and distribution of pharmaceuticals and medical sundries.

The AGD said the audit "reviewed the audited financial statements to determine whether the NHF's Pharmaceutical Division efficiently and effectively managed its supplies and distribution of pharmaceuticals and sundries to support the delivery of quality public health, as well as to assess the entity's financial performance".

One of the key facts identified were the high trade receivables over the review period, of which 94 per cent was from the health ministry in financial year 2016-2017. The health ministry was NHF's biggest debtor.




"What is happening is increasing demand and usage, and part of the reason is that NHF is doing a good job in terms of trying to ensure that they get the drugs to the people. More persons are using the system," said Permanent Secretary Sancia Bennett Templer.

PAC member Dr Morais Guy wanted to know how much of the $6 billion in the 2017-18 budget was outstanding to the NHF.

Bennett Templer said those were current issues, and the $2 billion debt was not yet tackled.

Guy then asked what was currently outstanding to the NHF.

"Roughly $130 million is the figure being indicated by the NHF. My principal financial officer is in discussion with the NHF to resolve any differences that there may be with respect to those figures," she said.

... Health, finance ministries to work out payment plan

Yesterday, during the sitting of the Public Accounts Committee (PAC) of Parliament, member Mikael Phillips enquired of the budgeted spend on pharmaceuticals by the National Health Fund (NHF) on the programme being managed by the Ministry of Health.

He was told that $7.1 billion was projected, but members wanted to know if only $6 billion was recoverable.

Permanent Secretary Sancia Bennett Templer said the warrants from the Ministry of Finance were paid over as soon as they came. Phillips wanted an explanation as to why there was a cash-flow problem with the NHF.

"No matter how aged, for the NHF to write off $2 billion of receivables and then an additional $130 million to $160 million, there must be a cash crunch, even though you are paying your invoices on time," stated Phillips.

Bennett Templer said part of the buildup included a pricing mechanism that has been adjusted and a write-off done to further adjust, which was the reason for the $2-billion write-off. She said the finance and health ministries would meet to work out a payment plan.