Serious weaknesses in the definition and implementation of procedures for the purpose of securing public revenue and controlling expenditure are identified, among other things, by the Audit Service in its report on the Ministry of Health.
Special reference is made to the contractor of the canteen of the Nicosia General Hospital which, according to the findings of the Audit Service report, owes the State €5,636.251.99, while at the same time refusing to vacate the premises after the termination of his contract.
What the report says about the Nicosia General Hospital canteen and the 5.6 million euros owed:
The background of the matter, regarding the licence to use the Nicosia General Hospital canteen, the termination of the contract by the Ministry of Health, the Contractor's debts to the State, and its refusal to vacate the premises after the termination of the contract, are set out in detail in the Service's Special Report to the Ministry of Health.
According to information received in September 2018 from the Director General of the Ministry of Health, following an investigation of a relevant complaint submitted to our Service, a similar phenomenon had occurred in the canteen contract of the Limassol General Hospital and the issue was handled by the Legal Service of the Republic, as in the case of the Nicosia General Hospital.
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In view of the above, we requested in a letter in December 2018 from the Attorney General of the Republic, to advise us on the measures that could be taken to resolve the above problems and put an end to the above behaviours, both to safeguard the interests of the public and to avoid similar incidents in the future, which however, until the preparation of this Report, remains unanswered.
In the context of the preparation of this Report, we requested in August 2021 the Director General of the Ministry of Health to inform us in detail, by public hospital, about the Contractors of the licenses for the use of their canteens, any debts of the Contractors towards the public and in case of non-compliance with their contractual obligations, the measures they had taken and/or intended to take to safeguard the interests of the public.
In September 2021, the Director General of the Ministry informed us in detail of the situation regarding the canteen contracts in the main Public Hospitals, which is presented in the table below, prepared on the basis of the information provided to us up to 14.9.2021.
From the study of the above data and the serious issues that arise in this matter, we expressed in the same month, in a letter to the Attorney General of the Republic, the concern of our Service with regard to the recovery of the amounts due, which totalled approximately €8.2 million. by the date of the audit, taking into account the long period of time that has passed, as well as the fact that the same phenomenon is observed in almost all public hospitals.
Indicative of the seriousness and the dimensions of the above phenomenon is the case of the canteen of the Nicosia General Hospital for which the contract was terminated in 2015 and the amount due to the state amounts to €5.636.251,99 the Contractor continues to operate it, without the public authorities having managed to recover neither the amounts due nor the premises.
From the above data, we also observe that, although the contract of the canteen of the Nicosia General Hospital was terminated in July 2015, the eviction of the Contractor has not been achieved to date, while for the previous contract of the canteen of the Limassol General Hospital, which was terminated in May 2017 (approximately two years later), the eviction of the Contractor was achieved. In the case of the canteen of the Archbishop Makarios III Hospital (NAM III) whose contract was terminated in March 2017, the eviction of the Contractor has also not been achieved.
In view of the above, we observe a delay in the recovery procedures of the debts and premises of the canteens of Nicosia General Hospital and NAM III, compared to that of Limassol, although the total debts of the above two canteens amount to approximately €6.75 million. and constitute 82% of the total debts to the State.
We note that in the past complaints had been submitted to our Service regarding overcharges to the public by the owners of the canteens, for which the Director General of the Ministry, Health informed us that the Ministry cannot impose any measure on the owner of the cafeteria for the overcharges, since there is essentially no contract, which makes the need for a speedy resolution of this serious problem even more urgent.
Recommendation: The Contracting Authority, to cooperate and provide any assistance required by the Legal Service of the Republic, so that the latter may take all necessary legal measures for the speedy resolution of the above problems, in order, on the one hand, to safeguard the interests of the public and, on the other hand, to act as a deterrent to the occurrence of similar incidents in the future.
In February 2022, the Director General of the Ministry of Health informed us that, in most cases, the issue of recovery of the amounts due has been referred to the Legal Service, which is responsible for taking appropriate legal measures and enforcing court decisions.
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