Palestine Hospital in Cairo / Ministry of Health — Palestine

- The Diwan conducted oversight and audit of the work of "Palestine Hospital" affiliated with the Palestinian Red Crescent Society for the years 2017-2018; the following are the most important observations:

- There is a mixed legal status for the hospital between being a charitable association exempt from taxes, subject to the Associations Law in the Arab Republic of Egypt, and being treated as a company with a tax card.

- The absence of approved legislation that governs the hospital’s work in all areas.

- A managerial vacuum exists in the administration that has the authority and ability to make decisions after the hospital’s Board of Directors was dissolved and the hospital’s subordination was transferred to the Palestinian Red Crescent Society in 12-2018, a steering committee was appointed to run the hospital’s affairs, and there is no approved organizational structure in the hospital.

- The internal audit unit in the hospital does not report directly to the Board of Directors, which led to errors in the hospital going undetected and uncorrected in a timely manner.

- There is no organized archive to refer to and obtain the necessary data, information and files; files are scattered on the floor and not arranged.

- There is no approved salary scale in the hospital, and there is a defect in the administrative and organizational structure in the hospital due to a mismatch between the number of doctors, nurses and workers and the number of administrators; the number of employees working in the hospital up to the end of 11-2018 is (421) employees, and since most employees are administrative, 75%, this led to high payroll costs without an increase in the quantity or quality of services provided.

- There are no bases and standards that clarify how end-of-service gratuities are disbursed and how they are calculated and the years used in their calculation; they were calculated retroactively for some employees, and end-of-service gratuities were calculated retroactively for employees referred to retirement in previous years, retroactively before 2016.

- A number of employees do not commit to recording their attendance on the electronic attendance system; some record their attendance by signing the manual sheet, and some do not record their attendance at all...!!

- There is no annual budget for the hospital. The report revealed a cash liquidity crisis in the hospital, where the total revenues it generates and the grants it receives from the Palestinian National Fund do not cover its obligations (hospital expenses and obligations to the Egyptian government), which led to the hospital’s inability to meet its obligations, resulting in annual losses amounting for the year ended 31-12-2017 to approximately 23 million Egyptian pounds, and the total accumulated losses up to the end of 2017 amounted to approximately 154 million Egyptian pounds. The report revealed the existence of high expenditures in the hospital such as: the expense of the permitted discount, overtime expense, and payment of end-of-service gratuities retroactively, which could affect the continuity of the hospital’s operation in the future..!

- The hospital’s Board of Directors wrote off receivables valued at 10,124,423 Egyptian pounds in 2016; the Diwan team did not have any data or schedules about the nature of the receivables that were written off, which does not provide reasonable assurance about the correctness of the decision and affects the hospital’s cash liquidity.

- The Diwan did not obtain the necessary confirmations for receivables or payables to rely on them in the audit process, which does not provide reasonable assurance about their correctness. The report revealed that the hospital has receivables from a number of Palestinian entities (Ministry of Health, Medical Services, Military, Embassy of Palestine in Cairo) amounting to 6,443,956 Egyptian pounds up to the date 31-12-2018.

- The hospital paid social insurance premiums for a number of seconded employees working in the hospital by the Palestinian Ministry of Health, although these seconded employees do not pay them to the hospital. In this context, the Diwan’s report revealed that an administrative attachment order was issued against the hospital for failure to pay social insurance entitlements (retirement entitlements for employees) amounting to 3,676,725 Egyptian pounds up to 31-3-2019; it was agreed with the hospital to stop the order and to schedule the amount in installments, but the hospital did not comply with paying the installments.

- Regarding revenues, the Diwan’s report clarified that there is a mismatch between revenue balances in the trial balance and their balances in the statement of financial position, where the difference amounted to 10,711,072 Egyptian pounds in 2016 and 1,213,016 Egyptian pounds in 2017.

- The hospital does not sufficiently follow up the accounts of the catheterization center leased to the International Radiology Center, as the accounts, statements, invoices and cases submitted by the center are not audited and reconciled with the hospital’s accounts and statements, which does not provide reasonable assurance about their correctness and credibility and could lead to cases performed by the center not being recorded in the hospital.

- Regarding expenses, there is a difference in expense values for 2016 and 2017 between their balances in the trial balance and their balances in the income statement, where the difference amounted to 23,991,408 Egyptian pounds in 2016 and 4,792,440 Egyptian pounds in 2017.

- The report also revealed that the hospital granted discounts to patients without approved, clear bases and standards to rely on when granting the permitted discount, where the value of discounts permitted in 2018 amounted to 1,577,334 Egyptian pounds. In general, the rate of discounts granted in 2018 increased by 73% compared to 2016.!!

- There is no register of the hospital’s assets relied upon to reconcile with the annual inventory.

- It was observed that the number of warehouses in the hospital is large: there are 47 warehouses distributed across floors and departments (pharmacy warehouses, medical supplies warehouses, stationery warehouses, maintenance warehouses), which made it difficult to control and follow up on them and led to discrepancies in the inventory carried out.

- There is no clear, approved system or mechanism for procurement; most purchasing operations are done directly..!

- There is no clear mechanism for dispensing medicines in an organized manner; additionally, the electronic pharmacy system is not functional as required...

- All the hospital’s ambulances, numbering 5, have expired licenses; 4 of them are out of service and do not operate because they are old and need maintenance, and only one operates as an ambulance although its license expired on 13-3-2019 and the license has not been renewed, which may expose the hospital to legal accountability...!

- There are large unused spaces in the hospital and closed rooms that are not used, and the distribution of departments and units across the hospital floors is not organized and ordered according to the interest of operations and patients; for example, the third and sixth floors can be utilized to provide medical services. This indicates a low occupancy rate in the hospital and leads to difficulties of communication between administrations and departments. The total occupancy rate of the hospital reached 74% in 2018, and the occupancy in the neonatal wards was 6% during 2018, which led to a decrease in the hospital’s income.

- The rate of surgeries performed in the hospital declined by 28% from 2016 to 2018, especially gynecology and obstetrics operations, which decreased by 77%, resulting in a reduction in the hospital’s revenues and there is no cooling system in the operating rooms, which may affect patient safety and endanger their lives...

- There are no security and fire systems in the hospital; the existing system is very old and ineffective, which could lead to damage to hospital property in the event of a fire without the ability to control it in a timely manner...!

- The hospital and its property are not insured, and there is no insurance for transporting cash from the hospital to the bank, which may expose the hospital and its property to risks of theft without any compensation.

- There are many old medical devices that have been in operation for 30 years; their condition is very poor and they need replacement...!

· The hospital’s infrastructure is dilapidated and very old, and other devices and equipment are old and need updating and replacement (electrical trusts and cables and water boilers), due to repeated faults in the electrical network, which affects service to patients.

- There is an electronic system that does not meet the work requirements in the hospital as required; some screens are not functional, it lacks many basic requirements for workflow, and the distribution and overlap of privileges on it led to the inability to determine who is responsible for an error when it occurs, because there are no defined privileges for each employee and no password to work with...

· The reply "from the association was positive, where the recommendations contained in the report were approved for correction and treatment!"

· How? We do not know!

·       1-11-2020