Auditor General Colin Murphy has tabled a report in parliament which assessed six hospitals’ implementation of key controls to ensure compliance with government purchasing policies and to reduce the risk of unauthorised access and use of pharmaceuticals.
Mr Murphy said the Department’s pharmaceutical procurement process and practice had a number of weaknesses relating to poor documentation of purchasing decisions and poor management of potential conflicts of interest.
“While we did not find any evidence of inappropriate influence, we did find weaknesses in Health’s management of free travel and gifts, especially the recognition and management of potential conflicts of interest,” he said.
Mr Murphy said pharmaceutical companies had reported providing Health officers with gifts and travel, ranging from chocolates and biscuits valued at about $25 to travel sponsorships valued at about $16000, which had not been reported to Parliament.
Twenty-seven pharmaceutical companies supplied the Auditor General with detailed lists of 200 relevant gifts and travel provided to WA Health officers since July 2010.
These were compared with the reports provided by Health to Parliament and it was found that 169 of the 200 gifts and travel sponsorships were not included in the reports to Parliament.
A significant majority were flights, accommodation and registration fees for clinical staff to attend conferences.
“Many companies in the health-care industry offer to fund health professionals to attend local or international medical events and the potential conflicts of interest associated with accepting these have been the subject of much ongoing debate,” Mr Murphy said.
“Since my last audit, Health has made some progress in addressing issues with the introduction of a new gifts policy, however this audit highlights that more remains to be done, including the implementation of its travel policy.”
Other issues identified across the six hospitals in relation to the purchasing of pharmaceuticals included; purchases made by officers without the appropriate delegated authority.
Also issues such as; quotes not obtained and documented when they should have been; products purchased from a supplier outside the approved common use contract list; and purchases not reviewed, were also identified.
“The weak controls over pharmaceutical purchasing mean that we cannot give assurance that purchases always represent value for money are transparent and accountable and demonstrate open and effective competition,” he said.
The report also found that WA Health was not effectively managing all risks associated with access and use of addictive and abuse-prone pharmaceuticals, and while the amount that goes missing is relatively small, the controls to prevent losses and processes for investigating them
need to be strengthened.
“The quantity of addictive and abuse-prone pharmaceuticals that go missing from public hospitals is relatively small and WA Health does investigate losses, however the investigations were often not transparent making it difficult to give assurance that the cause of losses was identified.”
Mr Murphy found that hospital processes for taking receipt of pharmaceutical deliveries from suppliers are not well controlled, there was no clear guidance for staff on how to measure and account for liquid pharmaceuticals and some of the processes used to destroy and dispose of pharmaceuticals were not well controlled.
“We also identified issues with the storage and access of pharmaceuticals including one instance where a cupboard was left unlocked, irregular stocktake of drugs and keys given to staff members with no sign-out process in place,” he said.
“We did however find that the administration of drugs to patients was well controlled.
“There is no doubt Health has made some progress in addressing issues with the purchasing and management of pharmaceuticals, however this audit highlights that more needs to be done.”
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