How SJGH operates as a haven for corruption

Although the hospital should introduce standard charges on surgeries, Consultants at SJGH are given a free hand to decide how much they should charge

It is disheartening for long standing employees to see the downfall of SJGH

Offer given to CECB to provide consultancy service for the three- storey building without calling for tenders 

Sri Jayewardenepura General Hospital (SJGH), the multi- specialty leading tertiary care hospital in the country is accused of allowing Consultants to exert unjust professional charges on patients at their own discretion.
Alleged Corruptions that have plagued SJGH surfaced at the Committee on Public Enterprises (COPE) meeting held on December 6, 2022. These were expressed based on Auditor General’s reports. 

Although, details are not available whether the respective former managements of the hospital too have allowed Consultants to levy professional charges unjustly at their own discretion on patients, the details that were disclosed at the COPE underscore that this practice has been followed since 2020.

In addition, it is also reported how the Director of the hospital has granted permission for Consultants to perform surgeries levying professional fees on patients in paying wards during normal duty hours bypassing Cabinet decision No: 1984/335(2) dated July 18, 1984.   

As per the details exposed in the audit reports- copies of which are in possession of this newspaper-present and former Chairmen and the Board of Directors are liable for what has taken place. Surprisingly, none of them has been brought to book although there is proven evidence to take action against them.

According to the Auditor General’s report, professional fees are being levied on patients at the discretion of Consultants when doing private practices after office hours and using hospital resources. Although the hospital should introduce standard charges on surgeries, Consultants at SJGH are given a free hand to decide how much they should charge from each patient. 

“This has been done without following a specific policy or standard. Even professional fees are levied on surgeries performed during the office hours on patients in paying wards which is strictly illegal,” a Senior Administrative Officer at SJGH said on strict condition of anonymity.

Professional fees should not be levied on surgeries performed during normal duty hours for paying ward patients in accordance with the Cabinet Decision No: 1984/335(2) of July 18, 1984, and the subsequent decision taken by the Board of Directors on November 15, 2000.

Although the regulations are as such, according to the audits conducted by the National Audit Office, Rs.2.653 million had been earned by the Consultants as professional fees from 15 surgeries performed during the normal duty hours in 2021.

“When records of the operation theatre- where heart surgeries are performed- was checked it was discovered that these operations have been carried out during duty hours on the approval of the Director of the hospital. However the auditors were unable to obtain the durations of the operations as it is alleged that the records either have been deleted or hidden to prevent the details from reaching the audit officers,” sources said.

Be that as it may, it has also come to light how the hospital has incurred a loss of Rs.581, 418 per month as overhead costs for these private surgeries and tests with the annual loss being estimated at Rs.6.977 million. From these surgeries, the Consultants have received their professional fee of Rs.363.17 million in 2020, but only 0.15% which is equal to a mere Rs.546, 035 had been remitted to the hospital account as service charges.

 “If not for the recurrent grant provided by the Treasury, this hospital would have become yet another white elephant project as it is incurring huge losses due to the mismanagement of the respective hospital administrations. Comparing to how this hospital was managed at the very early days, it is disheartening for long standing employees to see the downfall of SJGH. As per the financial report, in 2020, the hospital’s total revenue has been recorded as Rs.2938.2 million and in 2021 it was Rs.3310.5 million. But, after all the expenses are taken into account, the loss before Treasury Recurrent Grant was Rs. 2438.2 million and Rs.2223.7 million in 2020 and 2021 respectively,” sources claimed.   

Furthermore it has been revealed that only a service charge of Rs.583, 035 had been credited to the hospital account for the operations performed after office hours in 2021. This was from the professional fee of Rs.388 million. 

Professional fees totaling Rs.76.915 million had also been paid to the auxiliary medical officers and other staff in 2021 with the approval of the Board of Directors; without obtaining Cabinet approval.

“There again, the Board of Directors have taken decisions at their own discretion without obtaining proper approvals. All these decisions are taken in favour of doctors and not the patients. Instead of appointing professionals, in the management field, to the Board, what is the reason behind appointing only doctors to the Director Board? Had experienced professionals in the management sector been appointed together with a few in the medical field the hospital could have provided more facilities for the patients for a reasonable fee; ensuring profits. If that happened even the Consultant doctors couldn’t have charged unjust professional fees according to their own whims and fancies,” sources said. 

