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Cites ministerial interference on the part of Portfolio Minister, Dr. Chris Tufton  

Durrant Pate/Contributor

Former Chairman of the Board of Management at the University Hospital of the West Indies (UHWI), Wayne Chai Chong has ‘spilt the beans’ regarding some of the irregularities and management bungling that have been devilling the regional medical training institution.

In testifying before the Public Accounts Committee (PAC) of parliament yesterday, Chai Chong cited ministerial interference on the part of Portfolio Minister, Dr Christopher Tufton, as part of the reason for the debacle in which the hospital has found itself. The minister revoked the board’s decision in November 2023 to appoint a new Acting CEO and reappoint the previous Acting CEO, resulting in Choi Chong’s resignation and that of his deputy and thereafter, terminated the entire board, replacing it with a new one.

The PAC heard from Choi Chung on Governance and Management at the hospital, Governance Conflict with the position of Senior Director of Clinical Services, Audit and Risk Issues, Billings, Collections and Assessment, Contracts and Procurement. He was adamant that the abuse of tax-exempt status reported by Auditor General Pamela Monroe-Ellis, took place after the board he led was dissolved.

Lithany of weaknesses and management challenges

Choi Chong was appointed by Minister Tufton in November, 2022, resigning in December 2023. In his PAC submission, the former UHWI Chairman observed many shortcoming and managerial weaknesses when his board took control and sought to remedy these problems.

Among the most undesirable situations found includes the fact that “the institution operated at a significant deficit and had fallen behind in its payment of employee and employer statutory deductions, operational and financial procedures and controls were not being observed consistently, staff amenities and accommodations were in a poor state of repair and in some cases totally absent. Staff morale was low, exasperated by a management culture of intimidation and bullying, the patient management system was essentially manual, with the Hospital Information Management System unimplemented several years after being contracted. Accident and Emergency admissions were well below acceptable standards, and guidelines for GOJ Procurement were not consistently adhered to.”

Audit and Risk Issues 

He pointed to the need to have the external audits brought up to date was critical, noting that the 2019 audit had been completed but was being withheld by the Auditor, as payment for the services had not been completed. Management was instructed to make the necessary funding available and, if necessary, seek assistance from the portfolio ministry to complete payment. 

Payment was made in June 2023, and the management was also instructed to prepare bid documents for the 2020 audit. The tender was completed, and with only one company responding, the 2020 audit was awarded. The Chai Chong board observed a number of additional areas of concern highlighted by the Sub Committees of the Board. 

It was decided that resources and time would not allow all to be addressed immediately. However, the Board decided to focus on three areas that could have the most impact. Initially, these were Inventory Management (particularly drugs), Payroll and Procurement/Accounts Payable. Billings, Assessment and Collections was later substituted for the Inventory Management. 

The need for a further detailed external independent review of these areas was necessary to identify possible weaknesses, losses (if any), and make recommendations for policy or procedural changes. 

Billings, Collections and Assessment 

The hospital budget is funded 70% GOJ, 10% from Territories and 20% patient fees. Patient fees revenue has been a major area of weakness for several years. The weak performance in this area is one of the major factors contributing to the financial woes of the UHWI. 

In October 2022, Accounts Receivable, which were made up primarily of patient fees, were $13.5 billion with a bad debt provision of $8.9 billion. It was reported that between 35% and 40% of patient fees are assessed, and of the remaining amount, 30% is typically not collected. 

This equates to less than 45% collections on possible patient fees. 

The significant impact that improvement in this area could have on the UHWI’s financial health led the Board to authorise a more detailed external independent audit of the Billings, Collections and Assessment department. Further, fees had not been raised for several years, and in some cases, the fee did not even cover the cost of the service. 

As an example, boarding fees were $2,500 per day, while estimated direct costs that included meals were $6,200 per day. In comparison, private hospital fees at the time ranged from $13,000 to $19,000 daily. The Board reviewed the existing patient fee structure and made a representation to the Minister to approve an increase in fees. 

In terms of payroll, a number of internal control weaknesses had been detected. These had already led to financial loss, with “ghost employee” accounts being discovered and HR numbers not correlating to those in Finance. Arrests were made and litigation initiated to recover some of the funds. 

The Audit Sub Committee of the Board requested and was granted permission to contract an external audit of the payroll process. Terms of reference for this external audit were prepared, and management was instructed to prepare tender documents.

Contracts and procurement 

In reviewing the Minutes of the June 2022 Board meeting, which was the last Board meeting prior to my Chai Chong Board being appointed, it was noted, “there were 31 Divested Services with various contractors. The scopes of work for most of these services were outdated, and the fees currently being paid did not reflect the current reality. As such, the figure approved in the budget would not allow the Hospital to go to tender for all 31 services.” 

There were a number of buildings on the property that were unoccupied, in a state of disrepair, were occupied but no rent was being paid, or the rent contract was out of date. Along with the issues with divested services, the Board had concerns with management’s planning capacity. 

During the tenure of his Board, Chai Chong said, “there was no approved strategic plan, no operational plan and budgets excluded the cost of acquisition of some major capital items. Other discoveries that caused the Board concern included: – No approved Procurement Plan being made available to the Board for review – Insufficient inventory data to support procurement requests being sent to the Procurement Committee – Many contracts for works issued as emergency procurement – Contract splitting practised – Lack of clarity in the University of the West Indies/UWHI contractual relationship in a number of areas.”

The Board had concerns that there were compliance issues with the GOJ/Ministry of Finance  Procurement procedures. It authorised the contracting of an external independent audit of the Procurement process as the third special audit. The UHWI management team were instructed to schedule regular meetings with the UWI management to identify all shared buildings and services, with the objective of agreeing and formalising contractual relationships.