Internal Control Session 9 & 10

Case Study No. 3.7

(Time allowed : 20 Minutes)

A Non-Government Organization (NGO) had started an eye hospital in MANDVI village sometime in 1988, having population of 3000 persons, the fifty per cent of which were State Government Servants. The hospital was started to cater the need of tribal people residing in and around the village. The hospital was located in Taluka Kinwat, District Nanded, Maharashtra State.

The NGO was receiving donations from the foreign countries to run the hospital. Management of hospital had realized later that .there was no response from local people and therefore requested the Government to take over the hospital. The request of the NGO was conceded by the Government and the hospital was taken over by the Government w.e.f. 01-04-1992. The following additional staff was sanctioned to run the Eye Hospital.

i.  One post of Superintendent (Eye Surgeon) in Group A cadre.

ii.  Two posts of Asstt. Surgeon in Group B cadre.

iii.  Two Ophthalmist/Eye technician (Group C).

iv.  Two Senior clerks (Group C).

v.  Three clerk typists (Group C)

vi.  Two ward assistants (Group C).

vii.  Two peons (Group D)

viii.  One safaiwala (Group D)

Objective behind taking over the hospital was to serve the people in and around village were the hospital is located. The building of hospital, furniture and fixture, and machines were received as donation from the Non-Government Organization. Besides the above hospital, in Nanded district, one unit with Eye Specialist in District General Hospital and one more unit with Eye Specialist in Rural Hospital was already functioning.

During the examination of the accounts of the hospital in March 1999 following facts came to light:

1.  Medicine worth Rs.l000/- was being supplied by the District Hospital annually but even this medicine could not be used by the hospital.

2.  Only 5 to 10 patients were registering for treatment per month.

3.  Equipment donated by the NGO and supplied by the Government were found rusted (certified by Superintendents of Eye Hospital) as they were lying unused for considerable period of time.

4.  No camps in villages were held for treatment of eye ailment as funds were not made available by the Government.

The foregoing facts indicate that the staff was idle, medicines was not being used as the patients were not coming for treatment as per the intake capacity of the hospital The superintendent disclosed to audit that he was helping the Superintendent of Rural Hospital Mandavi and helping NGOs such as Rotary Club to conduct Eye Camp for poor people and therefore he was not without work. (This was not his assigned duty). He also clarified that the patients preferred to go to Rural Hospital for treatment as it was near to Bus stand and they avoided this hospital as it was far away from the bus stand and other mode of conveyance was also not available.

Please point-out at what stage the risk identification and its evaluation has not been done leading to inadequate capacity utilization of hospital.

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Case Study and Suggested Solution RTI, Nagpur