Issued by: Department of Health
DEPARTMENT OF HEALTH PRESS STATEMENT INCIDENT OF FRAUD AT UMTATA MEDICINES DEPOT
On 17 February 1997 the Department of Health received information from the Eastern Cape Provincial Health Department about irregular payments to a company trading as GGA Pharmaceuticals. These payments were purportedly for pharmaceutical goods supplied to the Umtata Medicines Depot, yet the company was not a contracted supplier to this depot. What is more, such goods were never supplied.
It subsequently transpired that GGA Pharmaceutical belongs to one, probably three, employees of Intersolve Health Information, a company contracted to manage the medicines procurement system at State depots. One of the employees was stationed at the Umtata depot.
Following a meeting between the Department of Health and the Management of Intersolve Health Informatics on 17 February, a team consisting of officials of the Department and Intersolve departed on the morning of 18 February 1997 to perform a preliminary investigation.
The preliminary investigation uncovered two type of fraud:
Firstly, during January 1997 seven orders were made out to GGA Pharmaceuticals from the Umtata Depot. Although not stocks were delivered, payments cheques were processed in favour of the company.
Secondly, during February 1997, five orders were made out to a different company. Although this company did not supply payment for the goods so ordered was nevertheless processed, but was diverted into the account of GGA.
The potential loss to the State resulting from these illegal transactions alone would have been approximately R269 000. Due to swift action by the Eastern Cape Provincial Administration, all payments were stopped in time.
It is likely that further investigation could unravel more tampering with the depot's computer system.
The SAPS Commercial Crime Unit in Port Elizabeth was informed of the irregularities on 17 February 1997. Intersolve Health Informatics also proceeded to suspend its 3 employees immediately, pending further investigation.
Other measures have been put in place to ensure that similar occurrences are prevented at other State medicines depots.
This incident comes at a time when the Department of Health has just embarked on a programme to improve the drug supply system in the public sector. Known as the South African Drugs Action Programmes (SADAP), it has as one of its priorities the improvement of the security of medicines at depots and other facilities.
The Department of Health is confident that pilferage of State funds, whether electronically or through the physical removal of medicines in facilities, will be reduced drastically in the near future. We are sustained firmly in this belief by the co-operation of the SAPS and their assurances that prosecutions will take place.
Contact: L Sebake Tel 012 312 0177 Fax 012 217 960
3 March 1997