“We don’t want to lose these Consultants. We want them to perform operations after working hours as we get an income out of these surgeries. From these operations we generate an income of 30% more than other hospitals. We cannot wait till the patients die. So we have to encourage our Consultants to do operations after duty hours,” 
- Prof. S.D. Jayaratne SJGH Chairman and Dr. Ratnasiri A. Hewage Director SJGH

Meanwhile questions have been raised as to who authorized four Consultant doctors- who are not attached to the hospital- to perform surgeries in 2021 by using hospital resources? A professional fee of Rs. 6.5 million has been obtained by them from the patients.

“Although these external consultants were allowed to perform operations at SJGH and charge exorbitant fees from patients at their own discretion, only 0.15% from the professional fee of Rs.6.5 million had been credited to the hospital as service charges in 2021. When the auditors requested the hospital authority to provide the written approvals granted to these external doctors to do surgeries using hospital resources, the management did not provide such details. In case any medical mishap occurs in the hands of these external doctors during and after operations, who is going to take the responsibility of these patients? The management has to inform what action they would take if any such unfortunate incident occurs as these external consultants cannot be held responsible as they have not entered into any agreement with the hospital,” sources said.

The hospital is further accused of not deducting PAYE Tax amounting to Rs.108.5 million from the professional fees paid for the Consultants and the auxiliary staff in 2014, 2015 and 2016.

“If not for the recurrent grant provided by the Treasury, this hospital would have become yet another white elephant project as it is incurring huge losses due to the mismanagement of the respective hospital administrations”
- Sources

Bids not called
The sources further said how a contract to build a three storied building for Rs.87 million (excluding VAT) had been awarded on November 9, 2016 to a contractor without calling for bids.

 “Central Engineering Consultancy Bureau (CECB) has been the consultancy service for this construction work. The Board of Directors has agreed to pay 8% of the contract value of Rs.6.96 million to CECB which is higher than the rates of State Engineering Corporation and Department of Buildings. Their rates were Rs.3.48 million and Rs.2.61 million respectively. How can the Board of Directors offer a contract without calling for tenders? Have they obtained approval from the Ministry to do so? How much of state funds could have been saved if a procurement process was followed and the lowest bidder was selected?” sources alleged.

Meanwhile SJGH Board is accused of not taking action to recover the possession of 0.1422 hectares of land which has been encroached by squatters over the years.

As per the deed No: 805, the Board of Management of the Urban Development Authority, in terms of Section 18(1) of the UDA Act No: 41 of 1978 has sold 10.013 hectares to the SJGH in 1983. The property has been vested under three survey plans No: Co. 5493 (9.937 hectares), No: Co. 6073 (0.038 hectares) and No: Co. 6074 (0.038 hectares) and all three plans have been authenticated by the Surveyor General on February 25, 1981, July 20, 1983 and July 13, 1983 respectively.

On the request of the management, the Surveyor General has re-surveyed the land depicted in plan No: Co 5493 in 2015, which had an extent of 9.937 hectares. From this survey, the Surveyor General had identified that the extent of the land had shrunk to 9.8047 hectares. Although this was reported by the Surveyor General to the Management- giving names and other details of the parties who were illegally occupying the land at nine different locations within the hospital property- legal action had not been taken against the squatters.

“Based on the Surveyor General’s 2015 report, the Management should have instituted legal action to recover the possession of the lost land as per the State Lands (Recovery of Possession) Act,” sources claimed.

Instead of taking legal action, the Management has once again got the land re-surveyed through a private Charted Surveyor in 2016 and had paid him a sum of Rs.392, 000.

This Surveyor had drawn a new plan by omitting the encroached extent of 0.1422 hectares. Urban Council Maharagama has approved the new plan on March 8, 2016.

When contacted Engineer (Planning), Urban Council Maharagama, Eng. Thushara Nishantha to find out why they did not check the initial survey plan of the SJGH before approving the new plan, the Engineer Planning said that it is the Surveyor that has to check the initial plan before carrying out a re-survey.

“When a plan is sent to us for approval, we give the necessary approvals if we are satisfied with the details submitted. It is not our duty to study the initial plans and check whether the new plan and the initial plan tally. It is the duty of the Surveyor to check the previous plans,” said Eng. Nishantha.  

Following the audit query, the Board of Directors on July 29, 2021, had taken a decision to seek the Attorney General’s (AG) instruction on what action should be taken against the encroachment. As per the AG’s instructions on November 10, 2021, on January 6, 2022, the Surveyor General has been requested to conduct a re-survey.
Although the Board decided to seek AG’s advice on July 29, 2021, the request letter has been sent to the AG on October 25, 2021, -three months later. 

