Procurement of Medicines and Medical Equipments
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Item Non Levy of Penalty Towards Non Supply of Medicines in Madhya Pradesh(CAG of India, 22-07-2015) CAG of IndiaPenalty amounting to ₹ 2.37 crore was not levied on the suppliers towards non-supply of medicines/material, in violation of contract clause.Item Procurement and Distribution of Non-Standard Medicines in Madhya Pradesh(CAG of India, 22-07-2015) CAG of IndiaMedicines procured from the suppliers were not tested by the Department before distribution. Medicines worth ₹ 65.95 lakh procured were found not of standard quality during test conducted by FDA.Item Idle Expenditure on Medical Equipment at Base Hospital, Almora, Uttarakhand(CAG of India, 2015) CAG of IndiaMedical equipment worth ₹ 60.52 lakh were not put to use for the benefit of patients and kept idle for periods ranging from six to eight years.Item Avoidable Excess Expenditure on Upgradation of Linear Accelerator in Chhattisgarh(CAG of India, 25-07-2015) CAG of IndiaUp-gradation of Linear Accelerator with Image Guided Radiation Therapy system by inviting fresh tender and overlooking the available valid rate led to avoidable excess expenditure of ₹ 52.88 lakh.Item Failure to Claim Refund of Customs Duty Exemption by the Firm(CAG of India, 04-04-2018) CAG of IndiaJawaharlal Institute of Postgraduate Medical Education and Research, Puducherry failed to claim refund of customs duty exemption availed by a firm on imported equipment resulting in loss of ₹ 1.08 crore.Item Procurement and Maintenance of Equipment in PGIMER Chandigarh(CAG of India, 04-04-2018) CAG of IndiaThe Institute lacked an established procedure in the form of a Procurement Manual that could ensure effective procurement management and timely acquisitions of equipment based on a holistic and systematic assessment of requirements. This resulted in procurements being made on an ad hoc basis, rush of expenditure towards the end of the financial year and delays in progressing of procurement cases. The Institute also failed to effectively invoke contractual remedies available to it where the supplier did not fulfil their contractual obligations with delay in levy of penalty amounting to ₹ 72.77 lakh for delay in supply or installation of equipment and incorrect calculation of downtime and non-recovery of penalty of about ₹ 1.46 crore for excess downtime with reference to the contractual terms. This undermined both the deterrent effect of the penal provisions as well as the Institute’s ability to enforce due performance of the contract by the suppliers.Item Improper Procurement Planning Resulting in Idle Equipment(CAG of India, 04-04-2018) CAG of IndiaImproper planning in procurement of equipment by National Institute of Nutrition as well as failure to enforce performance on terms of supply order by supplier resulted in equipment worth ₹ 1.52 crore lying idle and equipment worth ₹ 2.13 crore not being put to optimal use for more than five years.Item Medical Equipment Not Installed in Manipur(CAG of India, 23-07-2018) CAG of IndiaMedical equipment costing INR 3.68 crore was lying idle even after two years of their procurement.Item Avoidable Expenditure on Central Excise Duty by Karnataka Drugs Logistics and Warehousing Society(CAG of India, 06-07-2018) CAG of IndiaKarnataka State Drugs Logistics and Warehousing Society failed to insert specific clause in the tender/contract document for availing concession on Central Excise Duty. This resulted in avoidable expenditure of INR 76.55 lakh towards purchase of ambulances.Item Deficiencies in Quality Assurance while Procuring and Disributing Drugs in Karnataka(CAG of India, 06-07-2018) CAG of IndiaPoor quality assurance by the Karnataka State Drugs Logistics and Warehousing Society resulted in distribution of non-standard quality drugs. Besides, the Society did not recover INR 2.11 crore being the cost of these non-standard quality drugs.Item Irregular Purchase of Medicines Leading to Avoidable Expenditure in Tamil Nadu(CAG of India, 24-06-2021) CAG of IndiaIrregular purchase of two Ayurvedic medicines by Employees’ State Insurance (ESI) hospitals and Director of Medical and Rural Health Services (ESI) resulted in an avoidable expenditure of INR 2.67 crore.Item Irregular Procurement and Idling of Medical Equipments in Tamil Nadu(CAG of India, 24-06-2021) CAG of