PERFORMANCE AUDIT REPORT OF THE AUDITOR- …

1 PERFORMANCE AUDIT REPORT OF THE AUDITOR- GENERAL ON THE generation AND. management OF internally generated . FUNDS IN PUBLIC HOSPITALS. Table of contents Pages Transmittal letter . i Executive summary .. iii CHAPTER ONE . 1. Introduction . 1. Reasons for the AUDIT .. 1. Purpose and scope 2. Methods and implementation .. 3. CHAPTER TWO 5. Descriptive chapter . 5. Historical background 5. Mandate .. 7. Objectives 7. Funding 9. Organisational structure .. 10. System description . 11. Key players and their activities .. 11.

2 Current development .. 12. CHAPTER THREE 13. Findings .. 13. Introduction . 13. Challenges .. 14. Revenue defaulters . 14. Purchases not properly accounted for 15. Delays in re-imbursement of claims 19. Non-compliance with tariff structure by schemes 20. PERFORMANCE AUDIT REPORT of the AUDITOR- General on the generation and management of internally generated Funds in public hospitals Inadequate and poor maintenance of existing infrastructure . 23. Insufficient maintenance of equipment and machinery 27. Summary and conclusion 30.

3 CHAPTER FOUR .. 34. Recommendations .. 34. Revenue defaulters . 34. Non-compliance with store procedures 35. Delays in reimbursement of claims 35. Non-compliance with tariff structure by the schemes 36. Inadequate and poor maintenance of existing infrastructure and machine .. 37. APPENDICES 38. ABBREVIATIONS 52. PERFORMANCE AUDIT REPORT of the AUDITOR- General on the generation and management of internally generated Funds in public hospitals TRANSMITTAL LETTER. Ref. No. AG/01/109 Office of the AUDITOR- General Ministries Block O.

4 P. O. Box MB 96. Accra Tel. (021) 662493. Fax (021) 662493. 30 January 2011. Dear Madam Speaker, PERFORMANCE AUDIT REPORT ON THE AUDITOR- GENERAL ON generation AND management OF. internally generated FUNDS IN PUBLIC HOSPITALS. I have the honour to submit to you for presentation to Parliament my PERFORMANCE AUDIT REPORT , in pursuance of Article 187(5) of the 1992. Constitution of the Republic of Ghana and Section 13(e) of the AUDIT Service Act 2000, Act 584. The AUDIT Service Act mandates my office to AUDIT programmes and activities of public offices to ensure economy, efficiency and effectiveness in the use of resources.

5 PERFORMANCE auditing was introduced to the Ghana AUDIT Service in 2001, as part of a capacity building project funded by the European Union. Officers who have been professionally trained in conducting PERFORMANCE audits to internationally recognised standards prepared this REPORT . The team that carried out the AUDIT comprised Ms. Victoria Akordor, Assistant Director of AUDIT (Team Leader), Ms. Mary Arthur, and Mr. Kplorm Dovlo, both auditors , under the supervision of Mr. Augustine R. K. Boadu, Deputy AUDITOR- General.

6 PERFORMANCE AUDIT REPORT of the AUDITOR- General on the generation and management of i internally generated Funds in public hospitals In a rapidly changing society such as ours, there is a need for PERFORMANCE auditing, since the inherent incentives for improvements are limited in the public sector compared to the private one. The PERFORMANCE AUDIT process results in recommendations, which initiate a process of renewal and change, leading to greater efficiency and effectiveness in government administration. Depending on the extent of coverage and complexity, it normally takes between six and 12.

7 Months to complete one PERFORMANCE AUDIT , thus making it more expensive than the traditional audits. Effective PERFORMANCE audits can lead to better use of resources by public bodies and provide support to democratic governments by bringing about accountability, transparency, improved operations and better decision-making. I would like to thank my staff for the preparation of this REPORT and the staff of the various hospitals for the assistance offered to my staff during the period of the AUDIT . I trust that this REPORT would meet the approval of Parliament.

8 Yours sincerely, AUDITOR- GENERAL. THE RT. HON. SPEAKER. OFFICE OF PARLIAMENT. PARLIAMENT HOUSE. ACCRA. PERFORMANCE AUDIT REPORT of the AUDITOR- General on the generation and management of ii internally generated Funds in public hospitals PERFORMANCE AUDIT REPORT OF THE AUDITOR- GENERAL ON THE generation AND management OF. internally generated FUNDS IN PUBLIC HOSPITALS. EXECUTIVE SUMMARY. internally generated fund (IGF) is non-taxable revenue that is generated through the activities of public hospitals as an additional source of funding.

9 The aim of introducing IGF into public hospitals in 1985 is to help alleviate financial difficulties confronting the health sector in delivering quality health care. 2. Public hospitals have the legislative mandate (FAR 2004, 1802 part II) to collect and retain all IGF for its operations. IGF has now become the major source of finance to public hospitals constituting about 77% of total receipts. The AUDIT set out to ascertain whether the public hospitals are: strengthening financial management and revenue generation managing prudently resources available for the provision of health service through the use of IGF, and maintaining equipment and infrastructure to enhance revenue generation .

10 3. The AUDIT was carried out in four public hospitals comprising Volta, Central and Greater Accra Regional hospitals and Korle-Bu Teaching hospital. The AUDIT covered the period 2005 to 2008. PERFORMANCE AUDIT REPORT of the AUDITOR- General on the generation and management iii of internally generated Funds in public hospitals 4. The AUDIT team examined the generation , collection and disbursement from IGF. All the hospitals the AUDIT team visited have shown an increase in revenue generation for the period reviewed. Although revenue generated over the past four years has shown an increased trend due to increase in patient attendance, improvement in internal control systems and increase in tariffs, some difficulties have to be overcome to run the hospitals smoothly as government assistance and donor funds have dwindled over the review period.