The Committee on Public Enterprises (COPE) has instructed the Auditor General to conduct a special investigation into the confusion that has arisen as to who pilfered a staggering amount of money, following contradictory statements made by the State Pharmaceuticals Corporation (SPC) and a private software company, EWIS Sri Lanka, with regard to develop an inventory management software for the SPC.
Allegations of SPC
The controversy was unfolded after the SPC and the Medical Supplies Division of the Ministry of Health were summoned before COPE in the first week of June.
The SPC told COPE has poured Rs 644 million into the drain for inventory management software that does not accommodate its requirements.
They said the software took seven years to build and implement. The contract was granted to a local company and the software had been started to be developed from 2008 and was only been implemented in 2015.
In response to inquiries by COPE’s Chairman, the SPC representative said that the institution makes a payment of Rs 5 million monthly as maintenance even though the software does not work as intended, pointing out that only some entries can be put into the system.
Furthermore, the University of Colombo School of Computing estimated it would cost Rs 7 billion to upgrade the existing system to one that fulfills the requirements of the SPC.
Response from the EWIS Sri Lanka
Calling a media briefing the next day, the EWIS Sri Lanka refuted the allegation and claimed the cost for the total project was Rs 223 million.
The company said only Rs 83 million was spent on the software developed for the Medical Supplies Division and the cost for the total project was Rs 223 million.
Company Chairman Sanjeewa Wickramanayake said, 45,000 purchase orders have been placed through this system since 2015, while 950 purchase orders were placed from January 2020 to date.
“If this system is not working properly as the SPC claimed at COPE, how did they place orders through this system? Some Rs 4.9 million was due after the warranty ended. The warranty ended on 23 October 2020. From November, they paid us Rs 4.9 million, not from 2015,” Wickramanayake said.
Speaking further, the Chairman said from 2015 to 2017, for two years, the system was maintained without any other payments, and as per the contract, from 2017 to 2020 the warranty period of three years was given, adding that Rs 4.9 million maintenance fee of 83 hospitals per month was given to EWIS Sri Lanka from November 2020.
Wickramanayake also said, a clarification pertaining to the matter has been submitted to COPE.
Following these statements, confusion has arisen as to who pilfered Rs 421 million of public money.
After the company’s clarification letter to the COPE, the committee issued a statement. The figures of this statement cause more confusion as the figures provided by the company and the State Ministry of Health do not tally.
The COPE said EWIS Information Systems Ltd informed they were paid Rs 223 million for the software.
However, the written submission of the State Ministry of Health shows that a colossal amount of money has been paid to two companies operated under EWIS.
The State Ministry’s statement shows while EWIS Information Systems Ltd had been paid Rs 458 million, another company named EWIS Solutions (Pvt) Ltd had been paid Rs 66 million. Therefore, a total of Rs 524 million had been paid for the said software.
As the confusion is growing further, the COPE instructed the Auditor General to conduct a special investigation and submit a report within a month.
It is unfortunate that this type of news come to the light, when the public is paying for their lives because of medicinal drug shortage in the country. It does not need to say over and over that the crisis situation of the country is created by the mismanagement of economy and public funds. The public needs accountability and transparency to watch how the officials are spending their money. Therefore, the authorities are obliged to give proper answer to the public in light of the above findings.
By Methmalie Dissanayake