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GMH discovers questionable purchase orders

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by Mindy Aguon

Guam - While the Guam Memorial Hospital is looking to get on the road to recovery with regard to its ailing finances, the new management team at GMH has uncovered some questionable purchases made during the last administration. "In order to improve," noted CFO Siva Karrupan, "we need to look at all expenses the hospital and ensure that we are spending our money wisely."

And part of doing that is reviewing purchase orders from the previous hospital administration. Karuppan says he's found a number of POs that didn't jive, adding, "So far I have seen many, many purchase orders that do not make sense to me. unfortunately these were purchase orders that were done sometime late last year, so I basically have no control over it except basically to cut it out or to stop those services. So we're in the process of perhaps the road to recovery in a short while. But it's going to take time."

Among the purchase orders that Karuppan has concerns with, $25,000 a year for software that simply generates a form that could be photocopied for pennies. (Not to mention a significant purchase of equipment that is just sitting collecting dust.)

He continued, "The hospital had committed to buying mammography equipment when we don't have a mammography tech at the hospital, and the hospital has encumbered to spend somewhere around $100,000 for this mammography equipment. In fact, this equipment is here at the hospital it's already been ordered since last October and so now we are at a loss to see what we can do with this equipment."

The equipment was purchased with local funds at a time when the hospital wasn't making gross payroll and doesn't even have the personnel necessary to operate it.  When asked if the mammography equipment could turn into a revenue generating unit for the hospital, Karuppan replied, "No, it really wouldn't. It would take many, many years to cover the $100,000 expense for the mammography program to be financially viable."

While that equipment sits and collects dust while hospital officials try to figure out what to do with it, an MRI machine donated several years ago to the hospital also sits idle as it was deemed inoperable when the magnet collapsed.  Even though the machine has been broken and unused since December 2010, the previous hospital management proceeded to obligate funds for a fire suppression unit for the inoperable equipment.

"We bought a fire suppressant unit for example for somewhere around $44,000 for the MRI machine that has already been mothballed," the CFO told KUAM News. "The vendor is now claiming that the fire suppression unit was custom made for the unit so therefore we're stuck paying $44,000 for that equipment."

Karuppan says the new management isn't trying to lay blame but work to fix the problems of the past and stop the hemorrhaging that's resulted in the hospital losing hundreds of thousands of dollars each year. "We are slowly reviewing the innerworkings of each department and all the expenses related to the department and slowly educating managers that they make sure to spend money as if it's their own money rather than someone else's money." he concluded.

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