IndiaIrregular procurement resulted in an avoidable expenditure of INR 4.29 crore in respect of medical kits supplied to the seven sampled Medical College Hospitals as the equipment procured were neither required nor put to use. This raised a question on the entire procurement at a cost of INR 10.60 crore.Item Procurement and Utilisation of Medicines and Medical Equipments in Haryana(CAG of India, 26-11-2019) CAG of IndiaThere were shortcomings in procurement of medicines and equipment such as delay in processing of the indents, award of rate contract to ineligible firms, inadequate price comparison leading to extra expenditure of INR 1.25 crore and non-levy of penalty of INR 1.09 crore for non-supply of medicines. Availability of medicines at medical facilities was inadequate. Procedure followed for local purchase of medicines was not uniform and lacked transparency. Further, equipment worth INR 1.81 crore were lying unutilised at facilities.Item Procurement Supply and Utilisation of Drugs & Consumables and Machinery and Equipments in Himachal Pradesh (2015-2018)(CAG of India, 14-12-2019) CAG of IndiaAssessment of demand for procurement of drugs & consumables and their distribution was neither scientific nor systematic, leading to instances of non-procurement, delay in procurement and non-availability of drugs; and nonissuing, short-issuing, excess issuing of drugs to health institutions. Drugs were purchased irregularly and without requirement resulting in their expiry. Ineffective quality control resulted in distribution of substandard drugs to patients. Procurement of machinery & equipment was not systematic in the absence of any inventory management system leading to cases of non-procurement and procurement without requirement, which resulted in items remaining unutilised/ idle and non-functional. Items were also found to be lying unutilised owing to non-posting of technical staff.Item Avoidable Expenditure Due to Non Execution of AMC for MRI Machine at Shillong Meghalaya(CAG of India, 19-12-2019) CAG of IndiaDue to non-execution of Annual Maintenance Contract for maintenance of MRI machine, the Department incurred an avoidable expenditure of INR 1.50 crore towards its repair besides depriving the patients the benefit of its services for almost three years.Item Information Technology Audit of Drugs and Vaccines Distribution Management System in Punjab (2015-2018)(CAG of India, 27-02-2020) CAG of IndiaWith a view to strengthening and streamlining the supply chain management system for storage and distribution of drugs and consumables in the State of Punjab and to eliminate the prevailing manual system of processes followed in the hospitals where the chances of human errors are significant, a customized Drugs and Vaccine Distribution Management System (DVDMS) named ‘e-Aushadhi’ was implemented (August 2014) in Health and Family Welfare Department (Department). An information technology audit of the ‘e-Aushadhi’ brought out shortcomings/deficiencies in its implementation that undermined the achievement of its objectives in the State. Some of the significant audit findings are summarised below: Highlights 1. The Department had not prepared any time-bound roll-out plan for implementation of e-Aushadhi system for 360 health institutions still to be covered. (Paragraph 2.1.6.1) 2. In the absence of a barcode system, users were not entering the data on real time basis resulting in critical data input errors. (Paragraph 2.1.7.2 (ii & iii)) 3. As many as 4,405 delivery challans were freezed after a delay of up to 531 days. In 1,424 instances, the drugs/consumables were accepted with shorter shelf-life by three Drug Warehouses. The users while verifying the supplies of drugs/consumables ignored the system alert with regard to shorter shelf-life in these cases. (Paragraph 2.1.7.3 (i)(a) & (ii)) 4. 