Inefficient hospital management 
“This clearly shows how inefficient the hospital management is. Why couldn’t they seek AG’s advice soon after the Board decision was taken? In response, the AG has advised to do a re-survey, if needed and further action be taken in terms of State Lands (Recovery of Possession) Act. Why cannot the hospital take action to recover the land under the State Land (Recovery of Possession) Act rather than taking time to get a re-survey done” sources questioned. 

Questions have also been raised as to why action has not been taken against those who were involved in purchasing a stock of surgical materials at a cost of Rs.4.12 million for the Neurosurgery Unit in 2011 out of which 80% had to be discarded after two years when the stock expired.

“Consultant Neuro Surgeon is accused of purchasing this stocks for the Neurosurgery Unit in 2011, claiming to be ‘an urgent need’ for neuro surgeries. As the entire stock was not used, 80% of it had to be discarded,” sources said.

The sources meanwhile were critical of the Neurosurgery Unit at the hospital, where the Surgeons are accused of performing unnecessary operations on patients in order to obtain commissions from the medicines they prescribe to purchased from outside.

“This is a known fact. There is evidence of how the prescribed medicines or equipment are sold to the patients’ families at the hospital car park by brokers. At the time these surgical materials were purchased at a cost of Rs.4.12 million, the audits should focus whether a proper tender procedure was followed when procuring this stock,” sources said.     

On the request of the National Audit Office in 2017, a committee appointed by the Health Ministry has conducted an investigation in 2018, with regard to the said purchase. Although the findings of the investigation had been issued on May 19, 2018, it is said that the Ministry of Health has failed to send the report to SJGH.

Questions are raised whether it was the fault of the Ministry of Health or SJGH that has led to the purposely misplacing of the report to cover up the fraud. After the audit officers in 2022, questioned why the hospital authorities have failed to take action against this massive fraud and what the outcome of the investigation was, SJGH has requested for a copy of the findings of the investigations from the Health Ministry, which they received only on November 19, 2022. 

“Had the unused surgical materials been sent to the National Hospital of Sri Lanka, where neuro surgeries are performed on daily basis, the loss could have been averted,” sources added.  

As per the decision of the investigation, the Consultant Neuro Surgeon, the Director of the hospital, Technical Evaluation Committee, Pharmacist in charge of the stores and the hospital authority should be held responsible for this matter and action should be taken under Sections 102, 103 and 104 of Government Financial Regulations.

Startling revelations
Meanwhile, startling revelations have been made as to how the Board of Directors of  SJGH in 2015 had offered a contract to supply, implementation and maintenance of an Electronic Document Management System to a company owned by the spouse of the then Director of the hospital.

 The contract had been offered to Tele-channeling (Pvt) Ltd -a company that was registered on October 8, 2015. The contract has been offered to this company without following government procurement guidelines on November 26, 2015.

The postal address given of this company was No: 407, Pethiyagoda, Kelaniya. However, when the National Audit Office requested the Divisional Secretary Kelaniya whether Tele-Channeling (Pvt) Ltd is in the given address, by letter dated October 30, 2018, Divisional Secretary Kelaniya had claiming that there is no such company at the given address.  

According to the audit reports, this company has been formed few days before the contract was offered. The hospital management has failed to check the experience of this company and their past records. A sum of Rs.1.8 million was spent for the software and Rs.19.7 million for scanning and uploading documents as at December 31, 2019 and the bid documents have not been approved by the TEC and the Procurement Committee.

The audit report further states, ‘Even though the officials involved in a procurement action shall not abuse their positions to derive benefits for oneself or one’s close family or business associates in terms of guidelines 1.4.2 of the government procurement guidelines, it was observed according to the registration documents of Tele-Channeling (Pvt) Ltd that the spouse of the Director of the Hospital was working as a Director of that company by November 26, 2015, the date of awarding the contract for the installation of this system. In terms of Guideline 1.4.3 of Government Procurement Guidelines, the officials shall declare that they shall remain without a conflict of interest throughout the procurement process. Nevertheless no action had been taken in accordance therewith since the Director of the Hospital had intervened in taking decisions relating to the procurement activities.

‘In terms of guidelines 2.6.1.(a) of the government procurement guidelines, the TEC had not taken steps to review the bid documents prepared by the procurement entity and examine the pre-qualifications or draw attention to conduct pre-procurement meetings in order to review and approve of specifications to ensure that the specifications are generic in nature and competitiveness could be promoted on an equal level. Although members to the TEC have to be appointed by the Chairman SJGH, it was Director of the Board that has appointed the members’.

