NHLS suspends CFO, supply chain head ‘for PPE fraud’

The National Health Laboratory Service (NHLS) has suspended its head of supply chain management and chief financial officer after a report revealed alleged misconduct in the procurement of personal protective equipment (PPE).

It has, however, assured that this would not impact on its services as the largest diagnostic pathology service in South Africa, which supports national and provincial health departments.

Professor Eric Buch, chairperson of the board of the NHLS, said they took steps to procure goods and services for the Covid-19 pandemic early on in 2020.

The NHLS said it had to act without delay to be able to obtain the equipment and reagents needed to conduct tests, and also the PPE necessary to allow its staff to do so safely.

“The board of the NHLS, at a meeting, provided management with guidelines and the authorisation to conduct emergency procurement needed for Covid-19 testing. Management was requested to report to the board on the emergency procurement and did so routinely.”

Buch said that, following an internal audit of procurement of services and equipment, including PPE for Covid-19, PriceWaterhouseCoopers (PWC) was appointed to conduct a forensic investigation.

The NHLS also received requests from the Hawks with regard to information about particular companies and transactions, involving the procurement of PPE between March and April this year.

Investigation

As a result, the PWC scope of work was expanded to conduct a forensic investigation into the transactions between the NHLS and the six particular companies identified by the Hawks.

“The board extended the instruction to PWC to include an investigation of all individuals in the NHLS involved in the procurement of PPE,” Buch said.

While the PWC investigation found that the board and the CEO had fulfilled their statutory and fiduciary obligations, it identified that there was prima facie evidence of misconduct committed by the head of supply chain management, others in supply chain and the CFO.

“The officials concerned were suspended, pending disciplinary enquiries,” Buch added.

“In the interests of expediting justice, the board further resolved to share the PWC report and the associated legal opinion with the DPCI [Hawks] and the Special Investigating Unit (SIU).”

The PWC report has not been made available, with Buch saying it will remain confidential while the disciplinary and related legal processes take their course.

“The board will continue to ensure it implements measures to prevent corruption and act decisively if corrupt activities occur.”

“The board will also like to assure the public that this situation will not impact on the services rendered by the NHLS, and measures have been put in place to ensure that the NHLS continues to provide high quality services to the people of South Africa.”

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