1,324 samples of drugs/consumables were sent for quality check to Central Quality Control Cell (CQCC) after a delay of up to 412 days. (Paragraph 2.1.7.4 (iii)) 5. Test reports of samples of drugs/consumables were received after a delay of up to 315 days (387 batches) from Government laboratory and up to 51 days (686 batches) from empanelled laboratories. Activation of drugs not of standard quality (NOSQ) and their distribution showed that the system was not robust and lack of internal control diluted the quality assurance for testing ofdrugs/consumables. (Paragraph 2.1.7.5 (ii & iv to vii)) 6. Inadequate logical access controls, application standards, audit trails and non-conducting of internal audit showed weak information system security of e-Aushadhi. (Paragraph 2.1.8)Item Compliance Audit on Procurement and Distribution of Drugs, Medical Consumables and Equipments by Odisha State Medical Corporation(CAG of India, 03-04-2021) CAG of IndiaOdisha State Medical Corporation Limited (OSMCL) is an independent procurement agency for the Department of Health and Family Welfare (H&FW), Government of Odisha. The key functions of OSMCL are timely procurement of quality medicines, surgicals, equipment, instruments, furniture, etc., through fair, transparent and competitive bidding process. Audit of procurement and distribution of drugs by OSMCL for the period 2016-19 revealed the following: • There was inordinate delay ranging between five and seven months in the finalisation of annual procurement plans for drugs and medical consumables and six to 17 months in respect of Equipment, Instrument and Furniture (EIF). Delay in finalisation of procurement plan impacted the procurement process and supply of drugs and medical consumables to health institutions. (Paragraph 2.1.2) • Against the indented/ approved quantity of 692.97 crore units, OSMCL could supply 336.94 crore (49 per cent) units of drugs and medical consumables to health institutions during 2016-19. Non-supply of indented quantity resulted in non-availability of essential drugs in health institutions which resorted to local purchase at higher costs and stock out of essential and critical drugs. (Paragraph 2.1.3) • Out of 3,471 Purchase Orders (POs) placed for supply of drugs and medical consumables, 791 (23 per cent) POs were partially executed and 252 (7 per cent) POs were not executed at all, which led to less supply of drugs and consumables to the health institutions. (Paragraph 2.1.4) • Deficiencies in stock management led to expiry of 349 kinds valued at ₹4.18 crore during April 2017 to May 2019. Expiry of drugs was due to ineffective monitoring of indents, distribution, consumption, stock position of drugs through e-Niramaya software. (Paragraph 2.1.6) • Short supply of drugs and medical consumables by OSMCL led to the health institutions procuring these items locally incurring extra expenditure. During 2018-19, test checked health institutions had incurred extra expenditure of ₹98.12 lakh (44 per cent) in procuring medicines worth ₹2.24 crore. (Paragraph 2.1.7) • OSMCL could procure only 43 per cent EIF against the approved quantity during 2016-19. As of June 2019, 19 per cent of the procured EIF had not been installed and were lying unutilised with different indenting agencies. (Paragraph 2.1.8) • Quality test reports of 22 per cent drug samples were received with a delay ranging between 16 and 244 days due to which the drugs received remained quarantined without supply to health facilities. Instances of non-replacement of sub-standard drugs by the suppliers were also noticed. (Paragraph 2.1.10) • Monitoring of distribution of drugs and medical consumables through the online inventory management system (e-Niramaya) was not adequate and effective. Lack of monitoring at the level of H&FW Department/ State Drug Management Unit/ OSMCL/ health institutions ultimately resulted in shortage of essential drugs and wastage of government resources due to expiry of unused drugs, supplied in excess. (Paragraph 2.1.13)Item Injudicious and Excessive Procurement of Drugs in Tamil Nadu(CAG of India, 24-06-2021) CAG of IndiaRAMO, Madurai and DMRHS (ESI) did not follow the prescribed medicine indenting procedure, based on the number of patients, resulting in locking up of Government funds of INR 16.39 crore in the form of excess procured medicines.Item Procurement of Food Baskets at Exorbitantly Higher Rates in Chhattisgarh(CAG of India, 28-08-2020) CAG of IndiaProcurement of food baskets under Chief Minister TB Nutrition Scheme at exorbitantly higher rates from lone ineligible bidder resulted in avoidable extra expenditure of INR 5.04 crore.Item Unwarranted Purchase of Multi Vitamin Syrup at Higher Rates in Chhattisgarh(CAG of India, 28-08-2020) CAG of IndiaUnwarranted purchase of Multivitamin syrup at higher rates by placing purchase orders on backdate violating Government instructions resulted in loss to the State Government.