“The Officer who had been appointed as the Information Technology Consultant of the hospital on a duty assignment basis had been appointed as a member of the TEC. An investigation is conducted by the MoH in this connection. Although the AG informed the Board, in writing that printed copies of the scanned BHT’s shall not be used as originals and the original documents should be kept securely for 12 years in accordance with RTI Act, 240, 000 BHT’s out of the 250, 000 scanned had been destroyed,” sources alleged. 

Despite these revelations SJGH Chairman Prof. S.D. Jayaratne and Director Dr. Ratnasiri A. Hewage told this newspaper that they are not liable for the frauds that had taken place before they assumed duties.

“Regarding the issues that had cropped up during our time, we are in the process of correcting them,” Prof. Jayaratne said.

According to Dr. Hewage, due to the encroachment, the hospital has been deprived of 160 perches and action has already been initiated to take action against the squatters as directed by the AG.

When asked what the reason was to get this land re-surveyed in 2015, Board Secretary/ Legal Officer SJGH, Ruwanthika Gunawardhana said it was a decision taken by the then Chairman of the hospital M.M.N.D. Bandara.
By letter dated February 13, 2013, then Chairman Bandara has requested the Surveyor General to draw a plan to identify the exact extent of land the hospital was enjoying and has appointed one of his Nursing Officers to be in charge of the process.

“Although actions have not been taken to evict the squatters and take possession of the land after the Surveyor General’s 2015 report, after I joined SJGH, we wanted to take action, but due to the Covid outbreak we couldn’t accelerate the process,” Gunawardhana said.

She further said that a Board decision was taken on July 29, 2021 to get the AG’s advice what action the hospital should take to recover the possession of this land.

When asked why the hospital took almost three months to make a request to the AG from the date of the Board decision, Prof. Jayaratne said that it was due to Legal Officer Gunawardhana taking sick leave.

“Although the Board decided to take the legal advice from the AG, the decision taken was once again put to the Board in August to get it ratified. It was during this time our legal officer had to undergo a brain surgery. As we were confident that she would be back within two months, we did not ask the Ministry to send a legal officer to carry out our work. That was why we got delayed to send the request to the AG,” Prof. Jayaratne said. 

Meanwhile, Director, Dr. Hewage when asked why Consultants are given permission to perform operations on patients in paying wards during duty hours and levy exorbitant charges despite Cabinet and Board decisions prohibiting this practice, he said that this decision had been taken to save the lives of serious patients.

“On humanitarian grounds I had to take this decision. There is nothing wrong in my decision,” Dr. Hewage said.
With regard to the approvals given to Consultants to levy professional charges on their own discretions and allowing four external Consultants to perform operations using hospital resources, Prof. Jayaratne and Dr. Hewage maintained that if these Consultants are not allowed to levy professional charges on their own discretion, they would instead serve at other private hospitals in Colombo where their services would be paid for handsomely.

“We don’t want to lose these Consultants. We want them to perform operations after working hours as we get an income out of these surgeries. From these operations we generate an income of 30% more than other hospitals. We cannot wait till the patients die. So we have to encourage our Consultants to do operations after duty hours,” they said.

When asked why the Director had given permission to four external doctors to perform operations using hospital resources, Dr. Hewage said that if a patient needs further medication that hospital doctors cannot provide, there is nothing wrong in getting external doctors to do the necessary operations on them.

“This decision can be wrong to others, but as professionals, we have to get the service of external doctors to cure our patients,” Dr. Hewage said.

He further said AG’s advice has been sought to take action against the former Director for offering the Electronic Document Management System to Tele-channeling (Pvt) Ltd.

“Many frauds had taken place when offering this project to this company whose Director was the spouse of the then Director. We have sought legal advice from the AG to institute legal action against those who were involved in this,” Dr. Hewage said.

The reason to offer CECB to provide consultancy service for the three-storey building, without calling tenders to select the lowest bidder, Chairman Prof. Jayaratne said that there are few other projects at the hospital that had been given to the Department of Buildings.

“Department of Buildings and the States Engineering Corporation do not have the capacity to carry out many construction works. That was why the contract was offered to CECB. Constructions that have been carried out by the CECB is better than others. That was why we offered this to the latter,” Prof. Jayaratne reasoned.

He further said that the Management is awaiting Health Ministry’s decision to take action against those who were accused in the purchase of Neuro surgical materials.