By RASHAD ROLLE

Tribune Staff Reporter

rrolle@tribunemedia.net

ACCOUNTANT John Bain yesterday dismissed the Public Hospital Authority and Bahamas National Drug Agency’s attempts to “discredit” his firm’s forensic audit of PHA’s supply of pharmaceutical drugs and medical supplies, accusing officials of raising a red herring and “attacking the messenger.”

Mr Bain is managing partner of UHY Bain & Associates. His company completed an audit into the PHA in March, which raised a litany of concerns about its management and practices.

Last Friday, The Tribune reported that according to documents obtained by this newspaper PHA’s management claimed that the forensic audit did not follow best practice industry standards and exposed the agency to civil litigations.

As he lamented being criticised for doing his job, Mr Bain claimed that a culture of “fright” exists at PHA, one where “people brought (me) documents at night with a hoodie over their head, people terrified at the state of governance but who don’t want to talk in a public way.”

Mr Bain’s investigation found that among other things, there was a $10 million difference in pharmaceutical inventory between the physical count and what is reflected in the computer system of the Princess Margaret Hospital.

As reported by The Tribune last week, PHA officials blamed this discrepancy on a clerical error.

According to documents obtained by this newspaper PHA Finance Director Daniel Knowles responded to this criticism by saying he found it “difficult to believe” that internal auditors, on whose work Mr Bain’s auditing partly relied, did not recognise the errors in their report given that PHA’s total yearly inventory never exceeded $4m.

The official said the errors existed because the unit values for two drugs were incorrectly entered into the PHA’s inventory system, and that the pharmacy inventory for PMH had not exceeded $1.5m for 2012 or 2013.

However, stressing that he never suggested there was a $10m shortage of anything, Mr Bain dismissed this defence as a red herring.

“He says inventory hasn’t exceeded $1.5m and makes it seems like I don’t know what I’m doing,” Mr Bain said. “He’s just trying to discredit me – the fact is that $1.5m reflects what existed at the end of a (yearly) period. The $10m the report speaks about means someone wasn’t doing their jobs in updating their records. I saw a problem whereby drugs were being taken out, but not being cashed. They were distributing the inventory, but someone was not putting it in the computer. It’s the fact that for so long no one paid attention to this problem, which amounted to a $10m difference, that was being pointed out.”

Mr Bain added that PHA only corrected this error last week Thursday, following media reports about the discrepancy highlighted in his audit.  

Mr Bain had also criticised the PHA’s procurement process in his report, characterising it as having weaknesses that could be exploited and used to facilitate corruption.

In response, management of PHA said the forensic audit had “obviously been confused” in its attempt to understand or explain the PHA’s tender process.

Hitting back yesterday, Mr Bain highlighted concerns raised even by international experts over the procurement process used in various government agencies.

“Crown agent experts came in and did work with PHA, BEC…and concluded that as far as the selective tendering process is concerned, unless there is a cost-benefit analysis on this process, one will never know its value.

“This process gives enormous power to certain people and opens up the possibilities of bid rigging and corruption,” he said.

As for criticism that auditors failed to conduct interviews with PHA staff in accordance with “best industry standards,” Mr Bain said: “Interviews are only one part of an interrogation process. Most information I got came from other parties. I used lawful and generally approved forensic and fraud examination techniques approved by international professional bodies.”

PHA Chairman Frank Smith has said Mr Bain’s audit is one of several ordered by the authority and is under review.