Does the recent agreement that Government signed with the new owners of Universal Health Services (UHS) amount to another breach of the Finance and Audit (Reform) Act, 2005? That’s the question we posed to Financial Secretary Joe Waight today when we queried the details of the still undisclosed agreement.
Last Thursday morning Prime Minister Said Musa appeared on the KREM WUB with hosts Mose Hyde and Kalilah Enriquez. While he said on that show that not one cent of public funds had been used to settle the hospital’s $45 million debt with the Belize Bank, we have since been informed that the Government of Belize has entered into a multimillion-dollar agreement for services from the new owners.
The agreement is for up to $300,000 a month to be spent over the next five years—a total of $18 million when you do the math, and it was not open to tender.
Waight told us that the agreement was signed last week, and the highest authority in the Executive – Prime Minister Said Musa – was the one who penned it.
When we asked Waight whether such an agreement does not require some form of legislative approval, his reply was that that would depend on the legal interpretation of the act.
So we checked with attorney Lois Young for an opinion. She told us that the law requires tendering, which enables potential suppliers to make their bids – the process is supposed to be competitive and helps to ensure Government gets the best bang for taxpayer dollars.
Section 19, subsections 5 & 6 of the Finance and Audit (Reform) Act, 2005 say, “Any procurement or sale contract of or above five million dollars shall be subject to open tendering procedure…[and] shall be laid by the Minister on the table of both the Houses of the National Assembly within a month of its execution.” (emphasis ours.)
We had asked Waight why the Government entered into the agreement with UHS and not the Belize Medical Associates (BMA), or even the KHMH.
“I can only say they [UHS] are currently providing the service,” was his reply.
The Financial Secretary, of course, could not be expected to answer for the policy dimensions of this issue. We were informed that it was the Prime Minister who had signed the agreement, and the details of how it was to work were to be worked out between the new UHS owners and Joe Coye’s Ministry of Health.
We could not reach Health CEO Margaret Ventura when we called the office today, but Waight explained to us that the agreement enables the setup of what works like an imprest account, whereby an account balance (in this case a credit) is maintained at a fixed level by regular reimbursement for the exact amount of $300,000. The funds are paid in advance. If in a given month GOB uses $250,000, there is a credit balance of $50,000, and $250,000 is paid back into the account so that it has a starting balance of $300,000 at the beginning of each month.
Waight said that the agreement was supposed to kick in immediately at its signing last week.
As our newspaper reported late last year, Government had been making payments to the hospital as “prepayment for services,” since June last, when it paid $200,000. Monthly payments of $300,000 were made in October and November.
Now, there is a formal agreement to pay UHS up to $300,000 a month as of January 2008.
Waight told us that the money is for “specialized services not available elsewhere,” and only through referral from the Ministry of Health.
He told us that the Ministry of Finance releases the money to the Ministry of Health, which makes the payments to UHS. The UHS is to provide a financial statement to the Government at the end of the month.
The focus is on kidney-related illness, he furthermore stated, for dialysis and for treatment of kidney stones with non-invasive technology (lithotripsy). He said that the UHS is the only institution that provides these services at the moment.
While there is the benefit of select Belizeans getting specialized care at UHS, Waight said that the agreement “gives the new people [Belize Healthcare Partners] an assurance of business as well.”
The debate now will be whether the Prime Minister was correct in signing this 5-year agreement worth $18 million with UHS without having gone to tender.
The life of the UHS agreement runs almost in tandem with the length of the next political administration, which will inherit the UHS deal. In line with the legal requirements, Musa (or his successor) have until the last week of February to table the UHS contract to the House, which was dissolved earlier this month with the announcement of the date for general elections.
This is on top of a pending Supreme Court challenge, questioning whether the Prime Minister acted within the framework of the Finance and Audit (Reform) Act 2005 when he secretly signed an open-ended guarantee for UHS in 2001, and subsequently two loan agreements totaling $45 million for the same debt without the approval of the National Assembly. The Prime Minister is only legally authorized to sign such loan agreements without legislative approval if they are less than $10 million.
The same law says that any procurement agreement that is $5 million or more has to go to open tender.
The Supreme Court case, lodged by the Association of Concerned Belizeans (ACB) to challenge the UHS agreements, is in limbo, having been adjourned in December sine die (or without date) and without a specific reason having been given to the applicants.